EXHIBIT 10.7
LOAN AGREEMENT
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THIS LOAN AGREEMENT, dated as of the 15/th/ day of August, 2001, is
made by and between SUNTRUST BANK, a Georgia banking corporation (the Lender),
and SRA INTERNATIONAL, INC., a Delaware corporation (the Company), SYSTEMS
RESEARCH AND APPLICATIONS CORPORATION, a Virginia corporation (SRA), and SRA
TECHNICAL SERVICES CENTER, INC., a Delaware corporation (STSC), and each other
Subsidiary (as defined below) that becomes a party to this Agreement in
accordance with the provisions set forth below (together with the Company, SRA
and STSC, collectively, the Borrowers, and individually, a Borrower).
RECITALS
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The Lender has agreed to provide financing to the Borrowers, subject to
the terms and conditions of this Agreement. Each Borrower will derive
substantial direct and indirect benefits by the credit extended by the Lender to
the other Borrowers. Accordingly, for good and valuable consideration, the
receipt and sufficiency of which are acknowledged, the Lender and the Borrowers
agree as follows:
Section 1. Definitions. As used in this Agreement, the following
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terms shall have the meanings assigned to them below, which meanings shall be
equally applicable to the singular and plural forms of the terms defined.
"Adjusted EBILTDA" means, for any period, EBITLDA plus, if applicable,
extraordinary or unusual gains or other gains not incurred in the ordinary
course of business up to an amount not to exceed the New Ventures Addition, all
determined on a consolidated basis for the Company and its Subsidiaries in
accordance with GAAP.
"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. The term "control" 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 common stock, by contract or otherwise.
"Aging" means a schedule of all outstanding Receivables of the
Borrowers showing the age of such Receivables in intervals of 35, 60 and 90
days, and over 90 days, or such other intervals as may be acceptable to the
Lender.
"Agreement" means this Loan Agreement, as the same may be amended,
modified or supplemented from time to time.
"Applicable Margin" shall mean, for any date of calculation, the rate
per annum opposite the Cash Flow Leverage Ratio (calculated as of the end of the
Company's immediately preceding fiscal quarter) set forth below under the
caption "Applicable Margin." On the date hereof, the
Applicable Margin is 1.85% . The Applicable Margin will be adjusted on a
quarterly basis in accordance with the table set forth below:
Applicable Margin for
Cash Flow Leverage Ratio Revolving Loans
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Equal to or less than 2.00 to 1 1.100%
Greater than 2.00 to 1 but equal to 1.475%
or less than 2.75 to 1
Greater than 2.75 to 1 but equal to 1.850%
or less than 3.5 to 1
Greater than 3.5 to 1 2.250%
The Applicable Margin will be adjusted to the percentage corresponding
to the applicable Cash Flow Leverage Ratio in effect as of the last day of each
fiscal quarter of the Company. The adjustment will become effective as of the
first day of the calendar month next succeeding the receipt by the Lender of the
financial statements of the Company pursuant to Section 5.8 (a). No decrease in
the Applicable Margin shall become effective if, at such time, any Event of
Default has occurred and is continuing. If the Company's financial statements
are not delivered to the Lender within the specified time periods, the
Applicable Margin may be increased, at the option of the Lender, to the highest
applicable percentage from the date on which the statements were due through the
date such financial statements are delivered.
"Assignment of Claims Act" means, collectively, the Assignment of
Claims Act of 1940, as amended, 31 U.S.C. (s) 3727, 41 U.S.C. (s) 15, any
applicable rules, regulations and interpretations issued pursuant thereto, and
any amendments to any of the foregoing.
"Assumption Agreement" means each Assumption Agreement, substantially
in the form of Exhibit A attached to this Agreement, executed by a Subsidiary
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that becomes a party to this Agreement in accordance with the provisions of
Section 7.3 below.
"Borrowing Base" means, at the time in question (a) 90% of Eligible
Billed Government Receivables, plus (b) 80% of Eligible Billed Commercial
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Receivables, plus (c) 60% of Eligible Unbilled Receivables.
"Borrowing Base Certificate" means a certificate of the Company
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 B attached to this Agreement.
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"Business Day" means any day other than a Saturday, Sunday or other day
on which commercial banks are authorized or required to close under the laws of
the State, and, with
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respect to the determination of LIBOR, on which banks in the London interbank
market are open for business.
"Capital Lease" means any lease that has been or should be capitalized
on the books of the lessee in accordance with GAAP.
"Capitalization Ratio" means, at any time, the ratio of Funded Debt to
Total Capitalization.
"Capitalized Operating Lease Obligations" means, at any time, the net
present value of the annual Operating Lease commitments of the Company and its
Subsidiaries, on a consolidated basis, which amount shall be calculated by
taking actual amounts payable for each of the first five years after any
calculation date and by assuming that for each lease year remaining after the
fifth year of such Operating Lease commitments the annual Operating Lease
commitment will be the same as it was for the fifth year, and that the number of
lease years remaining on all such leases is equal to the aggregate future
minimum Operating Lease commitments remaining after such fifth year determined
in accordance with GAAP, divided by the Operating Lease commitment for such
fifth year, with the quotient being rounded to the nearest whole number, and
applying a discount rate of 10% per annum to each year's actual and assumed
lease payments.
"Cash Flow Leverage Ratio" means, at any time, the ratio of Funded Debt
plus Capitalized Operating Lease Obligations then outstanding to consolidated
Adjusted EBILTDA of the Company and its Subsidiaries for the period of four
fiscal quarters of the Company most recently ended or, when a determination is
to be made as of the last day of a fiscal quarter, for the period of four fiscal
quarters then ended.
"Cash Management Agreement" means any applicable agreement between the
Company and the Lender pursuant to which funds are transferred automatically to
and from the Company's operating account or controlled disbursement account with
the Lender, as any such agreement may be amended, modified or supplemented from
time to time.
"Code" means the Internal Revenue Code of 1986, as amended from time to
time, and all regulations issued pursuant thereto.
"Collateral" means the following properties, assets and rights of the
each Borrower, wherever located, whether now owned or hereafter acquired or
arising, and all proceeds and products thereof : all personal and fixture
property of every kind and nature including without limitation all goods
(including inventory, equipment and any accessions thereto), instruments
(including promissory notes), documents, accounts (including
health-care-insurance receivables), chattel paper (whether tangible or
electronic), deposit accounts, letter-of-credit rights (whether or not the
letter of credit is evidenced by a writing), commercial tort claims, securities
and all other investment property, supposing obligations, any other contract
rights or rights to the payment of money, insurance claims and proceeds, tort
claims, and all general intangibles (including all payment intangibles and
Intellectual Property).
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"Covenant Compliance Certificate" means a certificate executed by a
Principal Officer of the Company, substantially in the appropriate form of
Exhibit C attached to this Agreement, containing a calculation of the financial
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covenants contained in Section 6.11 below and certifying that no Default or
Event of Default has occurred.
"Customer" means any Person obligated on a Receivable.
"Customer List" means a schedule of all Customers of the Borrowers,
showing the address of each Customer and a listing of the active contracts
between each Borrower and such Customer, which is otherwise in form and
substance satisfactory to the Lender.
"Debt" means, collectively, and includes, without duplication, with
respect to any specified Person, (a) indebtedness or liability for borrowed
money (whether by loan, the issuance and sale of debt 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) obligations as a lessee under a
Capital Lease; (c) obligations to reimburse the issuer of letters of credit or
acceptances; (d) Guaranty Obligations; (e) obligations under Interest Rate Hedge
Agreements; (f) obligations under any foreign exchange contract, currency swap
or other similar agreements or arrangements designed to protect that Person
against fluctuations in currency values; (g) all preferred stock or similar
equity interests issued by such Person which by the terms thereof could be (at
the request of the holders thereof or otherwise) subject to mandatory sinking
fund payments, redemption or acceleration at any time during the term of this
Agreement; and (h) the amount of contingent obligations of such Person incurred
in connection with acquisitions (including, without limitation, obligations to
make earnout payments), in each case determined in accordance with GAAP; and (i)
obligations of any other Person secured by any Lien on property owned by the
specified Person, whether or not the obligations have been assumed.
"Default" means any event that, with the giving of notice, the lapse of
time, or both, would constitute an Event of Default.
"Default Rate" means the rate at which interest accrues on the loans
upon the occurrence of an Event of Default, determined in accordance with the
provisions of Section 2.3.
"Dollars" and "$" means the lawful currency of the United States of
America.
"EBILTDA" means, for any period, Net Income plus, (a) to the extent
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deducted to determine Net Income, the sum of (1) Interest Expense, (2) Rent
Expense, (3) income tax expense, (4) depreciation expense, (5) amortization
expense and (6) extraordinary or unusual losses or other losses not incurred in
the ordinary course of business, less, (b) to the extent added to determine Net
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Income, extraordinary or unusual gains or other gains not incurred in the
ordinary course of business, in each case determined in accordance with GAAP.
EBILTDA shall be adjusted in a manner satisfactory to the Lender to include on a
pro forma basis for the prior period of four consecutive fiscal quarters ending
as of the first day of any calculation period any Subsidiary or business
acquired during such period in compliance with this Agreement and to
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exclude on a pro forma basis for the prior period of four consecutive fiscal
quarters ending as of the first day of any calculation period any Subsidiary or
business sold during such period.
"Effective Date" means August 15, 2001.
"Eligible Billed Commercial Receivable" means any Eligible Billed
Receivable that is not an Eligible Billed Government Receivable.
"Eligible Billed Government Receivable" means an Eligible Billed
Receivable that arises out of a Government Contract.
"Eligible Billed Receivables" means Eligible Receivables that have been
billed to the appropriate Customer, are aged not greater than 90 days from the
date of the initial invoice. For the purposes of this definition, the term
"initial invoice" shall mean the first invoice relating to the applicable goods
shipped or services rendered, and not any subsequent invoice relating thereto.
"Eligible Receivables" means Receivables of a Borrower (a) that
represent valid obligations incurred by a Customer for property or services
sold, licensed, or rendered under valid contracts of sale, license or service
that have been formally awarded to a Borrower for which all required contract
documents have been executed by such Borrower and such Customer, and, if the
Government is the Customer, for which funds have been appropriated and
allocated; (b) that are due and payable not more than 45 days from the initial
invoice; (c) on which the Customer is not an Affiliate, Investee or Subsidiary
of a Borrower; (d) with respect to which no Borrower has 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 made in writing to a Borrower, 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 are not subject to any
restriction, prohibition or limitation upon assignment; (h) with respect to
which the Lender is and continues to be satisfied with the credit standing of
the Customer; (i) on which the Customer is not a creditor of a Borrower; and
(j) on which the Customer is not a Foreign Customer, unless the Foreign
Customer's obligations are secured by a letter of credit acceptable to the
Lender; (k) that are not subject to any dispute; (l) with respect to which the
applicable software, goods or services have been 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 a Borrower would
repurchase or accept a return of, or give a credit for, any such software, goods
or services; and (m) that are not subject to any contingencies; provided,
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however, and without limiting any other provisions of this Agreement with
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respect to the exclusion of Receivables from the category of Eligible
Receivables and the Borrowing Base, that (1) if the Lender reasonably determines
that the collectibility of any Receivable makes it unacceptable for inclusion in
the Borrowing Base and gives written notice to the Company indicating the
reasons for such determination, then such Receivable shall thereafter be
excluded from the category of Eligible Receivables, (2) after the occurrence of
a Security Event, if more than 50% of the aggregate face amount of Receivables
owed by a Customer are aged 90 days or more, then all Receivables owed by such
Customer shall be excluded from the category of
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Eligible Receivables, (3) in no case shall Eligible Receivables include any
Receivables representing or arising out of progress xxxxxxxx, 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,
rebillings or contracts secured by surety bonds; (4) Receivables arising out of
retainages, holdbacks and final payments due under Government Contracts that
otherwise satisfy the criteria for Eligible Receivables shall not be Eligible
Receivables unless the Borrowers reasonably expect that such Receivables will be
collected within 90 days after the date of the initial invoices therefor; and
(5) after the occurrence of a Security Event, a Receivable arising out of the
sale, installation, licensing or other disposition of Intellectual Property
subject or entitled to United States copyright, patent or trademark protection
shall not be an Eligible Receivable unless such Intellectual Property shall be
duly registered and filed with the United States Copyright Office and the United
States Patent and Trademark Office, as applicable. No Eligible Receivable shall
be included in more than three month-end Borrowing Base calculations.
"Eligible Unbilled Receivables" means Unbilled Receivables that satisfy
all of the criteria of Eligible Billed Receivables other than the requirement
that such Receivables be billed to the applicable Customer and for which the
applicable Borrower is entitled to send a xxxx within 30 days. No Eligible
Unbilled Receivable shall be included in more than one month-end Borrowing Base
calculation.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended from time to time, and all regulations issued pursuant thereto.
"Event of Default" means any of the events specified as an "Event of
Default" under this Agreement, provided that any requirement for the giving of
notice, the lapse of time, or both, or any other condition, has been satisfied.
"Fixed Charge Coverage Ratio" means, for each period of four
consecutive fiscal quarters ending on the last day of each fiscal quarter of the
Company, the ratio of (a) Adjusted EBILTDA for such period to (b) the sum of
Interest Expense plus Rent Expense for such period, determined on a consolidated
basis for the Company and its Subsidiaries in accordance with GAAP.
"Foreign Customer" means a Customer that is a foreign government, an
entity organized under the laws of a country other than the United States or an
individual who is not a United States citizen.
"Funded Debt" means the sum, without duplication, of the (a)
consolidated indebtedness of the Company and its Subsidiaries for (1) borrowed
money, repurchase agreements and deferred purchase price obligations, (2)
Capital Lease obligations, (3) Guaranty Obligations, (4) obligations of joint
ventures in which the Company or any Subsidiary has an interest and for which
the Company or such Subsidiary is liable, plus (5) contingent or matured
reimbursement obligations for letters of credit issued for the account of the
Company or any Subsidiary, in each case determined in accordance with GAAP, plus
(6) all preferred stock or similar equity interests issued by the Company or any
Subsidiary which by the terms thereof could be (at the request of
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the holders thereof or otherwise) subject to mandatory sinking fund payments,
redemption or acceleration at any time during the term of this Agreement; plus
(7) the amount of contingent obligations of the Company or any Subsidiary
incurred in connection with acquisitions (including, without limitation,
obligations to make earnout payments), in each case determined in accordance
with GAAP; (8) obligations of the Company or any Subsidiary secured by any Lien
on its property, whether or not the obligations have been assumed, plus (b) the
aggregate implied principal amount of Synthetic Lease obligations calculated in
accordance with applicable federal income tax laws and regulations.
"GAAP" means generally accepted accounting principles consistently
applied.
"Government" means the United States of America or any agency or
instrumentality thereof.
"Government Contract" means any contract with the Government under
which a Borrower is a prime contractor.
"Guaranty Obligation" means, with respect to any specified Person,
without duplication, any obligation, contingent or otherwise, of such Person
pursuant to which such Person has directly or indirectly guaranteed any Debt or
other similar obligation of any other Person and, without limiting the
generality of the foregoing, any obligation, direct or indirect, contingent or
otherwise, of any such Person (a) to purchase or pay (or advance or supply funds
for the purchase or payment of) such Debt or other obligation (whether arising
by virtue of partnership arrangements, by agreement to keep well, to purchase
assets, goods, securities or services, to take-or-pay, or to maintain financial
statement condition or otherwise) or (b) entered into for the purpose of
assuring in any other manner the obligee of such Debt or other obligation of the
payment thereof or to protect such obligee against loss in respect thereof (in
whole or in part); provided that the term Guaranty Obligation shall not include
endorsements for collection or deposit in the ordinary course of business.
"Increased Costs" means any reserve, special deposit, capital adequacy
guideline or similar requirement relating to any extensions of credit, Letters
of Credit, or other assets of the Lender, or the deposits with or other
liabilities of the Lender, that (a) is imposed as a result of any Regulatory
Change (including, without limitation, any Regulatory Change that requires that
letters of credit issued, or lines of credit established, by the Lender be
classified as "risk assets" for purposes of, or otherwise be subject to the
provisions of, any capital adequacy guidelines applicable to the Lender), and
(b) increases the cost to the Lender of making, issuing or maintaining any Loan
or Letter of Credit, reduces the amount receivable by the Lender in connection
with any Loan or Letter of Credit, or reduces the rate of return on the Lender's
capital as a consequence of its obligations under this Agreement.
"Intellectual Property" means all copyrights (whether registered or
unregistered), copyright registrations, trademarks, servicemarks, patents,
patent applications and other property described as the "Collateral" in the
Intellectual Property Assignment.
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"Intellectual Property Assignment" means a Collateral Assignment,
Patent Mortgage and Security Agreement, in substantially the form of Exhibit D
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attached hereto, as the same may be amended, modified or supplemented from time
to time.
"Interest Expense" means, for any period, the sum of the following,
determined on a consolidated basis for the Company and its Subsidiaries in
accordance with GAAP: (a) all interest in respect of Funded Debt (including the
interest component of any payments in respect of Capital Leases and Synthetic
Leases) accrued or capitalized during such period, plus (b) the net amount
payable (or minus the net amount receivable) under Interest Rate Hedge
Agreements during such period. Interest Expense shall be adjusted in a manner
acceptable to the Lender to include on a pro forma basis for the prior period of
four consecutive fiscal quarters ending as of the first day of any calculation
period any Subsidiary or business acquired during such period in compliance with
this Agreement and to exclude on a pro forma basis for the prior period of four
consecutive fiscal quarters ending as of the first day of any calculation period
any Subsidiary or business sold during such period.
"Interest Payment Date" means the first day of each calendar month.
"Interest Rate Hedge Agreement" means the obligations of any Person
pursuant to any arrangement with another Person whereby, directly or indirectly,
such Person is entitled to receive from time to time periodic payments
calculated by applying either a floating or fixed rate of interest on a stated
notional amount in exchange for periodic payments made by such Person calculated
by applying a floating or fixed rate of interest on the same notional amount and
shall include, without limitation, interest rate swaps, caps, floors, collars
and similar agreements.
"Investee" means any Person, other than a Subsidiary (a) to whom a
Borrower makes a loan, advance or extension of credit, other than Receivables
arising in the ordinary course of business, (b) from whom a Borrower purchases a
debt or equity security of any kind (including, without limitation, a bond,
debenture, note, convertible bonds, notes or debentures, common stock, preferred
stock or stock of any class, and any security acquired in connection with an
Equity Issuance), (c) to whom a Borrower makes a capital contribution, or (d) in
whom a Borrower acquires an ownership interest or equity interest of any kind;
provided that any such investment described in this definition does not
represent an acquisition of all or substantially all of the assets or ownership
interests of such Person.
"Letters of Credit" means any letter of credit issued by the Lender for
the account of any Borrower whether now outstanding or issued after the date of
this Agreement.
"Letter of Credit Agreement" means, collectively and individually, each
standard form of Application and Agreement for Irrevocable Standby Letter of
Credit, to be executed and delivered by the Borrowers to the Lender in
connection with each Letter of Credit, as any of the same may be amended,
modified or supplemented from time to time.
"LIBOR" means, for each calendar month, that rate per annum which is
equal to the quotient of (a) the rate per annum equal to the offered rate for
deposits in US dollars of amounts comparable to the principal amount of the
then outstanding offered for a term of
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one month, which rate appears on that page of Bloomberg reporting service, or
such similar On-Line Information Service selected by the Lender, that displays
the British Banker's Association interest settlement rates for deposits in US
dollars, as of 11:00 AM (London, England time) two (2) Business Days prior to
the first day of each calendar month; provided, that if no such offered rate
appears on such page, the rate used for such calendar month will be the per
annum rate at which US dollar deposits of amounts comparable to the principal
amount of the Revolving Note then outstanding, for a term of one month, are
offered to the Lender in the London Inter-Bank Market as of 11:00 AM (London,
England time), on the day which is two (2) Business Days prior to the first day
of such calendar month, divided by (b) a percentage equal to 1.00 minus the
stated maximum rate of all reserve requirements (expressed as a decimal) as
specified in Regulation D of the Board of Governors of the Federal Reserve
System (including, without limitation, any marginal, emergency, supplemental,
special or other reserves) that would be applicable on the day which is two (2)
Business Days prior to the first day of such calendar month during which LIBOR
is to be applicable to eurocurrency liabilities in an amount substantially equal
to the principal amount of the Revolving Note then outstanding and with a term
of one month, all as reasonably determined by SunTrust, such rate to be rounded
up to the nearest whole multiple of 1/100 of 1%.
"Lien" means 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 (including,
without limitation, any conditional sale or other title retention agreement, any
Capital Lease and the filing of any financing statement under the UCC or
comparable law of any jurisdiction to evidence any of the foregoing).
"Loans" means the Revolving Loans and the Term Loan.
"Loan Documents" means this Agreement, the Notes, each Assumption
Agreement, each Letter of Credit Agreement, each Security Agreement, each
Intellectual Property Assignment, each Cash Management Agreement, and any other
document now or hereafter executed or delivered in connection with the
Obligations, in evidence thereof or as security therefor, including, without
limitation, any life insurance assignment, pledge agreement, security agreement,
deed of trust, mortgage, guaranty, promissory note or subordination agreement.
"Maximum Amount" means, with respect to the Revolving Loans
$40,000,000, as such amount may be increased in accordance with the terms of
this Agreement; provided, however, that the Maximum Amount shall be reduced by
an amount equal to the aggregate of the undrawn amounts of any Letters of Credit
issued by the Lender for the account of a Borrower and outstanding at any time.
"Material Adverse Effect" means a material adverse effect on (a) the
business, assets, operations, prospects or condition, financial or otherwise, of
the Company and its Subsidiaries taken as a whole, (b) the ability of any
Borrower to perform its obligations under any Loan Document or (c) the rights of
or benefits available to the Lender under any Loan Document.
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"Material Contract" means any contract or other arrangement (other than
the Loan Documents), whether written or oral, to which a Borrower or any
Subsidiary is a party (a) requiring annual payments by any party thereto of more
than 10% of the annual consolidated gross revenues of the Company and its
Subsidiaries, or (b) as to which the breach, nonperformance, cancellation or
failure to renew by any party thereto could have a Material Adverse Effect.
"Net Income" means, for any Person for any period, the consolidated
gross revenues of such Person and its Subsidiaries for such period less all
consolidated operating and non-operating expenses (including taxes) of such
Person and its Subsidiaries for such period, all as determined in accordance
with GAAP.
"New Ventures" means the development by the Company or a Subsidiary of
a new product or service to be sold or licensed by the Company and its
Subsidiaries in the ordinary course of its business.
"New Ventures Addition" means for any period of four consecutive fiscal
quarters of the Company and its Subsidiaries, the lesser of (a) total pre-tax
extraordinary or unusual gains of the Company and its Subsidiaries for such
period, or (b) the excess of the total pre-tax losses over $7,000,000 that are
attributable to New Ventures for such period.
"Notes" means the Revolving Note and the Term Note.
"Obligations" means the Loans, the Notes, the Letter of Credit
Agreements, all indebtedness and obligations of a Borrower under this Agreement
and the other Loan Documents and all other indebtedness and obligations of a
Borrower to the Lender, now existing or hereafter arising, of every kind and
description, direct or indirect, fixed or contingent, liquidated or
unliquidated, due or to become due, secured or unsecured, joint, several or
joint and several, as amended, modified, renewed, extended or increased from
time to time, including, without limitation, any overdrafts in any deposit
account maintained by a Borrower with the Lender and any obligations under any
Interest Rate Hedge Agreement between a Borrower and the Lender or any Affiliate
of the Lender.
"On-Line Information Service" means a text line or other on-line
information service provided to the Lender by any of Reuters Information
Services, Inc., Xxxxxx-Xxxxxx Financial/Americas, Dow Xxxxx Telerate, Inc. or
Bloomberg Financial Markets News Services, or any comparable reporting service
selected by the Lender.
"Operating Lease" means any lease of real or personal property that is
not a Capital Lease or a Synthetic Lease.
"Optional Termination Date" means the date on which the Borrowers elect
to terminate the Lender's obligations to make Loans and issue Letters of Credit
in accordance with a notice given pursuant to Section 2.8.
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"Permitted Acquisition" means any transaction in which the Company or a
Subsidiary acquires all or substantially all of the assets or outstanding
capital stock or equity interests of any Person or merges or consolidates with
any Person, provided that (a) at the closing of such transaction, after giving
effect thereto, no Default or Event of Default shall have occurred and be
continuing , (b) at least 14 days prior to the closing of such transaction, the
Company shall have provided the Lender with pro forma financial statements for
next succeeding two-year period giving effect to the acquisition, which shall
reflect to the Lender's satisfaction that, without regard to any expense
reductions or other projected synergies attributable to the acquisition, the
Company and it Subsidiaries will continue to be in compliance with all of the
financial covenants set forth in Section 6.11, (c) the Company or a Subsidiary
shall be the surviving entity of any merger affecting the Company, and any
Subsidiary formed or acquired in connection with such transaction, shall satisfy
the conditions set forth in Section 7.3 of this Agreement upon the consummation
of such transaction, (d) the Company shall give the Lender at least 30 days'
prior written notice of such transaction if such transaction must be approved
pursuant to clause (e) of this definition, and such prior written notice as is
reasonably practicable for other transactions, and (e) if , using GAAP, the
aggregate value of the sum of current and deferred cash and securities to be
paid and issued, plus Debt assumed, in connection with such transaction, exceeds
$10,000,000, or, when added to the aggregate value of the sum of cash and
securities to be paid and issued, plus Debt assumed, in connection with all such
transactions during any period of four consecutive fiscal quarters, would exceed
$15,000,000, such transaction must be approved in writing by the Lender, which
approval shall be subject to the review by the Lender of all documentation and
financial analysis related to the transaction as the Lender shall reasonably
require.
"Person" means an individual, partnership, corporation, business trust,
joint stock company, trust, unincorporated association, joint venture,
governmental authority, limited liability company or other entity of whatever
nature.
"Primary Operating Account" means any deposit account or controlled
disbursement account on which the Company draws to pay all or substantially all
of its operating expenses.
"Prime Rate" means the rate of interest established and announced from
time to time by the Lender and recorded in its Central Credit Administration
Division as its Prime Rate, it being understood and agreed that the Prime Rate
is used as a reference for fixing the lending rate on commercial loans and is
not necessarily the lowest or most favorable rate of interest charged by the
Lender on such loans.
"Principal Officer" means the President, the Chief Executive Officer,
the Treasurer or the Chief Financial Officer of the Company.
"Prior Agreement" means the Loan Agreement, dated as of June 28,
1998,between the Borrowers and the Lender, as amended to the date hereof.
"Receivables" means all rights to payments for property sold or
licensed or for services rendered, whether now owned or hereafter acquired by a
Borrower.
11
"Regulatory Change" means any change, after the date of this Agreement,
in any federal or state laws, rules and regulations, or interpretations thereof,
or the adoption after the date of this Agreement of any rules, interpretations,
directives or requests, applying to a class of financial institutions including
the Lender, under any federal or state laws or regulations by any court or
regulatory authority charged with the interpretation or administration thereof.
"Rent Expense" means, for any period, all payments due under Operating
Leases, determined on a consolidated basis for the Company and its Subsidiaries
in accordance with GAAP. Rent Expense shall be adjusted in a manner acceptable
to the Lender to include on a pro forma basis for the prior period of four
consecutive fiscal quarters ending as of the first day of any calculation period
any Subsidiary or business acquired during such period in compliance with this
Agreement and to exclude on a pro forma basis for the prior period of four
consecutive fiscal quarters ending as of the first day of any calculation period
any Subsidiary or business sold during such period.
"Revolving Loans" means the loans to be made by the Lender to the
Borrowers pursuant to Section 2.1 of this Agreement.
"Revolving Note" means the $40,000,000 promissory note, in
substantially the form of Exhibit E attached to this Agreement, evidencing the
---------
joint and several obligations of the Borrowers to repay the Revolving Loans,
together with interest thereon, and all extensions, renewals, modifications and
amendments of such note.
"Security Agreement" means a security agreement, in substantially the
form of Exhibit F attached to this Agreement, from each Borrower in favor of the
---------
Lender, creating a security interest in the Collateral, as such security
agreement may be amended, modified or supplemented from time to time.
"Security Event" means the occurrence of any one or more of the
following: (a) if outstanding Funded Debt, as of June 30, 2001 or at any time
thereafter, exceeds 75% of the Borrowing Base as of the end of such fiscal
quarter, or (b) if the Fixed Charge Coverage Ratio for the period of four fiscal
quarters ending on December 31, 2001 or the last day of any fiscal quarter the
Company thereafter is less than 1.85 to 1, or (c) if an Event of Default shall
occur.
"State" means the Commonwealth of Virginia.
"Stockholders' Equity" means, at any time, amounts that are or should
be included under stockholders' equity on the consolidated balance sheet of the
Company and its Subsidiaries in accordance with GAAP.
"Stock Redemption" means the redemption, purchase, retirement or other
acquisition by a Borrower of any stock of the Company or another Borrower.
"Subsidiary" as to any Person, means a corporation, partnership,
limited partnership, limited liability company or other entity of which shares
of stock or other ownership interests having ordinary voting power (other than
stock or such other ownership interests having such
12
power only by reason of the happening of a contingency) to elect a majority of
the board of directors or other managers of such entity are at the time owned,
or the management of which is otherwise controlled, directly or indirectly
through one or more intermediaries, or both, by such Person. Unless otherwise
qualified, all references to a "Subsidiary" or to "Subsidiaries" in this
Agreement shall refer to a Subsidiary or Subsidiaries of the Company.
"Synthetic Lease" means any synthetic lease, tax retention operating
lease, off-balance sheet loan or similar off-balance sheet financing product
where the transaction is considered Debt for borrowed money for federal income
tax purposes but is classified as an operating lease in accordance with GAAP for
financial reporting purposes.
"Termination Date" means December 31, 2003, and any extension or
extensions thereof granted by the Lender in accordance with the provisions of
Section 2.1(f) below.
"Term Loan" means the $8,000,000 loan made by the Lender to the
Borrowers pursuant to Section 2.2 of the Prior Agreement.
"Term Note" means the $8,000,000 promissory note, dated June 28, 1998,
evidencing the joint and several obligations of the Borrowers to repay the Term
Loan, together with interest thereon, and all extensions, renewals,
modifications and amendments of such note.
"Total Capitalization" means, at any time, the sum of Funded Debt plus
Stockholders Equity.
"UCC" means the Uniform Commercial Code as adopted in the State, and
all amendments thereto.
"Unbilled Receivables" means all Receivables that (a) represent
components of unbilled costs and estimated profits arising out of work actually
performed by a Borrower under the terms of a validly and binding contract with a
Customer, and (b) may be included as current assets on the balance sheet of such
Borrower in accordance with GAAP, even though such amounts have not been billed
to such Customer.
Section 2. Loans.
Section 2.1. Revolving Loans and Letters of Credit.
-------------------------------------
(a) Subject to the terms and conditions of this Agreement,
the Lender agrees to make Revolving Loans to the Borrowers from time to time
until the Termination Date in an aggregate principal amount not to exceed at any
one time outstanding the Maximum Amount. Up to the Maximum Amount, the Borrowers
may borrow, repay without penalty and reborrow hereunder from the date of this
Agreement until the Termination Date; provided, however, that no Revolving Loan
will be disbursed by the Lender if, after such disbursement the aggregate
principal amount of the outstanding Funded Debt would exceed 85% of the
Borrowing Base.
13
(b) The proceeds of the Revolving Loans shall be used for
general corporate purposes, including short-term working capital purposes,
capital expenditures, Permitted Acquisitions and permitted Stock Redemptions.
(c) The Company authorizes the Lender to make Revolving
Loans from time to time in amounts sufficient to pay checks drawn on the
operating accounts of the Borrowers with the Lender, subject to the limitation
set forth in Section 2.1(a) above, all as more particularly described in any
applicable Cash Management Agreement. In addition, the Company may request that
a Revolving Loan be made. Any request for a Revolving Loan must be received by
the Lender no later than 12:00 noon (Washington, D.C. time) on the date on which
the Revolving Loan is to be made. Each request must specify the amount of the
Revolving Loan and, at the option of the Lender, shall be accompanied by a
current Borrowing Base Certificate and a current Aging. The Lender, in its sole
discretion, may accept requests from the Company by telephone. If required by
the Lender, any request made by telephone shall include all of the information
required by a current Borrowing Base Certificate and a current Aging. Requests
made by telephone shall be confirmed in writing and delivered to the Lender, and
if requested by the Lender, accompanied by the current Borrowing Base
Certificate and the current Aging, within two Business Days after the date of
the request. Each Borrower appoints the Company as its agent to request and
receive the proceeds of the Revolving Loans on behalf of all Borrowers. The
Company agrees to distribute the proceeds of the Revolving Loans among the
Borrowers when and as needed by the Borrowers for working capital. Revolving
Loans may be requested by those individuals designated by the Company from time
to time in written instruments delivered to the Lender. The proceeds of each
Revolving Loan will be credited to a Deposit Account maintained with the Lender
by the Company pursuant to a Cash Management Agreement. The Company agrees to
confirm in writing from time to time, when and as requested by the Lender, the
purpose for which the proceeds of each Revolving Loan were used.
(d) The unpaid principal balance of the Revolving Loans
shall bear interest at a rate per annum equal to (1) the Prime Rate or (2) LIBOR
plus the Applicable Margin in effect from time to time, whichever is selected by
the Company. If the Company wishes to select the Prime Rate option as of the
Effective Date, it must give written notice of such selection to the Lender at
least three Business Days prior to the Effective Date. If the Company wishes to
select the Prime Rate option after the Effective Date, it must give written
notice of such selection to the Lender at least three Business Days prior to the
first day of the calendar month in which such option is to become effective
after the Effective Date. Once selected, the Prime Rate option shall remain in
effect until the Company elects to convert to the LIBOR option by giving written
notice to the Lender at least two Business Days prior to the first day of the
next succeeding calendar month. When the Prime Rate option is in effect, the
interest rate on the Revolving Loans shall be changed on each day on which there
is a change in the Prime Rate. If the Company does not select the Prime Rate
option, interest shall be calculated by reference to the LIBOR option. When the
LIBOR option is in effect, the interest rate on the Revolving Loans shall be
determined initially based on LIBOR in effect on the first Business Day of the
calendar month in which Effective Date falls and shall be adjusted on the first
Business Day of each succeeding calendar month (to be effective as of the first
day of such calendar month if not a Business Day), and the Applicable Margin
shall be adjusted from time to time as provided in the
14
definition of such term. Payments of interest on each Revolving Loan shall be
made on each Interest Payment Date, beginning on the Interest Payment Date next
succeeding the date of disbursement of such Revolving Loan.
(e) The joint and several obligations of the Borrowers to
repay the Revolving Loans, together with interest thereon, shall be evidenced by
the Revolving Note. The unpaid principal balance of the Revolving Note shall be
payable on the Termination Date.
(f) At the Borrower's request, the Lender from time to time
may agree, in its sole discretion, to extend the Termination Date or increase
the amount of Revolving Loans to be provided under this Agreement, or both.
During any such periods of extension, the remaining terms and conditions of this
Agreement shall remain in full force and effect, and the Borrowers shall execute
and deliver any amendments or modifications to the Loan Documents that the
Lender may reasonably require in connection with any such extension or increase.
Nothing in this Section 2.1(f) shall obligate the Lender to grant such
extensions or to increase the amount of credit provided under this Agreement.
(g) Subject to the terms and conditions of this Agreement,
the Lender may issue Letters of Credit for the account of the Borrowers from
time to time until the Termination Date in an aggregate principal amount not to
exceed $5,000,000 at any one time outstanding; provided, however, that no Letter
of Credit will be issued by the Lender if, after such issuance, the aggregate
principal amount of the outstanding Funded Debt would exceed the Borrowing Base.
Prior to the issuance of any Letter of Credit, the Lender must receive an
appropriately completed Letter of Credit Agreement, executed by the Borrowers,
not less than five Business Days prior to the date on which the Letter of Credit
is to be issued. Each such request shall specify the name of the beneficiary of
the Letter of Credit, the amount and expiration date of the Letter of Credit and
the purpose for which the Letter of Credit is being issued. Unless otherwise
approved by the Lender in its sole discretion, no Letter of Credit shall have a
stated maturity of more than one year after the date of its issuance, and in no
event shall a Letter of Credit expire later than the Termination Date. The
purpose for which each Letter of Credit is to be issued and the form of each
Letter of Credit shall be subject to the Lender's approval. The Borrowers shall
pay to the Lender upon its demand therefor any amounts paid by the Lender under
a Letter of Credit, together with interest on such amounts from the date of
demand at a per annum rate equal to the Prime Rate, adjusted daily when and as
the Prime Rate is changed. Subject to the provisions of this Section 2.1, the
Borrowers may use the proceeds of a Revolving Loan to pay any Obligations
arising out of a Letter of Credit. The Borrowers promises to pay to the Lender
(1) a nonrefundable $300 opening fee upon the issuance of each Letter of Credit,
(2) a nonrefundable commission with respect to each Letter of Credit in an
amount equal to 1.50% per annum, calculated on the face amount of such Letter of
Credit for the entire term thereof, which fee shall be due and payable in
advance on the date of issuance of such Letter of Credit, and (3) a
nonrefundable $250 amendment fee upon the reissuance or amendment of any
previously issued and outstanding Letter of Credit.
(h) The Borrowers shall have the right to increase the
Maximum Amount by up to $20,000,000, subject to the following conditions:
15
(1) No Default or Event of Default shall have occurred
and be continuing at the time of any such increase;
(2) The Company shall give the Lender not less than 20
Business Days' prior written notice of the request of the Borrowers for such
increase;
(3) Each increase shall be in the amount of
$10,000,000 or an integral multiple thereof; and
(4) On the effective date of such increase, the
Borrowers shall execute and deliver to the Lender a new Revolving Note in the
amount of the Maximum amount, as increased.
(i) Any loans and letters of credit made pursuant to the Prior
Agreement and outstanding on the Effective Date, other than the Term Loan, shall
be deemed to be outstanding Revolving Loans and Letters of Credit, respectively,
under this Agreement.
Section 2.2. Term Loan.
----------
(a) The Borrowers acknowledge and agree that the unpaid
principal balance of the Term Loan as of the date of this Agreement is
$3,200,000.
(b) The unpaid principal balance of the Term Loan from time
to time outstanding shall continue to bear interest at 6.89% per annum. Payments
of interest on the Term Loan shall be made on each Interest Payment Date,
beginning on the Interest Payment Date next succeeding the date of this
Agreement.
(c) The joint and several obligations of the Borrowers to
repay the Term Loan, together with interest thereon, are evidenced by the Term
Note. The principal of the Term Loan shall is payable in equal consecutive
quarterly installments of $400,000 each due on the first day of each January,
April, July, and October, continuing until July 1, 2003, when the unpaid
principal balance of the Term Loan and all accrued and unpaid interest thereon
shall be due and payable. The Borrowers shall have the right to prepay the Term
Note in whole or in part at any time, subject to the payment of a prepayment
premium equal calculated in accordance with the terms of Schedule 2.2(c)
---------------
attached hereto. Partial prepayments of the Term Note shall be applied to
installments due thereunder in the inverse order of their maturities. Amounts
prepaid with respect to the Term Loan may not be reborrowed.
Section 2.3. Payments and Computations. All payments due under this
-------------------------
Agreement (including any payment or prepayment of principal, interest, fees and
other charges) or with respect to the Notes, the Letter of Credit Agreements or
the Loans shall be made in lawful money of the United States of America, in
immediately available funds, without defense, setoff or counterclaim, to the
Lender at its office at Commercial Loan Services, X.X. Xxx 00000, Xxxxxxxx,
Xxxxxxxx 00000-0000, or at such other place as the Lender may designate, and
shall be applied first to accrued fees, next to accrued late charges, next to
accrued interest and then to principal. If any payment of principal, interest or
fees is due on a day other than a Business Day,
16
then the due date will be extended to the next succeeding full Business Day and
interest and fees will be payable with respect to the extension. If any payment
of principal, interest or fees is not made within ten days of its due date, the
Borrowers agree to pay to the Lender a late charge equal to 5% of the amount of
the payment. Upon the occurrence of an Event of Default and during the
continuation of such Event of Default, interest shall accrue on the Loans at a
per annum rate of 2% above the rate of interest that otherwise would be
applicable. Interest and fees shall be computed on the basis of a year of 360
days and actual days elapsed. The Lender may, but shall not be obligated to,
debit the amount of any payment due from the Borrowers under this Agreement to
any deposit or investment account of any Borrower maintained with the Lender or
any Affiliate of the Lender. No setoff, claim, counterclaim, reduction or
diminution of any obligation of any defense of any kind or nature that a
Borrower has or may have against the Lender (other than the defense of payment)
shall be available against the Lender in any suit or action brought by the
Lender to enforce this Agreement or any other Loan Document. The foregoing shall
not be construed as a waiver by the Borrowers of any rights or claims that the
Borrowers may have against the Lender, but any recovery upon such rights and
claims shall be had from the Lender separately, it being the intent of this
Agreement and the other Loan Documents that the Borrowers shall be obligated to
pay, absolutely and unconditionally, all amounts due hereunder and under the
other Loan Documents.
Section 2.4. Increased Costs. If, as a result of any Regulatory
---------------
Change or for any other reason, the Lender incurs Increased Costs, the Borrowers
agree to pay such Increased Costs to the Lender within ten Business Days after
receipt by the Company of the Lender's invoice therefor. The invoice will be
accompanied by a written statement of the Lender setting forth in reasonable
detail the basis and the calculation of the Increased Costs. The Lender's
calculation shall include reasonable averaging and attribution methods to
determine the Increased Costs attributable to the Loans.
Section 2.5. Administrative Fee. In consideration of the expenses
------------------
incurred by the Lender in connection with administering the Loans and monitoring
the Borrowing Base, the Borrowers agree to pay to the Lender an annual,
non-refundable administration fee of $80,000 per year, payable quarterly, in
advance, in installments of $20,000 each, due on the Effective Date, and on last
day of each three-month period thereafter, through and including such payment
date next preceding the Termination Date, subject to the adjustment of the final
payment as set forth below. If the Borrowers elect to increase the Maximum
Amount, the annual fee shall increase by $20,000, and the quarterly installments
thereof shall increase by $5,000, for each $10,000,000 increase in the Maximum
Amount, effective as of the fee payment date next succeeding any such increase
in the Maximum Amount. On the payment date next preceding the Termination Date,
the amount due shall be equal to the quarterly installment then due, multiplied
by a fraction, the numerator of which shall be the number of days from such
payment date through and including the Termination Date, and the denominator of
which shall be 90.
Section 2.6. Primary Depository Relationship. If the Company fails
-------------------------------
to maintain its Primary Operating Account with the Lender, interest shall accrue
on the Loans at a per annum rate of 1.0% above the rate of interest that
otherwise would be applicable, effective as of the first day following the day
on which the Company moves its Primary Operating Account.
17
Section 2.7. Mandatory Prepayment. The Borrowers shall first prepay
--------------------
the Revolving Loans, next provide cover for the Letters of Credit, as specified
below, and next prepay the Term Loan, upon the Lender's demand therefor, to the
extent that the aggregate amount of outstanding Funded Debt exceeds the
Borrowing Base at any time. In the event that the Borrowers shall be required to
provide cover for the Letters of Credit, the Borrowers shall effect the same by
paying to the Lender immediately available funds in an amount equal to the
required amount, which funds shall be retained by the Lender in a cash
collateral account until such time as the Letters of Credit shall have been
terminated and all Obligations with respect to the Letter of Credit are paid in
full.
Section 2.8. Optional Termination Date. The Borrowers may terminate
-------------------------
the Lender's obligations to make Loans and issue Letters of Credit under this
Agreement provided that (a) the Company gives the Lender not less than 30 days'
prior written notice of such termination, specifying the Optional Termination
Date, (b) the Borrowers pay in full, on the Optional Termination Date, all
Obligations (including, without limitation, all prepayment premiums and the
balance of any administrative fees that would be payable through the
Termination Date pursuant to Section 2.5), and (c) the Borrowers shall, on the
Optional Termination Date, provide cover for the Letters of Credit pursuant to
Section 2.7.
Section 3. Collateral.
----------
Section 3.1. Blanket Security Interest. To secure the Obligations
-------------------------
upon the occurrence of a Security Event, each Borrower (a) shall execute and
deliver to the Lender, on the Effective Date, a Security Agreement which grants
to the Lender, its successors and assigns, a first priority security interest in
the Collateral, and (b) shall execute and deliver to the Lender, on the
Effective Date, an Intellectual Property Assignment to grant to the Lender, its
successors and assigns, a first priority security interest in all Intellectual
Property now owned or hereafter acquired by each Borrower. The security
interests created thereby shall attach to the Collateral and become effective
upon the occurrence of a Security Event.
Section 3.2. Perfection of Security Interest. Each Borrower shall
-------------------------------
perform any and all steps in all relevant or appropriate jurisdictions as may be
necessary or reasonably requested by the Lender to perfect, maintain and protect
the Lender's security interest in the Collateral, provided that the Borrower
shall not be required to make any filings under the Assignment of Claims Act
unless required by the Lender after the occurrence of an Event of Default. All
instruments and chattel paper that are part of the Collateral shall be delivered
to the Lender, duly endorsed to the order of the Lender. Each Borrower shall pay
the taxes and costs of, or incidental to, any recording or filing of any
financing statements concerning the Lender's security interests. The Lender
agrees that the Borrowers shall not be required to perfect the security
interests described in Section 3.1 above unless a Security Default occurs.
Section 3.3. Power of Attorney. Each Borrower appoints the Lender
-----------------
and any officer, employee or agent of the Lender, as the Lender from time to
time may designate, as attorneys-in-fact for a Borrower to perform all actions
necessary or desirable in the discretion of the Lender to effect the provisions
of this Agreement and to carry out the intent of this Agreement, to do any
18
act that a Borrower is required to do pursuant to the terms of this Agreement
and to exercise such rights and powers as each Borrower might exercise with
respect to the Collateral, all at the cost and expense of the Borrowers. Each
Borrower agrees that neither the Lender nor any other such attorney-in-fact will
be liable for any acts of omission or commission, unless such acts were willful
and malicious or grossly negligent, nor for any error of judgment or mistake of
law or fact. This power is coupled with an interest and is irrevocable so long
as any Obligations are outstanding. The Lender agrees that it shall not be
entitled to exercise its rights under this Section 3.4 prior to the occurrence
of an Event of Default.
Section 4. Representations and Warranties. Each Borrower
------------------------------
represents and warrants that:
Section 4.1. Incorporation, Good Standing and Due Qualification.
--------------------------------------------------
Each Borrower (a) is a corporation duly organized, validly existing and in good
standing under the laws of the jurisdiction of its incorporation; (b) has the
power and authority to own its assets and to transact the business in which it
is now engaged or in which it is proposed to be engaged; and (c) is duly
qualified as a foreign corporation and in good standing under the laws of each
other jurisdiction in which such qualification is required, except that the
Company is not qualified to do business in Virginia. As of the date of this
Agreement, the Company has no Subsidiaries other than SRA, and STSC, and no
other Borrower has any Subsidiary.
Section 4.2. Power and Authority. The execution, delivery and
-------------------
performance by the Borrowers of the Loan Documents have been duly authorized by
all necessary corporate actions and do not and will not (a) require any consent
or approval of, or filing or registration with, any governmental agency or
authority or the stockholders of a Borrower; (b) contravene a Borrower's
articles of incorporation or bylaws; (c) result in a breach of or constitute a
default under any agreement or instrument to which a Borrower is a party or by
which it or its properties may be bound or affected; (d) result in or require
the creation or imposition of any Lien upon or with respect to any of the
properties now owned or hereafter acquired by a Borrower; or (e) cause a
Borrower to be in default under any law, rule, regulation, order, writ,
judgment, injunction, decree, determination or award applicable to the Borrower.
Section 4.3. Legally Enforceable Agreement. This Agreement is, and
-----------------------------
each of the other Loan Documents when delivered under this Agreement will be,
legal, valid and binding obligations of each Borrower, enforceable against each
Borrower in accordance with their respective terms.
Section 4.4. Financial Statements. The financial statements of the
--------------------
Borrowers that have been furnished to the Lender in connection with this
Agreement are complete and correct and fairly present the financial condition of
the Borrowers as of the dates of such statements. Since the dates of such
statements, there has been no material adverse change in the condition
(financial or otherwise), business or operations of the Borrowers.
Section 4.5. Litigation. There is no pending or threatened action,
----------
investigation or proceeding against or affecting a Borrower before any court,
governmental agency or arbitrator,
19
that, in any one case or in the aggregate, if adversely determined, would have a
material adverse effect on the financial condition, operations, properties or
business of a Borrower.
Section 4.6. Ownership and Liens. Each Borrower has title to all
-------------------
of its assets, including the Collateral, and none of the Collateral or such
assets is subject to any Lien, except Liens permitted by this Agreement.
Section 4.7. ERISA. No Borrower has incurred any material
-----
"accumulated funding deficiency" within the meaning of (s) 302 of ERISA or
------------------------------
(s) 412 of the Code, nor has any Borrower incurred any material liability to the
PBGC in connection with any "employee pension benefit plan" (as defined in
-----------------------------
(s) 3(2) of ERISA) established or maintained by a Borrower. None of the employee
pension benefit plans (as defined above) of a Borrower, nor any trusts created
thereunder, nor any trustee or administrator thereof, has engaged in a
"prohibited transaction," as such term is defined in (s) 406 of ERISA or
----------------------
(s) 4975 of the Code, that could subject such plans or 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 (ss) 406 or 4975. Neither the
Borrowers nor any Affiliate of the Borrowers are now, or at any time in the past
have been, obligated to make contributions to a "multiemployer plan," as such
------------------
term is defined in (s) 4001(a)(3) of ERISA.
Section 4.8. Taxes. Each Borrower has filed all tax returns (federal,
-----
state and local) required to be filed and has paid all taxes, assessments and
governmental charges and levies thereon to be due, including interest and
penalties, other than those being contested in good faith and in appropriate
proceedings.
Section 4.9. Debt. No Borrower is directly or contingently obligated
----
with respect to any Debt that is not permitted by this Agreement. No Borrower is
in default with respect to any Debt.
Section 4.10. Corporate Name; Chief Executive Office. During the five
--------------------------------------
years immediately preceding the date of this Agreement, no Borrower nor any
predecessor of a Borrower has used any name other than its current corporate
name and the names listed on Schedule 4.10. The chief executive office of each
-------------
Borrower, within the meaning of Section 9.103(3)(d) of the UCC, is now at 0000
Xxxx Xxxxx Xxxxx, Xxxxxxx, Xxxxxxxx 00000, and prior to such location was at
0000 00xx Xxxxxx Xxxxx, Xxxxxxxxx, Xxxxxxxx 00000.
Section 4.11. Debarment and Suspension. No event has occurred and no
------------------------
condition exists that may result in the debarment or suspension of a Borrower
from any contracting with the Government, and no Borrower nor any Affiliate of a
Borrower has been subject to any such debarment or suspension prior to the date
of this Agreement.
Section 4.12. Material Contracts. Attached hereto as Schedule 4.12
------------------ -------------
is a correct and complete list, as of the date of this Agreement, of each
Material Contract. No Borrower, Subsidiary or any other party thereto is in
material default under any Material Contract.
20
Section 4.13. Intellectual Property. As of the date hereof, all
---------------------
Intellectual Property of the Borrows which has been registered with the United
States Patent and Trademark Office or the Register of Copyrights is listed on
Schedule 4.13 attached hereto. Each 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 each
Borrower and its Subsidiaries as now conducted or proposed to be conducted
without any conflict with any rights of any other Person.
Section 4.14. True and Complete Information. All factual and financial
-----------------------------
information (taken as a whole) previously furnished to the Lender in connection
with this Agreement by the Borrowers and each Subsidiary is, and all factual and
financial information (taken as a whole) furnished to the Lender by the
Borrowers and the Subsidiaries after the date of this Agreement will be, true
and accurate in all material respects on the date on which such information is
dated, 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. Notwithstanding the foregoing, the Lender acknowledges
and agrees that projected financial information provided by the Borrowers will
be prepared in good faith and on the basis of renewable assumptions.
Section 4.15. Integrated Business. The Borrowers and the 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 Borrowers be made available from time to time
to all Borrowers and Subsidiaries of the Borrowers, as required for the
successful operation of the Borrowers and the Subsidiaries separately, and the
integrated operation as a whole. In that connection, the Borrowers and the
Subsidiaries will request that the Lender provide the Loans to and issue the
Letters of Credit for the Borrowers to finance such operation. Each Borrower
will derive benefit, directly and indirectly, from the credit so extended to the
Borrowers, both in its separate capacity and as a member of the integrated
group.
Section 4.16. Employee Relations. No Borrower is a party to any
------------------
collective bargaining agreement nor has any labor union been recognized as the
representative of its employees. No Borrower knows of any pending, threatened or
contemplated strikes, work stoppage or other collective labor disputes involving
its employees.
Section 4.17. Burdensome Provisions. No Borrower 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 Borrowers 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.
Section 4.18. 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
21
default or event of default by any Borrower under any Material Contract or
judgment, decree or order to which any Borrower is a party or by which any
Borrower or any of its properties may be bound or which would require any
Borrower to make any payment thereunder prior to the scheduled maturity date
therefor.
Section 4.19. Regulation U. Neither the Company 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.
Section 4.20. Survival of Representations and Warranties, Etc. All
------------------------------------------------
statements contained in any certificate, financial statement or other instrument
delivered by any Borrower to the Lender pursuant to 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 any Borrower
prior to the date hereof and delivered to the Lender in connection with closing
the transactions contemplated hereby) shall constitute representations and
warranties made by the Borrowers 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 Effective Date and at and as
of the date of the disbursement of any Loan or 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). 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 the Letters of Credit.
Section 5. Affirmative Covenants. Each Borrower covenants and
---------------------
agrees that:
Section 5.1. Maintenance of Existence. Each Borrower will preserve
------------------------
and maintain its corporate existence and good standing in the jurisdiction of
its formation, and qualify and remain qualified, as a foreign corporation in
each jurisdiction in which such qualification is required.
Section 5.2. Maintenance of Records. Each Borrower will keep
----------------------
adequate records and books of account, in which complete entries will be made in
accordance with GAAP, reflecting all financial transactions of such Borrower.
The principal records and books of account, including those concerning the
Collateral, shall be kept at the chief executive office of the Borrowers
described above. No Borrower will move such records and books of account or
change its chief executive office or the name under which it does business
without (a) giving the Lender at least 30 days' prior written notice, and (b)
executing and delivering financing statements satisfactory to the Lender prior
to such move or change.
Section 5.3. Maintenance of Properties. Each Borrower will maintain,
-------------------------
keep and preserve all of its 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.
22
Section 5.4. Conduct of Business. Each Borrower will continue to
-------------------
engage in a business of the same general type as conducted by it on the date of
this Agreement.
Section 5.5. Maintenance of Insurance. Each Borrower will 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.
Section 5.6. Compliance with Laws. Each Borrower will comply in all
--------------------
respects with all applicable laws, rules, regulations and orders (including,
without limitation, ERISA), such compliance to include, without limitation,
paying, before the same become delinquent, all taxes, assessments and
governmental charges imposed upon it or upon its property other than those being
contested in good faith and in appropriate proceedings.
Section 5.7. Right of Inspection. At any reasonable time and from
-------------------
time to time, with reasonable notice, each Borrower will permit the Lender or
any agent or representative of the Lender to audit, examine and verify the
Collateral, examine and make copies of and abstracts from the records and books
of account of, and visit the properties of, each Borrower, and to discuss the
affairs, finances and accounts of each Borrower with any of its officers and
directors and each Borrower's independent accountants. The Borrowers agree to
reimburse the Lender for all reasonable audit and Collateral verification and
examination expenses incurred by it for not more than one such examination per
calendar year; provided the Borrowers agree to reimburse the Lender for all such
expenses incurred by it if a Default or Event of Default has occurred or if such
audit uncovers the occurrence of a Default or Event of Default.
Section 5.8. Reporting Requirements. The Borrowers will furnish to
----------------------
the Lender:
(a) Quarterly Financial Statements of the Company. As soon
---------------------------------------------
as available and in any event within 60 days after the end each fiscal quarter
of each fiscal year, unaudited financial statements consisting of a consolidated
balance sheet of the Company and its Subsidiaries as of the end of such quarter
and consolidated statements of stockholders' equity and cash flows of the
Company and its Subsidiaries for the period commencing at the end of the
previous fiscal year and ending with the end of such fiscal quarter. For each
such period, the Company also will provide consolidating income statements for
the Company and its Subsidiaries segregating New Ventures activities from all
other activities of the Company and its Subsidiaries. Quarterly financial
statements will be provided 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 the GAAP. Such
financial statements shall be certified to be accurate by a Principal Officer of
the Company (subject to year-end adjustments) and shall be accompanied by a
Covenant Compliance Certificate for such period;
(b) Annual Financial Statements of the Company. As soon as
------------------------------------------
available and, in any event, within 90 days after the end of each fiscal year of
the Company, audited financial statements consisting of the consolidated balance
sheet of the Company and its Subsidiaries as of the end of such fiscal year,
consolidated statements of income, stockholders' equity and cash
23
flows of the Company and its Subsidiaries for such fiscal year, and unaudited
consolidating statements of income of the Company and its Subsidiaries for such
fiscal year, segregating New Ventures activities from all other activities of
the Company and its Subsidiaries for such fiscal year, all in reasonable detail
and all prepared in accordance with GAAP, accompanied by an opinion thereon
acceptable to the Lender of Xxxxxx Xxxxxxxx LLP or any other independent
certified public accounting firm selected by the Company and acceptable to the
Lender;
(c) Management Letters. Promptly upon receipt thereof,
------------------
copies of any reports submitted to the Company by independent certified public
accountants in connection with examination of the financial statements of the
Company made by such accountants;
(d) Notice of Litigation. Promptly after the commencement
--------------------
thereof, notice of all actions, suits, investigations and proceedings before any
court or governmental department, commission, board, bureau, agency or
instrumentality, domestic or foreign, affecting a Borrower, that, if determined
adversely to such Borrower, could have a Material Adverse Effect;
(e) Notice of Defaults and Events of Default. As soon as
----------------------------------------
possible and, in any event, within ten 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 Borrowers
with respect thereto;
(f) Proxy Statements, etc. Promptly after the sending or
---------------------
filing thereof, copies of all proxy statements, financial statements and reports
that the Company sends to its stockholders, other than routine notices
concerning the annual meetings of the Company;
(g) Borrowing Base Certificate and Receivables Detail. As
-------------------------------------------------
soon as available and, in any event, within 30 days after the end of each fiscal
month during which the outstanding Funded Debt exceeded 50% of the Borrowing
Base at any time, and in any event within 60 days after the end of each fiscal
quarter of the Company(1) a Borrowing Base Certificate appropriately completed
and executed by a Principal Officer of the Company and including a computation
of the Borrowing Base as of the last day of the previous calendar month,
accompanied by (i) an Aging as of the last day of the previous calendar month,
(ii) such other supporting documents as the Lender from time to time reasonably
may request, and (iii) such invoices, instruments, chattel paper and other
evidence of indebtedness representing any Receivables, duly endorsed to the
Lender, as the Lender may request; and (2) an Eligible Unbilled Receivables
report in form and detail acceptable to the Lender;
(h) Unbilled Receivables and Contract Backlog Reports. As
-------------------------------------------------
soon as available and, in any event, within 60 days after the end of each fiscal
quarter of the Company, an Unbilled Receivables report and a contract backlog
report reflecting all contracts of the Borrowers, the work completed and billed
under such contracts, the work remaining to be completed and billed and the type
and term of each contract, each in form and detail acceptable to the Bank;
(i) Customer List. If required by the Lender, within 90 days
-------------
after the end of each fiscal quarter of the Company, a current Customer List;
24
(j) Management Changes. At least 30 days prior written
------------------
notice of any new appointments to the offices of the president, chairman or
chief financial officer of any Borrower;
(k) Projections. At least 30 days prior to the end of each
-----------
fiscal year, consolidated and consolidating balance sheets, income statements
and cash flows of the Borrowers setting forth projections for each fiscal
quarter of the next succeeding fiscal year, and setting forth in reasonable
detail the assumptions underlying such projections;
(l) Notice of Material Adverse Effect. Prompt notice of any
---------------------------------
change in the business, assets, liabilities, financial condition, results of
operations or business prospects of the Company or any Subsidiary which has had
or may have a Material Adverse Effect;
(m) Material Contracts. Promptly after entering into any
------------------
Material Contract or amendment thereof (other than contracts awarded to a
Borrower in the ordinary course of business and amendments thereof), a notice
containing a description of such Material Contract or amendment (with copies
thereof if requested by the Lender), and prompt written notice of the
termination or breach by any Person of a Material Contract; and
(n) General Information. Such other information respecting
-------------------
the condition or operations, financial or otherwise, of the Borrowers as the
Lender from time to time reasonably may request.
Section 5.9. Satisfaction of Conditions. The Borrowers shall cause
--------------------------
all of the conditions subsequent set forth in Section 7.1 to be satisfied by
September 15, 2001.
Section 6. Negative Covenants. Each Borrower agrees that, without
------------------
first obtaining the prior written consent of the Lender:
Section 6.1. Liens. No Borrower will create, incur, assume or permit
-----
to exist, any Lien upon or with respect to any of its assets or properties, now
owned or hereafter acquired, except: (a) Liens in favor of the Lender; (b) Liens
that are incidental to the conduct of the business of the Borrowers, are not
incurred in connection with the obtaining of credit and do not materially impair
the value or use of assets of the Borrowers; and (c) purchase-money Liens,
whether now existing or hereafter arising (including those arising out of a
Capital Lease) on any fixed assets provided that (1) any property subject to a
purchase-money Lien is acquired by a Borrower in the ordinary course of its
respective business and the Lien on any such property is created
contemporaneously with such acquisition, (2) each such Lien shall attach only to
the property so acquired, (3) the Debt of all Borrowers secured by all such
Liens shall not exceed the aggregate at any time outstanding $1,500,000.
Section 6.2. Debt. No Borrower will create, incur, assume or permit
----
to exist, any Debt, except: (a) the Obligations; (b) Debt of a Borrower
subordinated to the Obligations on terms satisfactory to the Lender;
(c) ordinary trade accounts payable; (d) unsecured Debt arising out of loans due
to shareholders of the Company to finance Stock Redemptions, and (e) Debt of a
25
Borrower (including Debt arising out of a Capital Lease) secured by
purchase-money Liens permitted by this Agreement.
Section 6.3. Mergers, etc. No Borrower will merge or consolidate with
------------
any Person except that a Subsidiary of the Company may merge into another Person
in connection with a Permitted Acquisition.
Section 6.4. Sale and Leaseback; Synthetic Leases. No Borrower will
------------------------------------
(a) 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, other than sale and lease back transactions for equipment used in the
ordinary course of business in an aggregate amount not to exceed $1,000,000 for
all Borrowers during any fiscal year; or (b) create, incur, assume or permit to
exist any obligations under a Synthetic Lease.
Section 6.5. Dividends and Distributions. The Company will not
---------------------------
declare or pay any dividends or distributions; 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 Company; 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, except that the Company may effect Stock
Redemptions if, at the time of such Stock Redemption and after giving effect
thereto, no Default or Event of Default shall occur.
Section 6.6. Sale of Assets. No Borrower will sell, lease, assign,
--------------
transfer, license or otherwise dispose of, any of its now owned or hereafter
acquired assets, except for (a) Inventory and Intellectual Property sold, leased
or licensed in the ordinary course of business and (b) the sale or other
disposition of assets other than Inventory and Intellectual Property no longer
used or useful in the conduct of its business not exceeding $1,000,000 in the
aggregate for the Borrowers during any fiscal year, based on the greater of book
value or gross sale or disposition proceeds.
Section 6.7. Loans. No Borrower will make any loan or advance to any
-----
Person, or purchase any notes or other Debt issued by any Person, except for (a)
travel advances or other, which are made to any employee of a Borrower in the
ordinary course of such Borrower's business and in furtherance of such
employee's performance under a contract with a Customer, and (b) loans to
officers and employees of the Borrowers not to exceed $1,500,000 in the
aggregate outstanding at any time for all Borrowers, provided that, after giving
effect thereto, no Default or Event of Default shall occur.
Section 6.8. Guaranties, etc. No Borrower will create, incur,
---------------
assume, or permit to exist any Guaranty Obligations.
Section 6.9. Acquisitions. Except for Permitted Acquisitions, no
------------
Borrower will purchase or acquire (1) all or substantially all of the assets of
any Person, or (2) any capital stock of or ownership interest in any other
Person.
26
Section 6.10. Transactions with Affiliates and Investees. No Borrower
------------------------------------------
will enter into any transaction, including, without limitation, the purchase,
sale or exchange of property or the rendering of any service, with any Affiliate
or Investee, except in the ordinary course of and pursuant to the reasonable
requirements of such Borrower's business and upon fair and reasonable terms no
less favorable to such Borrower than would be applicable in a comparable
arm's-length transaction with a Person not an Affiliate or Investee.
Section 6.11. Financial Covenants. The Company shall not permit:
-------------------
(a) The Capitalization Ratio to exceed 0.50 to 1 at any
time;
(b) The Cash Flow Leverage Ratio to exceed (1) 4.25 to 1 as
of June 30, 2001, and as of the end of each fiscal quarter thereafter through
and including March 31, 2002, (2) 3.50 to 1 as of June 30, 2002, and as of the
end of each fiscal quarter thereafter through and including March 31, 2003, and
(3) 3 to 1 as of June 30, 2003, and as of the end of each fiscal quarter
thereafter; or
(c) The Fixed Charge Coverage Ratio to be less than 1.75 to
1 as of the end of any fiscal quarter.
Section 6.12. Arrangements. No Borrower will propose, consent to or
------------
apply for any composition, arrangement or reorganization in accordance with the
terms of its certificate of incorporation unless such composition, arrangement
or reorganization has been approved in writing by the Lender.
Section 7. Conditions of Lending. The making of the Loans and the
---------------------
issuance of the Letters of Credit shall be subject to the following conditions:
Section 7.1. Conditions Subsequent. The initial disbursement of the
---------------------
Loans and the initial issuance of Letters of Credit after September 15, 2001,
shall be subject to the satisfaction of following conditions precedent:
(a) The Loan Documents shall have been appropriately
completed, duly executed by the parties thereto, recorded where necessary and
delivered to the Lender.
(b) No Default or Event of Default shall have occurred and
be continuing.
(c) All representations and warranties contained herein
shall be true and correct.
(d) All legal matters incident to the Loans shall be
satisfactory to counsel for the Lender, and the Borrowers agree to execute and
deliver to the Lender such additional documents and certificates relating to the
Loans as the Lender reasonably may request.
(e) Financing statements in form and substance satisfactory
to the Lender shall have been delivered to the Lender for each office where
necessary to perfect the Lender's
27
security interest in the Collateral, and termination statements shall have been
filed with respect to any other financing statements covering all or any portion
of the Collateral (except with respect to Liens permitted by this Agreement).
(g) The Borrowers shall have delivered to the Lender
(1) certified copies of evidence of all corporate action taken by each Borrower
to authorize the execution and delivery of the Loan Documents, (2) certified
copies of the article of incorporation and bylaws of each Borrower, (3) a
certificate of incumbency for the officers of each Borrower executing the Loan
Documents, (4) a good standing certificate, dated not more than 30 days prior to
the Effective Date, from the appropriate state official of any state in which
each Borrower is incorporated or qualified to do business; and (5) such
additional supporting documents as the Lender or counsel for the Lender
reasonably may request.
(h) The Lender shall have received (1) a Borrowing Base
Certificate, (2) an Aging, (3) a report setting forth the status of all
contracts relating to Eligible Receivables from the most recent fiscal month,
and (4) the financial statements of the Company, all of which shall be for the
period ended on June 30, 2001.
(i) The Lender shall have received the written opinion of
O'Melveny & Xxxxx LLP, counsel to the Company, in form and substance
satisfactory to the Lender.
(j) The Lender shall have received financing statement,
judgment and tax lien searches reflecting that there are no Liens outstanding
against the Collateral other than those permitted by the Agreement.
Section 7.2. Conditions Precedent to Subsequent Disbursements.
------------------------------------------------
Each disbursement and issuance of Loans and Letters of Credit shall be subject
to the following conditions precedent:
(a) No Default or Event of Default shall have occurred and
be continuing.
(b) No Material Adverse Effect shall have occurred.
(c) All representations and warranties of the Borrowers
contained in the Loan Documents shall be true and correct at the date of such
disbursement.
(d) No change shall have occurred in any law or regulations
thereunder or interpretations thereof that, in the opinion of counsel for the
Lender, would make it illegal for the Lender to make Loans hereunder.
(e) After giving effect to such Loan or Letter of Credit,
the Cash Flow Leverage Ratio and the Capitalization Ratio shall not be in excess
of the ratios required as of the end of the next succeeding fiscal quarter
pursuant to the terms of 6.11.
(f) If required by the Lender, the Company shall have
delivered to the Lender a current Borrowing Base Certificate and a current
Aging, duly executed by the Principal Officer
28
of the Company and appropriately completed, and such other supporting data and
documentation relating to the Receivables as may be required by the Lender in
its reasonable discretion.
Section 7.3. Conditions Precedent to Subsidiaries Becoming Borrowers.
-------------------------------------------------------
Each Subsidiary formed or acquired after the date of this Agreement shall become
a Borrower under this Agreement, and shall satisfy the following conditions
precedent:
(a) The Subsidiary shall execute and deliver to the Lender
an Assumption Agreement, 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 Subsidiary becoming
a Borrower shall be satisfactory to counsel for the Lender, and the Subsidiary
shall execute and deliver to the Lender such additional documents and
certificates relating to the Loans as the Lender reasonably may request.
(d) The Lender shall have received an opinion of counsel to
the Subsidiary, addressed to the Lender, covering such matters as the Lender may
request, in form and substance satisfactory to the Lender.
(e) Financing statements in form and substance satisfactory
to the Lender shall have been delivered to the Lender for each office where
necessary to perfect the security interest of the Lender in the Collateral of
the 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 Subsidiary
and the Lender shall have received such lien searches or reports as it shall
require confirming that the foregoing filings and recordings have been
completed.
(f) The Subsidiary shall have delivered the following
documents to the Lender, each of which shall be certified as of the date on
which the Subsidiary is to become a Borrower, by its secretary or representative
performing similar functions: (1) copies of evidence of all actions taken by the
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 Borrower that is not a corporation) of
the Subsidiary; and (3) a certificate as to the incumbency and signatures of the
officers of the Subsidiary executing the Loan Documents.
(g) The Lender shall have received current certificates of
good standing and qualification issued by the appropriate state official of the
state of formation of the Subsidiary and in each jurisdiction in which it is
qualified to do business.
(h) The Lender shall have received an Aging, Borrowing Base
Certificate and Inventory schedule of the Subsidiary, together with any other
information and documents the Lender may reasonably request with respect to the
Collateral of the Subsidiary.
29
(i) If required by the Lender, the Lender shall have
received a satisfactory field examination of the Collateral and internal control
systems of the Subsidiary performed by a consultant selected by the Lender, and
the Borrowers shall have reimbursed the Lender for the cost of such consultant.
(j) All Intellectual Property of such Subsidiary that is
subject or entitled 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 Lender shall have
received evidence that no Liens are recorded with respect thereto.
The Borrowers agree no Receivable of a Subsidiary shall be
included in the Borrowing Base prior to the date on which all of the foregoing
conditions are satisfied.
Section 8. Default.
-------
Section 8.1. Events of Default. Each of the following shall
-----------------
constitute an Event of Default under this Agreement:
(a) Failure of a Borrower to pay any Obligation to the
Lender, including, without limitation, the principal of or interest on any Note
or the Loans, or amounts due under a Letter of Credit Agreement, when the same
shall become due and payable, whether at maturity, or otherwise, and such
failure shall continue for a period of ten days; or
(b) If a Borrower refuses to permit the Lender to inspect,
examine, verify or audit the Collateral in accordance with the provisions of
this Agreement; or
(c) Failure of a Borrower to perform or observe any
covenant contained in Section 6of this Agreement; or
(d) Failure of the Borrowers to perform their obligations
under Section 5.8(g), and such failure shall continue for a period of ten days,
provided that such ten-day period may be extended to up to 30 days to the extent
that such failure is attributable to unforeseen operational problems or
personnel departures, and there are not more than two such extensions in any
period of four consecutive fiscal quarters; or
(e) Failure of a Borrower to perform or observe any other
term, condition, covenant, warranty, agreement or other provision contained in
this Agreement (except any such failure resulting in the occurrence of another
Event of Default described in this Section), within 30 days after the earlier of
actual knowledge thereof by such Borrower or written notice from the Lender to
the Company specifying such failure; or
(f) If any representation or warranty made or deemed made
by a Borrower in this Agreement, any Loan Document or any statement or
representation made in any certificate, report or opinion delivered pursuant to
this Agreement (including any Covenant Compliance Certificate, Borrowing Base
Certificate or financial statements) or in connection with any
30
borrowing under this Agreement was materially untrue when made or deemed made
under the terms of this Agreement; or
(g) If, as a result of default, any other obligation of a
Borrower for the payment of any Debt in an aggregate principal amount of
$250,000 or more becomes or is declared to be due and payable prior to the
expressed maturity thereof, unless and to the extent that the declaration is
being contested in good faith in a court of appropriate jurisdiction; or
(h) A Borrower 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 such Borrower or any substantial part of its
property, or commences any proceeding relating to such Borrower under any
reorganization, arrangement, readjustments of debt, dissolution or liquidation
law or statute of any jurisdiction, whether now or hereafter in effect; or
(i) If, within 60 days after the filing of a bankruptcy
petition or the commencement of any proceeding against a Borrower 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, bonded or discharged, or, if, within
60 days after the appointment, without the consent or acquiescence of such
Borrower, of any trustee, receiver or liquidator of a Borrower or of all or any
substantial part of the properties of a Borrower, the appointment shall not have
been vacated; or
(j) Any judgment against a Borrower in excess of $250,000
or any attachment in excess of $250,000 against any property of a Borrower that
remains unpaid, undischarged, unbonded or undismissed for a period of 30 days,
unless and to the extent that the judgment or attachment is appealed in good
faith in a court of higher jurisdiction and the appeal remains pending; or
(k) If any of the following events shall occur or exists
with respect to any Borrower or any employee benefit or other plan established,
maintained or to which contributions have been made by any Borrower, any
Affiliate of any Borrower or any other Person that, together with the Borrower,
would be treated as a single employer under (s) 4001 of ERISA, and the Lender
determines that the same would have a Material Adverse Effect: (1) any
prohibited transaction (as defined in (s) 406 of ERISA or (s) 4975 of the Code),
(2) any reportable event (as defined in (s) 4043 of ERISA and the regulations
issued thereunder), (3) the filing under (s) 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 (s) 4042 of ERISA for the
termination of, or the appointment of a trustee to administer, any such plan; or
(l) If any Borrower, any Subsidiary or any Affiliate of any
Borrower or Subsidiary shall be debarred or suspended from contracting with the
Government; or
(m) The Loan Documents shall for any reason cease to be in
full force and effect; or
31
(n) If the Lender, in good faith, deems itself insecure or
determines that an event has occurred that will result in a Material Adverse
Effect, and the cause for such determination is not cured to the Lender's
satisfaction within 30 days after notice from the Lender to the Company
specifying the Lender's basis therefor; or
(o) The dissolution, liquidation or termination of
existence of a Borrower; or
(p) If a Borrower fails to give the Lender any notice
required by this Agreement within ten days after the occurrence of the event
giving rise to the obligation 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
(q) If the Company at any time owns less than 100% of the
outstanding voting capital stock of any other Borrower, or if Xxxxx Xxxxxxxx and
Xxxxxxx X. Xxxxx at any time collectively own or control less than the amount of
outstanding voting capital stock of the Company necessary to elect a majority of
the Company's board of directors; or
(r) The occurrence of an event of default under any other
Loan Document and the expiration of all applicable cure periods.
Section 8.2. Remedies upon Default. Upon the occurrence of an Event
---------------------
of Default, the following provisions shall be applicable:
(a) The Lender, at its option, may terminate its obligation
to make Loans and issue Letters of Credit under this Agreement and declare all
Obligations (including, without limitation, any prepayment premium and the
remaining balance of administrative fees that would be payable through the
Termination Date pursuant to Section 2.5), whether incurred prior to,
contemporaneous with or subsequent to the date of this Agreement, and whether
represented in writing or otherwise, immediately due and payable and may
exercise all of its rights and remedies against the Borrowers and any
Collateral. The Lender also may require the Borrowers to pay, and the Borrowers
agree to pay, to the Lender an amount of cash equal to the aggregate amount of
the Letters of Credit then outstanding, and any amounts paid by the Borrowers
shall be held by the Lender in a cash collateral account, over which the Lender
shall have the exclusive power of withdrawal, as security for the Obligations
arising out of the Letters of Credit and the Letter of Credit Agreements.
(b) The Lender is hereby authorized at any time or from time
to time, without notice to the Borrowers (any such notice being expressly waived
by each Borrower), to setoff and apply any deposit (general or special, time or
demand, provisional or final) or investment account at any time held, including
any certificate of deposit, and other indebtedness at any time owed by the
Lender or any of its affiliates, whether or not any such deposit or indebtedness
is then due, to or for the credit or account of any Borrower against any and all
of the Obligations.
32
Section 9. Miscellaneous.
-------------
Section 9.1. Collection Costs. The Borrowers shall pay all of the
----------------
reasonable costs and expenses incurred by the Lender in connection with the
enforcement of this Agreement and the other Loan Documents, including, without
limitation, reasonable attorneys' fees and expenses.
Section 9.2. Modification and Waiver. Except for the other documents
-----------------------
expressly referred to in this Agreement, this Agreement contains the entire
agreement between the parties and supersedes all prior agreements between the
Lender and the Borrowers concerning the Loans and the Letters of Credit. No
modification or waiver of any provision of this Agreement or any other Loan
Document and no consent by the Lender to any departure therefrom by any Borrower
shall be effective unless such modification or waiver shall be in writing and
signed by the Borrowers and by an officer of the Lender with a title of vice
president or any higher office, and the same shall then be effective only for
the period and on the conditions and for the specific instances and purposes
specified in such writing. No notice to or demand on any Borrower in any case
shall entitle any Borrower to any other or further notice or demand in similar
or other circumstances. No failure or delay by the Lender in exercising any
right, power or privilege hereunder shall operate as a waiver thereof; nor shall
any single or partial exercise thereof preclude any other or further exercise
thereof or the exercise of any other right, power or privilege. The rights and
remedies of the Lender contained in this Agreement and the other Loan Documents
are cumulative and not exclusive of any rights or remedies otherwise provided by
law.
Section 9.3. Notices. All notices, requests, demands or other
-------
communications provided for in this Agreement (except for requests for Loans
made by telephone as described in Section 2.1 above) shall be in writing and
shall be delivered by hand, sent prepaid by Federal Express (or a comparable
overnight delivery service) or sent by the United States mail, certified,
postage prepaid, return receipt requested, to the Lender at 0000 Xxx Xxxx
Xxxxxx, XX, Xxxxxxxxxx, XX 00000, Attention: Xxxxx X. Xxxxxxx, or to the
Borrowers in care of the Company at 0000 Xxxx Xxxxx Xxxxx, Xxxxxxx, Xxxxxxxx
00000, Attention: Xxxxxxx X. Xxxxxx. Any notice, request, demand or other
communication delivered or sent in the foregoing manner shall be deemed given or
made (as the case may be) upon the earliest of (a) the date it is actually
received, (b) the business day after the day on which it is delivered by hand,
(c) the business day after the day on which it is properly delivered to Federal
Express (or a comparable overnight delivery service), or (d) the third business
day after the day on which it is deposited in the United States mail. Any
Borrower or the Lender may change its address by notifying the other party of
the new address in any manner permitted by this Section 9.3. Rejection or other
refusal to accept or the inability to deliver because of a changed address of
which no notice was given shall not affect the date of such notice, election or
demand sent in accordance with the foregoing provisions.
Section 9.4. Counterparts. This Agreement may be executed by the
------------
parties hereto individually or in any combination, in one or more counterparts,
each of which shall be an original and all of which together constitute one and
the same agreement.
33
Section 9.5. 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 9.6. Survival of Agreements. All agreements, representations
----------------------
and warranties made herein shall survive the delivery of this Agreement and the
making and renewal of the Loans hereunder.
Section 9.7. Fees and Expenses. Whether or not any Loans are made
-----------------
hereunder, the Borrowers shall pay on demand all reasonable out-of-pocket costs
and expenses incurred by the Lender in connection with the preparation,
negotiation, execution, delivery, filing, recording and enforcement of this
Agreement and any of the documents executed or delivered in connection herewith,
including, without limitation, the reasonable fees and expenses of counsel to
the Lender, and local counsel who may be retained by the Lender, with respect to
this Agreement and such documents and any amendments thereof and with respect to
advising the Lender as to its rights and responsibilities thereunder.
Section 9.8. Use of Defined Terms. All terms defined in this
--------------------
Agreement shall have the defined meanings when used in certificates, reports or
other documents made or delivered pursuant to this Agreement, unless the context
shall otherwise require.
Section 9.9. Successors and Assigns. This Agreement shall inure to
----------------------
the benefit of and bind the respective parties hereto and their successors and
assigns; provided, however, that no Borrower may assign its rights hereunder
without the prior written consent of the Lender.
Section 9.10. Accounting Terms. All accounting terms used herein that
----------------
are not otherwise expressly defined in this Agreement shall have the meanings
respectively given to them in accordance with GAAP in effect on the date of this
Agreement. Except as otherwise provided herein, all financial computations made
pursuant to this Agreement shall be made in accordance with GAAP and all balance
sheets and other financial statements shall be prepared in accordance with GAAP.
Except as otherwise provided herein, whenever reference is made in any provision
of this Agreement to a balance sheet or other financial statement or financial
computation with respect to a Borrower, such terms shall mean a consolidated
balance sheet or other financial statement or financial computation, as the case
may be, with respect to such Borrower and its Subsidiaries.
Section 9.11. Confidentiality. Except as otherwise provided by
---------------
applicable law, the Lender shall utilize all non-public information obtained
pursuant to the requirements of this Agreement which has been identified as
confidential or proprietary by the Company in accordance with its customary
procedure for handling confidential information of this nature and in accordance
with safe and sound banking practices but in any event may make disclosure: (a)
to any of its affiliates (provided they shall agree to keep such information
confidential in accordance with the terms of this Section); (b) as reasonably
required by any bona fide assignee, participant or other transferee in
connection with the contemplated transfer of any Loan or
34
participations therein (provided they shall agree to keep such information
confidential in accordance with the terms of this Section); (c) as required by
any governmental authority or representative thereof or pursuant to legal
process; (d) to the Lender's independent auditors, counsel and other
professional advisors (provided they shall be notified of the confidential
nature of the information); and (e) after the happening and during the
continuance of an Event of Default, to any other Person, in connection with the
exercise by the Lender of rights hereunder or under any of the other Loan
Documents.
Section 9.12. Limitation of Liability. Each Borrower hereby waives,
-----------------------
releases, and agrees not to xxx the Lender or any of the Lender'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 9.13. Waiver. EACH OF THE LENDER AND THE BORROWERS 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 9.14. 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 9.15. 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 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. Each 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 such
Borrower at its address for notice stated in Section 9.3 above, or at a
subsequent address of which the Lender received actual notice from such 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 the Lender or any other party hereto to serve process in
any other manner permitted by law or limit the right of the Lender 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.
35
Section 9.16. Interpretation.
--------------
(a) This Agreement and the rights and obligations of the
parties hereunder shall be construed and interpreted in accordance with the laws
of the State, without reference to conflict of laws principles.
(b) The representations, warranties, covenants and
agreements contained in this Agreement shall be deemed to have been given and
undertaken by the Borrowers jointly and severally.
[SIGNATURES ON FOLLOWING PAGES]
36
IN WITNESS WHEREOF, the Borrowers and the Lender have caused this Agreement to
be signed by their duly authorized representatives all as of the day and year
first above written.
LENDER:
------
SUNTRUST BANK,
a Georgia banking corporation
By: /s/ Xxxxx X. Xxxxxxx
----------------------------------
Name: Xxxxx X. Xxxxxxx
--------------------------------
Title: Director
--------------------------------
BORROWERS:
---------
SRA INTERNATIONAL, INC.,
a Delaware corporation
By: /s/ Xxxxxxx X. Xxxxxx
---------------------------------
Name: Xxxxxxx X. Xxxxxx
--------------------------------
Title: SVP, CFO
--------------------------------
SYSTEMS RESEARCH AND APPLICATIONS
CORPORATION, a Virginia corporation
By: /s/ Xxxxxxx X. Xxxxxx
----------------------------------
Name: Xxxxxxx X. Xxxxxx
--------------------------------
Title: SVP, CFO
--------------------------------
SRA TECHNICAL SERVICES CENTER, INC.
a Delaware corporation
By: /s/ Xxxxxxx X. Xxxxxx
----------------------------------
Name: Xxxxxxx X. Xxxxxx
--------------------------------
Title: SVP, CFO
--------------------------------
38
LIST OF SCHEDULES & EXHIBITS
----------------------------
Exhibit A - Assumption Agreement
Exhibit B - Borrowing Base Certificate
Exhibit C - Covenant Compliance Certificate
Exhibit D - Form of Intellectual Property Assignment
Exhibit E - Form of Revolving Note
Exhibit F - Form of Security Agreement
Schedule 2.2(c) - Prepayment Calculation
Schedule 4.10 - Corporate Names
Schedule 4.12 - Material Contracts
Schedule 4.13 - Intellectual Property
EXHIBIT A
Form of
-------
Assumption Agreement
--------------------
THIS ASSUMPTION AGREEMENT (as the same may be amended, modified or
supplemented from time to time, the Assumption), dated as of _____________,
_____, made by ____________________________, a _____________ corporation (the
Subsidiary), in favor of the Lender (as defined below), recites and provides:
R E C I T A L S
Pursuant to the terms of a Loan Agreement, dated as of August 15,
2001(as amended, modified or supplemented from time to time, the Loan
Agreement), between SRA International, Inc., a Delaware corporation (the
Company), Systems Research and Applications Corporation, a Virginia corporation
(SRA), SRA Technical Services Center, Inc., a Delaware corporation (STSC, and
together with the Company and SRA, the Original Borrowers), and SunTrust Bank, a
Georgia banking corporation (the Lender), the Lender agreed to extend credit to
the Original Borrowers. Terms defined in the Loan Agreement shall have the same
defined meanings when such terms are used in this Assumption.
[The Company owns 100% of the capital stock of the Subsidiary.] The
Original Borrowers and the Subsidiary, together with the other Subsidiaries of
the Original Borrowers, are engaged in business on a consolidated and integrated
basis, and their integrated operations include applying for and making use of
credit on a joint basis. Accordingly, the Original Borrowers have requested that
the Subsidiary become a Borrower under the Loan Agreement and the other Loan
Documents. The Lender has agreed to accept the Subsidiary as a Borrower
thereunder, and the Subsidiary has agreed to assume the Obligations.
Accordingly, the Subsidiary agrees as follows:
1. The Subsidiary (a) assumes and agrees to be jointly and severally
liable with each other Borrower for all of the Obligations now existing or
hereafter arising, including, without limitation, the Obligations arising out of
the Loan Agreement, the Loans, the Notes, the Letter of Credit Agreements and
the other Loan Documents, and (b) agrees to be jointly and severally bound by
all of the terms, covenants and conditions of the Loan Agreement, the Notes, the
Letter of Credit Agreements and the other Loan Documents, and hereby assumes all
of the Obligations of the Borrowers thereunder and agrees to be jointly and
severally liable therefor.
2. The Subsidiary represents that all items of equipment and inventory
of the Subsidiary are located at the places specified in Schedule 1 hereto.
----------
During the five years immediately preceding the date of this Agreement, neither
the Subsidiary nor any predecessor of the Subsidiary has used any corporate or
fictitious name other than its current corporate name. The Subsidiary has no
trade names. The chief executive office and mailing address of the Subsidiary is
0000 Xxxx Xxxxx Xxxxx, Xxxxxxx, Xxxxxxxx 00000. The Subsidiary's exact legal
name is that indicated on the signature pages hereof. The Subsidiary is an
organization of the type, and is organized in the jurisdiction set forth herein.
The signature page hereof accurately set forth the Subsidiary's organizational
identification number or accurately states that it has none. All of
the representations and warranties set forth in the Loan Agreement are
incorporated by reference in this Assumption, and shall be deemed to have been
made and given by the Subsidiary as of the date hereof as though such
representations and warranties were applicable to it.
3. The Subsidiary grants to the Lender, in accordance with and subject
to the provisions of the Security Agreement, a security interest in all of the
Collateral of the Subsidiary as security for the Obligations.
4. Simultaneously with the execution hereof, the Subsidiary agrees to
execute and deliver to the Lender a Collateral Assignment, Patent Mortgage and
Security Agreement, substantially in the form attached to the Loan Agreement,
granting to the Lender a security interest in all of the Intellectual Property
of the Subsidiary as security for the Obligations.
5. The Subsidiary also agrees to execute, deliver and, if applicable,
record, such additional instruments, documents and agreements as the Lender may
reasonably require for the purpose of effecting the assumption described herein.
IN WITNESS WHEREOF, the Subsidiary has caused this Assumption to be
executed by its duly authorized representative as of the day and year first
written above.
_____________________, a ___________
By: _____________________________
Name: _____________________________
Title: _____________________________
Organizational Number: _______________
- 2 -
EXHIBIT B
---------
BORROWING BASE CERTIFICATE
--------------------------
as of __/__/____
----------------------------------------------------------------------------
1 Billed Government Receivables $$$$$
----------------------------------------------------------------------------
2 Less
(a) Receivables Over 90 Days
(b) Ineligible Receivables (see Attachment II)
(c)
----------------------------------------------------------------------------
3 TOTAL ELIGIBLE BILLED GOVERNMENT RECEIVABLES
----------------------------------------------------------------------------
4 Billed Commercial Receivables
----------------------------------------------------------------------------
5 Less
(a) Receivables Over 90 Days
(b) Ineligible Receivables (see Attachment III)
----------------------------------------------------------------------------
6 TOTAL ELIGIBLE BILLED COMMERCIAL RECEIVABLES
----------------------------------------------------------------------------
7 Unbilled Receivables
----------------------------------------------------------------------------
8 Less Unbilled Amounts Not Billable Within 30 Days
and Ineligible Receivables(see Attachment IV)
----------------------------------------------------------------------------
9 TOTAL ELIGIBLE UNBILLED
----------------------------------------------------------------------------
10 Borrowing Base
Line 3 X 90%
Line 6 X 80%
Line 9 X 60%
----------------------------------------------------------------------------
11 TOTAL BORROWING BASE
----------------------------------------------------------------------------
Certified True and Correct
SRA International, Inc.
________________________________ Date_____________________
Name
Title
Exhibit C
SRA INTERNATIONAL, INC.
COVENANT COMPLIANCE CERTIFICATE
DATE
Xx. Xxxxx X. Xxxxxxx
Director
SunTrust Bank
0000 Xxx Xxxx Xxxxxx X.X.
Xxxxxxxxxx, X.X. 00000
Dear Xxxxx:
Reference is made to that certain Loan Agreement dated as of August 15, 2001 (as
amended, restated, supplemented or otherwise modified from time to time, the
"Loan Agreement"), by and among SRA International, Inc., a Delaware corporation
(the "Company"), Systems Research and Applications Corporation, a Virginia
corporation, SRA Technical Services Center, Inc., a Delaware corporation, and
SunTrust Bank (the "Lender"). Capitalized terms not otherwise defined herein are
used herein with the respective meanings given them in the Loan Agreement.
Also enclosed are the Outstanding Invoice report and Contract Backlog report as
of _______________.
The undersigned hereby certifies to the Lender as follows:
(1) The undersigned is a Principal Officer of the Company
(2) The undersigned has examined the books and records of each Borrower
and has conducted such other examinations and investigations as are
reasonably necessary to provide this Covenant Compliance Certificate.
(3) As of the date of this Covenant Compliance Certificate, no Default or
Event of Default has occurred and is continuing.
(4) The calculations on the attached pages are true and correct.
IN WITNESS WHEREOF, the undersigned has executed this Covenant
Compliance Certificate as of the date first above written.
_____________________________
Name
Title
CALCULATION OF ADJUSTED EBILTDA
---------------------------- ------------- ------------- ------------- ------------- --------------------
Quarter Ended Quarter Ended Quarter Ended Quarter Ended Sum of Four Quarters
__/__/____ __/__/____ __/__/____ __/__/____ Ended __/__/____
---------------------------- ------------- ------------- ------------- ------------- --------------------
Net Income
---------------------------- ------------- ------------- ------------- ------------- --------------------
+ Tax Expense
---------------------------- ------------- ------------- ------------- ------------- --------------------
+ Interest Expense
---------------------------- ------------- ------------- ------------- ------------- --------------------
+ Depreciation Exp.
---------------------------- ------------- ------------- ------------- ------------- --------------------
+ Amortization Exp.
---------------------------- ------------- ------------- ------------- ------------- --------------------
+ Rent Expense
---------------------------- ------------- ------------- ------------- ------------- --------------------
+ Extraordinary or Unusual
Loss
---------------------------- ------------- ------------- ------------- ------------- --------------------
-Extraordinary or Unusual
Gain
---------------------------- ------------- ------------- ------------- ------------- --------------------
EBILTDA
---------------------------- ------------- ------------- ------------- ------------- --------------------
EBILTDA ADJUSTMENT (If Necessary)
------------------
---------------------------- ------------- ------------- ------------- ------------- --------------------
Quarter Ended Quarter Ended Quarter Ended Quarter Ended Sum of Four Quarters
__/__/____ __/__/____ __/__/____ __/__/____ Ended __/__/____
---------------------------- ------------- ------------- ------------- ------------- --------------------
New Ventures Pre-Tax Losses $$$$$ $$$$$ $$$$$ $$$$$ $$$$$
---------------------------- ------------- ------------- ------------- ------------- --------------------
Budgeted Xxx Xxxxxxxx X/X X/X X/X X/X $7,000,000
Pre-Tax Loss
---------------------------- ------------- ------------- --------------------------------- --------------------
Excess Net New Venture Pre-Tax
Losses
---------------------------- ------------- ------------- --------------------------------- --------------------
---------------------------- ------------- ------------- ------------- ------------- --------------------
Extraordinary or Unusual $$$$$ $$$$$ $$$$$ $$$$$ $$$$$
Pre-tax Gains
---------------------------- ------------- ---------------------------------------------------- --------------------
New Ventures Addition*
---------------------------- ------------- ---------------------------------------------------- --------------------
*Gains added back may not exceed the amount of excess losses.
CASH FLOW LEVERAGE
------------------
------------------------------------------- ------------------------------
------------------------------------------- ------------------------------
Funded Debt $$$$$
------------------------------------------- ------------------------------
Capitalized Operating Lease Obligations $$$$$
------------------------------------------- ------------------------------
TOTAL ADJUSTED DEBT $$$$$
------------------------------------------- ------------------------------
EBILTDA (from page 1) $$$$$
------------------------------------------- ------------------------------
+New Ventures Addition $$$$$
------------------------------------------- ------------------------------
ADJUSTED EBILTDA $$$$$
------------------------------------------- ------------------------------
------------------------------------------- ------------------------------
CASH FLOW LEVERAGE RATIO XXX:1
------------------------------------------- ------------------------------
FIXED CHARGE COVERAGE
---------------------
------------------------------------------- ------------------------------
EBILTDA(from page 1) $$$$$
------------------------------------------- ------------------------------
+New Ventures Addition $$$$$
------------------------------------------- ------------------------------
ADJUSTED EBILTDA $$$$$
------------------------------------------- ------------------------------
------------------------------------------- ------------------------------
Interest Expense $$$$$
------------------------------------------- ------------------------------
Rent Expense $$$$$
------------------------------------------- ------------------------------
TOTAL FIXED CHARGES $$$$$
------------------------------------------- ------------------------------
------------------------------------------- ------------------------------
FIXED CHARGE COVERAGE RATIO XXX:1
------------------------------------------- ------------------------------
CAPITALIZATION
--------------
------------------------------------------- ------------------------------
Funded Debt $$$$$
------------------------------------------- ------------------------------
Total Capitalization $$$$$
------------------------------------------- ------------------------------
------------------------------------------- ------------------------------
Capitalization Ratio XXX:1
------------------------------------------- ------------------------------
CERTIFIED TRUE AND CORRECT AS OF __________, 200_
SRA INTERNATIONAL, INC
By:______________________
Title:_____________________
Exhibit D
---------
COLLATERAL ASSIGNMENT, PATENT MORTGAGE
AND SECURITY AGREEMENT
This Collateral Assignment, Patent Mortgage and Security Agreement (the
"Assignment") dated as of the 15/th/ day of August, 2001, and to become
----------
effective in accordance with the provisions set forth below, from SRA
INTERNATIONAL, INC., a Delaware corporation (the "Company"), SYSTEMS RESEARCH
-------
AND APPLICATIONSCORPORATION, a Delaware corporation ("SRA"), SRA TECHNICAL
---
SERVICES CENTER, INC., a Delaware corporation ("STSC"), and each other
----
Subsidiary that becomes a party to this Assignment in accordance with the
provisions set forth in the Loan Agreement (together with the Company, SRA, and
STSC, collectively, "Assignors," and individually, "Assignor"), in favor of
--------- --------
SUNTRUST BANK, a Georgia banking corporation ("Assignee").
--------
RECITALS
--------
Assignee has entered into a Loan Agreement of even date herewith (as
amended, modified or supplemented from time to time, the "Loan Agreement," the
--------------
terms defined therein and not otherwise defined herein being used herein as
therein defined) with Assignors. It is a condition precedent to the making of
the Loans and the issuance of Letters of Credit by Assignee under the Loan
Agreement that each Assignor shall have assigned certain property to Assignee in
accordance with this Assignment.
NOW, THEREFORE, FOR VALUABLE CONSIDERATION, THE RECEIPT AND SUFFICIENCY
OF WHICH ARE ACKNOWLEDGED, THE PARTIES HERETO AGREE AS FOLLOWS:
1. Assignment, Patent Mortgage and Grant of Security Interest. As
----------------------------------------------------------
collateral security for the prompt and complete payment and performance of the
Obligations (as defined below), each Assignor hereby assigns, transfers, conveys
and grants a security interest and mortgage to Assignee, as security, but not as
an ownership interest, in and to Assignor's entire right, title and interest in,
to and under the following (all of which shall collectively be called the
"Collateral"), provided that the foregoing assignment, transfer, conveyance,
----------
grant and mortgage shall not become effective unless and until a Security Event
shall occur under the Loan Agreement:
(a) All present and future United States registered copyrights
and copyright registrations, including, without limitation, the registered
copyrights listed in Exhibit A-1 to this Assignment (and including all of the
-----------
exclusive rights afforded a copyright registrant in the United States under 17
U.S.C. (s)106 and any exclusive rights which may in the future arise by act of
Congress or otherwise) and all present and future applications for copyright
registrations (including applications for copyright registrations of derivative
works and compilations) (collectively, the "Registered Copyrights"), and any and
---------------------
all royalties, payments, and other amounts payable to Assignor in connection
with the Registered Copyrights, together with all renewals and extensions of the
Registered Copyrights, the right to recover for all past, present, and future
infringements of the Registered Copyrights, and all computer programs, computer
databases, computer program flow diagrams, source codes, object codes and all
tangible property
embodying or incorporating the Registered Copyrights, and all other rights of
every kind whatsoever accruing thereunder or pertaining thereto;
(b) All present and future copyrights, or contract or license
rights arising from agreements by which Assignor is a licensee, which are not
registered in the United States Copyright Office (the "Unregistered Rights"),
-------------------
whether now owned or hereafter acquired, including without limitation the
Unregistered Rights listed in Exhibit A-2 to this Assignment, and any and all
-----------
royalties, payments, and other amounts payable to Assignor in connection with
the Unregistered Rights, together with all renewals and extensions of the
Unregistered Rights, the right to recover for all past, present, and future
infringements of the Unregistered Rights, and all computer programs, computer
databases, computer program flow diagrams, source codes, object codes and all
tangible property embodying or incorporating the Unregistered Rights, and all
other rights of every kind whatsoever accruing thereunder or pertaining thereto.
The Registered Copyrights and the Unregistered Rights collectively are referred
to herein as the "Copyrights";
----------
(c) All right, title and interest in and to any and all
present and future license agreements with respect to the Copyrights, including
without limitation the license agreements listed in Exhibit A-3 to this
-----------
Assignment (the "Licenses");
--------
(d) All present and future accounts, accounts receivable and
other rights to payment arising from, in connection with or relating to the
Copyrights;
(e) Any and all trade secrets, and any and all intellectual
property rights in computer software and computer software products now or
hereafter existing, owned by Assignor;
(f) Any and all design rights which may be owned by Assignor
now or hereafter existing, created, acquired or held;
(g) All patents, patent applications and like protections
including, without limitation, improvements, divisions, continuations, renewals,
reissues, extensions and continuations-in-part of the same, including without
limitation the patents and patent applications set forth on Exhibit B attached
---------
hereto (collectively, the "Patents"), and any and all royalties, payments, and
-------
other amounts payable to Assignor in connection with the Patents, together with
all renewals and extensions of the Patents, the right to recover for all past,
present, and future infringements of the Patents, and all computer programs,
computer databases, computer program flow diagrams, source codes, object codes
and all tangible property embodying or incorporating the Patents, and all other
rights of every kind whatsoever accruing thereunder or pertaining thereto;
(h) Any trademark and servicemark rights, whether registered
or not, applications to register, and the entire goodwill of the business of
Assignor connected with and symbolized by such trademarks, including without
limitation those set forth on Exhibit C attached hereto (collectively, the
---------
"Trademarks"), and any and all royalties, payments, and other amounts payable to
----------
Assignor in connection with the Trademarks, together with all renewals and
extensions of the Trademarks, and the right to recover for all past, present,
and future infringements of the Trademarks;
2
(i) Any and all claims for damages by way of past, present and
future infringements of any of the rights included above, with the right, but
not the obligation, to xxx for and collect such damages for said use or
infringement of the intellectual property rights identified above;
(j) All licenses or other rights to use any of the Copyrights,
Patents or Trademarks, and all license fees and royalties arising from such use
to the extent permitted by such license or rights;
(k) All amendments, extensions, renewals and extensions of any
of the Copyrights, Trademarks or Patents; and
(l) All proceeds and products of the foregoing, including
without limitation all payments under insurance or any indemnity or warranty
payable in respect of any of the foregoing.
THE INTEREST IN THE COLLATERAL BEING ASSIGNED HEREUNDER SHALL NOT BE CONSTRUED
AS A CURRENT ASSIGNMENT, BUT AS A CONTINGENT ASSIGNMENT TO SECURE EACH
ASSIGNOR'S OBLIGATIONS TO ASSIGNEE.
This Assignment secures the payment of all obligations of each Assignor
now or hereafter existing under the Loan Agreement, including, but not limited
to, the Loans, the Notes, and all obligations, indebtedness and liabilities of
such Assignor under this Assignment and each Letter of Credit Agreement, Letter
of Credit and other Loan Document, and all other obligations, indebtedness and
liabilities of such Assignor to Assignee, whether now existing or hereafter
arising, whether or not evidenced by notes or other instruments, and whether
such obligations, indebtedness and liabilities are direct or indirect, fixed or
contingent, liquidated or unliquidated, due or to become due, joint, several, or
joint and several (all such obligations of such Assignor being the
"Obligations"). Without limiting the generality of the foregoing, this
-----------
Assignment secures the payment of all amounts that constitute part of the
Obligations and would be owed by each Assignor to Assignee but for the fact that
they are unenforceable or not allowable due to the existence of a bankruptcy,
reorganization or similar proceeding involving such Assignor.
2. Authorization and Request. Each Assignor authorizes and
-------------------------
requests that the Register of Copyrights and the Commissioner of Patents and
Trademarks record this conditional assignment.
3. Covenants and Warranties. Each Assignor represents, warrants,
------------------------
covenants and agrees as follows:
(a) Assignor is now the sole owner of its Collateral, except
for non-exclusive licenses granted by Assignor to its Customers in the ordinary
course of business.
(b) Listed on Exhibits A-1 and A-2 are all material Copyrights
owned by Assignor, in which Assignor has an interest (excluding off-the-shelf
licensed software and databases), or which are used in Assignor's business.
Listed on Exhibit A-3 are all material Licenses pursuant to which Assignor has a
right to use the Collateral, in which Assignor has an interest (excluding
off-the-shelf licensed software and databases), or which are used in
3
Assignor's business. Listed on Exhibit B are all material Patents owned by
Assignor, in which Assignor has an interest, or which are licensed to Assignor
for use in Assignor's business. Listed on Exhibit C are all material Trademarks
owned by Assignor, in which Assignor has an interest, or which are used in
Assignor's business.
(c) Each employee, agent and/or independent contractor of
Assignor who has participated in the creation of the property constituting the
Collateral has either executed an assignment of his or her rights of authorship
to Assignor or is an employee of Assignor acting within the scope of his or her
employment and was such an employee at the time of said creation.
(d) If required by Assignee after the occurrence of a Security
Event, all of Assignor's present and future Collateral (including, without
limitation, software, computer programs and other works of authorship) subject
or entitled to United States copyright, patent or trademark protection, the
sale, licensing or other disposition of which results in royalties receivable,
license fees receivable, accounts receivable or other sums owing to Assignor
(collectively, "Receivables"), shall be registered with the United States
-----------
Copyright Office or the United States Patent and Trademark Office, as
applicable, and Assignor shall provide to Assignee copies of all such
registrations promptly upon the receipt of the same.
(e) Assignor shall undertake all reasonable measures to cause
its employees, agents and independent contractors to assign to Assignor all
rights of authorship to any copyrighted material in which Assignor has or may
subsequently acquire any right or interest.
(f) Performance of this Assignment does not conflict with or
result in a breach of any agreement to which Assignor is bound, except to the
extent that certain intellectual property agreements prohibit the disclosure of
information or the assignment of the rights thereunder to a third party without
the licensor's or other party's consent and this Assignment constitutes an
assignment or requires such disclosure.
(g) During the term of this Assignment, without the prior
written consent of Assignee, Assignor will not transfer or otherwise encumber
any interest in the Collateral, except for non-exclusive licenses granted by
Assignor in the ordinary course of business or as set forth in this Assignment.
(h) Each part of the Collateral is valid and enforceable, and
no part of the Collateral has been judged invalid or unenforceable, in whole or
in part, and no claim has been made that any part of the Collateral violates the
rights of any third party.
(i) Assignor shall promptly advise Assignee of any material
change in the composition of the Collateral, including but not limited to any
subsequent ownership right of Assignor in or to any material Trademark, Patent
or Copyright not specified in this Assignment.
(j) Assignor shall (1) protect, defend and maintain the
validity and enforceability of the Trademarks, Patents and Copyrights, subject
to Assignor's reasonable business judgment as to the value of the Trademark,
Patent or Copyright, and the cost of such defense, (2) use commercially
reasonable efforts to detect infringements of the Trademarks, Patents and
Copyrights and promptly advise Assignee in writing of material infringements
detected, and (3) not allow any Trademarks, Patents, or Copyrights to be
abandoned, forfeited or dedicated to the public without the written consent of
Assignee, which shall not be unreasonably
4
withheld, unless Assignor determines that reasonable business practices suggest
that abandonment is appropriate.
(k) Assignor shall promptly register the most recent version
of any of Assignor's Copyrights, Trademarks or Patents, if not so already
registered, that are material to Assignor's business, and shall, from time to
time, execute and file such other instruments, and take such further actions as
Assignee may reasonably request from time to time to perfect or continue the
perfection of Assignee's interest in the Collateral.
(l) This Assignment creates, and in the case of after acquired
Collateral, this Assignment will create at the time Assignor first has rights in
such after acquired Collateral, in favor of Assignee a valid and perfected first
priority security interest in the Collateral in the United States securing the
payment and performance of the Obligations upon making the filings referred to
in clause (m) below.
(m) To its knowledge, except for, and upon, the filing with
the United States Patent and Trademark office with respect to the Patents and
Trademarks and the Register of Copyrights with respect to the Copyrights
necessary to perfect the security interests and assignment created hereunder and
except as has been already made or obtained, no authorization, approval or other
action by, and no notice to or filing with, any U.S. governmental authority or
U.S. regulatory body is required either (1) for the grant by Assignor of the
security interest granted hereby or for the execution, delivery or performance
of this Assignment by Assignor in the U.S. or (2) for the perfection in the
United States or the exercise by Assignee of its rights and remedies thereunder.
(n) All information heretofore, herein or hereafter supplied
to Assignee by or on behalf of Assignor with respect to the Collateral is
accurate and complete in all material respects.
(o) Assignor shall not enter into any agreement that would
materially impair or conflict with Assignor's obligations hereunder without
Assignee's prior written consent. Assignor shall not permit the inclusion in any
material contract to which it becomes a party of any provisions that could or
might in any way prevent the creation of a security interest in Assignor's
rights and interest in any property included within the definition of the
Collateral acquired under such contracts.
(p) Upon any executive officer of Assignor obtaining actual
knowledge thereof, Assignor will promptly notify Assignee in writing of any
event that materially adversely affects the value of any material Collateral,
the ability of Assignor to dispose of any material Collateral or the rights and
remedies of Assignee in relation thereto, including the levy of any legal
process against any of the Collateral.
4. Assignee's Rights. Assignee shall have the right, but not the
-----------------
obligation, to take, at each Assignor's sole expense, any actions that such
Assignor is required under this Assignment to take but which such Assignor fails
to take, after fifteen (15) days' notice to such Assignor. Each Assignor shall
reimburse and indemnify Assignee for all reasonable costs and reasonable
expenses incurred in the reasonable exercise of its rights under this Section 4.
5
5. Inspection Rights. Each Assignor hereby grants to Assignee and its
-----------------
employees, representatives and agents the right to visit, during reasonable
hours upon prior reasonable written notice to such Assignor, any of such
Assignor's plants and facilities that manufacture, install or store products (or
that have done so during the prior six-month period) that are sold utilizing any
of the Collateral, and to inspect the products and quality control records
relating thereto upon reasonable written notice to such Assignor and as often as
may be reasonably requested, but not more than one (1) in every six (6) months.
6. Further Assurances; Attorney in Fact. Each Assignor represents,
------------------------------------
warrants, covenants and agrees as follows:
(a) Assignor will make, execute, acknowledge and deliver, and
file and record in the proper filing and recording places in the United States,
all such instruments, including, appropriate financing and continuation
statements and collateral agreements and filings with the United States Patent
and Trademarks Office and the Register of Copyrights, and take all such action
as may reasonably be deemed necessary or advisable, or as requested by Assignee,
to perfect Assignee's security interest in all Copyrights, Patents and
Trademarks and otherwise to carry out the intent and purposes of this
Assignment, or for assuring and confirming to Assignee the grant or perfection
of a security interest in all Collateral.
(b) Upon an Event of Default, Assignor hereby irrevocably
appoints Assignee as Assignor's attorney-in-fact, with full authority in the
place and stead of Assignor and in the name of Assignor, Assignee or otherwise,
from time to time in Assignee's discretion, upon Assignor's failure or inability
to do so, to take any action and to execute any instrument which Assignee may
deem necessary or advisable to accomplish the purposes of this Assignment,
including:
(i) To modify, in its sole discretion, this
Assignment without first obtaining Assignor's approval of or signature to such
modification by amending Exhibit X-0, Xxxxxxx X-0, Exhibit A-3, Exhibit B and
Exhibit C, thereof, as appropriate, to include reference to any right, title or
interest in any Copyrights, Patents or Trademarks acquired by Assignor after the
execution hereof or to delete any reference to any right, title or interest in
any Copyrights, Patents or Trademarks in which Assignor no longer has or claims
any right, title or interest; and
(ii) To file, in its sole discretion, one or more
financing or continuation statements and amendments thereto, relative to any of
the Collateral without the signature of Assignor where permitted by law.
7. Events of Default. The occurrence of any of the following shall
-----------------
constitute an Event of Default under the Assignment:
6
(a) An Event of Default occurs under the Loan Agreement; or
(b) Any Assignor breaches or fails to perform or observe in
any material respect any representation, warranty or agreement made by such
Assignor in this Assignment.
8. Remedies. Upon the occurrence and continuance of an Event of
--------
Default, Assignee shall have the right to exercise all the remedies of a secured
party under the UCC, including without limitation, the right to:
(a) require any Assignor to assemble any tangible property in
which the Collateral is embodied and in which Assignee has a security interest
and to make it available to Assignee at a place designated by Assignee,
(b) exercise any and all rights as beneficial and legal owner
of the Collateral, including, without limitation, any and all consensual rights
and powers with respect to the Collateral, and
(c) sell or assign or grant a license to use, or cause to be
sold or assigned or grant a license to use any or all of the Collateral or any
part thereof, in each case, free of all rights and claims of each Assignor
therein and thereto, except to the extent such actions would violate
restrictions against assignments contained in any Collateral in which such
Assignor's rights arise by contract or license. In that connection, Assignee
shall have the right to cause any or all of the Collateral to be transferred of
record into the name of Assignee or its nominee and the right to impose (i) such
limitations and restrictions on the sale or assignment of the Collateral as
Assignee may deem to be necessary or appropriate to comply with any law, rule or
regulation having applicability to such sale or assignment and (ii) requirements
for any necessary governmental approvals. To the extent not inconsistent with
any license or contract under which each Assignor's rights arise, Assignee shall
have a nonexclusive, royalty-free license to use the Copyrights, Patents and
Trademarks to the extent reasonably necessary to permit Assignee to exercise its
rights and remedies upon the occurrence of an Event of Default. Each Assignor
will pay any expenses (including reasonable attorney's fees) incurred by
Assignee in connection with the exercise of any of Assignee's rights hereunder,
including without limitation any expense incurred in disposing of the
Collateral. All of Assignee's rights and remedies with respect to the Collateral
shall be cumulative.
9. Indemnity. Each Assignor agrees to defend, indemnify and hold
---------
harmless Assignee and its officers, employees, and agents against: (a) all
obligations, demands, claims, and liabilities claimed or asserted by any other
party in connection with the transactions contemplated by this Assignment, and
(b) all losses or expenses in any way suffered, incurred, or paid by Assignee as
a result of or in any way arising out of, following or consequential to
transactions between Assignee and such Assignor, whether under this Assignment
or otherwise (including without limitation, reasonable attorneys fees and
reasonable expenses), except for losses arising from or out of Assignee's gross
negligence or willful misconduct.
10. Release. At such time as Assignors shall completely satisfy all of
-------
the Obligations, Assignee shall execute and deliver to Assignors all assignments
and other instruments as may be reasonably necessary or proper to terminate
Assignee's security interest and any conditional assignment in the Collateral,
subject to any disposition of the Collateral which may have been made by
Assignee pursuant to this Assignment. For the purpose of this Assignment, the
7
Obligations shall be deemed to continue if any Assignor enters into any
bankruptcy or similar proceeding at a time when any amount paid to Assignee
could be ordered to be repaid as a preference or pursuant to a similar theory,
and shall continue until it is finally determined that no such repayment can be
ordered.
11. No Waiver. No course of dealing between any Assignor and Assignee,
---------
nor any failure to exercise nor any delay in exercising, on the part of
Assignee, any right, power, or privilege under this Assignment or under the Loan
Agreement or any other agreement, shall operate as a waiver. No single or
partial exercise of any right, power, or privilege under this Assignment or
under the Loan Agreement or any other agreement by Assignee shall preclude any
other or further exercise of such right, power, or privilege or the exercise of
any other right, power, or privilege by Assignee.
12. Rights Are Cumulative. All of Assignee's rights and remedies with
---------------------
respect to the Collateral whether established by this Assignment, the Loan
Agreement, or any other documents or agreements, or by law shall be cumulative
and may be exercised concurrently or in any order.
13. Course of Dealing. No course of dealing, nor any failure to
-----------------
exercise, nor any delay in exercising any right, power or privilege hereunder
shall operate as a waiver thereof.
14. Attorneys' Fees. If any action relating to this Assignment is
---------------
brought by either party hereto against the other party, the prevailing party
shall be entitled to recover reasonable attorneys fees, costs and disbursements.
15. Amendments. This Assignment may be amended only by a written
----------
instrument signed by both parties hereto. To the extent that any provision of
this Assignment conflicts with any provision of the Loan Agreement, the
provision giving Assignee greater rights or remedies shall govern, it being
understood that the purpose of this Assignment is to add to, and not detract
from, the rights granted to Assignee under the Loan Agreement. This Assignment,
the Loan Agreement, and the documents relating thereto comprise the entire
agreement of the parties with respect to the matters addressed in this
Assignment.
16. Severability. The provisions of this Assignment are severable. If
------------
any provision of this Assignment is held invalid or unenforceable in whole or in
part in any jurisdiction, then such invalidity or unenforceability shall affect
only such provision, or part thereof, in such jurisdiction, and shall not in any
manner affect such provision or part thereof in any other jurisdiction, or any
other provision of this Assignment in any jurisdiction.
17. Counterparts. This Assignment may be executed in two or more
------------
counterparts, each of which shall be deemed an original but all of which
together shall constitute the same instrument.
18. Governing Law and Jurisdiction. This Assignment shall be governed
------------------------------
by the laws of the Commonwealth of Virginia, without regard for choice of law
provisions. Each Assignor and Assignee consent to the nonexclusive jurisdiction
of any state or federal court located in Fairfax County, Virginia.
19. Confidentiality. In handling any confidential information, each of
---------------
Assignee and its agents shall exercise the same degree of care that its exercise
with respect to its own
8
proprietary information of the same types to maintain the confidentiality of any
non-public information thereby received or received pursuant to this Assignment
except that the disclosure of this information may be made (a) to the affiliates
of Assignee, (b) to prospective transferee or purchasers of an interest in the
obligations secured hereby, provided that they have entered into a comparable
confidentiality agreement in favor of each Assignor and have delivered a copy to
such Assignor, (c) as required by law, regulation, rule or order, subpoena
judicial order or similar order and (d) as may be required in connection with
the examination, audit or similar investigation of Assignee.
20. WAIVER OF RIGHT TO JURY TRIAL. ASSIGNEE AND EACH ASSIGNOR EACH
-----------------------------
HEREBY WAIVE THE RIGHT TO TRIAL BY JURY IN ANY ACTION OR PROCEEDING BASED UPON,
ARISING OUT OF, OR IN ANY WAY RELATING TO: (a) THIS ASSIGNENT; OR (b) ANY OTHER
PRESENT OR FUTURE INSTRUMENT OR AGREEMENT BETWEEN ASSIGNEE AND SUCH ASSIGNOR; OR
(c) ANY CONDUCT, ACTS OR OMISSIONS OF ASSIGNEE OR SUCH ASSIGNOR OR ANY OF THEIR
DIRECTORS, OFFICERS, EMPLOYEES, AGENTS, ATTORNEYS OR ANY OTHER PERSONS
AFFILIATED WITH ASSIGNEE OR SUCH ASSIGNOR; IN EACH OF THE FOREGOING CASES,
WHETHER SOUNDING IN CONTRACT OR TORT OR OTHERWISE.
[SIGNATURES ON FOLLOWING PAGE]
9
IN WITNESS WHEREOF, the parties hereto have executed this Assignment on
the day and year first above written.
ASSIGNORS:
----------
SRA INTERNATIONAL, INC.,
a Delaware corporation
Address of Assignor:
By: _______________________________
Name: _____________________________
0000 Xxxx Xxxxx Xxxxx Title: ____________________________
Xxxxxxx, Xxxxxxxx 00000
SYSTEMS RESEARCH AND APPLICATIONS
CORPORATION,
a Delaware corporation
Address of Assignor:
By: _______________________________
Name: _____________________________
0000 Xxxx Xxxxx Xxxxx Title: ____________________________
Xxxxxxx, Xxxxxxxx 00000
SRA TECHNICAL SERVICES CENTER, INC.,
a Delaware corporation
Address of Assignor:
By: _______________________________
Name: _____________________________
0000 Xxxx Xxxxx Xxxxx Title: ____________________________
Xxxxxxx, Xxxxxxxx 00000
ASSIGNEE:
---------
SUNTRUST BANK, a Georgia banking
corporation
Address of Assignee:
By: ___________________________
0000 Xxx Xxxx Xxxxxx, X.X. Name: ___________________________
Xxxxxxxxxx, X.X. 00000 Title: ___________________________
10
______________ OF ______________ )
COUNTY OF ___________________ )
On _____________________, 2001, before me, __________________________
_________________________________________, Notary Public, personally appeared
_______________________________________________________________________,
personally known to me (or proved to me on the basis of satisfactory evidence)
to be the person(s) whose name(s) is/are subscribed to the within instrument and
acknowledged to me that he/she/they executed the same in his/her/their
authorized capacity(ies), and that by his/her/their signature(s) on the
instrument the person(s), or the entity upon behalf of which the person(s)
acted, executed the instrument.
Witness my hand and official seal.
-------------------------------
Notary Public
(Seal)
______________ OF _____________ )
COUNTY OF ___________________ )
On _____________________, 2001, before me, __________________________
_________________________________________, Notary Public, personally appeared
_______________________________________________________________________,
personally known to me (or proved to me on the basis of satisfactory evidence)
to be the person(s) whose name(s) is/are subscribed to the within instrument and
acknowledged to me that he/she/they executed the same in his/her/their
authorized capacity(ies), and that by his/her/their signature(s) on the
instrument the person(s), or the entity upon behalf of which the person(s)
acted, executed the instrument.
Witness my hand and official seal.
-------------------------------
Notary Public
(Seal)
______________ OF _____________ )
COUNTY OF ___________________ )
On _____________________, 2001, before me, __________________________
_________________________________________, Notary Public, personally appeared
_______________________________________________________________________,
personally known to me (or proved to me on the basis of satisfactory evidence)
to be the
11
person(s) whose name(s) is/are subscribed to the within instrument and
acknowledged to me that he/she/they executed the same in his/her/their
authorized capacity(ies), and that by his/her/their signature(s) on the
instrument the person(s), or the entity upon behalf of which the person(s)
acted, executed the instrument.
Witness my hand and official seal.
-------------------------------
Notary Public
(Seal)
______________ OF _____________ )
COUNTY OF ___________________ )
On _____________________, 2001, before me, __________________________
_________________________________________, Notary Public, personally appeared
_______________________________________________________________________,
personally known to me (or proved to me on the basis of satisfactory evidence)
to be the person(s) whose name(s) is/are subscribed to the within instrument and
acknowledged to me that he/she/they executed the same in his/her/their
authorized capacity(ies), and that by his/her/their signature(s) on the
instrument the person(s), or the entity upon behalf of which the person(s)
acted, executed the instrument.
Witness my hand and official seal.
-------------------------------
Notary Public
(Seal)
______________ OF _____________ )
COUNTY OF ___________________ )
On _____________________, 2001, before me, __________________________
_________________________________________, Notary Public, personally appeared
_______________________________________________________________________,
personally known to me (or proved to me on the basis of satisfactory evidence)
to be the person(s) whose name(s) is/are subscribed to the within instrument and
acknowledged to me that he/she/they executed the same in his/her/their
authorized capacity(ies), and that by his/her/their signature(s) on the
instrument the person(s), or the entity upon behalf of which the person(s)
acted, executed the instrument.
Witness my hand and official seal.
12
-------------------------------
Notary Public
(Seal)
13
EXHIBIT "A-1"
REGISTERED COPYRIGHTS
REG. NO. REG. DATE COPYRIGHT
-------- --------- ---------
EXHIBIT "A-2"
UNREGISTERED RIGHTS
EXHIBIT "A-3"
DESCRIPTION OF COPYRIGHT LICENSE AGREEMENTS
-------------------------------------------
EXHIBIT "B"
PATENTS
DOCKET NO. COUNTRY SERIAL NO. FILING DATE STATUS
---------- ------- ---------- ----------- ------
EXHIBIT "C"
TRADEMARKS
XXXX COUNTRY SERIAL NO. STATUS
---- ------- ---------- ------
EXHIBIT E
---------
REVOLVING NOTE
--------------
$40,000,000 August 15, 2001
Fairfax, Virginia
FOR VALUE RECEIVED, the undersigned corporations (collectively, the
Borrowers and individually, a Borrower) hereby jointly and severally promise to
pay to the order of SUNTRUST BANK, a Georgia banking corporation (the Lender),
at Commercial Loan Services, X.X. Xxx 00000, Xxxxxxxx, Xxxxxxxx 00000-0000, or
such other location as the holder hereof may in writing designate, the principal
sum of FORTY MILLION AND NO/00 DOLLARS ($40,000,000) (or such lesser amount as
shall equal the aggregate unpaid principal amount of the Revolving Loans made by
the Lender to the Borrowers under the Loan Agreement (as defined below)), in
lawful money of the United States of America in immediately available funds, on
the Termination Date, without defense, offset or counterclaim, and to pay
interest on the unpaid principal amount of the Revolving Loans, at such office,
in like money and funds, for the period commencing on the date of each Revolving
Loan until such Revolving Loan shall be paid in full, at the applicable rate per
annum and on the dates provided in the Loan Agreement. The Borrowers may borrow,
prepay, and reborrow hereunder in accordance with the provisions of the Loan
Agreement.
The Lender is hereby authorized by the Borrowers to maintain records of
the amount of each Revolving Loan made by the Lender, the date such Revolving
Loan is made, and the amount of each payment or prepayment of principal of such
Revolving Loan received by the Lender. Each Borrower agrees that the amounts so
evidenced in such records, absent manifest error, shall constitute conclusive
evidence of the amount owed hereunder.
This Revolving Note is the Revolving Note referred to in the Loan
Agreement (as amended, modified or supplemented from time to time, the Loan
Agreement), dated as of August 15, 2001, between the Borrowers and the Lender,
and evidences Revolving Loans made by the Lender thereunder. Undefined
capitalized terms used in this Revolving Note have the respective meanings
assigned to them in the Loan Agreement.
Upon the occurrence and continuation of an Event of Default, the
principal hereof and accrued interest hereon may be declared to be, or may
become, forthwith due and payable in the manner, upon the conditions and with
the effect provided in the Loan Agreement.
Each Borrower, and every guarantor and endorser hereof, hereby waive
presentment, demand, notice of dishonor, protest and all other demands and
notices in connection with the delivery, acceptance, performance and enforcement
of this Revolving Note.
This Revolving Note shall be governed by and construed in accordance
with the laws of the Commonwealth of Virginia, without reference to conflict of
laws principles.
IN WITNESS WHEREOF, each Borrower has caused this Revolving Note to be
executed by its duly authorized representative as of the day and year first
above written.
BORROWERS:
----------
SRA INTERNATIONAL, INC., a Delaware corporation
By: _______________________________
Name: ____________________________
Title: _____________________________
SYSTEMS RESEARCH AND APPLICATIONS CORPORATION,
a Virginia corporation
By: ______________________________
Name: ____________________________
Title: _____________________________
SRA TECHNICAL SERVICES CENTER, INC.,
a Delaware corporation
By: _______________________________
Name: ____________________________
Title: _____________________________
2
EXHIBIT F
---------
SECURITY AGREEMENT
------------------
THIS SECURITY AGREEMENT, dated as August 15, 2001, and to become
effective in accordance with the provisions set forth below, from SRA
INTERNATIONAL, INC., a Delaware corporation (the "Company"), SYSTEMS RESEARCH
-------
AND APPLICATIONS CORPORATION, a Delaware corporation ("SRA"), SRA TECHNICAL
---
SERVICES CENTER, INC., a Delaware corporation ("STSC"), and each other
----
Subsidiary (as defined below) that becomes a party to this Agreement in
accordance with the provisions set forth in the Loan Agreement, as such term is
defined below (together with the Company, SRA, STSC, collectively, the
"Borrowers", and individually, a "Borrower"), in favor of SUNTRUST BANK, a
--------- --------
Georgia banking corporation (the "Lender"), recites and provides as follows:
------
RECITALS
--------
A. Lender has entered into a Loan Agreement of even date herewith (as
amended, modified or supplemented from time to time, the "Loan Agreement") with
--------------
Borrowers.
B. It is a condition precedent to the making of the Loans and the
issuance of Letters of Credit by Lender under the Loan Agreement that Borrowers
shall grant the security interest contemplated by this Agreement.
NOW, THEREFORE, in consideration of the premises and in order to induce
Lender to make the Loans and to issue Letters of Credit under the Loan
Agreement, each Borrower hereby represents, warrants, covenants and agrees as
follows:
SECTION 1. Definitions. All capitalized terms used herein without
-----------
definitions shall have the respective meanings provided therefor in the Loan
Agreement. The term "State", as used herein, means the Commonwealth of Virginia.
All terms defined in the Uniform Commercial Code of the State and used herein
shall have the same definitions herein as specified therein. However, if a term
is defined in Article 9 of the Uniform Commercial Code of the State differently
than in another Article of the Uniform Commercial Code of the State, the term
has the meaning specified in Article 8.9A of the Uniform Commercial Code of the
State. In addition, as used in this Agreement, the following terms shall have
the meanings assigned to them below, which meanings shall be equally applicable
to the singular and plural forms of the terms defined.
"Accounts Receivable" means, collectively, and includes all of the
-------------------
following, whether now owned or hereafter acquired by a Borrower: all property
included within the definitions of "accounts," "chattel paper," "documents" and
"instruments" and "payment intangibles" set forth in the UCC.
"Collateral" means the following properties, assets and rights of each
----------
Borrower, wherever located, whether now owned or hereafter acquired or arising,
and all proceeds and products thereof: all personal and fixture property of
every kind and nature including without limitation all goods (including
inventory, equipment and any accessions thereto), instruments (including
promissory notes), documents, accounts (including health-care-insurance
receivables), chattel paper (whether tangible or electronic), deposit accounts,
letter-of-credit rights (whether or not the letter of credit is evidenced by a
writing), commercial tort claims, securities and all other investment property,
supposing obligations, any other contract rights or rights to the payment of
money, insurance claims and proceeds, tort claims, and all general intangibles
(including all payment intangibles and Intellectual Property).
"UCC" means the Uniform Commercial Code as adopted in the State, and
---
all amendments thereto.
SECTION 2. Grant of Security. Each Borrower hereby assigns and pledges
-----------------
to Lender, and hereby grants to Lender a security interest in all of such
Borrower's right, title and interest in and to the Collateral, whether now owned
or hereafter acquired by such Borrower, including all proceeds of any and all of
the foregoing or hereinafter-described Collateral (including, without
limitation, proceeds that constitute property of the types described herein)
and, to the extent not otherwise included, all policies of insurance on any
property of such Borrower and all payments and proceeds under any such insurance
(whether or not Lender is the loss payee thereof), or any indemnity, warranty or
guaranty payable by reason of loss or damage to or otherwise with respect to any
of the foregoing Collateral; all cash; all books of account and records,
including all computer software relating thereto; provided that the foregoing
assignment, pledge and grant shall not attach to the Collateral unless and until
a Security Event shall occur under the Loan Agreement.
SECTION 3. Security for Obligations. This Agreement secures the payment
------------------------
of all Obligations of each Borrower now or hereafter existing or arising.
Without limiting the generality of the foregoing, this Agreement secures the
payment of all amounts that constitute part of the Obligations and would be owed
by each Borrower to Lender under the Loan Agreement and the Notes but for the
fact that they are unenforceable or not allowable due to the existence of a
bankruptcy, reorganization or similar proceeding involving such Borrower.
SECTION 4. Borrowers Remain Liable. Anything herein to the contrary
-----------------------
notwithstanding, (a) each Borrower shall remain liable under the contracts and
agreements included in the Collateral to the extent set forth therein to perform
all of its duties and obligations thereunder to the same extent as if this
Agreement had not been executed, (b) the exercise by Lender of any of the rights
hereunder shall not release any of Borrowers from any of their respective duties
or obligations under the contracts and agreements included in the Collateral,
and (c) Lender shall not have any obligation or liability under the contracts
and agreements included in the Collateral by reason of this Agreement, nor shall
Lender be obligated to perform
2
any of the obligations or duties of any of Borrowers thereunder or to take any
action to collect or enforce any claim for payment assigned hereunder.
SECTION 5. Representations and Warranties. Each Borrower represents
------------------------------
and warrants as follows:
(a) All items of equipment and inventory of Borrower are
located at the places specified in Schedule 1 hereto. During the five years
----------
immediately preceding the date of this Agreement, neither Borrower nor any
predecessor of Borrower has used any corporate or fictitious name other than its
current corporate name. Borrower has no trade names. The chief executive office
and mailing address of each Borrower is 0000 Xxxx Xxxxx Xxxxx, Xxxxxxx, Xxxxxxxx
00000. Each Borrower's exact legal name is that indicated on the signature pages
hereof. Each Borrower is an organization of the type, and is organized in the
jurisdiction set forth herein. The signature pages hereof accurately set forth
each Borrower's organizational identification number or accurately states that
it has none.
(b) Borrower is the legal and beneficial owner of the
Collateral free and clear of any lien, security interest, option or other charge
or encumbrance except for the security interest created by this Agreement or
liens or other encumbrances permitted by the Loan Agreement. No effective
financing statement or other document similar in effect covering all or any part
of the Collateral is on file in any recording office, except such as may have
been filed in favor of Lender relating to this Agreement or otherwise permitted
by the Loan Agreement.
(c) Borrower has exclusive possession and control of the
Collateral.
(d) This Agreement creates a valid security interest in the
Collateral, securing the payment of the Obligations and, when properly
perfected, shall constitute a valid perfected security interest in such
Collateral, free and clear of all Liens except as permitted by the Loan
Agreement.
(e) No consent of any other person or entity and no
authorization, approval or other action by, and no notice to or filing with, any
governmental authority or regulatory body, other than the filing of UCC-1
financing statements in the applicable filing offices and such documentation as
is required to comply with the Assignment of Claims Act, is required (1) for the
grant by Borrower of the security interest granted hereby or for the execution,
delivery or performance of this Agreement by Borrower, or (2) for the exercise
by Lender of its rights and remedies hereunder. No consent of any other person
or entity and no authorization or approval by any governmental authority or
regulatory body is required for the perfection or maintenance of the security
interest created hereby (including the first priority nature of such security
interest).
3
(f) The inventory of each Borrower has been produced by
Borrower in compliance with all requirements of the Fair Labor Standards Act.
(g) Borrower represents and warrants as to each and every
Account Receivable now existing that: (1) it is a bona fide existing obligation,
valid and enforceable against the Customer, (2) it is subject to no dispute,
defense or offset except as disclosed in writing to Lender; (3) all instruments,
chattel paper and other evidences of indebtedness issued to Borrower with
respect to any Account Receivable have been delivered to Lender, and, together
with all supporting documents delivered to Lender, are genuine, complete, valid
and enforceable in accordance with their terms; (4) it is not subject to any
discount, allowance or special terms of payment except as permitted hereby or by
the Loan Agreement or as disclosed in writing to Lender; and (5) it is not and
shall not be subject to any prohibition or limitation upon assignment. Borrower
covenants and agrees that each Account Receivable arising after the date of this
Agreement will be in conformance with the foregoing representations.
SECTION 6. Further Assurances. Each Borrower agrees as follows:
------------------
(a) Each Borrower hereby irrevocably authorizes the Lender at
any time and from time to time to file in any Uniform Commercial Code
jurisdiction any initial financing statements and amendments thereto that (1)
indicate the Collateral (i) as all assets of Borrower or words of similar
effect, regardless of whether any particular asset comprised in the Collateral
falls within the scope of Article 9A of the Uniform Commercial Code of the State
or such jurisdiction, or (ii) as being of an equal or lesser scope or with
greater detail, and (2) contain any other information required by part 5 of
Article 9A of the Uniform Commercial Code of the State for the sufficiency or
filing office acceptance of any financing statement or amendment, including (i)
whether Borrower is an organization, the type of organization and any
organization identification number issued to Borrower and, (ii) in the case of a
financing statement filed as a fixture filing or indicating Collateral as
as-extracted collateral or timber to be cut, a sufficient description of real
property to which the Collateral relates. Each Borrower agrees to furnish any
such information to the Lender promptly upon request. Each Borrower also
ratifies its authorization for the Lender to have filed in any Uniform
Commercial Code jurisdiction any like initial financing statements or amendments
thereto if filed prior to the date hereof.
(b) Borrower will furnish to Lender from time to time
statements and schedules further identifying and describing the Collateral and
such other information and reports in connection with the Collateral as Lender
reasonably may request, all in form and substance satisfactory to Lender.
(c) Without providing at least 30 days prior written notice to
Lender, Borrower will not change its name, its type of organization,
jurisdiction of organization or other legal structure, its place of business or,
if more than one, chief executive office, or its mailing address or
organizational identification number if it has one. If Borrower does not have an
4
organizational identification number and later obtains one, Borrower shall
forthwith notify Lender of such organizational identification number.
SECTION 7. Other Actions. Further to insure the attachment, perfection
-------------
and first priority of, and the ability of Lender to enforce, Lender's security
interest in the Collateral, each Borrower agrees, in each case at Borrower's own
expense, to take the following actions with respect to the following Collateral:
(a) If Borrower shall at any time hold or acquire any
promissory notes or tangible chattel paper, Borrower shall forthwith endorse,
assign and deliver the same to Lender, accompanied by such instruments of
transfer or assignment duly executed in blank as Lender may from time to time
specify.
(b) For each deposit account that Borrower at any time opens
or maintains, Borrower shall, at Lender's request and option, pursuant to an
agreement in form and substance satisfactory to Lender, either (1) cause the
depositary bank to agree to comply at any time with instructions from Lender to
such depositary bank directing the disposition of funds from time to time
credited to such deposit account, without further consent of Borrower, or (2)
arrange for Lender to become the customer of the depositary bank with respect to
the deposit account, with Borrower being permitted, only with the consent of
Lender, to exercise rights to withdraw funds from such deposit account. Lender
agrees with Borrower that Lender shall not give any such instructions or
withhold any withdrawal rights from Borrower, unless an Event of Default has
occurred and is continuing, or, after giving effect to any withdrawal not
otherwise permitted by the Loan Documents, would occur. The provisions of this
paragraph shall not apply to (i) any deposit account for which Borrower, the
depositary bank and Lender have entered into a cash collateral agreement
specially negotiated among Borrower, the depositary bank and Lender for the
specific purpose set forth therein, (ii) deposit accounts for which Lender is
the depositary and (iii) deposit accounts specially and exclusively used for
payroll, payroll taxes and other employee wage and benefit payments to or for
the benefit of Borrower's salaried employees.
(c) If Borrower shall at any time hold or acquire any
certificated securities, Borrower shall forthwith endorse, assign and deliver
the same to Lender, accompanied by such instruments of transfer or assignment
duly executed in blank as Lender may from time to time specify. If any
securities now or hereafter acquired by Borrower are uncertificated and are
issued to Borrower or its nominee directly by the issuer thereof, Borrower shall
immediately notify Lender thereof and, at Lender's request and option, pursuant
to an agreement in form and substance satisfactory to Lender, either (1) cause
the issuer to agree to comply with instructions from Lender as to such
securities, without further consent of Borrower or such nominee, or (2) arrange
for Lender to become the registered owner of the securities. If any securities,
whether certificated or uncertificated, or other investment property now or
hereafter acquired by Borrower are held by Borrower or its nominee through a
securities intermediary or commodity
5
intermediary, Borrower shall immediately notify Lender thereof and, at Lender's
request and option, pursuant to an agreement in form and substance satisfactory
to Lender, either (i) cause such securities intermediary or (as the case may be)
commodity intermediary to agree to comply with entitlement orders or other
instructions from Lender to such securities intermediary as to such securities
or other investment property, or (as the case may be) to apply any value
distributed on account of any commodity contract as directed by Lender to such
commodity intermediary, in each case without further consent of Borrower or such
nominee, or (ii) in the case of financial assets or other investment property
held through a securities intermediary, arrange for Lender to become the
entitlement holder with respect to such investment property, with Borrower being
permitted, only with the consent of Lender, to exercise rights to withdraw or
otherwise deal with such investment property. Lender agrees with Borrower that
Lender shall not give any such entitlement orders or instructions or directions
to any such issuer, securities intermediary or commodity intermediary, and shall
not withhold its consent to the exercise of any withdrawal or dealing rights by
Borrower, unless an Event of Default has occurred and is continuing, or, after
giving effect to any such investment and withdrawal rights not otherwise
permitted by the Loan Documents, would occur. The provisions of this paragraph
shall not apply to any financial assets credited to a securities account for
which Lender is the securities intermediary.
(d) If any goods are at any time in the possession of a
bailee, Borrower shall promptly notify Lender thereof and, if requested by
Lender, shall promptly obtain an acknowledgement from the bailee, in form and
substance satisfactory to Lender, that the bailee holds such Collateral for the
benefit of Lender and shall act upon the instructions of Lender, without the
further consent of Borrower. Lender agrees with Borrower that Lender shall not
give any such instructions unless an Event of Default has occurred and is
continuing or would occur after taking into account any action by Borrower with
respect to the bailee.
(e) If Borrower at any time holds or acquires an interest in
any electronic chattel paper or any "transferable record," as that term is
defined in Section 201 of the federal Electronic Signatures in Global and
National Commerce Act, or in (s)l6 of the Uniform Electronic Transactions Act as
in effect in any relevant jurisdiction, Borrower shall promptly notify Lender
thereof and, at the request of Lender, shall take such action as Lender may
reasonably request to vest in Lender control, under (s)9-105 of the Uniform
Commercial Code, of such electronic chattel paper or control under Section 201
of the federal Electronic Signatures in Global and National Commerce Act or, as
the case may be, (s)16 of the Uniform Electronic Transactions Act, as so in
effect in such jurisdiction, of such transferable record. Lender agrees with
Borrower that Lender will arrange, pursuant to procedures satisfactory to Lender
and so long as such procedures will not result in Lender's loss of control, for
Borrower to make alterations to the electronic chattel paper or transferable
record permitted under UCC (s)9-105 or, as the case may be, Section 201 of the
federal Electronic Signatures in Global and National Commerce Act or (s)16 of
the Uniform Electronic Transactions Act for a party in control to make without
loss of control, unless an
6
Event of Default has occurred and is continuing or would occur after taking into
account any action by Borrower with respect to such electronic chattel paper or
transferable record.
(f) If Borrower is at any time a beneficiary under a letter of
credit now or hereafter issued in favor of Borrower, Borrower shall promptly
notify Lender thereof and, at the request and option of Lender, Borrower shall,
pursuant to an agreement in form and substance satisfactory to Lender, either
(1) arrange for the issuer and any confirmer of such letter of credit to consent
to an assignment to Lender of the proceeds of any drawing under the letter of
credit or (2) arrange for Lender to become the transferee beneficiary of the
letter of credit, with Lender agreeing, in each case, that the proceeds of any
drawing under the letter to credit are to be applied to the payment of the
Obligations.
(g) If Borrower shall at any time hold or acquire a commercial
tort claim, Borrower shall immediately notify Lender in a writing signed by
Borrower of the brief details thereof and grant to Lender in such writing a
security interest therein and in the proceeds thereof, all upon the terms of
this Agreement, with such writing to be in form and substance satisfactory to
Lender.
(h) Borrower further agrees to take any other action
reasonably requested by Lender to insure the attachment, perfection and first
priority of, and the ability of Lender to enforce, Lender's security interest in
any and all of the Collateral including, without limitation, (1) executing,
delivering and, where appropriate, filing financing statements and amendments
relating thereto under the Uniform Commercial Code, to the extent, if any, that
Borrower's signature thereon is required therefor, (2) causing Lenders name to
be noted as Lender on any certificate of title for a titled good if such
notation is a condition to attachment, perfection or priority of, or ability of
Lender to enforce, Lender's security interest in such Collateral, (3) complying
with any provision of any statute, regulation or treaty of the United States as
to any Collateral if compliance with such provision is a condition to
attachment, perfection or priority of, or ability of Lender to enforce, Lender's
security interest in such Collateral, (4) obtaining governmental and other third
party consents and approvals, including without limitation any consent of any
licensor, lessor or other person obligated on Collateral, (5) obtaining waivers
from mortgagees and landlords in form and substance satisfactory to Lender and
(6) taking all actions required by any earlier versions of the Uniform
Commercial Code or by other law, as applicable in any relevant Uniform
Commercial Code jurisdiction, or by other law as applicable in any foreign
jurisdiction.
SECTION 8. Covenants Concerning Collateral, Etc. Each Borrower further
------------------------------------
covenants with Lender as follows:
(a) The Collateral, to the extent not delivered to Lender
pursuant to this Agreement, will be kept at those locations listed on Schedule 1
----------
attached hereto and Borrower
7
will not remove the Collateral from such locations, without providing at least
30 days prior written notice to Lender.
(b) Except for the security interest herein granted and Liens
permitted by the Loan Agreement, Borrower shall be the owner of or have other
rights in the Collateral free from any Lien, security interest or other
encumbrance, and Borrower shall defend the same against all claims and demands
of all persons at any time claiming the same or any interests therein adverse to
Lender.
(c) Borrower shall not pledge, mortgage or create, or suffer
to exist a security interest in the Collateral in favor of any person other than
Lender except for Liens permitted by the Loan Agreement.
(d) Borrower will keep the Collateral in good order and repair
and will not use the same in violation of law or any policy of insurance
thereon.
(e) As provided in the Loan Agreement, Borrower will permit
Lender, or its designee, to inspect the Collateral at any reasonable time,
wherever located.
(f) Borrower will pay promptly when due all taxes,
assessments, governmental charges and levies upon the Collateral or incurred in
connection with the use or operation of such Collateral or incurred in
connection with this Agreement.
(g) Borrower will continue to operate, its business in
compliance with all applicable provisions of the federal Fair Labor Standards
Act, as amended, and with all applicable provisions of federal, state and local
statutes and ordinances dealing with the control, shipment, storage or disposal
of hazardous materials or substances.
(h) Borrower will not sell or otherwise dispose, or offer to
sell or otherwise dispose, of the Collateral or any interest therein except for
(1) sales and leases of inventory and licenses of general intangibles in the
ordinary course of business and (2) so long as no Event of Default has occurred
and is continuing, sales or other dispositions of obsolescent items of equipment
in the ordinary course of business consistent with past practices, and
dispositions permitted by the Loan Agreement.
SECTION 9. Insurance. Each Borrower agrees as follows:
---------
(a) Borrower shall, at its own expense, maintain insurance
with respect to the Collateral in such amounts, against such risks, in such form
and with such insurers, as shall be satisfactory to Lender from time to time.
Each policy for liability insurance shall provide for all losses to be paid on
behalf of Lender and Borrower as their respective interests may appear, and each
policy for property damage insurance shall provide for all losses to be paid
directly to Lender. Each such policy shall in addition (1) name Borrower and
Lender as insured parties
8
thereunder (without any representation or warranty by or obligation upon Lender)
as their interests may appear, (2) contain the agreement by the insurer that any
loss thereunder shall be payable to Lender notwithstanding any action, inaction
or breach of representation or warranty by Borrower, (3) provide that there
shall be no recourse against Lender for payment of premiums or other amounts
with respect thereto, and (4) provide that at least ten days' prior written
notice of cancellation or of lapse shall be given to Lender by the insurer.
Borrower shall, if so requested by Lender, deliver to Lender original or
duplicate policies of such insurance, together with such endorsements as may be
required by Lender, and, as often as Lender may reasonably request, a report of
a reputable insurance broker with respect to such insurance. Further, Borrower
shall, at the request of Lender, duly execute and deliver instruments of
assignment of such insurance policies to comply with the requirements of Section
6 and cause the insurers to acknowledge notice of such assignment.
(b) Reimbursement under any liability insurance maintained by
Borrower pursuant to this Section 9 may be paid directly to the person who shall
have incurred liability covered by such insurance. In case of any loss involving
damage to Collateral when Section 8(c) is not applicable, Borrower shall make or
cause to be made the necessary repairs to or replacements of such Collateral,
and any proceeds of insurance maintained by Borrower pursuant to this Section 8
shall be paid to Borrower as reimbursement for the costs of such repairs or
replacements.
(c) Upon (1) the occurrence and during the continuance of any
Event of Default, or (2) the actual or constructive total loss (in excess of
$50,000 per occurrence) of any Collateral, all insurance payments in respect of
such Equipment or Inventory shall be paid to and applied by Lender as specified
in Section 16(b).
SECTION 10. As to Accounts Receivable and General Intangibles. Each
-------------------------------------------------
Borrower agrees as follows:
(a) Borrower shall keep its chief place of business and chief
executive office and the office where it keeps its records concerning the
Accounts Receivable and the General Intangibles at 0000 Xxxx Xxxxx Xxxxx,
Xxxxxxx, Xxxxxxxx 00000 or, upon 45 days' prior written notice to Lender, at any
other location in a jurisdiction where all actions required by Section 6, shall
have been taken with respect to the Accounts Receivable. Borrower will hold and
preserve such records and will permit representatives of Lender at any time
during normal business hours to inspect and make abstracts from such records.
(b) Borrower shall immediately notify Lender of (1) any
dispute in excess of $1,000,000 with a Customer, and (2) the bankruptcy,
insolvency, receivership, assignment for the benefit of creditors or suspension
of business of any such Customer of which Borrower has knowledge. Borrower shall
not compromise or discount any Account Receivable without the prior written
consent of Lender except for (i) ordinary trade discounts or allowances for
prompt
9
payment, and (ii) prior to the occurrence of a Default or an Event of Default,
such compromises or discounts that, after giving effect thereto, will not cause
85% of the Borrowing Base to be less than the unpaid principal balance of Funded
Debt then outstanding.
(c) If required by Lender, upon the occurrence of a Default or
an Event of Default, Borrower shall establish a lockbox for the account of
Borrower with Lender and shall direct all Customers to make payments on Accounts
Receivable to such lockbox by printing such direction on all invoices given to
Customers. Borrower also shall remit to such lockbox all payments on Accounts
Receivable received by Borrower, all such payments to be received in trust for
the benefit of Lender hereunder, and shall be segregated from other funds of
Borrower. Such payments shall be remitted or delivered to such lockbox in their
original form on the day of receipt. All notes, checks and other instruments so
received by Borrower shall be duly endorsed to the order of Lender. The payments
remitted to the lockbox shall be credited to a cash collateral account
maintained by Lender in the name of Borrower over which Lender shall have the
exclusive power of withdrawal. After final collection, funds credited to the
cash collateral account shall be retained in the cash collateral account and be
held as security for the Obligations, and funds in the cash collateral account
may be applied to the Obligations by Lender from time to time, whether or not
such Obligations are then due.
(d) Except as otherwise provided in Section 10 (c) or this
Section 10(d), Borrower shall continue to collect, at its own expense, all
amounts due or to become due to Borrower under the Accounts Receivable. In
connection with such collections, Borrower may take (and, at Lender's direction,
shall take) such action as Borrower or Lender may deem necessary or advisable to
enforce collection of the Accounts Receivable; provided, however, that Lender
-----------------
shall have the right, upon the occurrence and during the continuance of any
Event of Default, and upon written notice to Borrower of its intention to do so,
to notify Customers of the assignment of the applicable Accounts Receivable to
Lender and, at the expense of Borrower, to enforce collection of any such
Accounts Receivable, and to adjust, settle or compromise the amount or payment
thereof, in the same manner and to the same extent as Borrower might have done.
After receipt by Borrower of the notice from Lender referred to in the proviso
to the preceding sentence, Borrower shall not adjust, settle or compromise the
amount or payment of any Account Receivable, release any Customer wholly or
partly with respect thereto, or allow any credit or discount thereon.
(e) Upon the occurrence of a Default or an Event of Default,
Lender shall have the right, to facilitate direct collection, to take over
Borrower's post office boxes or make other arrangements, with which Borrower
shall cooperate, to receive Borrower's mail.
(f) After the occurrence of an Event of Default, Borrower
shall execute all other agreements, instruments and documents and shall perform
all further acts that Lender may require with respect to Accounts Receivable
owing by the Government to ensure compliance with the Assignment of Claims Act.
10
SECTION 11. Defense of Collateral. Each Borrower, at its expense, shall
---------------------
defend the Collateral against any claims or demands adverse to the Security
Party's security interest granted hereunder and shall promptly pay, when due,
all taxes or assessments levied against such Borrower on the Collateral.
SECTION 12. Lender Appointed Attorney-in-Fact. Each Borrower hereby
---------------------------------
irrevocably appoints Lender as such Borrower's attorney-in-fact (such power
being coupled with an interest), with full authority in the place and stead of
such Borrower and in the name of such Borrower or otherwise, from time to time
in Lender's discretion, to take any action and to execute any instrument that
Lender may deem necessary or advisable to accomplish the purposes of this
Agreement (subject to the rights of such Borrower under Section 10), including,
without limitation:
(a) To obtain and adjust insurance required to be paid to
Lender pursuant to Section 9;
(b) To ask, demand, collect, xxx for, recover, compromise,
receive and give acquittance and receipts for moneys due and to become due under
or in connection with the Collateral;
(c) To receive, indorse, and collect any drafts or other
instruments, documents and chattel paper in connection therewith; and
(d) To file any claims or take any action or institute any
proceedings that Lender may deem necessary or desirable for the collection of
any of the Collateral, or otherwise to enforce the rights of such Borrower or
Lender with respect to any of the Collateral.
SECTION 13. Lender May Perform. If any Borrower fails to perform any
------------------
covenant or agreement contained herein, Lender may itself perform, or cause
performance of, such covenant or agreement, and the expenses of Lender incurred
in connection therewith, together with interest thereon at the highest per annum
interest rate in effect under the Loan Agreement plus 3.0%, shall be payable by
such Borrower to Lender on demand and shall constitute Obligations.
SECTION 14. Lender's Duties. The powers conferred on Lender hereunder
---------------
are solely to protect its interest in the Collateral and shall not impose any
duty upon it to exercise any such powers. Except for the safe custody of any
Collateral in its possession and the accounting for moneys actually received by
it hereunder, Lender shall have no duty as to any Collateral or as to the taking
of any necessary steps to preserve rights against prior parties or any other
rights pertaining to any Collateral. Lender shall be deemed to have exercised
reasonable care in the custody and preservation of any Collateral in its
possession if such Collateral is accorded treatment substantially equal to that
which Lender accords its own property.
11
SECTION 15. Remedies. If any Event of Default shall have occurred and
--------
be continuing:
(a) Lender may exercise in respect of the Collateral, in
addition to any other rights and remedies provided for herein or otherwise
available to it, all the rights and remedies of a Lender on default under the
UCC (to the extent that the UCC applies to the affected Collateral), and also
may (1) require any Borrower to, and such Borrower hereby agrees that it shall,
at such Borrower's expense and upon request of Lender, forthwith assemble all or
part of the Collateral as directed by Lender and make it available to Lender at
a place to be designated by Lender that is reasonably convenient to both
parties, and (2) without notice except as specified below, sell the Collateral
or any part thereof, whether in its then-condition or after further preparation
or processing, either at public or private sale or at any broker's board, in
lots or in bulk, at any time or place, in one or more parcels, at any of
Lender's offices or elsewhere, for cash, on credit or for future delivery, and
upon such other terms as Lender may deem commercially reasonable. Each Borrower
agrees that, to the extent notice of sale shall be required by law, at least ten
days' notice to such Borrower of the time and place of any public sale or the
time after which any private sale is to be made shall constitute reasonable
notification. Lender shall not be obligated to make any sale of Collateral
regardless of notice of sale having been given. Lender may adjourn any public or
private sale from time to time by announcement at the time and place fixed
therefor, and such sale may, without further notice, be made at the time and
place to which it was so adjourned. At any such sale Lender may be the
purchaser, subject to the applicable provisions of the UCC.
(b) Any cash held by Lender as Collateral and all cash
proceeds received by Lender in respect of any sale of, collection from, or other
realization upon all or any part of the Collateral may, in the discretion of
Lender, be held by Lender as collateral for, and then or at any time thereafter
be applied (after payment of any amounts payable to Lender pursuant to Section
17) in whole or in part by Lender against all or any part of the Obligations in
such order as Lender shall elect. Any deficiency shall be paid to Lender by any
Borrower forthwith upon demand, and any surplus of such cash or cash proceeds
held by Lender and remaining after payment in full of all the Obligations shall
be paid over to such Borrower or to whomsoever may be lawfully entitled to
receive such surplus.
(c) Each Borrower recognizes that, by reason of certain
prohibitions contained in the Securities Act of 1933, as amended, and applicable
state securities laws, Lender may be compelled, with respect to any sale of all
or any part of the Collateral, to limit purchasers to those who will agree,
among other things, to acquire the Collateral for their own account, for
investment and not with a view to the distribution or resale thereof. Each
Borrower acknowledges that any such private sales may be at prices and on terms
less favorable to Lender than those obtainable through a public sale without
such restrictions, and, notwithstanding such circumstances, agree that any such
private sale per se shall not be deemed to have been made in a commercially
unreasonable manner and that Lender shall have no obligation to engage in
12
public sales and no obligation to delay the sale of any Collateral for the
period of time necessary to permit the respective issuer thereof to register it
for public sale.
SECTION 16. Private Sale. Lender shall incur no liability as a result
------------
of the sale of the Collateral, or any part thereof, at any private sale pursuant
to Section 16(c) hereof conducted in a commercially reasonable manner. Each
Borrower hereby waives any claims against Lender arising by reason of the fact
that the price at which the Collateral may have been sold at such a private sale
was less than the price that might have been obtained at a public sale or was
less than the aggregate amount of the Obligations, even if Lender accepts the
first offer received and does not offer the Collateral to more than one offeree
so long as such private sale was conducted in a commercially reasonable manner.
SECTION 17. Indemnity and Expenses. Each Borrower agrees as follows:
----------------------
(a) Borrower agrees to indemnify Lender from and against any
and all claims, losses and liabilities (including reasonable attorneys' fees)
growing out of or resulting from this Agreement (including, without limitation,
enforcement of this Agreement), except claims, losses or liabilities resulting
from Lender's gross negligence or willful misconduct.
(b) Borrower shall pay to Lender, upon demand, the amount of
any and all reasonable expenses, including the reasonable fees and expenses of
its counsel and of any experts and agents, that Lender may incur in connection
with (1) the administration of this Agreement, (2) the custody, preservation,
use or operation of, or the sale of, collection from, or other realization upon,
any of the Collateral, (3) the exercise or enforcement of any of the rights of
Lender hereunder, or (4) the failure by Borrower to perform or observe any of
the provisions hereof.
(c) In any suit, proceeding or action brought by Lender
relating to the Collateral, Borrower will save, indemnify and keep Lender
harmless from and against all expense, loss or damage suffered by reason of any
defense, setoff, counterclaim, recoupment or reduction of liability whatsoever
of the obligor thereunder, arising out of a breach by Borrower of any obligation
thereunder or arising out of any other agreement, indebtedness or liability at
any time owing to or in favor of such obligor or its successors from Borrower,
and all such obligations of Borrower shall be and remain enforceable against and
only against Borrower and shall not be enforceable against Lender.
(d) The provisions of this Section 17 shall survive the
termination of this Agreement and the repayment of the Notes and all other
Obligations in full.
SECTION 18. Security Interest Absolute. All rights of Lender and
--------------------------
security interests hereunder, and all obligations of each Borrower hereunder,
shall be absolute and unconditional, irrespective of:
13
(a) Any lack of validity or enforceability of the Loan
Agreement, the Notes or any other Loan Document;
(b) Any change in the time, manner or place of payment of, or
in any other term of, all or any of the Obligations, or any other amendment or
waiver of or any consent to any departure from the Loan Agreement, the Notes or
any other Loan Document, including, without limitation, any increase in the
Obligations resulting from the extension of additional credit to any Borrower or
any of its Subsidiaries or otherwise;
(c) Any taking, exchange, release or non-perfection of any
other collateral, or any taking, release or amendment or waiver of, consent to
or departure from any guaranty, for all or any of the Obligations;
(d) Any manner of application of collateral, or proceeds
thereof, to all or any of the Obligations, or any manner of sale or other
disposition of any collateral for all or any of the Obligations or any other
assets of any Borrower or any of its Subsidiaries;
(e) Any change, restructuring or termination of the corporate
structure or existence of any Borrower or any of its Subsidiaries; or
(f) Any other circumstance that might otherwise constitute a
defense available to, or a discharge of, any Borrower or a third party grantor
of a security interest.
SECTION 19. Waivers.
-------
(a) EACH BORROWER, HAVING KNOWLEDGE THAT IT MAY BE ENTITLED TO
NOTICE AND A HEARING PRIOR TO REPOSSESSION OF THE COLLATERAL, WAIVES ANY RIGHT
THAT IT MAY HAVE UNDER EXISTING OR FUTURE LAW TO NOTICE OF FORECLOSURE (OTHER
THAN NOTICES REQUIRED BY THIS AGREEMENT) AND ANY OTHER ACT DESCRIBED HEREIN OR
IN ANY LOAN DOCUMENT, TO ANY HEARING THAT MAY BE HELD RELATING TO FORECLOSURE OR
ANY OTHER SUCH ACTS, AND TO ANY NOTICE THAT MAY BE REQUIRED TO BE GIVEN BY
LENDER PRIOR TO SUCH HEARING.
(b) Each Borrower waives any right to insist upon or plead or
in any way take advantage of any appraisement, valuation, stay, marshalling of
assets, extension, redemption or moratorium law now or hereafter in force and
effect so as to prevent, hinder or delay the enforcement of the provisions of
this Agreement or any Loan Document or any rights or remedies Lender may have
hereunder or thereunder or at law or in equity.
SECTION 20. Amendments, etc. No amendment or waiver of any provision
---------------
hereof, and no consent to any departure by any Borrower herefrom, shall in any
event be effective unless the
14
same shall be in writing and signed by Lender, and then such waiver or consent
shall be effective only in the specific instance and for the specific purpose
for which given.
SECTION 21. Addresses for Notices. 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, delivered by hand or sent, prepaid, by Federal Express (or a comparable
overnight delivery service) to any Borrower and Lender at their respective
addresses specified in the Loan Agreement, or, as to either party, at such other
address as shall be designated by such party in a written notice to the other
party. 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 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 22. Continuing Security Interest. This Agreement shall create a
----------------------------
continuing security interest in the Collateral and shall (a) remain in full
force and effect until the later of (1) the payment in full of the Obligations,
and (2) the expiration or termination of Lender's commitment to make the Loans
and issue Letters of Credit, (b) be binding upon Borrowers, their respective
successors and assigns, and (c) inure to the benefit of, and be enforceable by,
Lender and its successors, transferees and assigns. Upon the later of the
payment in full of the Obligations and the expiration or termination of the
commitments to make the Loans and issue Letters of Credit, the security interest
granted hereby shall terminate and all rights to the Collateral shall revert to
Borrowers. Upon any such termination, Lender, at Borrowers' expense, shall
execute and deliver to Borrowers such documents as Borrowers shall reasonably
request to evidence such termination.
SECTION 23. Governing Law; Terms; Jury Trial Waiver. This Agreement
---------------------------------------
shall be governed by and construed in accordance with the laws of the State,
without reference to conflict of laws principles. Unless otherwise defined
herein or in the Loan Agreement, terms used in Article 9 of the UCC are used
herein as therein defined. EACH BORROWER HEREBY WAIVES TRIAL BY JURY IN ANY
LITIGATION IN ANY COURT WITH RESPECT TO THIS AGREEMENT OR THE ENFORCEMENT OR
COLLECTION OF THE OBLIGATIONS.
SIGNATURES ON FOLLOWING PAGE
15
IN WITNESS WHEREOF, Borrowers have caused this Agreement to be duly
executed and delivered by their respective officers thereunto duly authorized as
of the date first above written.
SRA INTERNATIONAL, INC.,
a Delaware corporation
By: _______________________________
Name: ____________________________
Title: _____________________________
Organizational No.:__________________
SYSTEMS RESEARCH AND APPLICATIONS CORPORATION,
a Delaware corporation
By: ______________________________
Name: ____________________________
Title: _____________________________
Organizational No.:__________________
SRA TECHNICAL SERVICES CENTER, INC.,
a Delaware corporation
By: _______________________________
Name: ____________________________
Title: _____________________________
Organizational No.:__________________
16
SCHEDULE 1
----------
to
Security Agreement
Locations of Equipment:
----------------------
Company:
SRA:
STSC:
Locations of Inventory:
----------------------
Company:
SRA:
STSC:
17
Schedule 2.2(c)
---------------
For each prepayment of the Term Loan, the Borrowers shall pay to the
Lender a prepayment charge equal to the Economic Revenue Loss for such
prepayment, calculated as set forth below.
The "Economic Revenue Loss," which shall be calculated for each Prepaid
---------------------
Principal Balance, is the difference between the Original Treasury Rate minus
the Current Treasury Rate, expressed in decimals, times the Prepaid Term times
the Prepaid Principal Balance, discounted at the Current Treasury Rate to the
date of prepayment or acceleration. The Economic Revenue Loss shall be
determined by the Bank in good faith and the result, absent manifest error,
shall be conclusive.
If the Current Treasury Rate is equal to or greater than the Original
Treasury Rate, there is no Economic Revenue Loss.
The "Original Treasury Rate" is the bond equivalent interest rate per
----------------------
annum for a U.S. Treasury security as of the date on which the Term Loan was
disbursed pursuant to the Prior Agreement and with a maturity equal to the term
of the Term Loan.
The "Current Treasury Rate" is the bond equivalent interest rate per
---------------------
annum for a U.S. Treasury security as of the date of prepayment or acceleration
and with a maturity corresponding to the Remaining Term.
The "Maturity Date" means the date on which the Term Loan matures.
-------------
A "Prepaid Principal Balance" is the amount of a principal balance of
-------------------------
the Term Note that would be outstanding on each Scheduled Payment Date. For
partial prepayments, the determination of each Prepaid Principal Balance shall
be made in the inverse order of maturity, beginning with the Prepaid Principal
Balance due on the Maturity Date. If more than one Prepaid Principal Balance
will be prepaid at the same time, then the Economic Revenue Loss shall be the
sum of the several Economic Revenue Loss calculations for each Prepaid Principal
Balance.
A "Prepaid Term" is the period beginning on the date of prepayment or
------------
acceleration and ending on the Scheduled Payment Date.
The "Remaining Term" is the period beginning on the date of prepayment
--------------
or acceleration and ending on the Maturity Date.
A "Scheduled Payment Date" is a date on which any payment of principal
---------------------
or interest, or both, is due with respect to the Term Note.
S-1
Schedule 4.10
-------------
Corporate Names
Not Applicable
S-2
Schedule 4.12
-------------
Material Contracts
Not Applicable
S-3
Schedule 4.13
-------------
Intellectual Property
Attached to Exhibit "D"
S-4
