Exhibit 99.11
FOURTH AMENDMENT TO CREDIT AGREEMENT
THIS FOURTH AMENDMENT TO CREDIT AGREEMENT (this "Amendment"), dated as of
July 18, 2003, is made and entered into by and among ANALEX CORPORATION, a
Delaware corporation, successor by merger to Hadron, Inc. (the "Borrower"), and
the subsidiaries of the Borrower identified on the signature pages hereto (the
"Subsidiary Guarantors"), and BANK OF AMERICA, N.A., a national banking
association (the "Lender").
WITNESSETH
WHEREAS, the Borrower and the Lender entered into that certain Credit
Agreement dated as of November 2, 2001, as modified by that certain First
Amendment to Credit Agreement dated as of August 1, 2002, Second Amendment to
Credit Agreement dated as of December 20, 2002 and Third Amendment to Credit
Agreement dated as of April 30, 2003 (collectively, the "Existing Credit
Agreement").
WHEREAS, the parties have agreed to amend the Existing Credit Agreement as
set forth herein.
NOW, THEREFORE, in consideration of the agreements hereinafter set forth,
and for other good and valuable consideration, the receipt and adequacy of which
are hereby acknowledged, the parties hereto agree as follows:
PART I
DEFINITIONS
1. Certain Definitions. Unless otherwise defined herein or the context
otherwise requires, the following terms used in this Amendment, including its
preamble and recitals, have the following meanings:
"Amended Credit Agreement" means the Existing Credit Agreement as amended
hereby.
"Amendment No. 4 Effective Date" is defined in Part III.
2. Other Definitions. Unless otherwise defined herein or the context
otherwise requires, terms used in this Amendment, including its preamble and
recitals, have the meanings provided in the Amended Credit Agreement.
PART II
AMENDMENTS TO EXISTING CREDIT AGREEMENT
Effective on (and subject to the occurrence of) the Amendment No. 4
Effective Date, the Existing Credit Agreement is hereby amended in accordance
with this Part II. Except as so amended, the Existing Credit Agreement and all
other Loan Documents shall continue in full force and effect.
1. Amendment to Section 1.1. Each of the following definitions appearing in
Section 1.1 of the Existing Credit Agreement is amended in its entirety to read
as follows:
"Change of Control" shall mean the occurrence of any of the
following events: (i) after the Closing Date, any Person (other
than the Purchasers and their Affiliates) or two or more Persons
(other than the Purchasers and their Affiliates) acting in
concert shall have acquired beneficial ownership, directly or
indirectly, of, or shall have acquired by contract or otherwise,
or shall have entered into a contract or arrangement that, upon
consummation, will result in its or their acquisition of or
control over, voting stock of the Borrower (or other securities
convertible into such voting stock) representing 50% or more of
the combined voting power of all voting stock of the Borrower, or
(ii) during any period of up to 24 consecutive months, commencing
after the Closing Date, individuals who at the beginning of such
24 month period were directors of the Borrower (together with any
new director whose election by the Borrower's board of directors
or whose nomination for election by the Borrower's shareholders
was approved by a vote of at least a majority of the directors
then still in office who either were directors at the beginning
of such period or whose election or nomination for election was
previously so approved and any new director designated, nominated
and elected pursuant to the Stockholders' Agreement (as defined
in the Note Purchase Agreement) cease for any reason to
constitute a majority of the directors of the Borrower then in
office. As used herein, "beneficial ownership" shall have the
meaning provided in Rule 13d-3 of the Securities and Exchange
Commission under the Securities Exchange Act of 1934.
"Fixed Charges" for any period shall mean the sum of (a)
Interest Expense for such period, plus (b) preferred stock cash
dividends actually paid or required to be paid, plus (c) the
aggregate amount of all non-compete payments made by the Borrower
for such period, plus (d) without duplication, scheduled payments
of principal on Indebtedness and Capitalized Lease Obligations of
the Borrower for such period, all as determined on a consolidated
basis in accordance with GAAP. For the avoidance of doubt, the
Borrower's payment of $280,000 to Xxx Xxxxx related to the
termination of Xx. Xxxxx'x employment agreement shall not
constitute a Fixed Charge.
The following definitions are hereby added to Section 1.1 of the Existing
Credit Agreement:
"Note Purchase Agreement" shall mean that certain
Subordinated Note and Series A Convertible Preferred Stock
Purchase Agreement dated July 18, 2003, by and among the Borrower
and the Purchasers.
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"Pequot Subordination Agreement" shall mean that certain
Intercreditor and Subordination Agreement to be dated the Closing
Date (as defined in the Note Purchase Agreement), by and among
the Lender, the Purchasers, the Borrower and the Subsidiary
Guarantors, in the form of Exhibit A-4 hereto, as amended,
modified and supplemented from time to time.
"Purchasers" shall mean Pequot Private Equity Fund III,
L.P., a Delaware limited partnership, and Pequot Offshore Private
Equity Partners III, L.P., a Delaware limited partnership.
2. Amendment to Section 5.1(i). Section 5.1(i) of the Existing Credit
Agreement is hereby amended by adding the following new clause (vii):
(vii) Any Default (as defined in the Note Purchase
Agreement).
3. Amendment to Section 5.14. Section 5.14 of the Existing Credit Agreement
is hereby amended in its entirety to read as follows:
5.14 Government Contracts.
At the Lender's request, documentation necessary for
compliance with the Assignment of Claims Act will be executed and
delivered by the appropriate Credit Parties with respect to any
Government Contract which constitutes a Material Contract. In any
event, no Government Contract will be assigned pursuant to the
Assignment of Claims Act to the Junior Lender (as defined in the
Pequot Subordination Agreement) or any other Person; provided,
however, that if a Credit Party assigns to the Lender any
Government Contract pursuant to the Assignment of Claims Act, the
Lender shall, subject to the Pequot Subordination Agreement and
to the extent permitted by applicable law, permit the Junior
Lender to be a subordinate assignee of such Government Contract
or otherwise participate, on terms reasonably acceptable to the
Lender, in such assignment to the Lender.
4. Amendment to Section 6.1. Section 6.1 of the Existing Credit Agreement
is hereby amended in its entirety to read as follows:
6.1 Financial Covenants.
The Borrower hereby covenants to the Lender as follows, which
covenants shall be based upon the consolidated financial
statements of the Borrower:
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(a) Total Funded Debt to EBITDA Ratio. The Borrower will
maintain at all times during the following periods a Total
Funded Debt to EBITDA ratio of not greater than the
following:
MAXIMUM TOTAL FUNDED DEBT
PERIOD TO EBITDA RATIO
------------------------- -------------------------
Amendment No. 4
Effective Date - 09/30/04 4.0 to 1.0
10/01/04 - thereafter 3.5 to 1.0
(b) Fixed Charge Coverage Ratio. The Borrower will maintain at
all times during the following periods, a Fixed Charge
Coverage Ratio of not less than the following:
MAXIMUM TOTAL FUNDED DEBT
PERIOD TO EBITDA RATIO
------------------------- -------------------------
Amendment No. 4
Effective Date - 12/31/03 1.05 to 1.0
01/01/04 - 09/30/04 1.1 to 1.0
10/01/04 - thereafter 1.2 to 1.0
The financial covenants referenced in this Section 6.1 shall
be calculated and tested on a quarterly basis as of the last
day of each quarter for the four fiscal quarter period then
ended. Unless otherwise defined, all financial terms used in
this Section 6.1 shall have the meanings attributed to such
terms in accordance with GAAP; provided however, that for
the avoidance of doubt, regardless of how the Borrower's
series A preferred stock is characterized under GAAP, such
series A preferred stock shall not constitute Indebtedness,
as used in this Agreement.
5. Amendment to Section 6.4. Section 6.4 of the Existing Credit Agreement
is hereby amended in its entirety to read as follows:
6.4 Liens.
The Borrower shall not, and shall not permit any of its
Subsidiaries to, create, incur, assume or suffer to exist any Lien on
any of its property, or agree, become or remain liable (contingently
or otherwise) to do any of the foregoing, except for the following
("Permitted Liens"):
(a) Liens pursuant to the Security Documents in favor of the Lender
to secure the Obligations;
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(b) Liens securing the Junior Indebtedness (as defined in the Pequot
Subordination Agreement);
(c) Liens arising from taxes, assessments, charges or claims
described in Section 5.4 that are not yet due or that remain
payable without penalty or to the extent permitted to remain
unpaid under the proviso to such Section 5.4;
(d) Deposits or pledges of cash or securities in the ordinary course
of business to secure (i) worker's compensation, unemployment
insurance or other social security obligations, (ii) performance
of bids, tenders, trade contracts (other than for payment of
money) or leases, (iii) stay, surety or appeal bonds, or (iv)
other obligations of a like nature incurred in the ordinary
course of business;
(e) Liens securing Indebtedness permitted by Section 6.5(d),
provided, however, that such Liens shall only extend to the
property financed by the Indebtedness securing the same;
(f) Liens existing on the date hereof and specified on Schedule 6.4;
(g) Title exceptions or encumbrances granted in the ordinary course
of business, affecting real property owned by the Borrower or any
of its Subsidiaries, provided that such exceptions do not in the
aggregate materially detract from the value of such property or
materially interfere with its use in the ordinary conduct of the
Borrower's or each Subsidiary's business;
(h) Liens with respect to judgments, attachments and the like which
do not constitute Events of Default hereunder; and
(i) Liens arising from leases or subleases granted to others which do
not interfere in any material respects with the business of the
Borrower or its Subsidiaries.
"Permitted Lien" shall in no event include any Lien imposed by,
or required to be granted pursuant to, ERISA or any Environmental Law.
Nothing in this Section 6.4 shall be construed to limit any other
restriction on Liens imposed by the Security Agreement or otherwise in
the Loan Documents.
6. Amendment to Section 6.5. Section 6.5 of the Existing Credit Agreement
is hereby amended in its entirety to read as follows:
6.5 Indebtedness and Guaranty Obligations.
The Borrower shall not, and shall not permit any of its
Subsidiaries to, create, incur, assume or suffer to exist any
Indebtedness or Guaranty Obligations,
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or agree, become or remain liable (contingently or otherwise) to do
any of the foregoing, except:
(a) Indebtedness and Guaranty Obligations to or in favor of the
Lender pursuant to this Agreement and the other Loan Documents;
(b) The Junior Indebtedness (as defined in the Pequot Subordination
Agreement);
(c) Indebtedness of the Borrower or any of its Subsidiaries existing
on the date hereof and listed in Schedule 6.5 (and extensions,
renewals and refinancings thereof on terms no less favorable in
any material respect than those existing before such extension,
renewal or refinancing);
(d) Purchase money Indebtedness (including Capitalized Leases)
hereafter incurred by the Borrower or any of its Subsidiaries to
finance the purchase of fixed assets provided that (i) the total
of all such Indebtedness for all such Persons taken together
shall not exceed an aggregate principal amount of $500,000 during
any fiscal year; (ii) such Indebtedness when incurred shall not
exceed the purchase price of the assets(s) financed; and (ii) no
such Indebtedness shall be refinanced for a principal amount in
excess of the principal balance outstanding thereon at the time
of such refinancing;
(e) Intercompany Debt;
(f) Indebtedness that is expressly subordinate to the monetary
obligations arising under this Agreement pursuant to a written
subordination agreement in form and substance reasonably
acceptable to the Lender;
(g) Contingent liabilities arising out of endorsements of checks and
other negotiable instruments for deposit or collection in the
ordinary course of business; and
(h) To the extent not mentioned above, accruals and accounts payable
in the ordinary course of business not for borrowed money.
7. Amendment to Section 6.7. Section 6.7 of the Existing Credit Agreement
is hereby amended in its entirety to read as follows:
6.7 Dividends and Related Distributions.
The Borrower shall not, and shall not permit any of its
Subsidiaries to, declare or make any Stock Payment, or agree,
become or remain liable (contingently or otherwise) to do any of
the foregoing, except
(a) dividends payable to a Credit Party; and
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(b) so long as no Event of Default has occurred and is
continuing, or would occur as a result of such dividends,
dividends payable to holders of series A preferred stock in
accordance with the Certificate of Designations, Powers,
Preferences and Rights of the Series A Convertible Preferred
Stock to be dated the Closing Date (as defined in the Note
Purchase Agreement) ("Series A Certificate"); and
(c) so long as no Event of Default has occurred and is
continuing, or would occur as a result of such payment,
required redemption payments to holders of series A
preferred stock in accordance with the Series A Certificate.
8. Amendment to Section 6.14. Exhibit 6.14 to the Existing Credit Agreement
is hereby amended in its entirety to read as follows:
6.14 Limitations on Other Restrictions on Liens.
The Borrower shall not, and shall not permit any of its
Subsidiaries to, enter into, become or remain subject to any agreement
or instrument, except for the Loan Documents and the Junior Loan
Documents (as defined in the Pequot Subordination Agreement), that
would prohibit the grant of any Lien upon any of its properties.
9. Amendment to Exhibit J. Exhibit J to the Existing Credit Agreement is
hereby amended in its entirety to read as set forth in Exhibit J attached to
this Amendment.
10. Amendment to Section 7.1(f). Section 7.1(f) of the Existing Credit
Agreement is hereby amended in its entirety to read as follows:
(f) Any Cross-Default Event shall occur with respect to Cross-Default
Obligations. As used herein, "Cross-Default Obligation" shall
mean any Indebtedness or Guaranty Obligation of a Credit Party or
any agreement or instrument creating, evidencing or securing such
Indebtedness or Guaranty Obligation. As used herein,
"Cross-Default Event" with respect to a Cross-Default Obligation
shall mean the occurrence of any default, event or condition
(other than a default, event or condition waived by the obligee
of such Cross-Default Obligation) which causes or which would
permit any Person or Persons to cause all or any part of such
Cross-Default Obligation to become due (by acceleration,
mandatory prepayment or repurchase, or otherwise) before its
otherwise stated maturity, or failure to pay all or any part of
such Cross-Default Obligation at its stated maturity.
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PART III
CONDITIONS TO EFFECTIVENESS
1. Amendment No. 4 Effective Date. This Amendment shall be and become
effective as of the date hereof (the "Amendment No. 4 Effective Date") when all
of the conditions set forth in this Part III shall have been satisfied, and
thereafter this Amendment shall be known, and may be referred to, as "Amendment
No. 4".
2. Execution of Counterparts of Amendment. The Lender shall have received
counterparts of this Amendment, which collectively shall have been duly executed
on behalf of the Borrower, the Subsidiary Guarantors and the Lender.
3. Fees and Expenses. All out-of-pocket fees and expenses of the Lender in
connection with the Loan Documents, including this Amendment, including legal
and other professional fees and expenses incurred on or prior to the date of
this Amendment, shall have been paid.
4. Subordinated Debt Transaction. The Closing (as defined in the Note
Purchase Agreement) shall have occurred, as indicated in a letter delivered to
the Lender by the Borrower, which letter shall confirm the Closing Date (as
defined in the Note Purchase Agreement), and the Pequot Subordination Agreement
shall have been executed and delivered to the Lender.
5. Other Items. The Lender shall have received an amendment to the Security
Agreement in form satisfactory to it and such other documents, agreements or
information which may be reasonably requested by the Lender.
PART IV
MISCELLANEOUS
1. Representations and Warranties. Borrower hereby represents and warrants
to the Lender that, after giving effect to this Amendment, (a) no Default exists
under the Amended Credit Agreement or any of the other Loan Documents which has
not been waived and (b) except as set forth in the revised Schedule 3.19
attached hereto, the representations and warranties set forth in the Existing
Credit Agreement (other than the representations and warranties set forth in
Sections 3.6, 3.l6 and 3.18 of the Existing Credit Agreement) are, subject to
the limitations set forth therein, true and correct in all material respects as
of the date hereof (except for those which expressly relate to an earlier date
and except for representations that refer to or are qualified by Schedules to
the Existing Credit Agreement). The Borrower makes no representation as to the
accuracy of the Schedules to the Existing Credit Agreement as of the date of
this Amendment, other than the revised Schedule 3.19.
2. Cross-References. References in this Amendment to any Part are, unless
otherwise specified, to such Part of this Amendment.
3. Instrument Pursuant to Existing Credit Agreement. This Amendment is a
Loan Document executed pursuant to the Existing Credit Agreement and shall
(unless otherwise
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expressly indicated therein) be construed, administered and applied in
accordance with the terms and provisions of the Existing Credit Agreement.
4. References in Other Loan Documents. At such time as this Amendment shall
become effective pursuant to the terms of Part III, all references in the Loan
Documents to the "Agreement" shall be deemed to refer to the Existing Credit
Agreement as amended by this Amendment.
5. Counterparts. This Amendment may be executed by the parties hereto in
several counterparts, each of which shall be deemed to be an original and all of
which shall constitute together but one and the same agreement.
6. Governing Law. THIS AMENDMENT SHALL BE DEEMED TO BE A CONTRACT MADE
UNDER AND GOVERNED BY THE INTERNAL LAWS OF THE COMMONWEALTH OF VIRGINIA WITHOUT
GIVING EFFECT TO THE CONFLICT OF LAW PRINCIPLES THEREOF.
7. Successors and Assigns. This Amendment shall be binding upon and inure
to the benefit of the parties hereto and their respective successors and
assigns.
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IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be
duly signed, sealed and delivered by their properly and duly authorized officers
as of the day and year first above-written.
BORROWER:
ANALEX CORPORATION
By: (SEAL)
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Name:
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Title:
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SUBSIDIARY GUARANTORS:
ADVANCED BIOSYSTEMS, INC.
By: (SEAL)
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Name:
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Title:
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SYCOM SERVICES, INC.
By: (SEAL)
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Name:
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Title:
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LENDER:
BANK OF AMERICA, N.A.
By: (SEAL)
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Name:
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Title:
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