AMENDED AND RESTATED CREDIT AGREEMENT, dated as of the 1st day of
February, 1999, by and among GTS DURATEK, INC., a Delaware corporation ("GTS")
and each of the Subsidiaries of GTS listed on the signature pages hereto and
each additional Subsidiary of GTS which hereafter becomes a Borrower pursuant to
Section 9.12 (collectively, the "Subsidiary Borrowers" and, together with GTS,
the "Borrowers"), the Lenders who are or may become a party to this Agreement,
FIRST UNION NATIONAL BANK, as Collateral Agent and as Administrative Agent for
the Lenders and Issuing Lender and FIRST UNION COMMERCIAL CORPORATION, as
Swingline Lender and Lender.
STATEMENT OF PURPOSE
The Borrowers have requested, and the Lenders have agreed, to amend and
restate the Existing Facility (as defined below) pursuant to which the Lenders
have agreed to extend certain credit facilities to the Borrowers on the terms
and conditions of this Agreement.
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged by the parties hereto, such parties
hereby agree as follows:
ARTICLE I
DEFINITIONS
SECTION 1.1 Definitions. The following terms when used in this Agreement
shall have the meanings assigned to them below:
"Adjusted Maturity Date" means October 23, 2001.
"Accounts" means all "accounts" (as defined in the UCC) now owned or
hereafter acquired by any Borrower, and shall also mean and include all accounts
receivable, contract rights, book debts, notes, drafts and other obligations or
indebtedness owing to such Borrower arising from the sale, lease or exchange of
goods or other property by it and/or the performance of services by it
(including, without limitation, any such obligation which might be characterized
as an account, contract right or general intangible under the Uniform Commercial
Code in effect in any jurisdiction) and all of such Borrower's rights in, to and
under all purchase orders for goods, services or other property, and all of such
Borrower's rights to any goods, services or other property represented by any of
the foregoing (including returned or repossessed goods and unpaid seller's
rights of rescission, replevin, reclamation and rights to stoppage in transit)
and all monies due to or to become due to such Borrower under all contracts for
the sale, lease or exchange of goods or other property and/or the performance of
services by it (whether or not yet earned by performance on the part of such
Borrower), in each case whether now in existence or hereafter arising or
acquired including, without limitation, the right to receive the proceeds of
said purchase orders and contracts and all collateral security and guarantees of
any kind given by any Person with respect to any of the foregoing.
"Account Debtor" means, with respect to any Account, any Person obligated
to make payment thereunder, including, without limitation, any account debtor
thereon.
"Administrative Agent" means First Union in its capacity as administrative
agent hereunder, and any successor thereto appointed pursuant to Section 13.9.
"Administrative Agent's Office" means the office of the Administrative
Agent specified in or determined in accordance with the provisions of Section
14.1(c).
"Affiliate" means, with respect to any Person, any other Person (other than
a Borrower or a Subsidiary) which directly or indirectly through one or more
intermediaries, controls, or is controlled by, or is under common control with,
such first Person or any of its Subsidiaries. The term "control" means (a) the
power to vote five percent (5%) or more of the securities or other equity
interests of a Person having ordinary voting power, or (b) the possession,
directly or indirectly, of any other power to direct or cause the direction of
the management and policies of a Person, whether through ownership of voting
securities, by contract or otherwise.
"Aged Waste" means all Waste, including customer and Secondary Waste, that
remains in the possession of any Borrower or Subsidiaries (including DuraTherm,
Inc.) thereof for a period greater than three hundred sixty-five (365) days from
receipt and acceptance.
"Aging Waste" means all Waste, including customer and Secondary Waste, that
remains in the possession of any Borrower or Subsidiaries (including DuraTherm,
Inc.) thereof for a period greater than one hundred eighty (180) days and less
than three hundred sixty-six (366) days from receipt and acceptance.
"Agents" means the collective reference to the Administrative Agent and
Collateral Agent.
"Aggregate Commitment" means the aggregate amount of the Lenders'
Commitments hereunder, as such amount may be reduced or modified at any time or
from time to time pursuant to the terms hereof. On the Closing Date, the
Aggregate Commitment shall be Sixty Million Dollars ($60,000,000).
"Agreement" means this Credit Agreement, as amended, restated or otherwise
modified.
"Applicable Law" means all applicable provisions of constitutions, laws,
statutes, ordinances, rules, treaties, regulations, permits, licenses,
approvals, interpretations and orders of courts or Governmental Authorities and
all orders and decrees of all courts and arbitrators.
"Applicable Margin" shall have the meaning assigned thereto in Section
5.1(c).
"Application" means an application, in the form specified by the Issuing
Lender from time to time, requesting the Issuing Lender to issue a Letter of
Credit.
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"Assignment and Acceptance" shall have the meaning assigned thereto in
Section 14.10.
"Assignment of Claims Act" means Assignment of Claims Act of 1940 (41
U.S.C. Section 15, 31 U.S.C. Section 3737, and 31 U.S.C. Section 3727),
including all amendments thereto and regulations promulgated thereunder.
"Assignment of Security Interest in United States Patents and Trademarks"
means the Amended and Restated Assignments of Security Interest in United States
Patent and Trademarks, dated as of even date executed by a Borrower in favor of
the Collateral Agent, for the ratable benefit of the Agents and the Lenders, and
any additional assignments executed by any Borrower in favor of the Collateral
Agent for the ratable benefit of the Agents and the Lenders substantially in the
form of such existing assignments executed by any Borrower, as amended, restated
or otherwise modified.
"Base Rate" means, at any time, the higher of (a) the Prime Rate and (b)
the sum of (i) the Federal Funds Rate plus (ii) 1/2 of 1%; each change in the
Base Rate shall take effect simultaneously with the corresponding change or
changes in the Prime Rate or the Federal Funds Rate.
"Base Rate Loan" means any Loan (other than a Swingline Loan) bearing
interest at a rate based upon the Base Rate as provided in Section 5.1(a).
"Bear Creek" means GTS Duratek Bear Creek, Inc., a Tennessee Corporation.
"Bear Creek Operations Report" means the report, substantially in the form
of Exhibit M, setting forth the financial results, key performance indicators,
product line information, volume and cost per unit data and Secondary Waste and
Aging Waste Data.
"Borrowers" shall have the meaning assigned thereto in the preamble hereof.
"Borrowing Base" means at any date of determination thereof, the sum of (a)
ninety percent (90%) of Eligible Government Receivables, plus (b) eighty-five
percent (85%) of Eligible Commercial Receivables plus (c) the lesser of (i)
fifty percent (50%) of Eligible Unbilled Receivables and (ii) One Million
Dollars ($1,000,000).
"Borrowing Base Certificate" means each certificate delivered by the
Borrower substantially in the form of Exhibit A.
"Borrowing Limit" means, at any date of determination thereof, an amount
equal to the lesser of (a) the Borrowing Base and (b) the Revolving Credit
Commitment of all Lenders.
"Business Day" means (a) for all purposes other than as set forth in clause
(b) below, any day other than a Saturday, Sunday or legal holiday on which banks
in Xxxxxxxxx, Xxxxx Xxxxxxxx, Xxxxxxxxx, Xxxxxxxx and New York, New York, are
open for the conduct of their commercial banking business, and (b) with respect
to all notices and determinations in connection with, and payments of principal
and interest on, any LIBOR Rate Loan, any day that is a Business Day described
in clause (a) and that is also a day for trading by and between banks in Dollar
deposits in the London interbank market.
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"Capital Asset" means, with respect to the Borrowers and their Subsidiaries
(including DuraTherm, Inc.), any asset that should, in accordance with GAAP, be
classified and accounted for as a capital asset on a Consolidated balance sheet
of the Borrower and their Subsidiaries (including DuraTherm, Inc.).
"Capital Expenditures" means, with respect to the Borrowers and their
Subsidiaries for any period, the aggregate cost of all Capital Assets acquired
by the Borrowers and their Subsidiaries (including DuraTherm, Inc.) during such
period determined on a Consolidated basis in accordance with GAAP; provided,
that Capital Expenditures shall not include the purchase price paid in
connection with a Permitted Acquisition, or expenditures for the repair,
restoration or replacement of any asset that was damaged or destroyed, in an
amount equal to any insurance proceeds received in connection with such damage
or destruction.
"Capital Lease" means, with respect to the Borrowers and their Subsidiaries
(including DuraTherm, Inc.), any lease of any property that should, in
accordance with GAAP, be classified and accounted for as a capital lease on a
Consolidated balance sheet of the Borrowers and their Subsidiaries (including
DuraTherm, Inc.).
"Cash Equivalents" means (a) direct obligations of the United States or any
agency thereof, or obligations guaranteed by the United States of any agency
thereof, (b) commercial paper rated in the highest grade by a nationally
recognized credit rating agency or (c) time deposits with, including
certificates of deposit issued by, any office located in the United States of
any bank or trust company which is organized under the laws of the United States
or any state thereof and has capital, surplus and undivided profits aggregating
at least $250,000,000; provided, in each case that such investment matures
within one year from the date of acquisition thereby by any Borrower.
"Change in Control" shall have the meaning assigned thereto in Section
12.1(i).
"Closing Date" means the date of this Agreement or such later Business Day
upon which each condition described in Section 6.1 and Section 6.2 shall be
satisfied or waived in all respects in a manner acceptable to the Administrative
Agent, in its sole discretion.
"Code" means the Internal Revenue Code of 1986, and the rules and
regulations thereunder, each as amended, supplemented or otherwise modified.
"Collateral" shall have the meaning assigned thereto in the Pledge
Agreement and the Security Agreement, as applicable.
"Collateral Agent" means First Union, in its capacity as collateral agent
hereunder, and any successor thereto appointed pursuant to Section 13.9.
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"Commitment" means, as to any Lender, the sum of such Lender's (a)
Revolving Credit Commitment, (b) Term A Loan Commitment and (c) Term B Loan
Commitment.
"Commitment Fee Rate" shall have the meaning assigned thereto in Section
5.3(a).
"Commitment Percentage" means, as to any Lender at any time, the ratio of
(a) the amount of the Commitment of such Lender to (b) the Aggregate Commitment
of all the Lenders.
"Consolidated" means, when used with reference to financial statements or
financial statement items of the Borrowers and their Subsidiaries (including
DuraTherm, Inc.), such statements or items on a consolidated basis in accordance
with applicable principles of consolidation under GAAP.
"Credit Facilities" means the collective reference to the Revolving Credit
Facility, the Swingline Facility, the L/C Facility, the Term A Loan Facility and
the Term B Loan Facility.
"Debt" means, with respect to the Borrowers and their Subsidiaries
(including DuraTherm, Inc.) at any date and without duplication, the sum of the
following calculated on a Consolidated basis in accordance with GAAP: (a) all
liabilities, obligations and indebtedness for borrowed money including but not
limited to obligations evidenced by bonds, debentures, notes or other similar
instruments of any such Person, (b) all obligations to pay the deferred purchase
price of property or services of any such Person, except trade payables and
other similar charges and expenses arising in the ordinary course of business,
(c) all obligations of any such Person as lessee under Capital Leases, (d) all
Debt of any other Person secured by a Lien on any asset of any such Person, (e)
all Guaranty Obligations of any such Person, (f) all obligations, contingent or
otherwise, of any such Person relative to the face amount of letters of credit,
whether or not drawn, including without limitation any Reimbursement Obligation,
and banker's acceptances issued for the account of any such Person, (g) all
obligations of any such Person to redeem, repurchase, exchange, defease, in each
case in cash, or otherwise make cash payments in respect of capital stock or
other securities of such Person excluding any such obligations which are not, by
their terms entitled to any cash payment, cash redemption, cash repurchase, cash
exchange or cash defeasance at any time prior to the later to occur of the
Revolving Credit Maturity Date, the Term A Loan Maturity Date or the Term B Loan
Maturity Date (excluding the obligations of GTS under the Preferred Stock) and
(h) all net obligations incurred by any such Person pursuant to Hedging
Agreements.
"Default" means any of the events specified in Section 12.1 which with the
passage of time, the giving of notice or any other condition, would constitute
an Event of Default.
"Dollars" or "$" means, unless otherwise qualified, dollars in lawful
currency of the United States.
"EBITDA" means, for any period, the sum of the following determined on a
Consolidated basis, without duplication, for the Borrowers and their
Subsidiaries (including DuraTherm, Inc.) in accordance with GAAP: (a) Net Income
for such period plus (b) the sum of the following to the extent deducted in
determining Net Income: (i) income, franchise and other taxes, (ii) Interest
Expense, (iii) amortization, depreciation and other non-cash charges, (iv)
extraordinary losses less (c) interest income and any extraordinary gains which
were included in determining Net Income.
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"Eligible Assignee" means, with respect to any assignment of the rights,
interest and obligations of a Lender hereunder, a Person that is at the time of
such assignment (a) a commercial bank organized under the laws of the United
States or any state thereof, having combined capital and surplus in excess of
$500,000,000, (b) a commercial bank organized under the laws of any other
country that is a member of the Organization of Economic Cooperation and
Development, or a political subdivision of any such country, having combined
capital and surplus in excess of $500,000,000, (c) a finance company, insurance
company or other financial institution which in the ordinary course of business
extends credit of the type extended hereunder and that has total assets in
excess of $1,000,000,000, (d) already a Lender hereunder (whether as an original
party to this Agreement or as the assignee of another Lender), (e) the successor
(whether by transfer of assets, merger or otherwise) to all or substantially all
of the commercial lending business of the assigning Lender, or (f) any other
Person that has been approved in writing as an Eligible Assignee by the
Borrowers and the Administrative Agent.
"Eligible Commercial Receivables" means, at any date of determination
thereof, any bona fide Account (other than any Account that arises out of a
Government Contract) created or acquired by any Borrower or any Subsidiary
thereof in the ordinary course of their business as presently conducted for
which the Account Debtor has been billed and which Account satisfies and
continues to satisfy the following requirements:
(i) The Account is a bona fide existing obligation of the named Account
Debtor arising from the rendering of services or the sale and delivery of
merchandise to such Account Debtor in the ordinary course of business on terms
that are normal and customary in the business of the Borrowers or their
Subsidiaries and is actually and absolutely owing to a Borrower or a Subsidiary
of any Borrower and is not contingent for any reason and such Borrower or such
Subsidiary has lawful and absolute title to such Account;
(ii) The Account does not arise out of transactions with an employee,
officer, agent, director, stockholder or other Affiliate of any Borrower or any
Subsidiary thereof unless arising in the ordinary course of business conducted
on an arm's-length basis;
(iii) The Account is evidenced by an invoice and has not remained unpaid
for a period exceeding one hundred twenty (120) days or more beyond the invoice
date of the invoice;
(iv) The Account is not due from an Account Debtor whose Debt on Accounts
that are unpaid one hundred twenty (120) days or more after the invoice date of
the respective invoices exceeds fifty percent (50%) of such Account Debtor's
total Debt to the Borrowers and their Subsidiaries;
6
(v) The Account is a valid, legally enforceable obligation of the Account
Debtor and no offset (including without limitation discounts, advertising
allowances, counterclaims or contra accounts) or other defense on the part of
such Account Debtor or any claim on the part of such Account Debtor denying
liability thereunder has been asserted; provided, however, that if the Account
is subject to any such offset, defense or claim, or any inventory related
thereto has been returned, such account shall not be an Eligible Commercial
Receivable only to the extent of the maximum amount of such offset, defense,
claim or return and the balance of such Account, if it otherwise represents a
valid, uncontested and legally enforceable obligation of the Account Debtor and
meets all of the other criteria for eligibility set forth herein, shall be
considered an Eligible Commercial Receivable;
(vi) The Account Debtor is not the subject of any bankruptcy or insolvency
proceeding of any kind;
(vii) If the Account Debtor is located outside of the United States
(excluding its territories and possessions other than Puerto Rico), the Account
(x) is payable in the full amount of the face value of the Account in Dollars
and is supported by an irrevocable letter of credit issued by a United States
financial institution, satisfactory to the Administrative Agent in its
reasonable discretion, or (y) is credit guaranteed in full by a Foreign Credit
Insurance Association ("FCIA") insurance policy or such similar policy
reasonably acceptable to the Administrative Agent;
(viii) The services have been performed (unless billing prior to such
services having been performed is permitted under the agreement with the Account
Debtor) or the subject merchandise has been shipped or delivered on open Account
to the named Account Debtor on an absolute sale basis and not on a
xxxx-and-hold, consignment, on approval or subject to any other repurchase or
return agreement and no material part of the subject goods has been returned;
(ix) Other than pursuant to the Security Documents, the Account is not
subject to any Lien or security interest whatsoever, including any surety bond;
(x) The Account is not owing to DuraTherm, Inc.;
(xi) The Account is not evidenced by chattel paper or an instrument of any
kind;
(xii) The Account is not due from an Account Debtor whose total Debt to the
Borrowers and their Subsidiaries, on a Consolidated basis, on Accounts exceeds
fifteen percent (15%) of the aggregate amount of the Eligible Commercial
Receivables; provided, however, that the account shall not be an Eligible
Commercial Receivable only to the extent of such excess, if it otherwise
represents a valid, uncontested and legally enforceable obligation of the
Account Debtor and meets all of the other criteria for eligibility set forth
herein;
(xiii) The Account has not been turned over to any Person that is not a
Subsidiary or Affiliate of the Borrower for collection; and
7
(xiv) The Administrative Agent has not determined, in good faith in its
reasonable discretion in accordance with its internal credit policies that (A)
collection of the Account is insecure or (B) the Account may not be paid by
reason of the Account Debtor's financial inability to pay; provided, however,
that any Account referred to in this clause (xiv) shall not become ineligible
until the Administrative Agent shall have given the Borrowers three (3) Business
Days' advance notice of such determination.
"Eligible Government Receivables" means, at any date of determination
thereof, any bona fide Account arising out of a Government Contract created or
acquired by any Borrower or any Subsidiary thereof in the ordinary course of
their business as presently conducted for which the Account Debtor has been
billed and that (a) the applicable Borrower shall have satisfied the
requirements of the Assignment of Claims Act, as amended, and any similar state
legislation in respect thereof; (b) the Administrative Agent is satisfied as to
the absence of set-offs, counterclaims and other defenses to payment on the part
of the United States or such state governmental authority; and that (c) the
Account satisfies and continues to satisfy requirements contained in clauses (i)
through (xiii) of the definition of Eligible Commercial Receivables; provided,
that with regard to clauses (iii) and (iv) of such definition, Accounts arising
under Government Contracts which do not remain unpaid for a period of more of
more than one-hundred twenty (120) days beyond the applicable invoice date shall
qualify as "Eligible Government Receivables".
"Eligible Unbilled Receivables" means, at any date of determination
thereof, any Account which is an Eligible Commercial Receivable or Eligible
Government Receivable, but for the fact such Account has not been invoiced as a
result of normal frequency of billing under the particular contract, or as a
result of government delays in the preparation of contract documents and which
will be invoiced within thirty (30) days of the "as of" date of the particular
Borrowing Base Certificate.
"Employee Benefit Plan" means any employee benefit plan within the meaning
of Section 3(3) of ERISA which (a) is maintained by Borrower or by any ERISA
Affiliate for employees of any Borrower or any ERISA Affiliate or (b) has at any
time within the preceding six years been maintained by Borrower or by any ERISA
Affiliate for the employees of any Borrower or any current or former ERISA
Affiliate.
"Environmental Laws" means any and all federal, state and local laws,
statutes, ordinances, rules, regulations, permits, licenses, approvals,
interpretations and orders of courts or Governmental Authorities, relating to
the protection of human health or the environment, including, but not limited
to, requirements pertaining to the manufacture, processing, distribution, use,
treatment, storage, disposal, transportation, handling, reporting, licensing,
permitting, investigation or remediation of Hazardous Materials.
"ERISA" means the Employee Retirement Income Security Act of 1974, and the
rules and regulations thereunder, each as amended, supplemented or otherwise
modified.
"ERISA Affiliate" means any Person who together with any Borrower is
treated as a single employer within the meaning of Section 414(b), (c), (m) or
(o) of the Code or Section 4001(b) of ERISA.
8
"Eurodollar Reserve Percentage" means, for any day, the percentage
(expressed as a decimal and rounded upwards, if necessary, to the next higher
1/100th of 1%) which is in effect for such day as prescribed by the Federal
Reserve Board (or any successor) for determining the maximum reserve requirement
(including without limitation any basic, supplemental or emergency reserves) in
respect of eurocurrency liabilities or any similar category of liabilities for a
member bank of the Federal Reserve System in New York City.
"Event of Default" means any of the events specified in Section 12.1,
provided that any requirement for passage of time, giving of notice, or any
other condition, has been satisfied.
"Excess Cash Flow" means, with respect to the Borrowers and their
Subsidiaries (including DuraTherm, Inc.) for any period, the sum of the
following, in each case, for such period (a) EBITDA minus (b) cash Capital
Expenditures minus (c) Interest Expense paid in cash minus (d) federal, state
and other income and franchise and other taxes to the extent included in the
determination of EBITDA minus (e) all scheduled principal repayments with
respect to Debt minus (f) Rental Expense minus (g) any dividends paid or
distributions made by GTS or other payments made to shareholders of GTS (as
permitted hereunder) minus (h) an amount equal to any increase in Consolidated
Working Capital during such period (and plus an amount equal to any decrease in
Consolidated Working Capital during such period) minus (i) any cash paid for
Permitted Acquisitions. As used in this definition, the term "Consolidated
Working Capital" at any date means Consolidated Current Assets (exclusive of
cash and Cash Equivalents) of GTS and its Subsidiaries at such date minus
Consolidated Current Liabilities (excluding short term debt and the current
portion of any long term debt) of such Person at such date. The Term
"Consolidated Current Assets" at any date means all assets which would, in
accordance with GAAP, be classified on a consolidated balance sheet of GTS and
its Subsidiaries as current assets at such date. The term "Consolidated Current
Liabilities" at any date, means all liabilities which would, in accordance with
GAAP, be classified on a consolidated balance sheet of GTS and its Subsidiaries
as current liabilities at such date.
"Existing Facility" means the Credit Agreement dated as of April 18, 1997
among the Borrower, GTS Duratek Bear Creek, Inc., GTS Duratek Colorado, Inc.,
Hittman Transport Services, Inc., GTS Instrument Services, Incorporated, General
Technical Services, Inc., Analytical Resources, Inc., as borrowers thereunder,
First Union National Bank of Maryland and First Union National Bank of North
Carolina.
"Existing Letters of Credit" means those letters of credit issued by First
Union existing on the Closing Date and identified on Schedule 1.1(b).
"Existing Loans" shall have the meaning assigned thereto in Section 6.2
(g).
"Extensions of Credit" means (a) with respect to all Lenders, the aggregate
principal amount of all outstanding Loans and L/C Obligations and (b) with
respect to each Lender, the sum of (i) such Lender's Revolving Credit Commitment
Percentage of the outstanding Revolving Credit Loans, Swingline Loans and L/C
Obligations, (ii) such Lender's Term A Loan Percentage of the outstanding Term A
Loans and (iii) such Lender's Term B Loan Percentage of the outstanding Term B
Loans.
9
"FDIC" means the Federal Deposit Insurance Corporation, or any successor
thereto.
"Federal Funds Rate" means, the rate per annum (rounded upwards, if
necessary, to the next higher 1/100th of 1%) representing the daily effective
federal funds rate as quoted by the Administrative Agent and confirmed in
Federal Reserve Board Statistical Release H.15 (519) or any successor or
substitute publication selected by the Administrative Agent. If, for any reason,
such rate is not available, then "Federal Funds Rate" shall mean a daily rate
which is determined, in the opinion of the Administrative Agent, to be the rate
at which federal funds are being offered for sale in the national federal funds
market at 9:00 a.m. (Charlotte time). Rates for weekends or holidays shall be
the same as the rate for the most immediate preceding Business Day.
"First Union" means First Union National Bank, a national banking
association, and its successors.
"Fiscal Year" means the fiscal year of the Borrowers and their Subsidiaries
(including DuraTherm, Inc.) ending on December 31.
"Fixed Charges" means, with respect to the Borrowers and their Subsidiaries
(including DuraTherm, Inc.), for any period, the sum of the following each
calculated on a Consolidated basis without duplication for such period in
accordance with GAAP: (a) Interest Expense (but not including non-cash interest)
plus (b) Rental Expense plus (c) scheduled principal payments with respect to
Debt plus (d) any payment of Preferred Dividends plus (e) any payments in
connection with stock repurchases under Section 11.7(d) in excess of $4,000,000.
"GAAP" means generally accepted accounting principles, as recognized by the
American Institute of Certified Public Accountants and the Financial Accounting
Standards Board, as in effect from time to time, applied on a basis consistent
with the 1997 annual audited Consolidated financial statements of the Borrowers
and their Consolidated Subsidiaries (including DuraTherm, Inc.) (except for
changes concurred in by the Borrowers' independent public accountants).
"Governmental Approvals" means all authorizations, consents, approvals,
licenses and exemptions of, registrations and filings with, and reports to, all
Governmental Authorities.
"Governmental Authority" means any nation, province, state or political
subdivision thereof, and any government or any Person exercising executive,
legislative, regulatory or administrative functions of or pertaining to
government, and any corporation or other entity owned or controlled, through
stock or capital ownership or otherwise, by any of the foregoing.
"Governmental Contract" means a contract between any Borrower and an
agency, department or instrumentality of the United States or any state,
municipal or local Governmental Authority in the United States where such
Borrower is the prime contractor.
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"Guaranty Obligation" means, with respect to the Borrowers and their
Subsidiaries (including DuraTherm, Inc.), without duplication, any obligation,
contingent or otherwise, of any such Person pursuant to which such Person has
directly or indirectly guaranteed any Debt or other obligation of any other
Person and, without limiting the generality of the foregoing, any obligation,
direct or indirect, contingent or otherwise, of any such Person (a) to purchase
or pay (or advance or supply funds for the purchase or payment of) such Debt or
other obligation (whether arising by virtue of partnership arrangements, by
agreement to keep well, to purchase assets, goods, securities or services, to
take-or-pay, or to maintain financial statement condition or otherwise) or
(b) entered into for the purpose of assuring in any other manner the obligee of
such Debt or other obligation of the payment thereof or to protect such obligee
against loss in respect thereof (in whole or in part); provided, that the term
Guaranty Obligation shall not include endorsements for collection or deposit in
the ordinary course of business.
"Hazardous Materials" means any substances or materials which are or become
defined as hazardous wastes, hazardous substances or toxic substances or require
investigation or remediation under any Applicable Law or are or become regulated
by any Governmental Authority.
"Hedging Agreement" means any agreement with respect to an interest rate
swap, collar, cap, floor or a forward rate agreement or other agreement
regarding the hedging of interest rate risk exposure executed in connection with
hedging the interest rate exposure of any Borrower, and any confirming letter
executed pursuant to such hedging agreement, all as amended, restated or
otherwise modified.
"Interest Expense" means, for any period, total interest expense
(including, without limitation, interest expense attributable to Capital Leases)
determined on a Consolidated basis, without duplication, for the Borrowers and
their Subsidiaries (including DuraTherm, Inc.) in accordance with GAAP.
"Interest Period" shall have the meaning assigned thereto in Section
5.1(b).
"Issuing Lender" means First Union, in its capacity as issuer of any Letter
of Credit, or any successor thereto.
"Joinder Agreement" means a Joinder Agreement substantially in the form of
Exhibit I executed by each future Subsidiary in accordance with Section 9.12, as
amended, restated or otherwise modified.
"L/C Commitment" means the lesser of (a) Twenty Million Dollars
($20,000,000) and (b) the Revolving Credit Commitment.
"L/C Facility" means the letter of credit facility established pursuant to
Article III hereof.
"L/C Obligations" means at any time, an amount equal to the sum of (a) the
aggregate undrawn and unexpired amount of the then outstanding Letters of Credit
and (b) the aggregate amount of drawings under Letters of Credit which have not
then been reimbursed pursuant to Section 3.5.
11
"L/C Participants" means the collective reference to all the Lenders other
than the Issuing Lender.
"Lender" means each Person executing this Agreement as a Lender set forth
on the signature pages hereto and each Person that hereafter becomes a party to
this Agreement as a Lender pursuant to Section 14.10.
"Lending Office" means, with respect to any Lender, the office of such
Lender maintaining such Lender's Commitment Percentage of the Loans.
"Letters of Credit" shall have the meaning assigned thereto in Section 3.1
and on the Closing Date shall also include the Existing Letters of Credit.
"Leverage Ratio" shall have the meaning assigned thereto in Section 10.1.
"LIBOR" means the rate of interest per annum determined on the basis of the
rate for deposits in Dollars in minimum amounts of at least $5,000,000 for a
period equal to the applicable Interest Period which appears on the Telerate
Page 3750 at approximately 11:00 a.m. (London time) two (2) Business Days prior
to the first day of the applicable Interest Period). If, for any reason, such
rate does not appear on Telerate Page 3750, then "LIBOR" shall be determined by
the Administrative Agent to be the arithmetic average (rounded upward, if
necessary, to the nearest one-sixteenth of one percent (1/16%)) of the rate per
annum at which deposits in Dollars would be offered by first class banks in the
London interbank market to the Administrative Agent approximately 11:00 a.m.
(London time) two (2) Business Days prior to the first day of the applicable
Interest Period for a period equal to such Interest Period and in an amount
substantially equal to the amount of the applicable Loan.
"LIBOR Rate" means a rate per annum (rounded upwards, if necessary, to the
next higher 1/100th of 1%) determined by the Administrative Agent pursuant to
the following formula:
LIBOR Rate = LIBOR
----------------------------------
1.00-Eurodollar Reserve Percentage
"LIBOR Rate Loan" means any Loan bearing interest at a rate based upon the
LIBOR Rate as provided in Section 5.1(a).
"Lien" means, with respect to any asset, any mortgage, lien, pledge,
charge, security interest or encumbrance of any kind in respect of such asset.
For the purposes of this Agreement, a Person shall be deemed to own subject to a
Lien any asset which it has acquired or holds subject to the interest of a
vendor or lessor under any conditional sale agreement, Capital Lease or other
title retention agreement relating to such asset.
"Loans" means the collective reference to the Revolving Credit Loans, the
Term Loans and the Swingline Loans and "Loan" means any of such Loans.
12
"Loan Documents" means, collectively, this Agreement, the Notes, the
Applications, any Hedging Agreement with any Lender (which such Hedging
Agreement is permitted or required hereunder), the Security Documents and each
other document, instrument, certificate and agreement executed and delivered by
any Borrower or its Subsidiaries in connection with this Agreement or otherwise
referred to herein or contemplated hereby, all as may be amended, restated or
otherwise modified.
"M-Area Charge" shall have the meaning assigned thereto in the definition
of Net Income.
"M-Area Contract" means the contract between GTS and Westinghouse Savannah
River Company dated November 10, 1993.
"Material Adverse Effect" means, with respect to the Borrowers and their
Subsidiaries (including DuraTherm, Inc.) taken as a whole, a material adverse
effect on the properties, business, operations or condition (financial or
otherwise) of any such Person or the ability of any such Person to perform its
obligations under the Loan Documents or Material Contracts, in each case to
which it is a party.
"Material Contract" means (a) any contract or other agreement, written or
oral, of any Borrower or any of its Subsidiaries involving monetary liability of
or to any Person in an amount in excess of $10,000,000 per annum, or (b) any
other contract or agreement, written or oral, of any Borrower or any of its
Subsidiaries the failure to comply with which could reasonably be expected to
have a Material Adverse Effect.
"Maturity Adjustment Date" means June 30, 1999.
"Multiemployer Plan" means a "multiemployer plan" as defined in Section
4001(a)(3) of ERISA to which any Borrower or any ERISA Affiliate is making, or
is accruing an obligation to make, contributions within the preceding six years.
"Net Income" means, with respect to the Borrowers and their Subsidiaries
(including DuraTherm, Inc.) for any period, the Consolidated Net Income (or
loss) thereof for such period determined without duplication in accordance with
GAAP; provided, that there shall be excluded from net income (or loss) (a) the
income (or loss) of any other Person (other than any Wholly-Owned Subsidiary
including, so long as it is not a Wholly-Owned Subsidiary, DuraTherm, Inc.) in
which any Borrower has an ownership interest unless received by such Borrower or
Wholly-Owned Subsidiary in a cash distribution and (b) a loss in an amount, not
to exceed $10,000,000, equal to any non-cash charges arising out of the
termination of the M-Area Contract (including, any asset write-down related to
the termination of such contract) so long as any such non-cash charges are taken
on or prior to December 31, 2000 (any such non-cash charge, the "M-Area
Charge").
"Non-Disturbance Agreement" means the non-disturbance agreement of even
date executed by the Borrowers, the Agents, the Lenders and BNFL, Inc.
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"Non-Material Subsidiary" means, at any date of determination, any
Subsidiary which has stockholders' equity or assets with a value of less than
$50,000 at such date.
"Notes" means the collective reference to the Revolving Credit Notes, the
Swingline Note, the Term A Notes, the Term B Notes and "Note" means any of such
Notes.
"Notice of Assignment" means each Notice of Assignment executed by a
Borrower with respect to a Government Contract to which such Borrower is a party
substantially in the form of Exhibit L.
"Notice of Account Designation" shall have the meaning assigned thereto in
Section 2.3(b).
"Notice of Conversion/Continuation" shall have the meaning assigned thereto
in Section 5.2.
"Notice of Prepayment" shall have the meaning assigned thereto in Section
2.4(c).
"Notice of Revolving Credit/Swingline Borrowing" shall have the meaning
assigned thereto in Section 2.3(a).
"Notice of Term Loan Borrowing" shall have the meaning assigned thereto in
Section 4.2(a).
"Obligations" means, in each case, whether now in existence or hereafter
arising: (a) the principal of and interest on (including interest accruing after
the filing of any bankruptcy or similar petition) the Loans, (b) the L/C
Obligations, (c) all payment and other obligations owing by any Borrower to any
Lender or the Administrative Agent under any Hedging Agreement with any Lender
(which such Hedging Agreement is permitted or required hereunder), and (d) all
other fees and commissions (including attorney's fees), charges, indebtedness,
loans, liabilities, financial accommodations, obligations, covenants and duties
owing by any Borrower to the Lenders or the Administrative Agent, of every kind,
nature and description, direct or indirect, absolute or contingent, due or to
become due, contractual or tortious, liquidated or unliquidated, and whether or
not evidenced by any note, in each case under or in respect of this Agreement,
any Note, any Letter of Credit or any of the other Loan Documents.
"Officer's Compliance Certificate" shall have the meaning assigned thereto
in Section 8.2.
"Operating Lease" shall mean, as to any Person, as determined in accordance
with GAAP, any lease of property by such Person as lessee which is not a Capital
Lease.
"Other Taxes" shall have the meaning assigned thereto in Section 5.11(b).
"PBGC" means the Pension Benefit Guaranty Corporation or any successor
agency.
14
"Pension Plan" means any Employee Benefit Plan, other than a Multiemployer
Plan, which is subject to the provisions of Title IV of ERISA or Section 412 of
the Code and which (a) is maintained by Borrower or by any ERISA Affiliate for
employees of any Borrower or any ERISA Affiliates or (b) has at any time within
the preceding six years been maintained by Borrower or by any ERISA Affiliate
for the employees of any Borrower or any of their current or former ERISA
Affiliates.
"Permitted Acquisitions" means those acquisitions permitted pursuant to
Section 11.4(c) or otherwise consented to by the Required Lenders.
"Permitted Investments" means the stock, interests, Debt or other
obligation or security, business, assets, other investments or interests, loans,
advances and extensions of credit permitted by Section 11.4 or otherwise
consented to by the Required Lenders.
"Permitted Liens" means Liens permitted pursuant to Section 11.3 or
otherwise consented to by the Required Lenders.
"Permitted Stock Repurchases" means those stock repurchases permitted
pursuant to Section 11.7(d).
"Person" means an individual, corporation, limited liability company,
partnership, association, trust, business trust, joint venture, joint stock
company, pool, syndicate, sole proprietorship, unincorporated organization,
Governmental Authority or any other form of entity or group thereof.
"Pledge Agreement" means the pledge agreement of even date executed by GTS,
GTS Duratek Bear Creek, Inc. and General Technical Services, Inc. in favor of
the Collateral Agent for the ratable benefit of the Agents and the Lenders,
substantially in the form of Exhibit J, as amended, restated or otherwise
modified.
"Preferred Stock" means the 8% Cumulative Convertible Redeemable Preferred
Stock of GTS.
"Preferred Stock Redemption Amendment" means an amendment, in form and
substance reasonably satisfactory to the Administrative Agent, to the terms of
the Preferred Stock, which such amendment has the effect of extending the
mandatory redemption date of such Preferred Stock to a date which is at least
ninety-one (91) days after the later to occur of the Revolving Credit Maturity
Date, the Term A Loan Maturity Date or the Term B Loan Maturity Date, in each
case as in effect on the Closing Date.
"Prime Rate" means, at any time, the rate of interest per annum publicly
announced from time to time by First Union as its prime rate. Each change in the
Prime Rate shall be effective as of the opening of business on the day such
change in the Prime Rate occurs. The parties hereto acknowledge that the rate
announced publicly by First Union as its Prime Rate is an index or base rate and
shall not necessarily be its lowest or best rate charged to its customers or
other banks.
"Prior Lender" shall have the meaning assigned thereto in Section 6.2(g).
15
"Purchase Price" means with respect to the purchase of any equipment, the
actual cost of such equipment excluding any charges for taxes, shipping,
installation, service, maintenance or any other costs ancillary to the purchase
of such equipment.
"Register" shall have the meaning assigned thereto in Section 14.10(d).
"Reimbursement Obligation" means the obligation of the Borrowers to
reimburse the Issuing Lender pursuant to Section 3.5 for amounts drawn under
Letters of Credit.
"Rental Expense" means all obligations of the Borrowers and their
Subsidiaries (including DuraTherm, Inc.) under Operating Leases.
"Required Lenders" means any combination of Lenders holding at least
sixty-six and two-thirds percent (66 2/3%) of the Extensions of Credit or, if
there are no outstanding Loans and Letters of Credit, any combination of Lenders
whose Revolving Credit Commitment Percentage, Term A Loan Percentage and Term B
Loan Percentage equal at least sixty-six and two-thirds percent (66 2/3%) of the
Aggregate Commitment.
"Responsible Officer" means any of the following: the chief executive
officer, treasurer, or chief financial officer of any Borrower or any other
officer of any Borrower reasonably acceptable to the Administrative Agent.
"Revolving Credit Commitment" means (a) as to any Lender, the obligation of
such Lender to make Revolving Credit Loans to and issue or participate in
Letters of Credit issued for the account of the Borrowers hereunder in an
aggregate principal amount or face amount at any time outstanding not to exceed
the amount set forth opposite such Lender's name on Schedule 1.1(a) hereto as
such amount may be reduced or modified at any time or from time to time pursuant
to the terms hereof and (b) as to all Lenders, the aggregate commitment of all
Lenders to make Revolving Credit Loans and issue or participate in Letters of
Credit, as such amount or face amount may be reduced or modified at any time or
from time to time pursuant to the terms hereof. The Revolving Credit Commitment
of all Lenders on the Closing Date shall be Thirty-Five Million Dollars
($35,000,000).
"Revolving Credit Commitment Percentage" means, as to the respective
Revolving Credit Commitment of any Lender at any time, the ratio of (a) the
amount of the Revolving Credit Commitment of such Lender to (b) the Revolving
Credit Commitments of all Lenders.
"Revolving Credit Facility" means the revolving credit facility established
pursuant to Article II hereof.
"Revolving Credit Loans" means any revolving loan made to the Borrowers
pursuant to Section 2.1, and all such revolving loans collectively as the
context requires.
"Revolving Credit Maturity Date" means the earliest of the dates referred
to in Section 2.7.
16
"Revolving Credit Notes" means the collective reference to the Revolving
Credit Notes made by the Borrowers payable to the order of each Lender,
substantially in the form of Exhibit B-1 hereto, evidencing the Revolving Credit
Facility, and any amendments and modifications thereto, any substitutes
therefor, and any replacements, restatements, renewals or extension thereof, in
whole or in part; "Revolving Credit Note" means any of such Revolving Credit
Notes.
"Secondary Waste" means Waste generated directly or indirectly by
processing customer Waste.
"Security Agreement" means the amended and restated security agreement of
even date executed by the Borrowers in favor of the Collateral Agent for the
ratable benefit of the Agents and the Lenders, substantially in the form of
Exhibit K, as amended, restated or otherwise modified.
"Security Documents" means the collective reference to the Pledge
Agreement, the Security Agreement, the Notices of Assignment, the Assignment of
Security Interest in United States Patents and Trademarks, and each other
agreement or writing pursuant to which any Borrower or any Subsidiary thereof
purports to pledge or grant a security interest in any property or assets
securing the Obligations or any such Person purports to guaranty the payment
and/or performance of the Obligations.
"Solvent" means, as to the Borrowers and their Subsidiaries (including
DuraTherm, Inc.) on a particular date, that any such Person (a) has capital
sufficient to carry on its business and transactions and all business and
transactions in which it is about to engage and is able to pay its debts as they
mature, (b) owns property having a value, both at fair valuation and at present
fair saleable value, greater than the amount required to pay its probable
liabilities (including contingencies), and (c) does not believe that it will
incur debts or liabilities beyond its ability to pay such debts or liabilities
as they mature.
"Subordinated Debt" means the collective reference to Debt on Schedule
7.1(s) hereof designated as Subordinated Debt and any other Debt of any Borrower
or any Subsidiary thereof subordinated in right and time of payment to the
Obligations on terms and conditions reasonably satisfactory to the
Administrative Agent and Required Lenders.
"Subordination Agreement" means the subordination agreement of even date
executed by the Collateral Agent, BNFL, Inc. ("BNFL"), GTS, GTS Instrument
Services, Incorporated and General Technical Services, Inc. (collectively, the
"Obligors") subordinating to the Obligations amounts owed by the Obligors to
BNFL (a) under the convertible debenture dated November 7, 1995 executed by the
Obligors in favor of BNFL in the amount of Ten Million Dollars ($10,000,000) and
(b) under the Non-Disturbance Agreement and certain agreements related thereto.
17
"Subsidiary" means as to any Person, any corporation, partnership, limited
liability company or other entity of which more than fifty percent (50%) of the
outstanding capital stock or other ownership interests having ordinary voting
power to elect a majority of the board of directors or other managers of such
corporation, partnership, limited liability company or other entity is at the
time, directly or indirectly, owned by or the management is otherwise controlled
by such Person (irrespective of whether, at the time, capital stock or other
ownership interests of any other class or classes of such corporation,
partnership, limited liability company or other entity shall have or might have
voting power by reason of the happening of any contingency). Unless otherwise
qualified references to "Subsidiary" or "Subsidiaries" herein shall refer to
those of the Borrowers; provided that for purposes of this Agreement, unless
expressly stated to the contrary DuraTherm, Inc. shall not be considered to be a
Subsidiary of any Borrower.
"Subsidiary Borrowers" shall have the meaning assigned thereto in the
preamble hereof.
"Substantially Similar Line of Business" means any business which is
involved in the treatment, remediation, transportation, processing or disposal
of radioactive, hazardous, mixed and other wastes, or which provides technical
support services that include, but are not limited to, site decontamination and
decommissioning, radiological engineering services, staff augmentation and
outage support, instrumentation services, environmental and computer consulting
and environmental health and safety training (excluding the processing of high
level radioactive waste).
"Swingline Commitment" means the lesser of (a) Five Million Dollars
($5,000,000) and (b) the Revolving Credit Commitment.
"Swingline Facility" means the Swingline Facility established pursuant to
Article II hereof.
"Swingline Lender" means First Union Commercial Corporation in its capacity
as swingline lender hereunder.
"Swingline Loan" means any swingline loan made by the Swingline Lender to
the Borrowers pursuant to Section 2.2, and all such swingline loans collectively
as the context requires.
"Swingline Note" means the Swingline Note made by the Borrowers payable to
the order of the Swingline Lender, substantially in the form of Exhibit B-2
hereto, evidencing the Swingline Facility, and any amendments, modifications and
supplements thereto, any substitutes therefor, and any replacements,
restatements, renewals or extensions thereof, in whole or in part.
"Swingline Termination Date" means the earliest to occur of (a) the
resignation of First Union as Administrative Agent in accordance with Section
13.9 and (b) the Revolving Credit Maturity Date.
"Taxes" shall have the meaning assigned thereto in Section 5.11(a).
"Term A Loans" means the term loans made to the Borrowers by the Lenders
pursuant to Section 4.1(a).
"Term A Loan Commitment" means (a) as to any Lender, the obligation of such
Lender to make a Term A Loan for the account of the Borrowers hereunder in an
aggregate principal amount not to exceed the amount set forth opposite such
Lender's name on Schedule 1.1(a) and (b) as to all Lenders, the aggregate
commitment of all Lenders to make Term A Loans. The Term A Loan Commitment of
all Lenders as of the Closing Date shall be Twenty Million Dollars
($20,000,000).
18
"Term A Loan Facility" means the term loan facility established pursuant to
Article IV hereof under which the Lenders make Term A Loans to the Borrowers.
"Term A Loan Maturity Date" means February __, 2004; provided that, if the
Preferred Stock Redemption Amendment shall not have become effective on or prior
to the Maturity Adjustment Date, the Term A Loan Maturity Date shall mean the
Adjusted Maturity Date.
"Term A Loan Percentage" means, as to any Lender, (a) prior to making the
Term A Loans, the ratio of (i) the Term A Loan Commitment of such Lender to (ii)
the Term A Loan Commitments of all Lenders and (b) after the Term A Loans are
made, the ratio of (i) the outstanding principal balance of the Term A Loan of
such Lender to (ii) the aggregate outstanding principal balance of the Term A
Loans of all Lenders.
"Term A Notes" means the Term A Notes made by the Borrowers payable to the
order of each of the Lenders, substantially in the form of Exhibit B-3 hereto,
evidencing the Term A Loan Facility, and any amendments, modifications and
supplements thereto, any substitutes therefor, and any replacements,
restatements, renewals or extensions thereof, in whole or in part.
"Term B Loans" means the term loans made to the Borrowers by the Lenders
pursuant to Section 4.1(a).
"Term B Loan Commitment" means (a) as to any Lender, the obligation of such
Lender to make a Term B Loan for the account of the Borrowers hereunder in an
aggregate principal amount not to exceed the amount set forth opposite such
Lender's name on Schedule 1.1(a) and (b) as to all Lenders, the aggregate
commitment of all Lenders to make Term B Loans. The Term B Loan Commitment of
all Lenders as of the Closing Date shall be Five Million Dollars ($5,000,000).
"Term B Loan Facility" means the term loan facility established pursuant to
Article IV hereof under which the Lenders make Term B Loans to the Borrowers.
"Term B Loan Maturity Date" means February __, 2004; provided that, if the
Preferred Stock Redemption Amendment shall not have become effective on or prior
to the Maturity Adjustment Date, the Term B Loan Maturity Date shall mean the
Adjusted Maturity Date.
"Term B Loan Percentage" means, as to any Lender, (a) prior to making the
Term B Loans, the ratio of (i) the Term B Loan Commitment of such Lender to (ii)
the Term B Loan Commitments of all Lenders and (b) after the Term B Loans are
made, the ratio of (i) the outstanding principal balance of the Term B Loan of
such Lender to (ii) the aggregate outstanding principal balance of the Term B
Loans of all Lenders.
"Term B Notes" means the Term B Notes made by the Borrowers payable to the
order of each of the Lenders, substantially in the form of Exhibit B-4 hereto,
evidencing the Term B Loan Facility, and any amendments, modifications and
supplements thereto, any substitutes therefor, and any replacements,
restatements, renewals or extensions thereof, in whole or in part.
19
"Term Loans" means the Term A Loans or the Term B Loans made to the
Borrowers pursuant to Section 4.1, or all such Term Loans, as the context
requires.
"Term Notes" means the Term A Notes or the Term B Notes, or any combination
thereof.
"Termination Event" means: (a) a "Reportable Event" described in Section
4043 of ERISA, or (b) the withdrawal of any Borrower or any ERISA Affiliate from
a Pension Plan during a plan year in which it was a "substantial employer" as
defined in Section 4001(a)(2) of ERISA, or (c) the termination of a Pension
Plan, the filing of a notice of intent to terminate a Pension Plan or the
treatment of a Pension Plan amendment as a termination under Section 4041 of
ERISA, or (d) the institution of proceedings to terminate, or the appointment of
a trustee with respect to, any Pension Plan by the PBGC, or (e) any other event
or condition which would constitute grounds under Section 4042(a) of ERISA for
the termination of, or the appointment of a trustee to administer, any Pension
Plan, or (f) the partial or complete withdrawal of any Borrower or any ERISA
Affiliate from a Multiemployer Plan, or (g) the imposition of a Lien pursuant to
Section 412 of the Code or Section 302 of ERISA, or (h) any event or condition
which results in the reorganization or insolvency of a Multiemployer Plan under
Sections 4241 or 4245 of ERISA, or (i) any event or condition which results in
the termination of a Multiemployer Plan under Section 4041A of ERISA or the
institution by PBGC of proceedings to terminate a Multiemployer Plan under
Section 4042 of ERISA.
"Total Debt" means, as of any date of determination with respect to the
Borrowers and their Subsidiaries (including DuraTherm, Inc.) on a Consolidated
basis without duplication, the sum of all Debt of the Borrowers and their
Subsidiaries (including DuraTherm, Inc.).
"Uniform Customs" means the Uniform Customs and Practice for Documentary
Credits (1994 Revision), International Chamber of Commerce Publication No. 500.
"UCC" means the Uniform Commercial Code as in effect in the State of North
Carolina, as amended, restated or otherwise modified.
"United States" means the United States of America.
"Waste" means any product or other materials received and accepted by any
Borrower or Subsidiary thereof (including DuraTherm, Inc.) for processing,
treatment or remediation of radioactive, hazardous, mixed and other wastes.
"Wholly-Owned" means, with respect to a Subsidiary, that all of the shares
of capital stock or other ownership interests of such Subsidiary are, directly
or indirectly, owned or controlled by any Borrower and/or one or more of its
Wholly-Owned Subsidiaries.
SECTION 1.2 General . Unless otherwise specified, a reference in this
Agreement to a particular section, subsection, Schedule or Exhibit is a
reference to that section, subsection, Schedule or Exhibit of this Agreement.
Wherever from the context it appears appropriate, each term stated in either the
singular or plural shall include the singular and plural, and pronouns stated in
the masculine, feminine or neuter gender shall include the masculine, the
feminine and the neuter. Any reference herein to "Charlotte time" shall refer to
the applicable time of day in Charlotte, North Carolina.
20
SECTION 1.3 Other Definitions and Provisions.
(a) Use of Capitalized Terms. Unless otherwise defined therein, all
capitalized terms defined in this Agreement shall have the defined meanings when
used in this Agreement, the Notes and the other Loan Documents or any
certificate, report or other document made or delivered pursuant to this
Agreement.
(b) Miscellaneous. The words "hereof", "herein" and "hereunder" and words
of similar import when used in this Agreement shall refer to this Agreement as a
whole and not to any particular provision of this Agreement.
ARTICLE II
REVOLVING CREDIT FACILITY
SECTION 2.1 Revolving Credit Loans . Subject to the terms and conditions of
this Agreement, each Lender severally agrees to make Revolving Credit Loans to
the Borrowers on a joint and several basis from time to time from the Closing
Date through the Revolving Credit Maturity Date as requested by GTS on behalf of
the Borrowers in accordance with the terms of Section 2.3; provided, that (a)
each Lender's Revolving Credit Commitment Percentage of the sum of the aggregate
amount of all outstanding Revolving Credit Loans, Swingline Loans and L/C
Obligations shall at no time exceed such Lender's Revolving Credit Commitment
and (b) no borrowing of Revolving Credit Loans shall be made if, immediately
after giving effect thereto, the aggregate principal amount of Revolving Credit
Loans then outstanding plus (i) all outstanding Swingline Loans plus (ii) the
aggregate principal amount of all outstanding L/C Obligations would exceed the
then applicable Borrowing Limit. Each Revolving Credit Loan by a Lender shall be
in a principal amount equal to such Lender's Revolving Credit Commitment
Percentage of the aggregate principal amount of Revolving Credit Loans requested
on such occasion. Subject to the terms and conditions hereof, the Borrowers may
borrow, repay and reborrow Revolving Credit Loans hereunder until the Revolving
Credit Maturity Date.
SECTION 2.2 Swingline Loans.
(a) Availability. Subject to the terms and conditions of this Agreement,
the Swingline Lender agrees to make Swingline Loans to the Borrower from time to
time from the Closing Date through, but not including, the Swingline Termination
Date; provided, that the Swingline Lender shall have no obligation to make any
Swingline Loan, if, after giving effect to any amount requested, (a) the
aggregate principal amount of all Swingline Loans then outstanding would exceed
the Swingline Commitment or (b) the aggregate principal amount of all Revolving
Credit Loans then outstanding plus the aggregate principal amount of all
Swingline Loans then outstanding plus the L/C Obligations then outstanding would
exceed the then applicable Borrowing Limit.
21
(b) Refunding.
(i) If not earlier repaid by the Borrowers, Swingline Loans shall be
refunded by the Lenders on demand by the Swingline Lender. Such refundings shall
be made by the Lenders in accordance with their respective Revolving Credit
Commitment Percentages and shall thereafter be reflected as Revolving Credit
Loans of the Lenders on the books and records of the Administrative Agent. Each
Lender shall fund its respective Revolving Credit Commitment Percentage of
Revolving Credit Loans as required to repay Swingline Loans outstanding to the
Swingline Lender upon demand by the Swingline Lender but in no event later than
2:00 p.m. (Charlotte time) on the next succeeding Business Day after such demand
is made. No Lender's obligation to fund its respective Revolving Credit
Commitment Percentage of a Swingline Loan shall be affected by any other
Lender's failure to fund its Revolving Credit Commitment Percentage of a
Swingline Loan, nor shall any Lender's Revolving Credit Commitment Percentage be
increased as a result of any such failure of any other Lender to fund its
Revolving Credit Commitment Percentage.
(ii) The Borrowers shall pay to the Swingline Lender on demand the amount
of such Swingline Loans to the extent amounts received from the Lenders pursuant
to Section 2.2(b)(i) are not sufficient to repay in full the outstanding
Swingline Loans requested or required to be refunded. In addition, each Borrower
hereby authorizes the Administrative Agent to charge any account maintained with
the Swingline Lender (up to the amount available therein) in order to
immediately pay the Swingline Lender the amount of such Swingline Loans to the
extent amounts received from the Lenders are not sufficient to repay in full the
outstanding Swingline Loans requested or required to be refunded. If any portion
of any such amount paid to the Swingline Lender shall be recovered by or on
behalf of the Borrowers from the Swingline Lender in bankruptcy or otherwise,
the loss of the amount so recovered shall be ratably shared among all the
Lenders in accordance with their respective Revolving Credit Commitment
Percentages (unless the amounts so recovered by or on behalf of the Borrowers
pertain to a Swingline Loan extended after the occurrence and during the
continuance of an Event of Default of which the Administrative Agent has
received actual notice and which such Event of Default has not been waived by
the Required Lenders or the Lenders, as applicable).
(iii) Each Lender acknowledges and agrees that its obligation to refund
Swingline Loans in accordance with the terms of this Section 2.2 is absolute and
unconditional and shall not be affected by any circumstance whatsoever,
including, without limitation, non-satisfaction of the conditions set forth in
Article VI. Further, each Lender agrees and acknowledges that if prior to the
refunding of any outstanding Swingline Loans pursuant to this Section 2.2, one
of the events described in Section 12.1(j) or (k) shall have occurred, each
Lender will, on the date the applicable Revolving Credit Loan would have been
made, purchase an undivided participating interest in the Swingline Loan to be
refunded in an amount equal to its Revolving Credit Commitment Percentage of the
aggregate amount of such Swingline Loan. Each Lender will immediately transfer
to the Swingline Lender, in immediately available funds, the amount of its
participation and upon receipt thereof the Swingline Lender will deliver to such
Lender a certificate evidencing such participation dated the date of receipt of
such funds and for such amount. Whenever, at any time after the Swingline Lender
has received from any Lender such Lender's participating interest in a Swingline
Loan, the Swingline Lender receives any payment on account thereof, the
Swingline Lender will distribute to such Lender its participating interest in
such amount (appropriately adjusted, in the case of interest payments, to
reflect the period of time during which such Lender's participating interest was
outstanding and funded).
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SECTION 2.3 Procedure for Advances of Revolving Credit and Swingline Loans.
(a) Requests for Borrowing. GTS, on behalf of the Borrowers, shall give the
Administrative Agent irrevocable prior written notice in the form attached
hereto as Exhibit C-1 (a "Notice of Revolving Credit/Swingline Borrowing") not
later than 11:00 a.m. (Charlotte time) (i) on the same Business Day as each
Swingline Loan, (ii) at least one (1) Business Day before each Base Rate Loan
and (iii) at least three (3) Business Days before each LIBOR Rate Loan, of its
intention to borrow, specifying (A) the date of such borrowing, which shall be a
Business Day, (B) the amount of such borrowing, which shall be in an amount
equal to the amount of the Aggregate Commitment then available to the Borrowers,
or if less, (x) with respect to Base Rate Loans in an aggregate principal amount
of $1,000,000 or a whole multiple of $250,000 in excess thereof, (y) with
respect to LIBOR Rate Loans in an aggregate principal amount of $2,000,000 or a
whole multiple of $500,000 in excess thereof and (z) with respect to Swingline
Loans in an aggregate principle amount of $500,000 or a whole multiple of
$100,000 in excess thereof, (C) whether such Loan is to be a Revolving Credit
Loan or Swingline Loan, (D) in the case of a Revolving Credit Loan whether the
Loans are to be LIBOR Rate Loans or Base Rate Loans, and (E) in the case of a
LIBOR Rate Loan, the duration of the Interest Period applicable thereto. Notices
received after 11:00 a.m. (Charlotte time) shall be deemed received on the next
Business Day. The Administrative Agent shall promptly notify the Lenders of each
Notice of Borrowing.
(b) Disbursement of Revolving Credit and Swingline Loans. Not later than
2:00 p.m. (Charlotte time) on the proposed borrowing date, (i) each Lender will
make available to the Administrative Agent, for the account of the Borrowers, at
the office of the Administrative Agent in funds immediately available to the
Administrative Agent, such Lender's Revolving Credit Commitment Percentage of
the Revolving Credit Loans to be made on such borrowing date and (ii) the
Swingline Lender will make available to the Administrative Agent, for the
account of the Borrowers, at the office of the Administrative Agent in funds
immediately available to the Administrative Agent, the Swingline Loans to be
made on such borrowing date. The Borrowers hereby irrevocably authorize the
Administrative Agent to disburse the proceeds of each borrowing requested
pursuant to this Section 2.3 in immediately available funds by crediting or
wiring such proceeds to the deposit account of the Borrowers identified in the
most recent notice substantially in the form of Exhibit D hereto (a "Notice of
Account Designation") delivered by the Borrowers to the Administrative Agent or
as may be otherwise agreed upon by the Borrowers and the Administrative Agent
from time to time. Subject to Section 5.7 hereof, the Administrative Agent shall
not be obligated to disburse the portion of the proceeds of any Revolving Credit
Loan requested pursuant to this Section 2.3 to the extent that any Lender has
not made available to the Administrative Agent its Revolving Credit Commitment
Percentage of such Loan. Revolving Credit Loans to be made for the purpose of
refunding Swingline Loans shall be made by the Lenders as provided in Section
2.2(b).
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SECTION 2.4 Repayment of Revolving Credit and Swingline Loans.
(a) Repayment on Revolving Credit Maturity Date. The Borrower shall repay
the outstanding principal amount of (i) all Revolving Credit Loans in full on
the Revolving Credit Maturity Date, and (ii) all Swingline Loans in accordance
with Section 2.2(b) and, in any event, on the Swingline Termination Date,
together, in each case, with all accrued but unpaid interest thereon.
(b) Mandatory Repayment of Revolving Credit Loans. If at any time the sum
of (A) the aggregate principal amount of all Revolving Credit Loans outstanding
at such time plus (B) the aggregate principal amount of all Swingline Loans
outstanding at such time plus (C) the aggregate L/C Obligations outstanding at
such time shall exceed the Borrowing Limit at such time, the Borrowers shall
repay immediately upon notice from the Administrative Agent, by payment to the
Administrative Agent for the account of the Swingline Lender or Lenders, as
applicable, Revolving Credit Loans, Swingline Loans and/or furnishing cash
collateral reasonably satisfactory to the Administrative Agent or repay the L/C
Obligations in an amount equal to such excess with each such repayment applied
first to the principal amount of the outstanding Swingline Loans and second to
the principal amount of the L/C Obligations and third to the principal amount of
outstanding Revolving Credit Loans. Such cash collateral shall be applied in
accordance with Section 12.2(b). Each such repayment shall be accompanied by any
amount required to be paid pursuant to Section 5.9 hereof.
(c) Optional Repayments. The Borrowers may at any time and from time to
time repay the Revolving Credit Loans, in whole or in part, upon at least three
(3) Business Days' irrevocable notice to the Administrative Agent with respect
to LIBOR Rate Loans and one (1) Business Day irrevocable notice with respect to
Base Rate Loans and Swingline Loans, in the form attached hereto as Exhibit E (a
"Notice of Prepayment") specifying the date and amount of repayment and whether
the repayment is of LIBOR Rate Loans, Base Rate Loans, Swingline Loans or a
combination thereof, and, if of a combination thereof, the amount allocable to
each. Upon receipt of such notice, the Administrative Agent shall promptly
notify each Lender. If any such notice is given, the amount specified in such
notice shall be due and payable on the date set forth in such notice. Partial
repayments shall be in an aggregate amount of $1,000,000 or a whole multiple of
$250,000 in excess thereof with respect to Base Rate Loans, $2,000,000 or a
whole multiple of $500,000 in excess thereof with respect to LIBOR Rate Loans
and $500,000 or a whole multiple thereof with respect to Swingline Loans. Each
such repayment shall be accompanied by any amount required to be paid pursuant
to Section 5.9 hereof.
(d) Limitation on Repayment of LIBOR Rate Loans. The Borrowers may not
repay any LIBOR Rate Loan on any day other than on the last day of the Interest
Period applicable thereto unless such repayment is accompanied by any amount
required to be paid pursuant to Section 5.9 hereof.
SECTION 2.5 Notes.
(a) Revolving Credit Notes. Each Lender's Revolving Credit Loans and the
obligation of the Borrowers to repay such Revolving Credit Loans shall be
evidenced by a separate Revolving Credit Note executed by the Borrowers payable
to the order of such Lender representing the obligation of the Borrowers to pay
such Lender's Revolving Credit Commitment or, if less, the aggregate unpaid
principal amount of all Revolving Credit Loans made and to be made by such
Lender to the Borrowers hereunder, plus interest and all other fees, charges and
other amounts due thereon. Each Revolving Credit Note shall bear interest on the
unpaid principal amount thereof at the applicable interest rate per annum
specified in Section 5.1.
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(b) Swingline Note. The Swingline Loans and the obligation of the Borrowers
to repay such Swingline Loans shall be evidenced by a Swingline Note executed by
the Borrowers payable to the order of the Swingline Lender representing the
obligation of the Borrowers to pay the Swingline Lender's Swingline Commitment
or, if less, the aggregate unpaid principal amount of all Swingline Loans made
by the Swingline Lender to the Borrowers hereunder, plus interest on such
principal amounts and all other fees, charges and other amounts due thereon. The
Swingline Note shall bear interest on the unpaid principal amount thereof at the
applicable interest rate per annum specified in Section 5.1.
SECTION 2.6 Permanent Reduction of the Revolving Credit Commitment and/or
Swingline Commitment.
(a) Voluntary Reduction. The Borrowers shall have the right at any time and
from time to time, upon at least five (5) Business Days prior written notice to
the Administrative Agent, to permanently reduce, without premium or penalty, (i)
the entire Revolving Credit Commitment and/or Swingline Commitment at any time
or (ii) portions of the Revolving Credit Commitment and/or Swingline Commitment,
from time to time, in an aggregate principal amount not less than $2,000,000 or
any whole multiple of $500,000 in excess thereof.
(b) Application. Each permanent reduction permitted pursuant to this
Section 2.6 shall be accompanied by a payment of principal sufficient to reduce
the aggregate outstanding (i) Revolving Credit Loans and L/C Obligations, as
applicable, after such reduction to the Revolving Credit Commitment as so
reduced and if the Revolving Credit Commitment as so reduced is less than the
aggregate amount of all outstanding Letters of Credit, the Borrowers shall be
required to deposit in a cash collateral account opened by the Administrative
Agent an amount equal to the aggregate then undrawn and unexpired amount of such
Letters of Credit and (ii) Swingline Loans after such reduction to the Swingline
Commitment as so reduced. Any reduction of (i) the Revolving Credit Commitment
to zero shall be accompanied by payment of all outstanding Revolving Credit
Loans and Swingline Loans (and furnishing of cash collateral satisfactory to the
Administrative Agent for all L/C Obligations) and shall result in the
termination of the Revolving Credit Commitment and the Swingline Commitment and
the Revolving Credit Facility and Swingline Facility and (ii) the Swingline
Commitment to zero shall be accompanied by payment of all outstanding Swingline
Loans and shall result in the termination of the Swingline Commitment and
Swingline Facility. Such cash collateral shall be applied in accordance with
Section 12.2(b). If the reduction of the Revolving Credit Commitment requires
the repayment of any LIBOR Rate Loan, such repayment shall be accompanied by any
amount required to be paid pursuant to Section 5.9 hereof.
SECTION 2.7 Termination of Revolving Credit Facility. The Revolving Credit
Facility shall terminate on the earliest of (a) February __, 2004, (b) the date
of termination by the Borrowers pursuant to Section 2.6(a) and (c) the date of
termination by the Administrative Agent on behalf of the Lenders pursuant to
Section 12.2(a); provided that, if the Preferred Stock Redemption Amendment
shall not have become effective on or prior to the Maturity Adjustment Date, the
date set forth in clause (a) of this Section 2.7 shall be deemed to be replaced
with the Adjusted Maturity Date.
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ARTICLE III
LETTER OF CREDIT FACILITY
SECTION 3.1 L/C Commitment.
(a) Subject to the terms and conditions hereof, the Issuing Lender, in
reliance on the agreements of the other Lenders set forth in Section 3.4(a),
agrees to issue standby letters of credit ("Letters of Credit") for the account
of the Borrowers on a joint and several basis on any Business Day from the
Closing Date through but not including the Revolving Credit Maturity Date in
such form as may be approved from time to time by the Issuing Lender; provided,
that the Issuing Lender shall have no obligation to issue any Letter of Credit
if, after giving effect to such issuance, (i) the L/C Obligations would exceed
the L/C Commitment or (ii) the sum of (A) the L/C Obligations at such time plus
(B) the aggregate principal amount of all outstanding Revolving Credit Loans and
Swingline Loans would exceed the then applicable Borrowing Limit. If at any time
the L/C Obligations exceed such permitted amount, the Borrowers shall furnish to
the Administrative Agent cash collateral satisfactory to the Administrative
Agent in an amount equal to such excess to be applied in accordance with Section
12.2(b).
(b) Each Letter of Credit shall (i) be denominated in Dollars in a minimum
amount of $100,000, (ii) be a standby letter of credit issued to support
obligations of the Borrowers or any of their Subsidiaries, contingent or
otherwise, incurred in the ordinary course of business, (iii) expire on a date
no later than one (1) year from the date of issuance thereof; provided, that in
no case shall such expiration date be later than three (3) Business Days prior
to the Revolving Credit Maturity Date and (iv) be subject to the Uniform Customs
and, to the extent not inconsistent therewith, the laws of the State of North
Carolina. The Issuing Lender shall not at any time be obligated to issue any
Letter of Credit hereunder if such issuance would conflict with, or cause the
Issuing Lender or any L/C Participant to exceed any limits imposed by, any
Applicable Law. References herein to "issue" and derivations thereof with
respect to Letters of Credit shall also include extensions or modifications of
any Existing Letters of Credit, unless the context otherwise requires.
SECTION 3.2 Procedure for Issuance of Letters of Credit. The Borrowers may
from time to time request that the Issuing Lender issue a Letter of Credit by
delivering to the Issuing Lender at the Administrative Agent's Office an
Application therefor, completed to the satisfaction of the Issuing Lender, and
such other certificates, documents and other papers and information as the
Issuing Lender may request. Upon receipt of any Application, the Issuing Lender
shall process such Application and the certificates, documents and other papers
and information delivered to it in connection therewith in accordance with its
customary procedures and shall, subject to Section 3.1 and Article VI hereof,
promptly issue the Letter of Credit requested thereby (but in no event shall the
Issuing Lender be required to issue any Letter of Credit earlier than three (3)
Business Days after its receipt of the Application therefor and all such other
certificates, documents and other papers and information relating thereto) by
issuing the original of such Letter of Credit to the beneficiary thereof or as
otherwise may be agreed by the Issuing Lender and the Borrowers. The Issuing
Lender shall promptly furnish to the Borrowers a copy of such Letter of Credit
and promptly notify each Lender of the issuance and upon request by any Lender,
furnish to such Lender a copy of such Letter of Credit and the amount of such
Lender's L/C Participation therein.
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SECTION 3.3 Commissions and Other Charges.
(a) The Borrowers shall pay to the Administrative Agent, for the account of
the Issuing Lender and the L/C Participants, a letter of credit commission with
respect to each Letter of Credit in an amount equal to the product of (i) the
face amount of such Letter of Credit times (ii) an annual percentage equal to
the Applicable Margin with respect to LIBOR Rate Loans in effect on the date of
issuance of such Letter of Credit. Such commission shall be payable quarterly in
arrears on the last Business Day of each calendar quarter and on the Revolving
Credit Maturity Date.
(b) In addition to the foregoing commission, the Borrowers shall pay the
Issuing Lender an issuance fee of 0.125% per annum on the face amount of each
Letter of Credit, payable quarterly in arrears on the last Business Day of each
calendar quarter and on the Revolving Credit Maturity Date; provided, that such
issuance fee shall not be payable with respect to the Existing Letters of
Credit.
(c) The Borrowers shall also pay all normal costs and expenses of the
Issuing Lender in connection with the issuance, transfer or other administration
of the Letters of Credit.
(d) The Administrative Agent shall, promptly following its receipt thereof,
distribute to the Issuing Lender and the L/C Participants all commissions
received by the Administrative Agent in accordance with their respective
Revolving Credit Commitment Percentages.
SECTION 3.4 L/C Participations.
(a) The Issuing Lender irrevocably agrees to grant and hereby grants to
each L/C Participant, and, to induce the Issuing Lender to issue Letters of
Credit hereunder, each L/C Participant irrevocably agrees to accept and purchase
and hereby accepts and purchases from the Issuing Lender, on the terms and
conditions hereinafter stated, for such L/C Participant's own account and risk
an undivided interest equal to such L/C Participant's Revolving Credit
Commitment Percentage in the Issuing Lender's obligations and rights under each
Letter of Credit issued hereunder and the amount of each draft paid by the
Issuing Lender thereunder. Each L/C Participant unconditionally and irrevocably
agrees with the Issuing Lender that, if a draft is paid under any Letter of
Credit for which the Issuing Lender is not reimbursed in full by the Borrowers
in accordance with the terms of this Agreement, such L/C Participant shall pay
to the Issuing Lender upon demand at the Issuing Lender's address for notices
specified herein an amount equal to such L/C Participant's Revolving Credit
Commitment Percentage of the amount of such draft, or any part thereof, which is
not so reimbursed.
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(b) Upon becoming aware of any amount required to be paid by any L/C
Participant to the Issuing Lender pursuant to Section 3.4(a) in respect of any
unreimbursed portion of any payment made by the Issuing Lender under any Letter
of Credit, the Issuing Lender shall notify each L/C Participant of the amount
and due date of such required payment and such L/C Participant shall pay to the
Issuing Lender the amount specified on the applicable due date. If any such
amount is paid to the Issuing Lender after the date such payment is due, such
L/C Participant shall pay to the Issuing Lender on demand, in addition to such
amount, the product of (i) such amount, times (ii) the daily average Federal
Funds Rate as determined by the Administrative Agent during the period from and
including the date such payment is due to the date on which such payment is
immediately available to the Issuing Lender, times (iii) a fraction the
numerator of which is the number of days that elapse during such period and the
denominator of which is 360. A certificate of the Issuing Lender with respect to
any amounts owing under this Section 3.4(b) shall be conclusive in the absence
of manifest error. With respect to payment to the Issuing Lender of the
unreimbursed amounts described in this Section 3.4(b), if the L/C Participants
receive notice that any such payment is due (A) prior to 1:00 p.m. (Charlotte
time) on any Business Day, such payment shall be due that Business Day, and (B)
after 1:00 p.m. (Charlotte time) on any Business Day, such payment shall be due
on the following Business Day.
(c) Whenever, at any time after the Issuing Lender has made payment under
any Letter of Credit and has received from any L/C Participant its Revolving
Credit Commitment Percentage of such payment in accordance with this Section
3.4, the Issuing Lender receives any payment related to such Letter of Credit
(whether directly from any Borrower or otherwise), or any payment of interest on
account thereof, the Issuing Lender will distribute to such L/C Participant its
pro rata share thereof; provided, that in the event that any such payment
received by the Issuing Lender shall be required to be returned by the Issuing
Lender, such L/C Participant shall return to the Issuing Lender the portion
thereof previously distributed by the Issuing Lender to it.
SECTION 3.5 Reimbursement Obligation of the Borrowers. The Borrowers
jointly and severally agree to reimburse the Issuing Lender on each date on
which the Issuing Lender notifies the Borrowers of the date and amount of a
draft paid under any Letter of Credit for the amount of (a) such draft so paid
and (b) any taxes, fees, charges or other costs or expenses incurred by the
Issuing Lender in connection with such payment. Each such payment shall be made
to the Issuing Lender at its address for notices specified herein in lawful
money of the United States and in immediately available funds. Interest shall be
payable on any and all amounts remaining unpaid by the Borrowers under this
Article III from the date such amounts become payable (whether at stated
maturity, by acceleration or otherwise) until payment in full at the rate which
would be payable on any outstanding Base Rate Loans which were then overdue.
Unless the Borrowers have otherwise previously reimbursed the Issuing Lender,
then on the date on which the Issuing Lender notifies the Borrowers of the date
and amount of a draft paid under any Letter of Credit, the Borrowers shall be
deemed to have timely given a Notice of Revolving Credit/Swingline Borrowing
hereunder to the Administrative Agent requesting the Lenders to make a Base Rate
Loan on such date in an amount equal to the amount of such drawing and,
regardless of whether or not the conditions precedent specified in Article VI
have been satisfied, the Lenders shall make Base Rate Loans in such amount, the
proceeds of which shall be applied to reimburse the Issuing Lender for the
amount of the related drawing and costs and expenses.
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SECTION 3.6 Obligations Absolute. The obligations of the Borrowers under
this Article III (including without limitation the Reimbursement Obligation)
shall be absolute and unconditional under any and all circumstances and
irrespective of any set-off, counterclaim or defense to payment which the
Borrowers may have or have had against the Issuing Lender or any beneficiary of
a Letter of Credit. The Borrowers also agree with the Issuing Lender that the
Issuing Lender shall not be responsible for, and the Reimbursement Obligation of
the Borrowers under Section 3.5 shall not be affected by, among other things,
the validity or genuineness of documents or of any endorsements thereon, even
though such documents shall in fact prove to be invalid, fraudulent or forged,
or any dispute between or among the Borrowers and any beneficiary of any Letter
of Credit or any other party to which such Letter of Credit may be transferred
or any claims whatsoever of a Borrower against any beneficiary of such Letter of
Credit or any such transferee. The Issuing Lender shall not be liable for any
error, omission, interruption or delay in transmission, dispatch or delivery of
any message or advice, however transmitted, in connection with any Letter of
Credit, except for errors or omissions caused by the Issuing Lender's gross
negligence or willful misconduct. The Borrowers agree that any action taken or
omitted by the Issuing Lender under or in connection with any Letter of Credit
or the related drafts or documents, if done in the absence of gross negligence
or willful misconduct and in accordance with the standards of care specified in
the Uniform Customs and, to the extent not inconsistent therewith, the UCC shall
be binding on the Borrowers and shall not result in any liability of the Issuing
Lender to the Borrowers. The responsibility of the Issuing Lender to the
Borrowers in connection with any draft presented for payment under any Letter of
Credit shall, in addition to any payment obligation expressly provided for in
such Letter of Credit, be limited to determining that the documents (including
each draft) delivered under such Letter of Credit in connection with such
presentment are in conformity with such Letter of Credit.
SECTION 3.7 Effect of Application . To the extent that any provision of any
Application related to any Letter of Credit is inconsistent with the provisions
of this Article III, the provisions of this Article III shall apply.
ARTICLE IV
TERM LOAN FACILITIES
SECTION 4.1 Term Loans. Subject to the terms and conditions of this
Agreement, each Lender severally agrees to make Term Loans to the Borrowers on a
joint and several basis from the Closing Date through the second anniversary of
the Closing Date (at which time the Term Loan A Commitments and the Term Loan B
Commitments shall expire), as requested by GTS on behalf of the Borrowers in
accordance with Section 4.2; provided that, (a) the aggregate principal amount
of (i) all Term A Loans (after giving effect to the amount requested) and (ii)
all Term B Loans (after giving effect to the amount requested) shall not exceed
the aggregate Term A Loan Commitment or aggregate Term B Loan Commitment, as
applicable, (b) the aggregate principal amount of (i) all Term A Loans (after
giving effect to the amount requested) and (ii) all Term B Loans (after giving
effect to the amount requested) from any Lender shall not exceed the Term A Loan
Commitment or Term B Loan Commitment, as applicable, of such Lender, (c) the
proceeds of all Term A Loans shall be used solely to finance Permitted
Acquisitions and Permitted Stock Repurchases; provided, that on the Closing Date
the Borrowers may use up to $8,000,000 of the Term A Loans to refinance the
purchase price in connection with the acquisition of Bear Creek and (d) the
proceeds of all Term B Loans shall be used solely to finance up to seventy-five
percent (75%) of the Purchase Price of new equipment.
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SECTION 4.2 Procedure for Advance of Term Loans.
(a) Requests for Borrowing. GTS, on behalf of the Borrowers, shall give the
Administrative Agent irrevocable prior written notice in the form attached
hereto as Exhibit C-2 (a "Notice of Term Loan Borrowing") not later than 11:00
a.m. (Charlotte time) (i) at least one (1) Business Day before each Term Loan
that is a Base Rate Loan and (ii) at least three (3) Business Days before each
Term Loan that is a LIBOR Rate Loan, of its intention to borrow, specifying (A)
the date of such borrowing, which shall be a Business Day, (B) the amount of
such borrowing, which shall be (x) with respect to Base Rate Loans in an
aggregate principal amount of $1,000,000 or a whole multiple of $250,000 in
excess thereof and (y) with respect to LIBOR Rate Loans in an aggregate
principal amount of $2,000,000 or a whole multiple of $500,000 in excess
thereof, (C) whether such Term Loan is to be a Term A Loan or Term B Loan, (D)
whether such Term Loan is to be a LIBOR Rate Loan or a Base Rate Loan, and (E)
in the case of a LIBOR Rate Loan, the duration of the Interest Period applicable
thereto; provided, that LIBOR Rate Loans shall not be available until three (3)
Business Days following the Closing Date. Notices received after 11:00 a.m.
(Charlotte time) shall be deemed received on the next Business Day. The
Administrative Agent shall promptly notify the Lenders of each Notice of Term
Loan Borrowing.
(b) Disbursement of Term Loans. Not later than 2:00 p.m. (Charlotte time)
on the proposed borrowing date, each Lender will make available to the
Administrative Agent, for the account of the Borrowers, at the office of the
Administrative Agent in funds immediately available to the Administrative Agent,
such Lender's (i) Term A Loan Percentage of the Term A Loans and/or (ii) Term B
Loan Percentage of the Term B Loans to be made on such borrowing date. The
Borrowers hereby irrevocably authorize the Administrative Agent to disburse the
proceeds of each borrowing requested pursuant to this Section 4.2 in immediately
available funds by crediting or wiring such proceeds to the deposit account of
the Borrowers identified in the Notice of Account Designation. Subject to
Section 5.7 hereof, the Administrative Agent shall not be obligated to disburse
the portion of the proceeds of any Term Loan requested pursuant to this Section
4.2 to the extent that any Lender has not made available to the Administrative
Agent its Term A Loan Percentage of such Term A Loan or Term B Loan Percentage
of such Term B Loan, as applicable.
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SECTION 4.3 Repayment of Term Loans.
(a) Term A Loans. The Borrowers shall repay the aggregate outstanding
principal amount of each separate Term A Loan in equal quarterly installments
(the amount of such installments being equal to 1/20th of the original principal
amount of the Term A Loan) commencing on the last Business Day of each fiscal
quarter commencing on the first fiscal quarter end immediately following the
date such Term A Loan was disbursed to the Borrower. If not sooner paid, the
Term A Loans shall be paid in full, together with accrued interest thereon, on
the Term A Loan Maturity Date.
(b) Term B Loans. The Borrowers shall repay the aggregate outstanding
principal amount of each separate Term B Loan was disbursed to the Borrower in
equal quarterly installments (the amount of such installments being equal to
1/12th of the original principal amount of the Term B Loan) commencing on the
last Business Day of each fiscal quarter commencing on the first fiscal quarter
end immediately following the date such Term B Loan was disbursed to the
Borrower. If not sooner paid, the Term B Loans shall be paid in full, together
with accrued interest thereon, on the Term B Loan Maturity Date.
SECTION 4.4 Prepayments of Term Loans.
(a) Optional Prepayment of Term Loans. The Borrowers shall have the right
at any time and from time to time, upon delivery to the Administrative Agent of
a Notice of Prepayment (i) at least two (2) Business Days prior to any repayment
of a Base Rate Loan and (ii) at least three (3) Business Days prior to the
repayment of a LIBOR Rate Loan to prepay the Term Loans in whole or in part
without premium or penalty except as provided below and as required pursuant to
Section 5.9. Upon receipt of any such notice, the Administrative Agent promptly
shall forward a copy thereof to the Lenders. Each optional prepayment of the
Term Loans hereunder shall be in an aggregate principal amount of at least
$1,000,000 or any whole multiple of $250,000 in excess thereof with respect to
Base Rate Loans and $2,000,000 or any whole multiple of $500,000 in excess
thereof with respect to LIBOR Rate Loans, shall be applied to the outstanding
principal balance of the Term Loans on a pro rata basis between the Term A Loan
Facility and the Term B Loan Facility on a pro rata basis among each separate
Term Loan under each such facility to reduce the remaining scheduled principal
installments of the separate outstanding Term Loans under each such facility.
(b) Mandatory Prepayment of Term Loan.
(i) Excess Cash Flow. Within ninety (90) days after the end of any Fiscal
Year commencing with the Fiscal Year ending December 31, 1999, the Borrowers
shall make a mandatory principal prepayment (in the manner set forth in Section
4.4(b)(ii) below) of the Term A Loans in an amount equal to fifty percent (50%)
of Excess Cash Flow, if any, for such Fiscal Year.
(ii) Notice; Manner of Payment. Upon the occurrence of any event triggering
the prepayment requirement under Section 4.4(b)(i), GTS, on behalf of the
Borrowers, shall promptly deliver a Notice of Prepayment to the Administrative
Agent and upon receipt of such notice, the Administrative Agent shall promptly
so notify the Lenders. Each prepayment under this Section 4.4(b) shall be
applied to reduce on a pro rata basis in inverse order of maturity the remaining
scheduled principal installments of the Term A Loans.
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(c) No Reborrowing of Term Loans. Amounts prepaid under the Term Loans
pursuant to Section 4.3 or Section 4.4 may not be reborrowed and will constitute
a permanent reduction in the applicable Term Loan Commitment. Each prepayment
shall be accompanied by any amount required to be paid pursuant to Section 5.9
hereof.
SECTION 4.5 Term Notes. Each Lender's Term A Loans and the obligation of
the Borrowers to repay such Term A Loans shall be evidenced by a Term A Note,
payable to the order of such Lender representing the Borrowers' obligation to
pay such Lender's Term A Loan Commitment in accordance with the terms hereof.
Each Lender's Term B Loans and the obligation of the Borrowers to repay such
Term B Loans shall be evidenced by a Term B Note, payable to the order of such
Lender representing the Borrowers' obligation to pay such Lender's Term B Loan
Commitment in accordance with the terms hereof. Each Term Note shall bear
interest on the unpaid principal amount thereof at the applicable interest rate
per annum specified in Section 5.1.
ARTICLE V
GENERAL LOAN PROVISIONS
SECTION 5.1 Interest.
(a) Interest Rate Options. Subject to the provisions of this Section 5.1,
at the election of GTS on behalf of the Borrowers, the aggregate principal
balance of any Revolving Credit Note and any Term Loan Note shall bear interest
at (i) the Base Rate plus the Applicable Margin as set forth in Section 5.1(c)
or (ii) the LIBOR Rate plus the Applicable Margin as set forth in Section
5.1(c); provided that the LIBOR Rate shall not be available until three (3)
Business Days after the Closing Date. The Swingline Note shall bear interest at
the Base Rate plus the Applicable Margin as set forth in Section 5.1(c). The
Borrowers shall select the rate of interest and Interest Period, if any,
applicable to any Loan at the time a Notice of Revolving Credit/Swingline
Borrowing is given pursuant to Section 2.3(a) or a Notice of Term Loan Borrowing
is given pursuant to Section 4.2 or at the time a Notice of
Conversion/Continuation is given pursuant to Section 5.2. Each Loan or portion
thereof bearing interest based on the Base Rate (other than Swingline Loans)
shall be a "Base Rate Loan", each Loan or portion thereof bearing interest based
on the LIBOR Rate shall be a "LIBOR Rate Loan." Any Loan or any portion thereof
as to which the Borrowers have not duly specified an interest rate as provided
herein shall be deemed a Base Rate Loan.
(b) Interest Periods. In connection with each LIBOR Rate Loan, GTS on
behalf of the Borrowers, by giving notice at the times described in Section
5.1(a), shall elect an interest period (each, an "Interest Period") to be
applicable to such LIBOR Rate Loan, which Interest Period shall be a period of
one (1), two (2), three (3), or six (6) months with respect to each LIBOR Rate
Loan; provided that:
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(i) the Interest Period shall commence on the date of advance of or
conversion to any LIBOR Rate Loan and, in the case of immediately successive
Interest Periods, each successive Interest Period shall commence on the date on
which the next preceding Interest Period expires;
(ii) if any Interest Period would otherwise expire on a day that is not a
Business Day, such Interest Period shall expire on the next succeeding Business
Day; provided, that if any Interest Period with respect to a LIBOR Rate Loan
would otherwise expire on a day that is not a Business Day but is a day of the
month after which no further Business Day occurs in such month, such Interest
Period shall expire on the next preceding Business Day;
(iii) any Interest Period with respect to a LIBOR Rate Loan that begins on
the last Business Day of a calendar month (or on a day for which there is no
numerically corresponding day in the calendar month at the end of such Interest
Period) shall end on the last Business Day of the relevant calendar month at the
end of such Interest Period;
(iv) no Interest Period shall extend beyond the Revolving Credit
Termination Date, the Term A Loan Maturity Date or the Term B Loan Maturity
Date, as applicable, no Interest Periods shall be selected by the Borrowers
which would result in the repayment of any LIBOR Rate Loan prior to the end of
an Interest Period; and
(v) there shall be no more than six (6) Interest Periods in effect at any
time.
(c) Applicable Margin. The Applicable Margin provided for in Section 5.1(a)
with respect to the Loans (the "Applicable Margin") shall (i) on the Closing
Date and for the fiscal quarters ending March 31, 1999 and June 30, 1999 equal
1.00% with respect to Base Rate Loans and Swingline Loans and 2.25% with respect
to LIBOR Rate Loans and (ii) for each fiscal quarter thereafter be determined by
reference to the Leverage Ratio as of the end of the fiscal quarter immediately
preceding the delivery of the applicable Officer's Compliance Certificate as
follows:
Leverage Applicable Margin Per Annum
Level Ratio Base Rate + LIBOR Rate +
----- ----- ---------------------------
1 Greater than 3.00 to 1.00 but
Less than or equal to 3.50 to 1.00 1.25% 2.50%
2 Greater than 2.50 to 1.00 but
Less than or equal to 3.00 to 1.00 1.00% 2.25%
3 Greater than 2.00 to 1.00 but
Less than or equal to 2.50 to 1.00 0.75% 2.00%
4 Less than or equal to 2.00 to 1.00 0.50% 1.75%
33
Adjustments, if any, in the Applicable Margin shall be made by the
Administrative Agent on the tenth (10th) Business Day after receipt by the
Administrative Agent of quarterly financial statements for the Borrowers and
their Subsidiaries and the accompanying Officer's Compliance Certificate setting
forth the Leverage Ratio of the Borrowers and their Subsidiaries as of the most
recent fiscal quarter end. In addition to any increase, if any, in the interest
rate purusant to Section 5.1(d), in the event the Borrowers fail to deliver such
financial statements and certificate within the time required by Sections 8.1
and 8.2 hereof, the Applicable Margin shall be the highest Applicable Margin set
forth above until the delivery of such financial statements and certificate.
(d) Default Rate. Subject to Section 12.3, at the discretion of the
Administrative Agent and Required Lenders, upon the occurrence and during the
continuance of an Event of Default, (i) the Borrowers shall no longer have the
option to request LIBOR Rate Loans or Swingline Loans, (ii) all outstanding
LIBOR Rate Loans shall bear interest at a rate per annum two percent (2%) in
excess of the rate then applicable to LIBOR Rate Loans, as applicable, until the
end of the applicable Interest Period and thereafter at a rate equal to two
percent (2%) in excess of the rate then applicable to Base Rate Loans
(calculated at the highest Applicable Margin), and (iii) all outstanding Base
Rate Loans and Swingline Loans shall bear interest at a rate per annum equal to
two percent (2%) in excess of the rate then applicable to Base Rate Loans.
Interest shall continue to accrue on the Notes after the filing by or against
any Borrower of any petition seeking any relief in bankruptcy or under any act
or law pertaining to insolvency or debtor relief, whether state, federal or
foreign.
(e) Interest Payment and Computation. Interest on each Base Rate Loan and
Swingline Loans shall be payable in arrears on the last Business Day of each
calendar quarter commencing March 31, 1999; and interest on each LIBOR Rate Loan
shall be payable on the last day of each Interest Period applicable thereto, and
if such Interest Period extends over three (3) months, at the end of each three
(3) month interval during such Interest Period. All interest rates, fees and
commissions provided hereunder shall be computed on the basis of a 360-day year
and assessed for the actual number of days elapsed.
(f) Maximum Rate. In no contingency or event whatsoever shall the aggregate
of all amounts deemed interest hereunder or under any of the Notes charged or
collected pursuant to the terms of this Agreement or pursuant to any of the
Notes exceed the highest rate permissible under any Applicable Law which a court
of competent jurisdiction shall, in a final determination, deem applicable
hereto. In the event that such a court determines that the Lenders have charged
or received interest hereunder in excess of the highest applicable rate, the
rate in effect hereunder shall automatically be reduced to the maximum rate
permitted by Applicable Law and the Lenders shall at the Administrative Agent's
option (i) promptly refund to the Borrowers any interest received by Lenders in
excess of the maximum lawful rate or (ii) shall apply such excess to the
principal balance of the Obligations. It is the intent hereof that the Borrowers
not pay or contract to pay, and that neither the Administrative Agent nor any
Lender receive or contract to receive, directly or indirectly in any manner
whatsoever, interest in excess of that which may be paid by the Borrowers under
Applicable Law.
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SECTION 5.2 Notice and Manner of Conversion or Continuation of Loans.
Provided that no Event of Default has occurred and is then continuing, the
Borrowers shall have the option to convert at any time following the third
Business Day after the Closing Date all or any portion of its outstanding Base
Rate Loans (other than Swingline Loans) in a principal amount equal to
$2,000,000 or any whole multiple of $500,000 in excess thereof into one or more
LIBOR Rate Loans and (b) upon the expiration of any Interest Period, (i) convert
all or any part of its outstanding LIBOR Rate Loans in a principal amount equal
to $1,000,000 or a whole multiple of $250,000 in excess thereof into Base Rate
Loans or (ii) continue such LIBOR Rate Loans as LIBOR Rate Loans. Whenever the
Borrowers desire to convert or continue Loans as provided above, GTS on behalf
of the Borrowers shall give the Administrative Agent irrevocable prior written
notice in the form attached as Exhibit F (a "Notice of Conversion/Continuation")
not later than 11:00 a.m. (Charlotte time) three (3) Business Days before the
day on which a proposed conversion or continuation of such Loan is to be
effective specifying (A) the Loans to be converted or continued, and, in the
case of any LIBOR Rate Loan to be converted or continued, the last day of the
Interest Period therefor specifying the Credit Facility to which such Loan
relates, (B) the effective date of such conversion or continuation (which shall
be a Business Day), (C) the principal amount of such Loans to be converted or
continued, and (D) the Interest Period to be applicable to such converted or
continued LIBOR Rate Loan. The Administrative Agent shall promptly notify the
Lenders of such Notice of Conversion/Continuation.
SECTION 5.3 Fees.
(a) Commitment Fee. Commencing on the Closing Date and continuing through
but excluding the Revolving Credit Maturity Date, the Borrowers shall pay to the
Administrative Agent, for the account of the Lenders, a non-refundable
commitment fee at a rate per annum equal to the rate set forth below (the
"Commitment Fee Rate") on the average daily unused portion of the Aggregate
Commitment (the outstanding principal balance of all Loans and L/C Obligations
shall be considered usage). The commitment fee shall be payable in arrears on
the last Business Day of each calendar quarter commencing March 31, 1999, and on
the Revolving Credit Maturity Date. Such commitment fee shall be distributed by
the Administrative Agent to the Lenders pro rata in accordance with the Lenders'
respective Commitment Percentages. The Commitment Fee Rate provided for above
shall equal the percentage set forth below corresponding to the level at which
the Applicable Margin is determined in accordance with Section 5.1(c). Any
change in the applicable level at which Applicable Margin is determined shall
result in a corresponding and simultaneous change in the Commitment Fee Rate.
Level Commitment Fee Rate
----- -------------------
1 0.500%
2 0.375%
3 0.375%
4 0.375%
35
(b) Administrative Agent's and Other Fees. In order to compensate the
Administrative Agent for structuring and syndicating the Loans and for its
obligations hereunder, the Borrowers agree to pay to the Administrative Agent,
for its account, the fees set forth in the separate fee letter agreement
executed by the GTS, on behalf of itself and the other Borrowers, and the
Administrative Agent dated November 6, 1998.
SECTION 5.4 Manner of Payment. (a) Each payment by the Borrowers on
account of the principal of or interest on the Revolving Credit Loans or of any
fee, commission or other amounts (including the Reimbursement Obligation)
payable to the Lenders under this Agreement with respect to the Revolving Credit
Loans, the Letters of Credit or any Revolving Credit Note shall be made not
later than 1:00 p.m. (Charlotte time) on the date specified for payment under
this Agreement to the Administrative Agent at the Administrative Agent's Office
for the account of the Lenders (other than as set forth below) pro rata in
accordance with their respective Revolving Credit Commitment Percentages,
(except as specified below) in Dollars, in immediately available funds and shall
be made without any set-off, counterclaim or deduction whatsoever, (b) each
payment to the Administrative Agent on account of the principal of or interest
on the Swingline Loans or of any fee, commission or other amounts shall be made
in like manner, except for the account of the Swingline Lender, (c) each payment
by the Borrowers on account of the principal of or interest on the Term A Loans
or of any fee, commission or other amounts payable to the Lenders under this
Agreement with respect to the Term A Loans or any Term A Note shall be made in
like manner, except for the account of the Lenders pro rata in accordance with
their respective Term A Loan Percentages, (d) each payment by the Borrowers on
account of the principal of or interest on the Term B Loans or of any fee,
commission or other amounts payable to the Lenders under this Agreement with
respect to the Term B Loans or any Term B Note shall be made in like manner,
except for the account of the Lenders pro rata in accordance with their
respective Term B Loan Percentages and (e) any other amounts payable to the
Lenders under this Agreement shall be made in like manner, except for the
account of the Lenders pro rata based on its or their respective share in the
Obligation with respect to which such payment was received. Any payment received
after such time but before 2:00 p.m. (Charlotte time) on such day shall be
deemed a payment on such date for the purposes of Section 12.1, but for all
other purposes shall be deemed to have been made on the next succeeding Business
Day. Any payment received after 3:00 p.m. (Charlotte time) shall be deemed to
have been made on the next succeeding Business Day for all purposes. Upon
receipt by the Administrative Agent of each such payment, the Administrative
Agent shall distribute to each Lender at its address for notices set forth
herein its pro rata share of such payment in accordance with such Lender's
Commitment Percentage (except as specified below) and shall wire advice of the
amount of such credit to each Lender. Each payment to the Administrative Agent
of the Issuing Lender's fees or L/C Participants' commissions shall be made in
like manner, but for the account of the Issuing Lender or the L/C Participant,
as the case may be. Each payment to the Administrative Agent of the
Administrative Agent's or Issuing Lender's fees or expenses shall be made for
the account of the Administrative Agent or Issuing Lender, as the case may be,
and each amount payable by the Borrowers to the Swingline Lender with respect to
the Swingline Note shall be made to the Administrative Agent for the account of
the Swingline Lender, and any amount payable to any Lender under Sections 5.8,
5.9, 5.10, 5.11 or 14.2 shall be paid to the Administrative Agent for the
account of the applicable Lender. Subject to Section 5.1(b)(ii) if any payment
under this Agreement or any Note shall be specified to be made upon a day which
is not a Business Day, it shall be made on the next succeeding day which is a
Business Day and such extension of time shall in such case be included in
computing any interest if payable along with such payment.
36
SECTION 5.5 Crediting of Payments and Proceeds. In the event that the
Borrowers shall fail to pay any of the Obligations when due and the Obligations
have been accelerated pursuant to Section 12.2, all payments received by the
Lenders upon the Notes and the other Obligations and all net proceeds from the
enforcement of the Obligations shall be applied first to all expenses then due
and payable by the Borrowers hereunder, then to all indemnity obligations then
due and payable by the Borrowers hereunder, then to all Administrative Agent's
and Issuing Lender's fees then due and payable, then to all commitment and other
fees and commissions then due and payable, then to accrued and unpaid interest
on the Swingline Note to the Swingline Lender, then to the principal amount
outstanding under the Swingline Note to the Swingline Lender, then to accrued
and unpaid interest on the other Notes and the Reimbursement Obligation (pro
rata in accordance with all such amounts due), then to the principal amount of
the other Notes and Reimbursement Obligation and any termination payments due in
respect of a Hedging Agreement with any Lender (which such Hedging Agreement is
permitted hereunder and required or requested by the Required Lenders) (pro rata
in accordance with all such amounts due) and then to the cash collateral account
described in Section 12.2(b) hereof to the extent of any L/C Obligations then
outstanding, then to any termination payments due in respect of a Hedging
Agreement with any Lender (which such Hedging Agreement is permitted, but not
required or requested by the Required Lenders), in that order.
SECTION 5.6 Adjustments. If any Lender (a "Benefited Lender") shall at any
time receive any payment of all or part of the Obligations owing to it, or
interest thereon, or if any Lender shall at any time receive any collateral in
respect of the Obligations owing to it (whether voluntarily or involuntarily, by
set-off or otherwise) in a greater proportion than any such payment to and
collateral received by any other Lender, if any, in respect of the Obligations
owing to such other Lender, or interest thereon, such Benefited Lender shall
purchase for cash from the other Lenders such portion of each such other
Lender's Extensions of Credit, or shall provide such other Lenders with the
benefits of any such collateral, or the proceeds thereof, as shall be necessary
to cause such Benefited Lender to share the excess payment or benefits of such
collateral or proceeds ratably with each of the Lenders; provided, that if all
or any portion of such excess payment or benefits is thereafter recovered from
such Benefited Lender, such purchase shall be rescinded, and the purchase price
and benefits returned to the extent of such recovery, but without interest. The
Borrowers agree that each Lender so purchasing a portion of another Lender's
Extensions of Credit may exercise all rights of payment (including, without
limitation, rights of set-off) with respect to such portion as fully as if such
Lender were the direct holder of such portion.
37
SECTION 5.7 Nature of Obligations of Lenders Regarding Extensions of
Credit; Assumption by the Administrative Agent. The obligations of the Lenders
under this Agreement to make the Loans and issue or participate in Letters of
Credit are several and are not joint or joint and several. Unless the
Administrative Agent shall have received notice from a Lender prior to a
proposed borrowing date that such Lender will not make available to the
Administrative Agent such Lender's ratable portion of the amount to be borrowed
on such date (which notice shall not release such Lender of its obligations
hereunder), the Administrative Agent may assume that such Lender has made such
portion available to the Administrative Agent on the proposed borrowing date in
accordance with Sections 2.3(b) and 4.2, and the Administrative Agent may, in
reliance upon such assumption, make available to the Borrowers on such date a
corresponding amount. If such amount is made available to the Administrative
Agent on a date after such borrowing date, such Lender shall pay to the
Administrative Agent on demand an amount, until paid, equal to the product of
(a) the amount of such Lender's Commitment Percentage of such borrowing, times
(b) the daily average Federal Funds Rate during such period as determined by the
Administrative Agent, times (c) a fraction the numerator of which is the number
of days that elapse from and including such borrowing date to the date on which
Lender's Commitment Percentage of such borrowing shall have become immediately
available to the Administrative Agent and the denominator of which is 360. A
certificate of the Administrative Agent with respect to any amounts owing under
this Section 5.7 shall be conclusive, absent manifest error. If such Lender's
Commitment Percentage of such borrowing is not made available to the
Administrative Agent by such Lender within three (3) Business Days of such
borrowing date, the Administrative Agent shall be entitled to recover such
amount made available by the Administrative Agent with interest thereon at the
rate per annum applicable to Base Rate Loans hereunder, on demand, from the
Borrowers. The failure of any Lender to make its Revolving Credit Commitment
Percentage, Term A Loan Percentage or Term B Loan Percentage, as applicable, of
any Loan available shall not relieve it or any other Lender of its obligation,
if any, hereunder to make its Revolving Credit Commitment Percentage, Term A
Loan Percentage or Term B Loan Percentage, as applicable, of such Loan available
on such borrowing date, but no Lender shall be responsible for the failure of
any other Lender to make its Revolving Credit Commitment Percentage, Term A Loan
Percentage or Term B Loan Percentage, as applicable, of such Loan available on
the borrowing date.
SECTION 5.8 Changed Circumstances.
(a) Circumstances Affecting LIBOR Rate Availability. If with respect to any
Interest Period the Administrative Agent or any Lender (after consultation with
Administrative Agent) shall determine that, by reason of circumstances affecting
the foreign exchange and interbank markets generally, deposits in eurodollars,
in the applicable amounts are not being quoted via Telerate Page 3750 or offered
to the Administrative Agent or such Lender for such Interest Period, then the
Administrative Agent shall forthwith give notice thereof to the Borrowers.
Thereafter, until the Administrative Agent notifies the Borrowers that such
circumstances no longer exist, the obligation of the Lenders to make LIBOR Rate
Loans and the right of the Borrowers to convert any Loan to or continue any Loan
as a LIBOR Rate Loan shall be suspended, and the Borrowers shall repay in full
(or cause to be repaid in full) the then outstanding principal amount of each
such LIBOR Rate Loans together with accrued interest thereon, on the last day of
the then current Interest Period applicable to such LIBOR Rate Loan or convert
the then outstanding principal amount of each such LIBOR Rate Loan to a Base
Rate Loan as of the last day of such Interest Period.
(b) Laws Affecting LIBOR Rate Availability. If, after the date hereof, the
introduction of, or any change in, any Applicable Law or any change in the
interpretation or administration thereof by any Governmental Authority, central
bank or comparable agency charged with the interpretation or administration
thereof, or compliance by any Lender (or any of their respective Lending
Offices) with any request or directive (whether or not having the force of law)
of any such Authority, central bank or comparable agency, shall make it unlawful
or impossible for any of the Lenders (or any of their respective Lending
Offices) to honor its obligations hereunder to make or maintain any LIBOR Rate
Loan, such Lender shall promptly give notice thereof to the Administrative Agent
and the Administrative Agent shall promptly give notice to the Borrowers and the
other Lenders. Thereafter, until the Administrative Agent notifies the Borrowers
that such circumstances no longer exist, (i) the obligations of the Lenders to
make LIBOR Rate Loans and the right of the Borrowers to convert any Loan or
continue any Loan as a LIBOR Rate Loan shall be suspended and thereafter the
Borrowers may select only Base Rate Loans hereunder, and (ii) if any of the
Lenders may not lawfully continue to maintain a LIBOR Rate Loan to the end of
the then current Interest Period applicable thereto as a LIBOR Rate Loan, the
applicable LIBOR Rate Loan shall immediately be converted to a Base Rate Loan
for the remainder of such Interest Period.
38
(c) Increased Costs. If, after the date hereof, the introduction of, or any
change in, any Applicable Law, or in the interpretation or administration
thereof by any Governmental Authority, central bank or comparable agency charged
with the interpretation or administration thereof, or compliance by any of the
Lenders (or any of their respective Lending Offices) with any request or
directive (whether or not having the force of law) of such Authority, central
bank or comparable agency:
(i) shall subject any of the Lenders (or any of their respective Lending
Offices) to any tax, duty or other charge with respect to any Note, Letter of
Credit or Application or shall change the basis of taxation of payments to any
of the Lenders (or any of their respective Lending Offices) of the principal of
or interest on any Note, Letter of Credit or Application or any other amounts
due under this Agreement in respect thereof (except for changes in the rate of
tax on the overall net income of any of the Lenders or any of their respective
Lending Offices imposed by the jurisdiction in which such Lender is organized or
is or should be qualified to do business or such Lending Office is located); or
(ii) shall impose, modify or deem applicable any reserve (including,
without limitation, any imposed by the Board of Governors of the Federal Reserve
System), special deposit, insurance or capital or similar requirement against
assets of, deposits with or for the account of, or credit extended by any of the
Lenders (or any of their respective Lending Offices) or shall impose on any of
the Lenders (or any of their respective Lending Offices) or the foreign exchange
and interbank markets any other condition affecting any Note; and the result of
any of the foregoing is to increase the costs to any of the Lenders of
maintaining any LIBOR Rate Loan or issuing or participating in Letters of Credit
or to reduce the yield or amount of any sum received or receivable by any of the
Lenders under this Agreement or under the Notes in respect of a LIBOR Rate Loan
or Letter of Credit or Application, then such Lender shall promptly notify the
Administrative Agent, and the Administrative Agent shall promptly notify the
Borrowers of such fact and demand compensation therefor and, within fifteen (15)
days after such notice by the Administrative Agent, the Borrowers shall pay to
such Lender such additional amount or amounts as will compensate such Lender or
Lenders for such increased cost or reduction. The Administrative Agent will
promptly notify the Borrowers of any event of which it has knowledge which will
entitle such Lender to compensation pursuant to this Section 5.8(c); provided,
that the Administrative Agent shall incur no liability whatsoever to the Lenders
or the Borrowers in the event it fails to do so. The amount of such compensation
shall be determined, in the applicable Lender's sole discretion, based upon the
assumption that such Lender funded its Commitment Percentage of the LIBOR Rate
Loans in the London interbank market and using any reasonable attribution or
averaging methods which such Lender deems appropriate and practical. A
certificate of such Lender setting forth the basis for determining such amount
or amounts necessary to compensate such Lender shall be forwarded to the
Borrowers through the Administrative Agent and shall be conclusively presumed to
be correct save for manifest error.
39
SECTION 5.9 Indemnity. The Borrowers hereby indemnify each of the Lenders
against any loss or expense which may arise or be attributable to each Lender's
obtaining, liquidating or employing deposits or other funds acquired to effect,
fund or maintain any Loan (a) as a consequence of any failure by the Borrowers
to make any payment when due of any amount due hereunder in connection with a
LIBOR Rate Loan, (b) due to any failure of the Borrowers to borrow on a date
specified therefor in a Notice of Borrowing or Notice of Continuation/Conversion
or (c) due to any payment, prepayment or conversion of any LIBOR Rate Loan on a
date other than the last day of the Interest Period therefor. The amount of such
loss or expense shall be determined, in the applicable Lender's sole discretion,
based upon the assumption that such Lender funded its Commitment Percentage of
the LIBOR Rate Loans in the London interbank market and using any reasonable
attribution or averaging methods which such Lender deems appropriate and
practical. A certificate of such Lender setting forth the basis for determining
such amount or amounts necessary to compensate such Lender shall be forwarded to
the Borrowers through the Administrative Agent and shall be conclusively
presumed to be correct save for manifest error.
SECTION 5.10 Capital Requirements. If after the date hereof either (a) the
introduction of, or any change in, or in the interpretation of, any Applicable
Law or (b) compliance with any guideline or request from any central bank or
comparable agency or other Governmental Authority (whether or not having the
force of law), has or would have the effect of reducing the rate of return on
the capital of, or has affected or would affect the amount of capital required
to be maintained by, any Lender or any corporation controlling such Lender as a
consequence of, or with reference to the Commitments and other commitments of
this type, below the rate which the Lender or such other corporation could have
achieved but for such introduction, change or compliance, then within five (5)
Business Days after written demand by any such Lender, the Borrowers shall pay
to such Lender from time to time as specified by such Lender additional amounts
sufficient to compensate such Lender or other corporation for such reduction. A
certificate as to such amounts submitted to the Borrowers and the Administrative
Agent by such Lender, shall, in the absence of manifest error, be presumed to be
correct and binding for all purposes.
SECTION 5.11 Taxes.
(a) Payments Free and Clear. Any and all payments by the Borrowers
hereunder or under the Notes or the Letters of Credit shall be made free and
clear of and without deduction for any and all present or future taxes, levies,
imposts, deductions, charges or withholding, and all liabilities with respect
thereto excluding, (i) in the case of each Lender and the Administrative Agent,
income and franchise taxes imposed by the jurisdiction under the laws of which
such Lender or the Administrative Agent (as the case may be) is organized or is
or should be qualified to do business or any political subdivision thereof, (ii)
in the case of each Lender, income and franchise taxes imposed by the
jurisdiction of such Lender's Lending Office or any political subdivision
thereof and (iii) any United States federal income tax that is imposed on, or
required to be deducted from, a payment hereunder (or under the Notes or Letters
of Credit) by reason of a failure to comply with the requirements of Section
5.11(e) (all such non-excluded taxes, levies, imposts, deductions, charges,
withholdings and liabilities being hereinafter referred to as "Taxes"). If the
Borrowers shall be required by law to deduct any Taxes from or in respect of any
sum payable hereunder or under any Note or Letter of Credit to any Lender or the
Administrative Agent, (A) the sum payable shall be increased as may be necessary
so that after making all required deductions (including deductions applicable to
additional sums payable under this Section 5.11) such Lender or the
Administrative Agent (as the case may be) receives an amount equal to the amount
such party would have received had no such deductions been made, (B) the
Borrowers shall make such deductions, (C) the Borrowers shall pay the full
amount deducted to the relevant taxing authority or other authority in
accordance with applicable law, and (D) the Borrowers shall deliver to the
Administrative Agent evidence of such payment to the relevant taxing authority
or other authority in the manner provided in Section 5.11(d).
40
(b) Stamp and Other Taxes. In addition, the Borrowers shall pay any present
or future stamp, registration, recordation or documentary taxes or any other
similar fees or charges or excise or property taxes, levies of the United States
or any state or political subdivision thereof or any applicable foreign
jurisdiction which arise from any payment made hereunder or from the execution,
delivery or registration of, or otherwise with respect to, this Agreement, the
Loans, the Letters of Credit, the other Loan Documents, or the perfection of any
rights or security interest in respect thereto (hereinafter referred to as
"Other Taxes").
(c) Indemnity. The Borrowers shall indemnify each Lender and the
Administrative Agent for the full amount of Taxes and Other Taxes (including,
without limitation, any Taxes and Other Taxes imposed by any jurisdiction on
amounts payable under this Section 5.11) paid by such Lender or the
Administrative Agent (as the case may be) and any liability (including
penalties, interest and expenses) arising therefrom or with respect thereto,
whether or not such Taxes or Other Taxes were correctly or legally asserted.
Such indemnification shall be made within thirty (30) days from the date such
Lender or the Administrative Agent (as the case may be) makes written demand
therefor.
(d) Evidence of Payment. Within thirty (30) days after the date of any
payment of Taxes or Other Taxes, the Borrowers shall furnish to the
Administrative Agent, at its address referred to in Section 14.1, the original
or a certified copy of a receipt evidencing payment thereof or other evidence of
payment satisfactory to the Administrative Agent.
(e) Delivery of Tax Forms. Each Lender organized under the laws of a
jurisdiction other than the United States or any state thereof shall deliver to
the Borrowers, with a copy to the Administrative Agent, on the Closing Date or
concurrently with the delivery of the relevant Assignment and Acceptance, as
applicable, (i) two United States Internal Revenue Service Forms 4224 or Forms
1001, as applicable (or successor forms) properly completed and certifying in
each case that such Lender is entitled to a complete exemption from withholding
or deduction for or on account of any United States federal income taxes, and
(ii) an Internal Revenue Service Form W-8 or W-9 or successor applicable form,
as the case may be, to establish an exemption from United States backup
withholding taxes. Each such Lender further agrees to deliver to the Borrowers,
with a copy to the Administrative Agent, a Form 1001 or 4224 and Form W-8 or
W-9, or successor applicable forms or manner of certification, as the case may
be, on or before the date that any such form expires or becomes obsolete or
after the occurrence of any event requiring a change in the most recent form
previously delivered by it to the Borrowers, certifying in the case of a Form
1001 or 4224 that such Lender is entitled to receive payments under this
Agreement without deduction or withholding of any United States federal income
taxes (unless in any such case an event (including without limitation any change
in treaty, law or regulation) has occurred prior to the date on which any such
delivery would otherwise be required which renders such forms inapplicable or
the exemption to which such forms relate unavailable and such Lender notifies
the Borrowers and the Administrative Agent that it is not entitled to receive
payments without deduction or withholding of United States federal income taxes)
and, in the case of a Form W-8 or W-9, establishing an exemption from United
States backup withholding tax.
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(f) Survival. Without prejudice to the survival of any other agreement of
the Borrowers hereunder, the agreements and obligations of the Borrowers
contained in this Section 5.11 shall survive the payment in full of the
Obligations and the termination of the Commitments.
SECTION 5.12 Security. The Obligations of the Borrowers shall be secured
as provided in the Security Documents.
ARTICLE VI
CLOSING; CONDITIONS OF CLOSING AND BORROWING
SECTION 6.1 Closing. The closing shall take place at the offices of
Xxxxxxx Xxxxxxxxx Xxxxxxx & Xxxxxxx, L.L.P. at 10:00 a.m. on February __, 1999,
or on such other date as the parties hereto shall mutually agree.
SECTION 6.2 Conditions to Closing and Initial Extensions of Credit. The
obligation of the Lenders to close this Agreement and to make the initial Loan
or issue the initial Letter of Credit is subject to the satisfaction of each of
the following conditions:
(a) Executed Loan Documents. This Agreement, the Revolving Credit Notes,
the Term A Notes, the Term B Notes, the Swingline Note and the Security
Documents shall have been duly authorized, executed and delivered to the
Administrative Agent by the parties thereto, shall be in full force and effect
and no default shall exist thereunder, and the Borrowers shall have delivered
original counterparts thereof to the Administrative Agent.
(b) Closing Certificates; etc.
(i) Officer's Certificate of the Borrowers. The Administrative Agent shall
have received a certificate from a Responsible Officer, in form and substance
satisfactory to the Administrative Agent, to the effect that all representations
and warranties of the Borrowers contained in this Agreement and the other Loan
Documents are true, correct and complete; that the Borrowers are not in
violation of any of the covenants contained in this Agreement and the other Loan
Documents; that, after giving effect to the transactions contemplated by this
Agreement, no Default or Event of Default has occurred and is continuing; and
that the Borrowers have satisfied each of the closing conditions.
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(ii) Certificate of Secretary of each Borrower. The Administrative Agent
shall have received a certificate of the secretary or assistant secretary of
each Borrower certifying as to the incumbency and genuineness of the signature
of each officer of such Borrower executing Loan Documents to which it is a party
and certifying that attached thereto is a true, correct and complete copy of (A)
the articles of incorporation of such Borrower and all amendments thereto,
certified as of a recent date by the appropriate Governmental Authority in its
jurisdiction of incorporation, (B) the bylaws of such Borrower as in effect on
the date of such certifications, (C) resolutions duly adopted by the Board of
Directors of such Borrower authorizing the borrowings contemplated hereunder and
the execution, delivery and performance of this Agreement and the other Loan
Documents to which it is a party, and (D) each certificate required to be
delivered pursuant to Section 6.2(b)(iii).
(iii) Certificates of Good Standing. The Administrative Agent shall have
received long-form certificates as of a recent date of the good standing of each
Borrower under the laws of its jurisdiction of organization and each other
jurisdiction where such Borrower is qualified to do business and a certificate
of the relevant taxing authorities of such jurisdictions certifying that such
Person has filed required tax returns and owes no delinquent taxes.
(iv) Opinions of Counsel. The Administrative Agent shall have received
favorable opinions of counsel to the Borrowers addressed to the Administrative
Agent and the Lenders with respect to the Borrowers, the Loan Documents and such
other matters as the Lenders shall request.
(v) Tax Forms. The Administrative Agent shall have received copies of the
United States Internal Revenue Service forms required by Section 5.11(e) hereof.
(vi) Borrowing Base Certificate. The Administrative Agent shall have
received a Borrowing Base Certificate from the chief executive officer or chief
financial officer of the Borrower in the form of Exhibit A attached hereto,
which shall be accurate and complete in all material respects.
(c) Collateral.
(i) Filings and Recordings. All filings and recordations that are necessary
to perfect the security interests of the Lenders in the collateral described in
the Security Documents shall have been received by the Collateral Agent and the
Collateral Agent shall have received evidence satisfactory to the Collateral
Agent that upon such filings and recordations such security interests constitute
valid and perfected first priority Liens therein.
(ii) Pledged Collateral. The Collateral Agent shall have received original
stock certificates or other certificates evidencing the capital stock or other
ownership interests pledged pursuant to the Pledge Agreement, together with an
undated stock power for each such certificate duly executed in blank by the
registered owner thereof .
(iii) Lien Search. The Collateral Agent shall have received the results of
a Lien search (including a search as to judgments, pending litigation and tax
matters) made against the Borrowers under the Uniform Commercial Code (or
applicable judicial docket) as in effect in any state in which any of its assets
are located, indicating among other things that its assets are free and clear of
any Lien except for Liens permitted hereunder.
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(iv) Hazard and Liability Insurance. The Collateral Agent shall have
received (i) a report from the independent insurance consultant of the
Borrowers, in form and substance reasonably satisfactory to the Collateral
Agent, stating that insurance satisfying the requirements of the Loan Documents
is in effect and (ii) certificates of insurance, evidence of payment of all
insurance premiums for the current policy year of each, and, if requested by the
Collateral Agent, copies (certified by a Responsible Officer) of insurance
policies in the form required under the Security Documents and otherwise in form
and substance reasonably satisfactory to the Collateral Agent.
(v) Assignment of Claims Act Notices. Notices of assignment, in form and
substance satisfactory to the Collateral Agent, with respect to Government
Contracts identified in any "Perfection Certificate" under and as defined in the
Security Agreement duly executed by the Borrower party to such contract in
compliance with the Assignment of Claims Act.
(d) Consents; Defaults.
(i) Governmental and Third Party Approvals. The Borrowers shall have
obtained all necessary approvals, authorizations and consents of any Person and
of all Governmental Authorities and courts having jurisdiction with respect to
the transactions contemplated by this Agreement and the other Loan Documents.
(ii) No Injunction, Etc. No action, proceeding, investigation, regulation
or legislation shall have been instituted, threatened or proposed before any
Governmental Authority to enjoin, restrain, or prohibit, or to obtain
substantial damages in respect of, or which is related to or arises out of this
Agreement or the other Loan Documents or the consummation of the transactions
contemplated hereby or thereby, or which, in the Administrative Agent's sole
discretion, would make it inadvisable to consummate the transactions
contemplated by this Agreement and such other Loan Documents.
(iii) No Event of Default. No Default or Event of Default shall have
occurred and be continuing.
(e) Financial Matters.
(i) Financial Statements. The Administrative Agent shall have received the
most recent audited Consolidated financial statements of the Borrowers and their
Subsidiaries, all in form and substance satisfactory to the Administrative
Agent.
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(ii) Financial Condition Certificate. The Borrowers shall have delivered to
the Administrative Agent a certificate, in form and substance satisfactory to
the Administrative Agent, and certified as accurate by a Responsible Officer,
that (A) the Borrowers and their Subsidiaries taken as a whole are Solvent, (B)
the payables of the Borrowers are current and not past due, except where failure
to pay could not reasonably be expected to have a Material Adverse Effect, (C)
attached thereto is a calculation evidencing that EBITDA of the Borrowers and
their Subsidiaries for the four (4) consecutive fiscal quarters ending on
September 30, 1998 equals or exceeds $11,500,000, (D) attached thereto is a pro
forma balance sheet of the Borrowers and their Subsidiaries setting forth on a
pro forma basis the financial condition of the Borrowers and their Subsidiaries
on a Consolidated basis as of the date of such certificate reflecting on a pro
forma basis the effect of the transactions contemplated herein, including all
fees and expenses in connection therewith, and evidencing compliance on a pro
forma basis with the covenants contained in Articles X and XI hereof,
(E) attached thereto are the financial projections previously delivered to the
Administrative Agent representing the good faith opinions of each Borrower and
senior management thereof as to the projected results contained therein and (F)
attached thereto is a calculation of the Leverage Ratio and corresponding
Applicable Margin pursuant to Section 5.1(c).
(iii) Payment at Closing; Fee Letters. The Borrowers shall have paid the
fees set forth or referenced in Section 5.3 and any other accrued and unpaid
fees or commissions due hereunder (including, without limitation, legal fees and
expenses) to the Administrative Agent and Lenders, and to any other Person such
amount as may be due thereto in connection with the transactions contemplated
hereby, including all taxes, fees and other charges in connection with the
execution, delivery, recording, filing and registration of any of the Loan
Documents. The Administrative Agent shall have received duly authorized and
executed copies of the fee letter agreement referred to in Section 5.3(b).
(f) Non-Disturbance Agreement; Subordination Agreement. The Non-Disturbance
Agreement and the Subordination Agreement shall have been duly authorized,
executed and delivered to the Administrative Agent by the parties thereto and
shall be in form and substance satisfactory to the Administrative Agent.
(g) Miscellaneous.
(i) Notice of Borrowing. The Administrative Agent shall have received a
Notice of Borrowing from GTS on behalf of the Borrowers in accordance with
Section 2.3(a) and Section 4.2, and a Notice of Account Designation specifying
the account or accounts to which the proceeds of any Loans made after the
Closing Date are to be disbursed.
(ii) Proceedings and Documents. All opinions, certificates and other
instruments and all proceedings in connection with the transactions contemplated
by this Agreement shall be satisfactory in form and substance to the Lenders.
The Lenders shall have received copies of all other instruments and other
evidence as the Lender may reasonably request, in form and substance
satisfactory to the Lenders, with respect to the transactions contemplated by
this Agreement and the taking of all actions in connection therewith.
(iii) Due Diligence and Other Documents. The Borrowers shall have delivered
to the Administrative Agent such other documents, certificates and opinions as
the Administrative Agent may reasonably request.
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(h) Refinancing. On the Closing Date, (i) all loans under the Existing
Facility ("Existing Loans") made by any lender under the Existing Facility (each
a "Prior Lender") who is not a Lender hereunder shall be repaid in full and the
commitments and other obligations and (except as expressly set forth in the
Existing Facility) rights of such Prior Lender shall be terminated, (ii) all
outstanding Existing Loans shall be deemed Loans hereunder and the
Administrative Agent shall make such transfers of funds as are necessary in
order that the outstanding balance of such Loans, together with any Loans funded
on the Closing Date, reflect the Commitments of the Lenders hereunder, (iii) all
outstanding letters of credit issued pursuant to the Existing Facility shall be
deemed Letters of Credit hereunder and each Lender agrees to purchase a
participation therein pursuant to Section 3.4 in accordance with its Revolving
Credit Commitment Percentage, (iv) there shall have been paid in cash in full
all accrued but unpaid interest due on the Existing Loans to but excluding the
Closing Date, (v) there shall have been paid in cash in full all accrued but
unpaid fees under the Existing Facility due to but excluding the Closing Date
and all other amounts, costs and expenses then owing to any of the Prior Lenders
and/or any Agent, as agent under the Existing Facility, in each case to the
satisfaction of such Agent or Prior Lender, as the case may be, regardless of
whether or not such amounts would otherwise be due and payable at such time
pursuant to the terms of the Existing Facility and (vi) all outstanding
promissory notes issued by the Borrowers to the Prior Lenders under the Existing
Facility shall be deemed canceled and the originally executed copies thereof
shall be promptly returned to the Administrative Agent who shall forward such
notes to the Borrowers.
SECTION 6.3 Conditions to All Extensions of Credit. The obligations of the
Lenders to make any Extensions of Credit is subject to the satisfaction of the
following conditions precedent on the relevant borrowing or issue date, as
applicable:
(a) Continuation of Representations and Warranties. The representations and
warranties contained in Article VII shall be true and correct on and as of such
borrowing or issuance date with the same effect as if made on and as of such
date; except for any representation and warranty made as of an earlier date,
which representation and warranty shall remain true and correct as of such
earlier date.
(b) No Existing Default. No Default or Event of Default shall have occurred
and be continuing hereunder (i) on the borrowing date with respect to such Loan
or after giving effect to the Loans to be made on such date or (ii) or the issue
date with respect to such Letter of Credit or after giving affect to such
Letters of Credit on such date.
(c) Officer's Compliance Certificate; Additional Documents. The
Administrative Agent shall have received the current Officer's Compliance
Certificate and each additional document, instrument, legal opinion or other
item of information reasonably requested by it.
ARTICLE VII
REPRESENTATIONS AND WARRANTIES OF THE BORROWERS
46
SECTION 7.1 Representations and Warranties. To induce the Administrative
Agent and Lenders to enter into this Agreement and to induce the Lenders to make
Extensions of Credit, each Borrower hereby represents and warrants to the
Administrative Agent and Lenders both before and after giving effect to the
transactions contemplated hereunder that:
(a) Organization; Power; Qualification. Each Borrower and each Subsidiary
(including DuraTherm, Inc.) thereof is duly organized, validly existing and in
good standing under the laws of the jurisdiction of its incorporation or
formation, has the power and authority to own its properties and to carry on its
business as now being and hereafter proposed to be conducted and is duly
qualified and authorized to do business in each jurisdiction in which the
character of its properties or the nature of its business requires such
qualification and authorization, except where the failure to be duly qualified
and authorized will not have a Material Adverse Effect. The jurisdictions in
which each Borrower and each Subsidiary (including DuraTherm, Inc.) thereof are
organized and qualified to do business as of the Closing Date are described on
Schedule 7.1(a).
(b) Ownership. Each Subsidiary (including DuraTherm, Inc.) of each Borrower
as of the Closing Date is listed on Schedule 7.1(b). As of the Closing Date, the
capitalization of each Borrower and each Subsidiary thereof consists of the
number of shares, authorized, issued and outstanding, of such classes and
series, with or without par value, described on Schedule 7.1(b). All outstanding
shares have been duly authorized and validly issued and are fully paid and
nonassessable. The shareholders of the Subsidiaries (including DuraTherm, Inc.)
of each Borrower and the number of shares owned by each as of the Closing Date
are described on Schedule 7.1(b). As of the Closing Date, there are no
outstanding stock purchase warrants, subscriptions, options, securities,
instruments or other rights of any type or nature whatsoever, which are
convertible into, exchangeable for or otherwise provide for or permit the
issuance of capital stock of any Borrower or any Subsidiary (including
DuraTherm, Inc.) thereof, except as described on Schedule 7.1(b).
(c) Authorization of Agreement, Loan Documents and Borrowing. Each Borrower
and each Subsidiary thereof has the right, power and authority and has taken all
necessary corporate and other action to authorize the execution, delivery and
performance of this Agreement and each of the other Loan Documents to which it
is a party in accordance with their respective terms. This Agreement and each of
the other Loan Documents have been duly executed and delivered by the duly
authorized officers of each Borrower and each of its Subsidiaries party thereto,
and each such document constitutes the legal, valid and binding obligation of
each Borrower or its Subsidiary party thereto, enforceable in accordance with
its terms, except as such enforcement may be limited by bankruptcy, insolvency,
reorganization, moratorium or similar state or federal debtor relief laws from
time to time in effect which affect the enforcement of creditors' rights in
general and the availability of equitable remedies.
(d) Compliance of Agreement, Loan Documents and Borrowing with Laws, Etc.
The execution, delivery and performance by each Borrower and each Subsidiary
thereof of the Loan Documents to which each such Person is a party, in
accordance with their respective terms, the borrowings hereunder and the
transactions contemplated hereby do not and will not, by the passage of time,
the giving of notice or otherwise, (i) require any Governmental Approval or
violate any Applicable Law relating to any Borrower or any Subsidiary thereof,
(ii) conflict with, result in a breach of or constitute a default under the
articles of incorporation, bylaws or other organizational documents of any
Borrower or any Subsidiary thereof or any indenture, agreement or other
instrument to which such Person is a party or by which any of its properties may
be bound or any Governmental Approval relating to such Person, or (iii) result
in or require the creation or imposition of any Lien upon or with respect to any
property now owned or hereafter acquired by such Person other than Liens arising
under the Loan Documents.
47
(e) Compliance with Law; Governmental Approvals. Each Borrower and each
Subsidiary (including DuraTherm, Inc.) thereof (i) has all Governmental
Approvals required by any Applicable Law for it to conduct its business, each of
which is in full force and effect, is final and not subject to review on appeal
and is not the subject of any pending or, to the best of its knowledge,
threatened attack by direct or collateral proceeding, and (ii) is in compliance
with each Governmental Approval applicable to it and in compliance with all
other Applicable Laws relating to it or any of its respective properties, in
each case except to the extent that any such lack of Governmental Approval or
failure to comply would not have a Material Adverse Effect.
(f) Tax Returns and Payments. Each Borrower and each Subsidiary (including
DuraTherm, Inc.) thereof has duly filed or caused to be filed all federal,
state, material local and other tax returns required by Applicable Law to be
filed, and has paid, or made adequate provision for the payment of, all federal,
state, local and other taxes, assessments and governmental charges or levies
upon it and its property, income, profits and assets which are due and payable.
No Governmental Authority has asserted any Lien or other claim against any
Borrower or Subsidiary (including DuraTherm, Inc.) thereof with respect to
unpaid taxes which has not been discharged or resolved. The charges, accruals
and reserves on the books of each Borrower and each Subsidiary (including
DuraTherm, Inc.) thereof in respect of federal, state, material local and other
taxes for all Fiscal Years and portions thereof since the organization of such
Borrower and each Subsidiary (including DuraTherm, Inc.) thereof are in the
judgment of each such Borrower adequate, and each such Borrower does not
anticipate any additional taxes or assessments for any of such years.
(g) Intellectual Property Matters. Each Borrower and each Subsidiary
thereof owns or possesses rights to use all franchises, licenses, copyrights,
copyright applications, patents, patent rights or licenses, patent applications,
trademarks, trademark rights, trade names, trade name rights, copyrights and
rights with respect to the foregoing which are required to conduct its business.
No event has occurred which permits, or after notice or lapse of time or both
would permit, the revocation or termination of any such rights, and no Borrower
nor any Subsidiary thereof is liable to any Person for infringement under
Applicable Law with respect to any such rights as a result of its business
operations.
(h) Environmental Matters. In the ordinary course of its business, each
Borrower conducts an ongoing review of the effect of Environmental Laws on the
business, operations and properties of such Borrower and its Subsidiaries, in
the course of which it identifies and evaluates associated liabilities and costs
(including, without limitation, any capital or operating expenditures required
for clean-up or closure of properties presently or previously owned, any capital
or operating expenditures required to achieve or maintain compliance with
environmental protection standards imposed by law or as a condition of any
license, permit or contract, any related constraints on operating activities,
including any periodic or permanent shutdown of any facility or reduction in the
level of or change in the nature of operations conducted at any such facility,
any costs or liabilities in connection with off-site disposal of wastes or
Hazardous Substances, and any actual or potential liabilities to third parties,
including employees, and any related costs and expenses). On the basis of this
review, each Borrower has concluded that such associated liabilities and costs,
including the costs of compliance with Environmental Laws, could not reasonably
be expected to have a Material Adverse Effect.
48
(i) ERISA.
(i) As of the Closing Date, no Borrower nor any ERISA Affiliate maintains
or contributes to, or has any obligation under, any Employee Benefit Plans other
than those identified on Schedule 7.1(i);
(ii) Each Borrower and each ERISA Affiliate is in material compliance with
all applicable provisions of ERISA and the regulations and published
interpretations thereunder with respect to all Employee Benefit Plans except for
any required amendments for which the remedial amendment period as defined in
Section 401(b) of the Code has not yet expired. Each Employee Benefit Plan that
is intended to be qualified under Section 401(a) of the Code has been determined
by the Internal Revenue Service to be so qualified, and each trust related to
such plan has been determined to be exempt under Section 501(a) of the Code. No
liability has been incurred by any Borrower or any ERISA Affiliate which remains
unsatisfied for any taxes or penalties with respect to any Employee Benefit Plan
or any Multiemployer Plan;
(iii) No Pension Plan has been terminated, nor has any accumulated funding
deficiency (as defined in Section 412 of the Code) been incurred (without regard
to any waiver granted under Section 412 of the Code), nor has any funding waiver
from the Internal Revenue Service been received or requested with respect to any
Pension Plan, nor has any Borrower or any ERISA Affiliate failed to make any
contributions or to pay any amounts due and owing as required by Section 412 of
the Code, Section 302 of ERISA or the terms of any Pension Plan prior to the due
dates of such contributions under Section 412 of the Code or Section 302 of
ERISA, nor has there been any event requiring any disclosure under Section
4041(c)(3)(C) or 4063(a) of ERISA with respect to any Pension Plan;
(iv) No Borrower nor any ERISA Affiliate has: (A) engaged in a nonexempt
prohibited transaction described in Section 406 of the ERISA or Section 4975 of
the Code, (B) incurred any liability to the PBGC which remains outstanding other
than the payment of premiums and there are no premium payments which are due and
unpaid, (C) failed to make a required contribution or payment to a Multiemployer
Plan, or (D) failed to make a required installment or other required payment
under Section 412 of the Code;
(v) No Termination Event has occurred or is reasonably expected to occur;
and
(vi) No proceeding, claim, lawsuit and/or investigation is existing or, to
the best knowledge of any Borrower after due inquiry, threatened concerning or
involving any (A) employee welfare benefit plan (as defined in Section 3(1) of
ERISA) currently maintained or contributed to by any Borrower or any ERISA
Affiliate, (B) Pension Plan or (C) Multiemployer Plan.
49
(j) Margin Stock. No Borrower nor any Subsidiary thereof is engaged
principally or as one of its activities in the business of extending credit for
the purpose of "purchasing" or "carrying" any "margin stock" (as each such term
is defined or used in Regulation U of the Board of Governors of the Federal
Reserve System). No part of the proceeds of any of the Loans or Letters of
Credit will be used for purchasing or carrying margin stock or for any purpose
which violates, or which would be inconsistent with, the provisions of
Regulation T, U or X of such Board of Governors.
(k) Government Regulation. No Borrower nor any Subsidiary thereof is an
"investment company" or a company "controlled" by an "investment company" (as
each such term is defined or used in the Investment Company Act of 1940, as
amended) and no Borrower nor any Subsidiary thereof is, or after giving effect
to any Extension of Credit will be, subject to regulation under the Public
Utility Holding Company Act of 1935 or the Interstate Commerce Act, each as
amended, or any other Applicable Law which limits its ability to incur or
consummate the transactions contemplated hereby.
(l) Material Contracts. Schedule 7.1(l) sets forth a complete and accurate
list of all Material Contracts of the Borrowers and their Subsidiaries in effect
as of the Closing Date not listed on any other Schedule hereto; other than as
set forth in Schedule 7.1(l), each such Material Contract is, and after giving
effect to the consummation of the transactions contemplated by the Loan
Documents will be, in full force and effect in accordance with the terms
thereof. The Borrowers and their Subsidiaries have delivered or made available
to the Administrative Agent a true and complete copy of each Material Contract
required to be listed on Schedule 7.1(l) or any other Schedule hereto.
(m) Employee Relations. Each Borrower and each Subsidiary thereof has a
stable work force in place and is not, as of the Closing Date, party to any
collective bargaining agreement nor has any labor union been recognized as the
representative of its employees except as set forth on Schedule 7.1(m). No
Borrower knows of any pending, threatened or contemplated strikes, work stoppage
or other collective labor disputes involving its employees or those of its
Subsidiaries, which would have a Material Adverse Effect.
(n) Financial Statements. The (i) Consolidated balance sheets of the
Borrowers and their Subsidiaries (including DuraTherm, Inc.) as of December 31,
1997 and the related statements of income and retained earnings and cash flows
for the Fiscal Year then ended and (ii) unaudited Consolidated balance sheet of
the Borrowers and their Subsidiaries (including DuraTherm, Inc.) as of September
30, 1998 and related unaudited interim statements of revenue and retained
earnings, copies of which have been furnished to the Administrative Agent and
each Lender, are complete and correct in all material respects and fairly
present the assets, liabilities and financial position of the Borrowers and
their Subsidiaries (including DuraTherm, Inc.) as at such dates, and the results
of the operations and changes of financial position for the periods then ended.
All such financial statements, including the related schedules and notes
thereto, have been prepared in accordance with GAAP, except in the case of the
unaudited financial statements referred to above, for the omission of footnotes
and ordinary year end adjustments). The Borrowers and their Subsidiaries
(including DuraTherm, Inc.) have no Debt, obligation or other unusual forward or
long-term commitment which is not reflected in accordance with GAAP in the
foregoing financial statements or in the notes thereto.
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(o) No Material Adverse Change. Since December 31, 1997, there has been no
material adverse change in the properties, business, operations, or condition
(financial or otherwise) of the Borrowers and their Subsidiaries (including
DuraTherm, Inc.) taken as a whole and no event has occurred or condition arisen
that could reasonably be expected to have a Material Adverse Effect, except as
previously disclosed in materials filed with the SEC after December 31, 1997 and
prior to the Closing Date.
(p) Solvency. As of the Closing Date and after giving effect to each Loan
and Letter of Credit made hereunder, GTS and its Subsidiaries (including
DuraTherm, Inc.), taken as a whole, will be Solvent.
(q) Titles to Properties. Each Borrower and each Subsidiary thereof has
such title to the real property owned by it as is necessary or desirable to the
conduct of its business and valid and legal title to all of its personal
property and assets, including, but not limited to, those reflected on the
balance sheets of the Borrowers and their Subsidiaries delivered pursuant to
Section 7.1(o), except those which have been disposed of by any Borrower or any
Subsidiary thereof subsequent to such date which dispositions have been in the
ordinary course of business or as otherwise expressly permitted hereunder.
(r) Liens. None of the properties and assets of any Borrower or any
Subsidiary thereof is subject to any Lien, except Permitted Liens. No financing
statement under the Uniform Commercial Code of any state which names any
Borrower or any Subsidiary thereof or any of their respective trade names or
divisions as debtor and which has not been terminated, has been filed in any
state or other jurisdiction and no Borrower nor any Subsidiary thereof has
signed any such financing statement or any security agreement authorizing any
secured party thereunder to file any such financing statement, except to perfect
Permitted Liens.
(s) Debt and Guaranty Obligations. Schedule 7.1(s) is a complete and
correct listing of all Debt and Guaranty Obligations of each Borrower and each
Subsidiary (including DuraTherm, Inc.) thereof as of the Closing Date in excess
of $750,000. Each Borrower and each Subsidiary (including DuraTherm, Inc.)
thereof have performed and are in compliance with all of the terms of such Debt
and Guaranty Obligations and all instruments and agreements relating thereto,
and no default or event of default, or event or condition which with notice or
lapse of time or both would constitute such a default or event of default on the
part of any Borrower or any Subsidiary (including DuraTherm, Inc.) thereof
exists with respect to any such Debt or Guaranty Obligation.
(t) Litigation. Except for matters existing on the Closing Date and set
forth on Schedule 7.1(t), there are no actions, suits or proceedings pending
nor, to the knowledge of any Borrower, threatened against or in any other way
relating adversely to or affecting any Borrower or any Subsidiary (including
DuraTherm, Inc.) thereof or any of their respective properties in any court or
before any arbitrator of any kind or before or by any Governmental Authority
which, if adversely determined could reasonably be expected to have a Material
Adverse Effect, and which are reasonably likely to be determined adversely to
the Borrower or such Subsidiary.
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(u) Absence of Defaults. No event has occurred or is continuing which
constitutes a Default or an Event of Default.
(v) Accounts. Each Account shown on the most recent Borrowing Base
Certificate is, as of the date of the Borrowing Base Certificate, qualified to
be in the Borrowing Base.
(w) Year 2000.
(i) As of the Closing Date, each Borrower and each Subsidiary thereof (A)
has initiated a review and assessment of all areas of its business and
operations (including those affected by information received from suppliers and
vendors) that may be adversely affected by a Year 2000 Problem, (B) has
developed or is in the process of developing a comprehensive and detailed
strategic plan to address its Year 2000 Problem, if any, and will, on a timely
basis (but in no event later than September 30, 1999), implement such plan and
(C) reasonably believes that the necessary expenditure of capital and resources
to eliminate any such Year 2000 Problem will not result in a Material Adverse
Effect.
(ii) As of the Closing Date, to the best knowledge of each Borrower (after
due inquiry), each material supplier, vendor and customer of such Borrower and
each Subsidiary of such Borrower thereof will on a timely basis eliminate, its
Year 2000 Problem.
(iii) "Year 2000 Problem" shall mean, with respect to any Person, the
possibility that the computer applications and software programs used by such
Person in the operation of its business will be unable to effectively process
data including data fields requiring references to dates on and after January 1,
2000, and may experience or produce invalid or incorrect results or abnormal
operation related to or as a result of the occurrence of such dates.
(x) Accuracy and Completeness of Information. All written information,
reports and other papers and data other than financial projections produced by
or on behalf of each Borrower and each Subsidiary (including DuraTherm, Inc.)
thereof and furnished to the Lenders were, at the time the same were so
furnished, complete and correct in all material respects to the extent necessary
to give the recipient a true and accurate knowledge of the subject matter. No
document furnished or written statement other than financial projections made to
the Administrative Agent or the Lenders by any Borrower or any Subsidiary
(including DuraTherm, Inc.) thereof in connection with the negotiation,
preparation or execution of this Agreement or any of the Loan Documents contains
or will contain any untrue statement of a fact material to the creditworthiness
of any Borrower or any Subsidiary (including DuraTherm, Inc.) thereof or omits
or will omit to state a material fact necessary in order to make the statements
contained therein not misleading. No Borrower is aware of any facts which it has
not disclosed in writing to the Administrative Agent having a Material Adverse
Effect, or insofar as any Borrower can now foresee, could reasonably be expected
to have a Material Adverse Effect.
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SECTION 7.2 Survival of Representations and Warranties, Etc . All
representations and warranties set forth in this Article VII and all
representations and warranties contained in any certificate, or any of the Loan
Documents (including but not limited to any such representation or warranty made
in or in connection with any amendment thereto) shall constitute representations
and warranties made under this Agreement. All representations and warranties
made under this Agreement shall be made or deemed to be made at and as of the
Closing Date, shall survive the Closing Date and shall not be waived by the
execution and delivery of this Agreement, any investigation made by or on behalf
of the Lenders or any borrowing hereunder.
ARTICLE VIII
FINANCIAL INFORMATION AND NOTICES
Until all the Obligations have been paid and satisfied in full and the
Commitments terminated, unless consent has been obtained in the manner set forth
in Section 14.11 hereof, each Borrower will furnish or cause to be furnished to
the Administrative Agent and to the Lenders at their respective addresses as set
forth on Schedule 1.1(a), or such other office as may be designated by the
Administrative Agent and Lenders from time to time:
SECTION 8.1 Financial Statements and Projections.
(a) Quarterly Financial Statements. As soon as practicable and in any event
within forty-five (45) days after the end of the first three fiscal quarters, an
unaudited Consolidated balance sheet of the Borrowers and their Subsidiaries
(including DuraTherm, Inc.) as of the close of such fiscal quarter and unaudited
Consolidated statements of income, retained earnings and cash flows for the
fiscal quarter then ended and that portion of the Fiscal Year then ended,
including the notes thereto, all in reasonable detail setting forth in
comparative form the corresponding figures for the preceding Fiscal Year and
prepared by the Borrowers in accordance with GAAP and, if applicable, containing
disclosure of the effect on the financial position or results of operations of
any change in the application of accounting principles and practices during the
period, and certified by the chief financial officer of each Borrower to present
fairly in all material respects the financial condition of the Borrowers and
their Subsidiaries (including DuraTherm, Inc.) as of their respective dates and
the results of operations of the Borrowers and their Subsidiaries (including
DuraTherm, Inc.) for the respective periods then ended, subject to normal year
end adjustments.
(b) Annual Financial Statements. As soon as practicable and in any event
within ninety (90) days after the end of each Fiscal Year, an audited
Consolidated and consolidating balance sheet of the Borrowers and their
Subsidiaries (including DuraTherm, Inc.) as of the close of such Fiscal Year and
audited Consolidated and consolidating statements of income, retained earnings
and cash flows for the Fiscal Year then ended, including the notes thereto, all
in reasonable detail setting forth in comparative form the corresponding figures
for the preceding Fiscal Year and prepared by an independent certified public
accounting firm acceptable to the Administrative Agent in accordance with GAAP
and, if applicable, containing disclosure of the effect on the financial
position or results of operation of any change in the application of accounting
principles and practices during the year, and accompanied by a report thereon by
such certified public accountants that is not qualified with respect to scope
limitations imposed by any Borrower or any Subsidiary (including DuraTherm,
Inc.) thereof or with respect to accounting principles followed by any Borrower
or any Subsidiary (including DuraTherm, Inc.) thereof not in accordance with
GAAP or with respect to whether the Borrowers and their Subsidiaries, taken as a
whole, are a going concern.
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(c) Annual Business Plan and Financial Projections. As soon as practicable
and in any event within forty-five (45) days after the beginning of each Fiscal
Year beginning with the 2000 Fiscal Year, a business plan of the Borrowers and
their Subsidiaries (including DuraTherm, Inc.) for the ensuing four (4) fiscal
quarters, such plan to be prepared in accordance with GAAP and to include, on a
quarterly basis, the following: a quarterly operating and capital budget, a
projected income statement, statement of cash flows and balance sheet and a
report containing management's discussion and analysis of such projections,
accompanied by a certificate from the chief financial officer of each Borrower
to the effect that, to the best of such officer's knowledge, such projections
are good faith estimates of the financial condition and operations of the
Borrowers and their Subsidiaries (including DuraTherm, Inc.)for such four (4)
quarter period.
SECTION 8.2 Officer's Compliance Certificate. At each time financial
statements are delivered pursuant to Sections 8.1 (a) or (b) and at such other
times as the Administrative Agent shall reasonably request, a certificate of the
chief financial officer or the treasurer of each Borrower in the form of Exhibit
G attached hereto (an "Officer's Compliance Certificate").
SECTION 8.3 Accountants' Certificate. If requested by the Administrative
Agent, simultaneously with the delivery of each set of financial statements
referred to in Section 8.1(b) (or at such other time as the Administrative Agent
may specify), a statement of the firm of independent public accountants which
reported on such statements (i) whether anything has come to their attention to
cause them to believe that any Default existed on the date of such statements
and (ii) confirming the calculations set forth in the officer's certificate
delivered simultaneously therewith pursuant to Section 8.2.
SECTION 8.4 Other Reports.
(a) Auditors' Management Letters. Promptly upon receipt thereof, copies of
each report submitted to any Borrower or its Consolidated Subsidiaries
(including DuraTherm, Inc.) by independent public accountants in connection with
any annual, interim or special audit made by them of the books of such Borrower
or its Consolidated Subsidiaries including, without limitation, each report
submitted to such Borrower or its Consolidated Subsidiaries (including
DuraTherm, Inc.) concerning its accounting practices and systems and any final
comment letter submitted by such accountants to management in connection with
the annual audit of such Borrower and its Consolidated Subsidiaries (including
DuraTherm, Inc.).
(b) SEC Filings. Within five (5) days after the sending, filing or receipt
thereof, copies of (i) all financial statements, reports, notices and proxy
statements that GTS shall send to its shareholders, and (ii) all regular,
periodic and special reports, registration statements and prospectuses (other
than on Form S-8) that GTS shall render to or file with the Securities and
Exchange Commission, the National Association of Securities Dealers, Inc. or any
national securities exchange.
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(c) Borrowing Base Certificate. As soon as available, but in any event
within twenty (20) days after the end of each calendar month (or on a more
frequent basis if requested by the Administrative Agent), a Borrowing Base
Certificate.
(d) Accounts Receivable Aging Report. As soon as available, but in any
event within twenty (20) days after the end of each calendar month (and, upon
the occurrence and during the continuation of a Default or Event of Default, on
a more frequent basis if requested by the Administrative Agent), an accounts
receivable aging report listing all Accounts of the Borrowers as of the last
Business Day of such month which report shall include the amount and age of each
Account Debtor and such other information as the Administrative Agent may
require, all in form and substance satisfactory to the Administrative Agent. The
Borrowers shall deliver annually on the first day of the second quarter of each
Fiscal Year and upon the occurrence and during the continuation of a Default or
Event of Default, within thirty (30) days upon the request of the Administrative
Agent, the name and mailing address of each Account Debtor.
(e) Accounts Payable Aging Report. As soon as available, but in any event
within twenty (20) days after the end of each calendar month (and, upon the
occurrence and during the continuation of a Default or Event of Default, on a
more frequent basis if requested by the Administrative Agent), an accounts
payable aging report which report shall include the amount and age of each
payable, the name of each payee and such other information as the Administrative
Agent may require, all in form and substance satisfactory to the Administrative
Agent.
(f) Bear Creek Operations Report. As soon as available, but in any event
within forty-five (45) days after the end of each calendar quarter (or on a more
frequent basis if reasonably requested by the Administrative Agent but in no
event more than once a calendar month), the Bear Creek Operations Report.
(g) Government Contract Report. Upon the request of the Administrative
Agent, a status report with respect to all Governmental Contracts of the
Borrowers and their Subsidiaries, in form and substance satisfactory to the
Administrative Agent.
(h) Environmental Database Reports. Written notice to the Administrative
Agent of the existence and location of any new facility of any Borrower at which
Hazardous Materials will be processed for disposal or reclamation; and a risk
portfolio or environmental database report for each such facility, obtained by
the Administrative Agent at the Borrowers' expense upon notice of each new
facility and at least every two years with respect to all such facilities, and
prepared by an entity and in detail satisfactory to the Administrative Agent;
and copies of all state inspections, including updates, and all internally
prepared environmental audits relating to any such facility on an annual basis.
(i) Tax Returns. Upon request by the Administrative Agent, copies of (i)
all federal, state and local income tax returns filed by any Borrower or its
Subsidiaries, (ii) all quarterly reports by any Borrower or its Subsidiaries on
Form 941 and (iii) all annual FUTA tax returns of any Borrower or its
Subsidiaries.
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(j) Material Contracts. Written notice immediately upon the award to any
Borrower or any of its Subsidiaries of, or the termination, lapse or nonrenewal
of, any contract or agreement including monetary liability of or to any such
Person in an amount in excess of $10,000,000.
(k) Other Information. Such other information regarding the operations,
business affairs and financial condition of any Borrower or any Subsidiary
thereof as the Administrative Agent or any Lender may reasonably request.
SECTION 8.5 Notice of Litigation and Other Matters. Prompt (but in no
event later than ten (10) days after a Responsible Officer of GTS obtains
knowledge thereof) telephonic and written notice of:
(a) the commencement of, or of a material threat of the commencement of, an
action, suit, proceeding or investigation against any Borrower or any of its
Subsidiaries (including DuraTherm, Inc.) which could reasonably be expected to
have a Material Adverse Effect or which in any manner questions the validity of
this Agreement or any of the other transactions contemplated hereby or thereby,
an explanation of the nature of such pending or threatened action, suit,
proceeding or investigation and such additional information as may be reasonably
requested by the Administrative Agent;
(b) any notice of any complaint, order, citation, notice or other written
communication from any Person with respect to (i) the existence or alleged
existence of a violation of any applicable Environmental Law in connection with
any property now or previously owned, leased or operated by a Borrower or any of
its Subsidiaries, (ii) any release on such property or any part thereof in a
quantity that is reportable under any applicable Environmental Law and (iii) any
pending or threatened proceeding for the termination, suspension or non-renewal
of any permit required under any applicable Environmental Law, in each case in
which there is a reasonable likelihood of an adverse decision or determination
which could result in a Material Adverse Effect;
(c) any labor controversy that has resulted in, or threatens to result in,
a strike or other work action against any Borrower or any Subsidiary thereof
(including DuraTherm, Inc.) which could result in a Material Adverse Effect;
(d) any attachment, judgment, lien, levy or order exceeding $250,000 that
may be assessed against or threatened against any Borrower or any Subsidiary
thereof;
(e) any Default or Event of Default, or any event which constitutes or
which with the passage of time or giving of notice or both would constitute a
default or event of default under any Material Contract to which any Borrower or
any Subsidiary thereof is a party or by which any Borrower or any Subsidiary
thereof or any of their respective properties may be bound;
(f) any change in the government contracting status of the Borrowers with
respect to the government of the United States or any department or agency
thereof that could reasonably be expected to have a Material Adverse Effect;
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(g) (i) any unfavorable determination letter from the Internal Revenue
Service regarding the qualification of an Employee Benefit Plan under Section
401(a) of the Code (along with a copy thereof), (ii) all notices received by any
Borrower or any ERISA Affiliate of the PBGC's intent to terminate any Pension
Plan or to have a trustee appointed to administer any Pension Plan, (iii) all
notices received by any Borrower or any ERISA Affiliate from a Multiemployer
Plan sponsor concerning the imposition or amount of withdrawal liability
pursuant to Section 4202 of ERISA and (iv) any Borrower obtaining knowledge or
reason to know that any Borrower or any ERISA Affiliate has filed or intends to
file a notice of intent to terminate any Pension Plan under a distress
termination within the meaning of Section 4041(c) of ERISA; and
(h) any event which makes any of the representations set forth in Section
7.1 inaccurate in any respect.
SECTION 8.6 Accuracy of Information. All written information, reports,
statements and other papers and data furnished by or on behalf of the Borrowers
to the Administrative Agent or any Lender (other than financial forecasts)
whether pursuant to this Article VIII or any other provision of this Agreement,
or any of the Security Documents, shall be, at the time the same is so
furnished, complete and correct in all material respects to the extent necessary
to give the Administrative Agent or any Lender complete, true and accurate
knowledge of the subject matter based on the Borrowers' knowledge thereof.
ARTICLE IX
AFFIRMATIVE COVENANTS
Until all of the Obligations have been paid and satisfied in full and the
Commitments terminated, unless consent has been obtained in the manner provided
for in Section 14.11, each Borrower will, and will cause each of its
Subsidiaries to:
SECTION 9.1 Preservation of Corporate Existence and Related Matters.
Except as permitted by Section 11.5, preserve and maintain its separate
corporate existence and all rights, franchises, licenses and privileges
necessary to the conduct of its business, and qualify and remain qualified as a
foreign corporation and authorized to do business in each jurisdiction where the
nature and scope of its activities require it to so qualify under Applicable
Law.
SECTION 9.2 Maintenance of Property. In addition to the requirements of
any of the Security Documents, protect and preserve all properties useful in and
material to its business, including copyrights, patents, trade names and
trademarks; maintain in good working order and condition all buildings,
equipment and other tangible real and personal property; and from time to time
make or cause to be made all renewals, replacements and additions to such
property necessary for the conduct of its business, so that the business carried
on in connection therewith may be properly and advantageously conducted at all
times.
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SECTION 9.3 Insurance. Maintain insurance with financially sound and
reputable insurance companies against such risks and in such amounts as are
customarily maintained by similar businesses and as may be required by
Applicable Law and as are required by any Security Documents including, without
limitation, hazard and business interruption insurance, and on the Closing Date
and from time to time thereafter deliver to the Administrative Agent upon its
request a detailed list of the insurance then in effect, stating the names of
the insurance companies, the amounts and rates of the insurance, the dates of
the expiration thereof and the properties and risks covered thereby.
SECTION 9.4 Accounting Methods and Financial Records. Maintain a system of
accounting, and keep such books, records and accounts (which shall be true and
complete in all material respects) as may be required or as may be necessary to
permit the preparation of financial statements in accordance with GAAP and in
compliance with the regulations of any Governmental Authority having
jurisdiction over it or any of its properties.
SECTION 9.5 Payment and Performance of Obligations. Pay and perform all
Obligations under this Agreement and the other Loan Documents, and pay or
perform (a) all taxes, assessments and other governmental charges that may be
levied or assessed upon it or any of its property, and (b) all other obligations
and liabilities in accordance with customary trade practices; except where the
failure to pay or perform the obligations referred to in clause (a) or (b) could
not reasonably be expected to have a Material Adverse Effect; provided, that
such Borrower or such Subsidiary thereof may contest any item described in
clauses (a) or (b) of this Section 9.5 in good faith so long as adequate
reserves are maintained with respect thereto in accordance with GAAP.
SECTION 9.6 Compliance With Laws and Approvals . Observe and remain in
compliance with all Applicable Laws and maintain in full force and effect all
Governmental Approvals, in each case applicable to the conduct of its business,
except to the extent that any such failure to comply would not have a Material
Adverse Effect.
SECTION 9.7 Environmental Laws. In addition to and without limiting the
generality of Section 9.6, (a) comply with, and ensure such compliance by all
tenants and subtenants with all applicable Environmental Laws and obtain and
comply with and maintain, and ensure that all tenants and subtenants obtain and
comply with and maintain, any and all licenses, approvals, notifications,
registrations or permits required by applicable Environmental Laws except to the
extent that failure to so comply would not have a Material Adverse Effect, and
except that such Borrower or such Subsidiary (including DuraTherm, Inc.) thereof
may contest any such compliance in good faith so long as adequate reserves are
maintained with respect thereto in accordance with GAAP, (b) conduct and
complete all investigations, studies, sampling and testing, and all remedial,
removal and other actions required under Environmental Laws, and promptly comply
with all lawful orders and directives of any Governmental Authority regarding
Environmental Laws except to the extent that failure to so comply would not have
a Material Adverse Effect, and except that such Borrower or such Subsidiary
(including DuraTherm, Inc.) thereof may contest any such compliance in good
faith so long as adequate reserves are maintained with respect thereto in
accordance with GAAP, and (c) defend, indemnify and hold harmless the
Administrative Agent and the Lenders, and their respective parents,
Subsidiaries, Affiliates, employees, agents, officers and directors, from and
against any claims, demands, penalties, fines, liabilities, settlements,
damages, costs and expenses of whatever kind or nature known or unknown,
contingent or otherwise, arising out of, or in any way relating to the presence
of Hazardous Materials, or the violation of, noncompliance with or liability
under any Environmental Laws applicable to the operations of such Borrower or
such Subsidiary, or any orders, requirements or demands of Governmental
Authorities related thereto, including, without limitation, reasonable
attorney's and consultant's fees, investigation and laboratory fees, response
costs, court costs and litigation expenses, except to the extent that any of the
foregoing directly result from the gross negligence or willful misconduct of the
party seeking indemnification therefor.
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SECTION 9.8 Compliance with ERISA. In addition to and without limiting the
generality of Section 9.6, (a) comply in all material respects with all
applicable provisions of ERISA and the regulations and published interpretations
thereunder with respect to all Employee Benefit Plans, (b) not take any action
or fail to take action the result of which could be a material liability to the
PBGC or to a Multiemployer Plan, (c) not participate in any prohibited
transaction that could result in any material civil penalty under ERISA or tax
under the Code, (d) operate each Employee Benefit Plan in such a manner that
will not incur any material tax liability under Section 4980B of the Code or any
liability to any qualified beneficiary as defined in Section 4980B of the Code
and (e) furnish to the Administrative Agent upon the Administrative Agent's
request such additional information about any Employee Benefit Plan as may be
reasonably requested by the Administrative Agent.
SECTION 9.9 Compliance With Agreements. Comply in all respects with each
term, condition and provision of all leases, agreements and other instruments
entered into in the conduct of its business, except to the extent that any such
failure to comply would not have a Material Adverse Effect.
SECTION 9.10 Conduct of Business. Engage only in the businesses conducted
on the Closing Date and Substantially Similar Lines of Business.
SECTION 9.11 Visits and Inspections. Permit representatives of the
Administrative Agent or any Lender, from time to time, to visit and inspect its
properties; inspect, audit and make extracts from its books, records and files,
including, but not limited to, management letters prepared by independent
accountants; and discuss with its principal officers, and its independent
accountants, its business, assets, liabilities, financial condition, results of
operations and business prospects.
SECTION 9.12 Additional Subsidiaries. At such time as any Subsidiary
(other than (i) a Non-Material Subsidiary of GTS or any other Borrower or (ii) a
Subsidiary of DuraTherm) is created or acquired after the Closing Date, cause to
be executed and delivered to the Administrative Agent (a) a Joinder Agreement
such that such Subsidiary shall become a Borrower hereunder, (b) a supplement to
the Security Agreement, and such other applicable Security Documents in form and
substance reasonably satisfactory to the Administrative Agent such that the
assets of such Subsidiary shall become Collateral for the Obligations, (c) a
duly executed Pledge Agreement or supplement thereto, with such changes as the
Administrative Agent may reasonably request, such that all of the capital stock
or other equity interests of such Subsidiary is pledged to the Administrative
Agent for the ratable benefit of itself and the Lenders and (d) favorable legal
opinions addressed to the Administrative Agent and Lenders in form and substance
satisfactory thereto with respect to such supplements and agreements and such
other documents and closing certificates as consistent with Article VI as may be
requested by the Administrative Agent.
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SECTION 9.13 Use of Proceeds. The Borrowers shall use the proceeds of the
(a) Revolving Credit Loans, Swingline Loans and Letters of Credit to refinance
certain existing Debt, including, without limitation, the Existing Facility, to
fund working capital and for general corporate purposes, including the payment
of certain fees and expenses incurred in connection with the transactions
contemplated hereby, (b) Term A Loans for the purposes set forth in Section
4.1(c) and (c) Term B Loans for the purpose set forth in Section 4.1(d).
SECTION 9.14 Year 2000 Compatibility. Take all actions reasonably
necessary to assure that each Borrower's computer based systems are able to
operate and effectively process data which includes dates on and after January
1, 2000. At the request of the Administrative Agent, each Borrower shall provide
reasonable assurances satisfactory to the Administrative Agent of such
Borrower's Year 2000 compatibility.
SECTION 9.15 Collection of Accounts; Notification to Account Debtors.
(a) Use their best efforts to cause to be collected from each Account
Debtor, as and when due, any and all amounts owing under or on account of each
Account (including, without limitation, Accounts which are delinquent, such
Accounts to be collected in accordance with lawful collection procedures) and
shall apply forthwith upon receipt thereof all such amounts as are so collected
to the outstanding balance of such Account. No Borrower shall rescind or cancel
any indebtedness or obligation evidenced by any Account, modify, make
adjustments to, extend, renew, compromise or settle any material dispute, claim,
suit or legal proceeding relating to or sell or assign any Account, or interest
therein, without the prior written consent of the Collateral Agent, except that,
subject to the rights of the Lenders under the Loan Documents, as long as a
Default or an Event of Default shall not have occurred and be continuing, a
Borrower may allow in the ordinary course of business as adjustments to amounts
owing under its Accounts (i) an extension or renewal of the time or times of
payment, or settlement for less than the total unpaid balance, which the
Borrower finds appropriate in accordance with sound business judgment and (ii) a
refund or credit due as a result of discounts, over-xxxxxxxx and miscellaneous
credits, or the sale or assignment, without recourse, of an Account for
collection purposes, all of the foregoing in accordance with the Borrowers'
ordinary course of business consistent with its historical collection practices.
The costs and expenses (including, without limitation, attorneys' fees) of
collection, whether incurred by a Borrower or any of the Lenders, shall be borne
by the Borrowers.
(b) Promptly notify each Account Debtor in respect of any Account that any
payments due or to become due in respect of such Collateral are to be made in
the name of the related Borrower to such address and post office box as shall be
specified by the Collateral Agent. Except as set forth in Section 3.03 of the
Security Agreement, each such payment shall, upon receipt by the Collateral
Agent, be deposited in the Operating Account in accordance with past practices
of the Borrowers. Upon the occurrence and continuation of an Event of Default,
the Borrowers will promptly notify (and the Borrowers hereby authorize the
Collateral Agent so to notify) each Account Debtor in respect of any Account or
instrument that such Collateral has been assigned to the Collateral Agent and
that any payments due or to become due in respect of such Collateral are to be
made directly to the Collateral Agent in accordance with Section 3.03 of the
Security Agreement.
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SECTION 9.16 Further Assurances. Make, execute and deliver all such
additional and further acts, things, deeds and instruments as the Administrative
Agent or any Lender may reasonably require to document and consummate the
transactions contemplated hereby and to vest completely in and insure the
Administrative Agent and the Lenders their respective rights under this
Agreement, the Notes, the Letters of Credit and the other Loan Documents.
ARTICLE X
FINANCIAL COVENANTS
Until all of the Obligations have been paid and satisfied in full and the
Commitments terminated, unless consent has been obtained in the manner set forth
in Section 14.11 hereof, the Borrowers and their Subsidiaries (including
DuraTherm, Inc.) on a Consolidated basis will not:
SECTION 10.1 Leverage Ratio: As of any fiscal quarter end, permit the
ratio of (a) Total Debt on such date to (b) EBITDA for the period of four (4)
consecutive fiscal quarters ending on or immediately prior to such date to
exceed the corresponding ratio set forth below:
Closing Date - 6/29/1999 3.50 to 1.00
6/30/1999 - 12/30/1999 3.25 to 1.00
12/31/1999 - 12/30/2000 3.00 to 1.00
12/31/2000 - 12/30/2001 2.75 to 1.00
12/31/2001 - thereafter 2.50 to 1.00
SECTION 10.2 Fixed Charge Coverage Ratio: As of any fiscal quarter end,
permit the ratio of (a) the sum of (i) EBITDA for the period of four (4)
consecutive fiscal quarters ending on or immediately prior to such date plus
(ii) Rental Expense for such period minus (iii) Capital Expenditures for such
period minus (iv) income, franchise and other similar tax expense paid in cash
for such period to (b) Fixed Charges for the period of four (4) consecutive
fiscal quarters ending on or immediately prior to such date to be less than the
corresponding ratio set forth below:
Closing Date - 12/30/2000 1.50 to 1.00
12/31/2000 - 12/30/2001 1.75 to 1.00
12/31/2001 - thereafter 2.00 to 1.00
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; provided that, Capital Expenditures for the fourth fiscal quarter of Fiscal
Year 1997 shall be deemed to equal $ 2,800,000.
SECTION 10.3 Interest Coverage Ratio: As of any fiscal quarter end, permit
the ratio of (a) EBITDA for the period of four (4) consecutive fiscal quarters
ending on or immediately prior to such date to (b) Interest Expense for the
period of four (4) consecutive fiscal quarters ending on or immediately prior to
such date to be less than the corresponding ratio set forth below:
Closing Date - 12/30/1999 2.50 to 1.00
12/31/1999 - 12/30/2000 2.75 to 1.00
12/31/2000 - thereafter 3.00 to 1.00
SECTION 10.4. Limitation on Capital Expenditures. Permit Capital
Expenditures in the aggregate during any Fiscal Year to exceed the corresponding
number set forth below:
Fiscal Year 1998 $ 8,000,000
Fiscal Year 1999 $ 9,000,000
Fiscal Year 2000 $ 9,000,000
Fiscal Year 2001 and thereafter $10,000,000;
provided that, the maximum amount of Capital Expenditures permitted by this
Section 10.4 in any Fiscal Year shall be increased by the amount of Capital
Expenditures that were permitted by this Section 10.4 in the immediately
preceding Fiscal Year and were not previously made (without giving effect to any
carryover amount from prior Fiscal Years).
SECTION 10.5 Minimum Stockholders' Equity. Permit, at any time,
Consolidated stockholders' equity plus Preferred Stock to be less than the sum
of $74,700,000 less (i) the M-Area Charge less (ii) dividends paid on Preferred
Stock pursuant to Section 11.7(c) less (iii) up to $4,000,000 of stock
repurchases pursuant to Section 11.7(d) plus (iv) 50% of cumulative annual Net
Income (to the extent positive) after December 31, 1998.
For purposes of calculating each financial covenant (other than the
limitation on Capital Expenditures set forth in Section 10.4) set forth in this
Article X, each financial term referred to in such financial covenants shall be
adjusted in a manner reasonably satisfactory to the Administrative Agent to take
into account, on a pro forma basis, as of the first day of any calculation
period, the effect of any acquisition consummated, or asset sold, during such
period (any such adjustment or determination, a "Pro Forma" adjustment or
determination, as applicable); provided, that such acquisition or asset sale is
permitted under this Agreement.
ARTICLE XI
NEGATIVE COVENANTS
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Until all of the Obligations have been paid and satisfied in full and the
Commitments terminated, unless consent has been obtained in the manner set forth
in Section 14.11 hereof, each Borrower has not and will not permit any of its
Subsidiaries to:
SECTION 11.1 Limitations on Debt. Create, incur, assume or suffer to exist
any Debt or any additional Preferred Stock except:
(a) the Obligations;
(b) Debt incurred in connection with a Hedging Agreement (i) with a (A)
Lender or (B) counterparty reasonably satisfactory to the Administrative Agent
and (ii) upon terms and conditions (including interest rate) reasonably
satisfactory to the Administrative Agent;
(c) Debt existing on the Closing Date and not otherwise permitted under
this Section 11.1, as set forth on Schedule 7.1(s) and the renewal and
refinancing (but not the increase of the aggregate principal amount thereof)
thereof;
(d) Debt of the Borrowers and their Subsidiaries incurred in connection
with Capital Leases in an aggregate amount not to exceed $3,000,000 on any date
of determination;
(e) purchase money Debt of the Borrowers and their Subsidiaries (or any
renewal or refinancing thereof which does not increase the principal amount
secured) in an aggregate amount not to exceed $2,500,000 on any date of
determination;
(f) Debt consisting of Guaranty Obligations permitted by Section 11.2(a) or
(b);
(g) Debt of any Borrower consisting of Capital Leases and purchase money
Debt not otherwise permitted under this Section 11.1, incurred by reason of
merger or otherwise assumed in connection with any acquisition permitted
pursuant to Section 11.4(c) the terms and conditions of which (including without
limitation any collateral security therefor) shall be reasonably acceptable to
the Administrative Agent and the Required Lenders; provided that such Debt was
not created in contemplation of such merger or acquisition;
(h) Subordinated Debt; and
(i) Debt of the Borrowers or any of their Subsidiaries to any Borrower;
provided, that no agreement or instrument with respect to Debt permitted to be
incurred by this Section shall restrict, limit or otherwise encumber (by
covenant or otherwise) the ability of any Subsidiary (including DuraTherm, Inc.)
of any Borrower to make any payment to such Borrower or any of its Subsidiaries
(in the form of dividends, intercompany advances or otherwise) for the purpose
of enabling such Borrower to pay the Obligations.
SECTION 11.2 Limitations on Guaranty Obligations. Create, incur, assume or
suffer to exist any Guaranty Obligations except
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(a) Guaranty Obligations in favor of the Administrative Agent for the
benefit of the Administrative Agent and the Lenders;
(b) Guaranty Obligations existing on the Closing Date and not otherwise
permitted under this Section 11.2, as set forth on Schedule 7.1(s) (or as
specifically permitted to be excluded from such Schedule) and the renewal and
refinancing but not the increase in the aggregate principal amount thereof; and
(c) Guaranty Obligations with respect to Debt permitted under Section
11.1(a) - (e) or (g) or (h), or with respect to any other obligations of any
Borrower or a Subsidiary (other than DuraTherm, Inc.) not prohibited under the
Loan Documents; provided, that Guaranty Obligations with respect to Debt
permitted under Section 11.1(h) shall be subordinated on terms and in a manner
acceptable to the Administrative Agent and the Required Lenders.
SECTION 11.3 Limitations on Liens. Create, incur, assume or suffer to
exist, any Lien on or with respect to any of its assets or properties (including
without limitation shares of capital stock or other ownership interests), real
or personal, whether now owned or hereafter acquired, except:
(a) Liens not otherwise permitted by this Section 11.3 and in existence on
the Closing Date and described on Schedule 11.3;
(b) Liens securing Debt permitted under Section 11.1(d) or (e); provided
that (i) such Liens shall be created within one hundred eighty (180) days of the
acquisition or lease of the related asset, (ii) such Liens do not at any time
encumber any property other than the property financed by such Debt, (iii) the
amount of Debt secured thereby is not increased and (iv) the principal amount of
Debt secured by any such Lien shall at no time exceed the lesser of the cost or
the fair market value of such property at the time it was acquired or leased.
(c) any Lien existing on an asset prior to the acquisition thereof by a
Borrower or any Subsidiary and not created in contemplation of such acquisition;
(d) Liens created by any Loan Document;
(e) any Lien arising out of the refinancing, extension, renewal or
refunding of any Debt secured by any Lien permitted by clauses (a) through (d)
of this Section 11.3; provided that the principal amount of such Debt is not
increased and such Debt is not secured by any additional assets;
(f) Liens for taxes not yet due or Liens for taxes being contested as
permitted pursuant to Section 9.5;
(g) Liens imposed by law securing the charges, claims, demands or levies of
carriers, warehousemen, mechanics and other like persons which were incurred in
the ordinary course of business, statutory landlord liens, Liens in favor of
customs and revenue authorities in connection with the import of goods, and
which, if any such asset or property is material which (i) do not in the
aggregate materially detract from the value of the property or assets subject to
such Lien or materially impair the use thereof in the operation of the business
of any Borrower or Subsidiary or (ii) are being contested (A) as permitted
pursuant to Section 9.5, and (B) which contest proceedings have the effect of
preventing the forfeiture or sale of the property or assets subject to such
Lien;
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(h) Liens (other than any Liens imposed by ERISA or pursuant to any
Environmental Law) not securing Debt or obligations under Hedging Agreements,
incurred or deposits made in the ordinary course of business in connection with
workers' compensation, unemployment insurance and other types of social
security, or to secure the performance of tenders, statutory obligations, surety
bonds (other than appeal bonds or bonds securing judgments), bids, leases,
government contracts, performance and return-of-money bonds and other similar
obligations incurred in the ordinary course of business;
(i) Liens constituting easements, rights of way and similar charges, title
defects or other irregularities with respect to real property which do not
result in a Material Adverse Effect and which do not affect the marketability of
the property subject thereto;
(j) leases or subleases of any of the Borrowers' owned or leased real
property which leases or subleases do not result in a Material Adverse Effect or
the retention of title by a lessor which has entered into an operating lease
with a Borrower;
(k) Liens arising from the rendering of a final judgment or order against
any Borrower which does not give rise to any Event of Default;
(l) Liens securing Debt permitted in accordance with Section 11.1(g) and
existing on any property or asset (excluding Accounts) prior to the acquisition
thereof by any Borrower or any Subsidiary; provided, that (i) such Lien is not
created in contemplation of or in connection with such acquisition and (ii) such
Lien does not apply to any Account or any property or assets of any Borrower
(other than the property or assets (excluding Accounts) acquired); and
(m) Liens on cash or Cash Equivalents securing a Hedging Agreement
permitted under this Agreement.
SECTION 11.4 Limitations on Loans, Advances, Investments and Acquisitions.
Purchase, own, invest in or otherwise acquire, directly or indirectly, any
capital stock, interests in any partnership or joint venture (including without
limitation the creation or capitalization of any Subsidiary), evidence of Debt
or other obligation or security, substantially all or a portion of the business
or assets of any other Person or any other investment or interest whatsoever in
any other Person, or make or permit to exist, directly or indirectly, any loans,
advances or extensions of credit to, or any investment in cash or by delivery of
property in, any Person except:
(a) investments not otherwise permitted by this Section 11.4 in
Subsidiaries (including DuraTherm, Inc.) existing on the Closing Date and the
other existing loans, advances and investments not otherwise permitted by this
Section 11.4 described on Schedule 11.4;
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(b) investments (i) in Cash Equivalents, (ii) consisting of receivables
owing to any Borrower or Subsidiary thereof, so long as any such receivable is
created or acquired in the ordinary course of business and is payable or
dischargeable in accordance with customary trade terms; (iii) received in
connection with the bankruptcy or reorganization of suppliers and customers and
in settlement of delinquent obligations of, and other disputes with, customers
and suppliers arising in the ordinary course of business; and (iv) in the form
of loans and advances to employees in the ordinary course of business, which, in
the aggregate for all Borrowers, do not exceed at any time $2,000,000;
(c) the acquisitions of all or substantially all of the business or line of
business (whether by acquisition of capital stock, other equity interest, assets
or any combination thereof) in an aggregate amount not to exceed, over the term
of the Credit Facilities, $25,000,000 in total aggregate consideration
(including, without limitation, all cash payments, Debt assumed, earn out
payments, seller financing or equity issued); provided that the following
conditions are met: (i) the entity to be acquired is a going concern; (ii) the
entity to be acquired is in a Substantially Similar Line of Business; (iii) the
Borrowers shall have delivered written evidence to the Administrative Agent, or
Required Lenders if applicable, that the acquisition does not have a negative
impact on EBITDA of the Borrowers and their Subsidiaries taken as a whole
(determined on an adjusted pro forma basis reasonably satisfactory to the
Administrative Agent (or, the Lenders if such pro forma adjustment equals or
exceeds $2,000,000) to take into account, as of the first day of the applicable
calculation period, the effect of the proposed acquisition) for the four (4)
consecutive fiscal quarter period ending on or immediately prior to the date of
such proposed acquisition; (iv) a Borrower is the surviving, controlling
corporation upon the consummation of any such acquisition; (v) the Required
Lenders shall have previously consented in writing to any single acquisition or
series of related acquisitions having total aggregate consideration (including,
without limitation, all cash payments, Debt and other obligations assumed, earn
out payments, seller financing or equity issued, actual environmental
liabilities assumed and potential future environmental liabilities assumed as
reasonably valued by the Borrowers and recorded on the balance sheet of the
Borrowers) in excess of $20,000,000; (vi) the Borrowers shall have delivered
evidence in form and substance satisfactory to the Administrative Agent that the
board of directors of the entity or entities to be acquired have approved such
proposed acquisition; (vii) the entity to be acquired is not subject to material
pending litigation which could reasonably be expected to have a Material Adverse
Effect; (viii) no Default and no Event of Default has occurred and is continuing
or would result from the consummation of such proposed acquisition; and (ix) the
Borrowers shall have delivered written evidence of compliance on a Pro Forma
basis with the financial covenants set forth in Article X.
(d) investments by any Borrower or a Subsidiary in a Borrower, or as
otherwise permitted under Section 11.5 and Section 11.6(g);
(e) investments which may be deemed to exist as a result of a Hedging
Agreement permitted under this Agreement; and
(f) investments in Subsidiaries which become Borrowers in accordance with
Section 9.12.
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SECTION 11.5 Limitations on Mergers and Liquidation. Merge, consolidate or
enter into any similar combination with any other Person or liquidate, wind-up
or dissolve itself (or suffer any liquidation or dissolution) except:
(a) any Borrower or Wholly-Owned Subsidiary of any Borrower may merge with
any Borrower or any other Wholly-Owned Subsidiary of any Borrower; provided,
that in the case of a merger with a Borrower, such Borrower shall be the
surviving entity;
(b) any Wholly-Owned Subsidiary may merge into the Person such Wholly-Owned
Subsidiary was formed to acquire in connection with an acquisition permitted by
Section 11.4(c); and
(c) any Wholly-Owned Subsidiary of any Borrower may wind-up into any
Borrower or any other Wholly-Owned Subsidiary of any Borrower.
SECTION 11.6 Limitations on Sale of Assets. Convey, sell, lease, assign,
transfer or otherwise dispose of any of its property, business or assets
(including, without limitation, the sale of any receivables and leasehold
interests and any sale-leaseback or similar transaction), whether now owned or
hereafter acquired except:
(a) the sale of inventory in the ordinary course of business;
(b) the sale of obsolete or excess assets no longer used or usable in the
business of any Borrower or any Subsidiary thereof;
(c) the transfer of assets to any Borrower or any Wholly-Owned Subsidiary
of any Borrower pursuant to Section 11.5;
(d) the sale or discount without recourse of Accounts as permitted pursuant
to Section 9.15(a); and
(e) the termination of operating leases of property in the ordinary course
of business.
(f) the sale of an asset in connection with its immediate leasing back, to
the extent permitted under Sections 11.1 and 11.3; and
(g) sales or other dispositions of assets, in addition to the sales or
dispositions permitted by the foregoing provisions, for at least fair market
value, in an amount not to exceed $100,000 per fiscal year, of which amount up
to twenty percent (20%) may be paid other than in cash at the time of sale.
Upon any sale of Collateral which is permitted under the Loan Documents,
such Collateral shall be sold free and clear of the Liens in favor of the
Collateral Agent created by the Loan Documents and the Collateral Agent shall
take such actions as may be reasonably requested by any Borrower to evidence
such Lien release, at the expense of such Borrower.
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SECTION 11.7 Limitations on Dividends and Distributions. Declare or pay
any dividends upon any of its capital stock; purchase, redeem, retire or
otherwise acquire, directly or indirectly, any shares of its capital stock, or
make any distribution of cash, property or assets among the holders of shares of
its capital stock, or make any change in its capital structure; provided that:
(a) any Borrower or any Subsidiary thereof may pay dividends in shares of
its own capital stock;
(b) any Borrower or any Subsidiary may pay cash dividends to any Borrower;
(c) so long as no Default or Event of Default has occurred and is
continuing or would result therefrom, GTS may pay dividends on Preferred Stock
in an amount not to exceed $1,280,000 in any Fiscal Year; and
(d) GTS shall be permitted to make stock repurchases; provided that (i)
such repurchase is pursuant to a repurchase plan duly adopted by the board of
directors of GTS, (ii) no Default or Event of Default has occurred and is
continuing or would result from such stock repurchase, and (iii) the aggregate
amount of all share repurchases during the term of this Agreement shall not
exceed $8,000,000 in the aggregate; provided further that stock repurchases of
up to $2,000,000, in the aggregate, made at any time that the Leverage Ratio is
less than 2.0 to 1.0 (after giving Pro Forma effect to the proposed transaction)
shall not be counted against the $8,000,000 limitation set forth in clause (iii)
of the immediately preceding proviso.
SECTION 11.8 Aging and Secondary Waste. At the end of any fiscal quarter,
permit (a) the quantity of Aging Waste to exceed thirty percent (30%) of total
Waste or (b) the quantity of Aged Waste to exceed the amount set forth below for
the corresponding periods:
Any fiscal quarter during Fiscal Year 1999 500,000 lbs.
Any fiscal quarter during Fiscal Year 2000 400,000 lbs.
Any fiscal quarter during Fiscal Year 2001
and thereafter 300,000 lbs.
SECTION 11.9 Limitations on Exchange and Issuance of Capital Stock. Issue,
sell or otherwise dispose of any class or series of capital stock that, by its
terms or by the terms of any security into which it is convertible or
exchangeable, is, or upon the happening of an event or passage of time would be,
(a) convertible or exchangeable into Debt or (b) required to be redeemed or
repurchased, including at the option of the holder, in whole or in part, or has,
or upon the happening of an event or passage of time would have, a redemption or
similar payment due; provided that the foregoing shall not apply to any class or
series of capital stock that cannot by its terms be redeemed in cash,
repurchased in cash or entitled to any cash payment at any time on or prior to
the date that is ninety (90) days after the later to occur of the Revolving
Credit Maturity Date, the Term A Loan Maturity Date or the Term B Loan Maturity
Date.
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SECTION 11.10 Transactions with Affiliates. Directly or indirectly (a) make
any loan or advance to, or purchase or assume any note or other obligation to or
from, any of its officers, directors, shareholders or other Affiliates
(including DuraTherm, Inc.), or to or from any member of the immediate family of
any of its officers, directors, shareholders or other Affiliates (including
DuraTherm, Inc.), or subcontract any operations to any of its Affiliates
(including DuraTherm, Inc.) except as otherwise permitted pursuant to Section
11.4 or (b) enter into, or be a party to, any other transaction with any of its
Affiliates (including DuraTherm, Inc.), except pursuant to the reasonable
requirements of its business and upon fair and reasonable terms that are no less
favorable to it than it would obtain in a comparable arm's length transaction
with a Person not its Affiliate.
SECTION 11.11 Certain Accounting Changes. Subject to Section 14.9, change
its Fiscal Year end, or make any change in its accounting treatment and
reporting practices except as are in accordance with GAAP.
SECTION 11.12 Amendments; Payments and Prepayments of Subordinated Debt or
Preferred Stock. Amend or modify (or permit the modification or amendment of)
any of the terms or provisions of any Subordinated Debt or the Preferred Stock
(which such amendment shall accelerate any cash payment, cash redemption or cash
repurchase date, adversely affect any subordination terms or otherwise have a
materially adverse effect on the position of the Credit Facilities within the
capital structure of the Borrowers), or cancel or forgive, make any voluntary or
optional payment or prepayment on, or redeem or acquire for value (including
without limitation by way of depositing with any trustee with respect thereto
money or securities before due for the purpose of paying when due) any
Subordinated Debt or the Preferred Stock, except as permitted pursuant to
Section 11.7.
SECTION 11.13 Restrictive Agreements. Enter into any Debt which restricts,
limits or otherwise encumbers its ability to incur Liens on or with respect to
any of its assets or properties other than the assets or properties securing
such Debt.
ARTICLE XII
DEFAULT AND REMEDIES
SECTION 12.1 Events of Default. Each of the following shall constitute an
Event of Default, whatever the reason for such event and whether it shall be
voluntary or involuntary or be effected by operation of law or pursuant to any
judgment or order of any court or any order, rule or regulation of any
Governmental Authority or otherwise:
(a) Default in Payment of Principal of Loans and Reimbursement Obligations.
Any Borrower shall default in any payment of principal of any Loan, Note or
Reimbursement Obligation when and as due (whether at maturity, by reason of
acceleration or otherwise).
(b) Other Payment Default. Any Borrower shall default in the payment when
and as due (whether at maturity, by reason of acceleration or otherwise) of
interest on any Loan, Note or Reimbursement Obligation or the payment of any
other Obligation and such default shall not be cured within three (3) Business
Days after Borrowers have received notice of such default.
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(c) Misrepresentation. Any representation or warranty made or deemed to be
made by any Borrower or any Subsidiary thereof under this Agreement, any Loan
Document or any amendment hereto or thereto, shall at any time prove to have
been incorrect or misleading in any material respect when made or deemed made.
(d) Default in Performance of Certain Covenants. (i) Any Borrower shall
default in the performance or observance of any covenant or agreement contained
in Sections 8.1, 8.2 or 8.5(e) or Articles X or XI of this Agreement and (ii)
any Borrower shall default in the performance or observance of any covenant or
agreement contained in Section 8.4(c) and such default shall not be cured within
five (5) Business Days after the Borrowers have received notice of such default.
(e) Default in Performance of Other Covenants and Conditions. Any Borrower
or any Subsidiary thereof shall default in the performance or observance of any
term, covenant, condition or agreement contained in this Agreement (other than
as specifically provided for otherwise in this Section 12.1) or any other Loan
Document and such default shall continue for a period of thirty (30) days after
written notice thereof has been given to the Borrowers by the Administrative
Agent.
(f) Hedging Agreement. Any termination payment shall be due by any Borrower
under any Hedging Agreement and such amount is not paid within fifteen (15)
Business Days of the due date thereof.
(g) Debt or Preferred Stock Cross-Default. Any Borrower or any Subsidiary
thereof shall (i) default in the payment of any Debt (other than the Notes or
any Reimbursement Obligation) or the Preferred Stock the aggregate outstanding
amount of which Debt is in excess of $750,000 beyond the period of grace if any,
provided in the instrument or agreement under which such Debt was created, or
(ii) default in the observance or performance of any other agreement or
condition relating to any Debt (other than the Notes or any Reimbursement
Obligation) the aggregate outstanding amount of which Debt is in excess of
$750,000 or contained in any instrument or agreement evidencing, securing or
relating thereto or any other event shall occur or condition exist, the effect
of which default or other event or condition is to cause, or to permit the
holder or holders of such Debt (or a trustee or agent on behalf of such holder
or holders) to cause, with the giving of notice if required, any such Debt to
become due, be redeemed in cash or be repurchased in cash prior to its stated
maturity (any applicable grace period having expired).
(h) Other Cross-Defaults. Any Borrower or any Subsidiary thereof shall
default in the payment when due, or in the performance or observance, of any
obligation or condition of any Material Contract, if the effect of such default
is to permit the other party to terminate such Material Contract, and such
termination is reasonably likely to occur, except where any such occurrence
could not reasonably be expected to have a Material Adverse Effect.
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(i) Change in Control. (i) Any person or group of persons (within the
meaning of Section 13(d) of the Securities Exchange Act of 1934, as amended)
other than The Carlyle Group and its Affiliates (as such persons are described
in the 1996 Proxy Statement of GTS) (the "Carlyle Group"), shall obtain
beneficial ownership or control (within the meaning of Section 13(d) of the
Securities Exchange Act of 1934, as amended) in one or more series of
transactions of more than thirty-five percent (35%) of the common stock or
thirty-five percent (35%) of the voting power of any Borrower entitled to vote
in the election of members of the board of directors of any Borrower or (ii)
there shall have occurred under any indenture or other instrument evidencing any
Debt in excess of $750,000 any "change in control" (as defined in such indenture
or other evidence of Debt) obligating any Borrower to repurchase, redeem or
repay all or any part of the Debt or capital stock provided for therein or (iii)
if (a) the Carlyle Group shall fail to maintain, at any time, as a direct result
of a sale or other liquidation of ownership interests in GTS, a beneficial
ownership interest (within the meaning of Section 13(d) of the Securities
Exchange Act of 1934, as amended) of at least twenty percent (20%) of the
capital stock entitled to vote in the election of the members of the board of
directors of GTS, (and this provision (iii) shall exclude a decline in the
Carlyle Group's ownership below the twenty percent (20%) threshold as a direct
result of a stock issuance by GTS, either as a primary equity offering or as
consideration for an acquisition or merger transaction) and (b) during any
annual period after any such reduction in the ownership interests of the Carlyle
Group, individuals who at the beginning of such period were nominated, elected,
designated or appointed to the board of directors by the Carlyle Group (together
with any new directors whose election by such board of directors or whose
nomination for election by the shareholders of GTS was approved by the Carlyle
Group) cease for any reason to constitute a majority of the board of directors
then in office, any such event, a "Change in Control."
(j) Voluntary Bankruptcy Proceeding. Any Borrower or any Subsidiary
(including DuraTherm, Inc.) thereof shall (i) commence a voluntary case under
the federal bankruptcy laws (as now or hereafter in effect), (ii) file a
petition seeking to take advantage of any other laws, domestic or foreign,
relating to bankruptcy, insolvency, reorganization, winding up or composition
for adjustment of debts, (iii) consent to or fail to contest in a timely and
appropriate manner any petition filed against it in an involuntary case under
such bankruptcy laws or other laws, (iv) apply for or consent to, or fail to
contest in a timely and appropriate manner, the appointment of, or the taking of
possession by, a receiver, custodian, trustee, or liquidator of itself or of a
substantial part of its property, domestic or foreign, (v) admit in writing its
inability to pay its debts as they become due, (vi) make a general assignment
for the benefit of creditors, or (vii) take any corporate action for the purpose
of authorizing any of the foregoing.
(k) Involuntary Bankruptcy Proceeding. A case or other proceeding shall be
commenced against any Borrower or any Subsidiary (including DuraTherm, Inc.)
thereof in any court of competent jurisdiction seeking (i) relief under the
federal bankruptcy laws (as now or hereafter in effect) or under any other laws,
domestic or foreign, relating to bankruptcy, insolvency, reorganization, winding
up or adjustment of debts, or (ii) the appointment of a trustee, receiver,
custodian, liquidator or the like for any Borrower or any Subsidiary (including
DuraTherm, Inc.) thereof or for all or any substantial part of their respective
assets, domestic or foreign, and such case or proceeding shall continue without
dismissal or stay for a period of sixty (60) consecutive days, or an order
granting the relief requested in such case or proceeding (including, but not
limited to, an order for relief under such federal bankruptcy laws) shall be
entered.
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(l) Failure of Agreements. Any provision of this Agreement or of any other
Loan Document shall for any reason cease to be valid and binding on any Borrower
or Subsidiary party thereto or any such Person shall so state in writing, or
this Agreement or any other Loan Document shall for any reason cease to create a
valid and perfected first priority Lien on, or security interest in, any of the
collateral purported to be covered thereby, in each case other than in
accordance with the express terms hereof or thereof.
(m) Termination Event. The occurrence of any of the following events: (i)
any Borrower or any ERISA Affiliate fails to make full payment when due of all
amounts which, under the provisions of any Pension Plan or Section 412 of the
Code, any Borrower or any ERISA Affiliate is required to pay as contributions
thereto, (ii) an accumulated funding deficiency in excess of $100,000 occurs or
exists, whether or not waived, with respect to any Pension Plan, (iii) a
Termination Event or (iv) any Borrower or any ERISA Affiliate as employers under
one or more Multiemployer Plan makes a complete or partial withdrawal from any
such Multiemployer Plan and the plan sponsor of such Multiemployer Plans
notifies such withdrawing employer that such employer has incurred a withdrawal
liability requiring payments in an amount exceeding $100,000.
(n) Judgment. A judgment or order for the payment of money which causes the
aggregate amount of all such judgments to exceed $500,000 in any Fiscal Year
shall be entered against any Borrower or any Subsidiary (including DuraTherm,
Inc.) thereof by any court and such judgment or order shall continue without
discharge or stay for a period of thirty (30) days.
SECTION 12.2 Remedies. Upon the occurrence and during the continuation of
an Event of Default, with the consent of the Required Lenders, the
Administrative Agent may, or upon the request of the Required Lenders, the
Administrative Agent shall, by notice to the Borrowers:
(a) Acceleration; Termination of Facilities. Declare the principal of and
interest on the Loans, the Notes and the Reimbursement Obligations at the time
outstanding, and all other amounts owed to the Lenders and to the Administrative
Agent under this Agreement or any of the other Loan Documents (other than any
Hedging Agreement) (including, without limitation, all L/C Obligations, whether
or not the beneficiaries of the then outstanding Letters of Credit shall have
presented the documents required thereunder) and all other Obligations (other
than obligations owing under any Hedging Agreement), to be forthwith due and
payable, whereupon the same shall immediately become due and payable without
presentment, demand, protest or other notice of any kind, all of which are
expressly waived, anything in this Agreement or the other Loan Documents to the
contrary notwithstanding, and terminate the Credit Facility and any right of the
Borrowers to request borrowings or Letters of Credit thereunder; provided, that
upon the occurrence of an Event of Default specified in Section 12.1(j) or (k),
the Credit Facility shall be automatically terminated and all Obligations (other
than obligations owing under any Hedging Agreement) shall automatically become
due and payable.
(b) Letters of Credit. With respect to all Letters of Credit with respect
to which presentment for honor shall not have occurred at the time of an
acceleration pursuant to the preceding paragraph, require the Borrowers at such
time to deposit in a cash collateral account opened by the Administrative Agent
an amount equal to the aggregate then undrawn and unexpired amount of such
Letters of Credit. Amounts held in such cash collateral account shall be applied
by the Administrative Agent to the payment of drafts drawn under such Letters of
Credit, and the unused portion thereof after all such Letters of Credit shall
have expired or been fully drawn upon, if any, shall be applied to repay the
other Obligations. After all such Letters of Credit shall have expired or been
fully drawn upon, the Reimbursement Obligation shall have been satisfied and all
other Obligations shall have been paid in full, the balance, if any, in such
cash collateral account shall be returned to the Borrowers.
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(c) Rights of Collection. Exercise on behalf of the Lenders all of its
other rights and remedies under this Agreement, the other Loan Documents and
Applicable Law, in order to satisfy all of the Obligations of the Borrowers.
SECTION 12.3 Rights and Remedies Cumulative; Non-Waiver; etc. The
enumeration of the rights and remedies of the Administrative Agent and the
Lenders set forth in this Agreement is not intended to be exhaustive and the
exercise by the Administrative Agent and the Lenders of any right or remedy
shall not preclude the exercise of any other rights or remedies, all of which
shall be cumulative, and shall be in addition to any other right or remedy given
hereunder or under the Loan Documents or that may now or hereafter exist in law
or in equity or by suit or otherwise. No delay or failure to take action on the
part of the Administrative Agent or any Lender in exercising any right, power or
privilege shall operate as a waiver thereof, nor shall any single or partial
exercise of any such right, power or privilege preclude other or further
exercise thereof or the exercise of any other right, power or privilege or shall
be construed to be a waiver of any Event of Default. No course of dealing
between the Borrowers, the Administrative Agent and the Lenders or their
respective agents or employees shall be effective to change, modify or discharge
any provision of this Agreement or any of the other Loan Documents or to
constitute a waiver of any Event of Default.
ARTICLE XIII
THE ADMINISTRATIVE AGENT AND COLLATERAL AGENT
SECTION 13.1 Appointment. Each of the Lenders hereby irrevocably
designates and appoints First Union as Administrative Agent and as Collateral
Agent of such Lender, in each case, under this Agreement and the other Loan
Documents for the term hereof and each such Lender irrevocably authorizes each
of First Union as Administrative Agent and as Collateral Agent for such Lender,
to take such action on its behalf under the provisions of this Agreement and the
other Loan Documents and to exercise such powers and perform such duties as are
expressly delegated to such Agent by the terms of this Agreement and such other
Loan Documents, together with such other powers as are reasonably incidental
thereto. Notwithstanding any provision to the contrary elsewhere in this
Agreement or such other Loan Documents, neither Agent shall have any duties or
responsibilities, except those expressly set forth herein and therein, or any
fiduciary relationship with any Lender, and no implied covenants, functions,
responsibilities, duties, obligations or liabilities shall be read into this
Agreement or the other Loan Documents or otherwise exist against any Agent. Any
reference to the Agent in this Article XIII shall be deemed to refer to the
Administrative Agent or Collateral Agent, as applicable, solely in its capacity
as Administrative Agent or Collateral Agent, as applicable, and not in its
capacity as a Lender.
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SECTION 13.2 Delegation of Duties. The Agents may execute any of their
respective duties under this Agreement and the other Loan Documents by or
through agents or attorneys-in-fact and shall be entitled to advice of counsel
concerning all matters pertaining to such duties. No Agent shall be responsible
for the negligence or misconduct of any agents or attorneys-in-fact selected by
such Agent with reasonable care.
SECTION 13.3 Exculpatory Provisions. Neither Agent nor any of such Agent's
officers, directors, employees, agents, attorneys-in-fact, Subsidiaries or
Affiliates shall be (a) liable for any action lawfully taken or omitted to be
taken by it or such Person under or in connection with this Agreement or the
other Loan Documents (except for actions occasioned solely by its or such
Person's own gross negligence or willful misconduct), or (b) responsible in any
manner to any of the Lenders for any recitals, statements, representations or
warranties made by any Borrower or any Subsidiary thereof or any officer thereof
contained in this Agreement or the other Loan Documents or in any certificate,
report, statement or other document referred to or provided for in, or received
by such Agent under or in connection with, this Agreement or the other Loan
Documents or for the value, validity, effectiveness, genuineness, enforceability
or sufficiency of this Agreement or the other Loan Documents or for any failure
of any Borrower or any Subsidiary thereof to perform its obligations hereunder
or thereunder. No Agent shall be under any obligation to any Lender to ascertain
or to inquire as to the observance or performance of any of the agreements
contained in, or conditions of, this Agreement, or to inspect the properties,
books or records of the Borrowers or any of their Subsidiaries.
SECTION 13.4 Reliance by the Agents. The Agents shall be entitled to rely,
and shall be fully protected in relying, upon any note, writing, resolution,
notice, consent, certificate, affidavit, letter, cablegram, telegram, telecopy,
telex or teletype message, statement, order or other document or conversation
believed by such Agent to be genuine and correct and to have been signed, sent
or made by the proper Person or Persons and upon advice and statements of legal
counsel (including, without limitation, counsel to the Borrowers), independent
accountants and other experts selected by such Agent. The Agents may deem and
treat the payee of any Note as the owner thereof for all purposes unless such
Note shall have been transferred in accordance with Section 14.10 hereof. The
Agents shall be fully justified in failing or refusing to take any action under
this Agreement and the other Loan Documents unless such Agent shall first
receive such advice or concurrence of the Required Lenders (or, when expressly
required hereby or by the relevant other Loan Document, all the Lenders) as it
deems appropriate or it shall first be indemnified to its satisfaction by the
Lenders against any and all liability and expense which may be incurred by it by
reason of taking or continuing to take any such action except for its own gross
negligence or willful misconduct. The Agents shall in all cases be fully
protected in acting, or in refraining from acting, under this Agreement and the
Notes in accordance with a request of the Required Lenders (or, when expressly
required hereby, all the Lenders), and such request and any action taken or
failure to act pursuant thereto shall be binding upon all the Lenders and all
future holders of the Notes.
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SECTION 13.5 Notice of Default. No Agent shall be deemed to have knowledge
or notice of the occurrence of any Default or Event of Default hereunder unless
it has received notice from a Lender or the Borrowers referring to this
Agreement, describing such Default or Event of Default and stating that such
notice is a "notice of default". In the event that any Agent receives such a
notice, it shall promptly give notice thereof to the other Agent and to the
Lenders. The Agents shall take such action with respect to such Default or Event
of Default as shall be reasonably directed by the Required Lenders; provided
that unless and until such Agent shall have received such directions, such Agent
may (but shall not be obligated to) take such action, or refrain from taking
such action, with respect to such Default or Event of Default as it shall deem
advisable in the best interests of the Lenders, except to the extent that other
provisions of this Agreement expressly require that any such action be taken or
not be taken only with the consent and authorization or the request of the
Lenders or Required Lenders, as applicable.
SECTION 13.6 Non-Reliance on the Agents and Other Lenders. Each Lender
expressly acknowledges that neither Agent nor any of such Agent's officers,
directors, employees, agents, attorneys-in-fact, Subsidiaries or Affiliates has
made any representations or warranties to it and that no act by any Agent
hereinafter taken, including any review of the affairs of the Borrowers or any
of their Subsidiaries, shall be deemed to constitute any representation or
warranty by such Agent to any Lender. Each Lender represents to each Agent that
it has, independently and without reliance upon any Agent or any other Lender,
and based on such documents and information as it has deemed appropriate, made
its own appraisal of and investigation into the business, operations, property,
financial and other condition and creditworthiness of the Borrowers and their
Subsidiaries and made its own decision to make its Loans and issue or
participate in Letter of Credit hereunder and enter into this Agreement. Each
Lender also represents that it will, independently and without reliance upon any
Agent or any other Lender, and based on such documents and information as it
shall deem appropriate at the time, continue to make its own credit analysis,
appraisals and decisions in taking or not taking action under this Agreement and
the other Loan Documents, and to make such investigation as it deems necessary
to inform itself as to the business, operations, property, financial and other
condition and creditworthiness of the Borrowers and their Subsidiaries. Except
for notices, reports and other documents expressly required to be furnished to
the Lenders by an Agent hereunder or by the other Loan Documents, no Agent shall
have any duty or responsibility to provide any Lender with any credit or other
information concerning the business, operations, property, financial and other
condition or creditworthiness of the Borrowers or any of their Subsidiaries
which may come into the possession of any Agent or any of its respective
officers, directors, employees, agents, attorneys-in-fact, Subsidiaries or
Affiliates.
SECTION 13.7 Indemnification. The Lenders agree to indemnify each of the
Administrative Agent and Collateral Agent in its respective capacity as such and
(to the extent not reimbursed by the Borrowers and without limiting the
obligation of the Borrowers to do so), ratably according to the respective
amounts of their Commitment Percentages, from and against any and all
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
costs, expenses or disbursements of any kind whatsoever which may at any time
(including, without limitation, at any time following the payment of the Notes
or any Reimbursement Obligation) be imposed on, incurred by or asserted against
any Agent in any way relating to or arising out of this Agreement or the other
Loan Documents, or any documents contemplated by or referred to herein or
therein or the transactions contemplated hereby or thereby or any action taken
or omitted by any Agent under or in connection with any of the foregoing;
provided that no Lender shall be liable for the payment of any portion of such
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
costs, expenses or disbursements resulting solely from such Agent's bad faith,
gross negligence or willful misconduct. The agreements in this Section 13.7
shall survive the payment of the Notes, any Reimbursement Obligation and all
other amounts payable hereunder and the termination of this Agreement.
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SECTION 13.8 The Agents in Their Individual Capacity. Each Agent and its
respective Subsidiaries and Affiliates may make loans to, accept deposits from
and generally engage in any kind of business with the Borrowers as though such
Agent were not an Agent hereunder. With respect to any Loans made or renewed by
it and any Note issued to it and with respect to any Letter of Credit issued by
it or participated in by it, such Agent shall have the same rights and powers
under this Agreement and the other Loan Documents as any Lender and may exercise
the same as though it were not an Agent, and the terms "Lender" and "Lenders"
shall include the Agent in its individual capacity, if applicable.
SECTION 13.9 Resignation of the Agents; Successor Agents. Subject to the
appointment and acceptance of a successor as provided below, any Agent may
resign at any time by giving notice thereof to the Lenders and the Borrowers.
Upon any such resignation, the Required Lenders shall have the right to appoint
a successor Agent, which successor shall have minimum capital and surplus of at
least $500,000,000. If no successor Agent shall have been so appointed by the
Required Lenders and shall have accepted such appointment within thirty (30)
days after such Agent's giving of notice of resignation, then such Agent may, on
behalf of the Lenders, appoint a successor Agent, which successor shall have
minimum capital and surplus of at least $500,000,000. Upon the acceptance of any
appointment as Agent hereunder by a successor Agent, such successor Agent shall
thereupon succeed to and become vested with all rights, powers, privileges and
duties of the retiring Agent, and the retiring Agent shall be discharged from
its duties and obligations hereunder. After any retiring Agent's resignation
hereunder as Agent, the provisions of this Section 13.9 shall continue in effect
for its benefit in respect of any actions taken or omitted to be taken by it
while it was acting as 946808354946808430Agent946808430.
ARTICLE XIV
MISCELLANEOUS
SECTION 14.1 Notices.
(a) Method of Communication. Except as otherwise provided in this
Agreement, all notices and communications hereunder shall be in writing, or by
telephone subsequently confirmed in writing. Any notice shall be effective if
delivered by hand delivery or sent via telecopy, recognized overnight courier
service or certified mail, return receipt requested, and shall be presumed to be
received by a party hereto (i) on the date of delivery if delivered by hand or
sent by telecopy, (ii) on the next Business Day if sent by recognized overnight
courier service and (iii) on the third Business Day following the date sent by
certified mail, return receipt requested. A telephonic notice to the
Administrative Agent as understood by the Administrative Agent will be deemed to
be the controlling and proper notice in the event of a discrepancy with or
failure to receive a confirming written notice.
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(b) Addresses for Notices. Notices to any party shall be sent to it at the
following addresses, or any other address as to which all the other parties are
notified in writing.
If to the Borrowers: GTS Duratek, Inc.
00000 Xxx Xxxxxxxx Xxxx
Xxxxxxxx, Xxxxxxxx 00000
Attention: Xx. Xxxxxx X. Xxxxxxx,
Executive Vice President
and Chief Financial Officer
Telephone No.: (000) 000-0000
Telecopy No.: (000) 000-0000
With copies to: The Carlyle Group
1001 Pennsylvania
Washington, D.C. 20004
Attention: Xxxxx Xxxxxxxx
Telephone No.: (000) 000-0000
Telecopy No.: (000) 000-0000
Piper & Marbury L.L.P.
00 Xxxxx Xxxxxxx Xxxxxx
Xxxxxxxxx, XX 00000
Attention: Xxxxxxxx X. Xxxxxxx, Esq.
Telephone No.: (000) 000-0000
Telecopy No.: (000) 000-0000
If to First Union as First Union National Bank
Administrative Agent One First Union Center, 4th Floor
or as Collateral Agent: 000 Xxxxx Xxxxxxx Xxxxxx
Xxxxxxxxx, Xxxxx Xxxxxxxx 00000-0000
Attn: Syndication Agency Services
Telephone No.: (000) 000-0000
Telecopy No.: (000) 000-0000
If to any Lender: To the Address set forth on Schedule 1.1(a) hereto
(c) Administrative Agent's Office. The Administrative Agent hereby
designates its office located at the address set forth above, or any subsequent
office which shall have been specified for such purpose by written notice to the
Borrowers and Lenders, as the Administrative Agent's Office referred to herein,
to which payments due are to be made and at which Loans will be disbursed and
Letters of Credit issued.
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SECTION 14.2 Expenses; Indemnity. The Borrowers will (a) pay all
out-of-pocket expenses of the Agents in connection with (i) the preparation,
execution and delivery of this Agreement and each other Loan Document, whenever
the same shall be executed and delivered, including without limitation all
out-of-pocket syndication and due diligence expenses and reasonable fees and
disbursements of counsel for the Agents and (ii) the preparation, execution and
delivery of any waiver, amendment or consent by the Agents or the Lenders
relating to this Agreement or any other Loan Document, including without
limitation reasonable fees and disbursements of counsel for the Agents, (b) pay
all reasonable out-of-pocket expenses of the Agents and each Lender actually
incurred in connection with the administration and enforcement of any rights and
remedies of the Agents and Lenders under the Credit Facility, including
consulting with appraisers, accountants, engineers, attorneys and other Persons
concerning the nature, scope or value of any right or remedy of the Agents or
any Lender hereunder or under any other Loan Document or any factual matters in
connection therewith, which expenses shall include without limitation the
reasonable fees and disbursements of such Persons, and (c) defend, indemnify and
hold harmless each Agent and each of the Lenders, and their respective parents,
Subsidiaries, Affiliates, employees, Agents, officers and directors, from and
against any losses, penalties, fines, liabilities, settlements, damages, costs
and expenses, suffered by any such Person in connection with any claim,
investigation, litigation or other proceeding (whether or not any Agent or any
Lender is a party thereto) and the prosecution and defense thereof, arising out
of or in any way connected with the Agreement, any other Loan Document or the
Loans, including without limitation reasonable attorney's and consultant's fees,
except to the extent that any of the foregoing directly result from the gross
negligence or willful misconduct of the party seeking indemnification therefor.
SECTION 14.3 Set-off. In addition to any rights now or hereafter granted
under Applicable Law and not by way of limitation of any such rights, upon and
after the occurrence of any Event of Default and during the continuance thereof,
the Lenders and any assignee or participant of a Lender in accordance with
Section 14.10 are hereby authorized by the Borrowers at any time or from time to
time, without notice to the Borrowers or to any other Person, any such notice
being hereby expressly waived subject to Section 5.6, to set off and to
appropriate and to apply any and all deposits (general or special, time or
demand, including, but not limited to, indebtedness evidenced by certificates of
deposit, whether matured or unmatured) and any other indebtedness at any time
held or owing by the Lenders, or any such assignee or participant to or for the
credit or the account of the Borrowers against and on account of the Obligations
irrespective of whether or not (a) the Lenders shall have made any demand under
this Agreement or any of the other Loan Documents or (b) the Administrative
Agent shall have declared any or all of the Obligations to be due and payable as
permitted by Section 12.2 and although such Obligations shall be contingent or
unmatured.
SECTION 14.4 Governing Law. This Agreement, the Notes and the other Loan
Documents, unless otherwise expressly set forth therein, shall be governed by,
construed and enforced in accordance with the laws of the State of North
Carolina, without reference to the conflicts or choice of law principles
thereof.
SECTION 14.5 Consent to Jurisdiction. The Borrowers hereby irrevocably
consent to the personal jurisdiction of the state and federal courts located in
Mecklenburg County, North Carolina, in any action, claim or other proceeding
arising out of any dispute in connection with this Agreement, the Notes and the
other Loan Documents, any rights or obligations hereunder or thereunder, or the
performance of such rights and obligations. The Borrowers hereby irrevocably
consent to the service of a summons and complaint and other process in any
action, claim or proceeding brought by any Agent or any Lender in connection
with this Agreement, the Notes or the other Loan Documents, any rights or
obligations hereunder or thereunder, or the performance of such rights and
obligations, on behalf of itself or its property, in the manner specified in
Section 14.1. Nothing in this Section 14.5 shall affect the right of any Agent
or any Lender to serve legal process in any other manner permitted by Applicable
Law or affect the right of any Agent or any Lender to bring any action or
proceeding against any Borrower or its properties in the courts of any other
jurisdictions.
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SECTION 14.6 Binding Arbitration; Waiver of Jury Trial.
(a) Binding Arbitration. Upon demand of any party, whether made before or
after institution of any judicial proceeding, any dispute, claim or controversy
arising out of, connected with or relating to the Notes or any other Loan
Documents ("Disputes"), between or among parties to the Notes or any other Loan
Document shall be resolved by binding arbitration as provided herein.
Institution of a judicial proceeding by a party does not waive the right of that
party to demand arbitration hereunder. Disputes may include, without limitation,
tort claims, counterclaims, claims brought as class actions, claims arising from
Loan Documents executed in the future, disputes as to whether a matter is
subject to arbitration, or claims concerning any aspect of the past, present or
future relationships arising out of or connected with the Loan Documents.
Arbitration shall be conducted under and governed by the Commercial Financial
Disputes Arbitration Rules (the "Arbitration Rules") of the American Arbitration
Association and Title 9 of the U.S. Code. All arbitration hearings shall be
conducted in Charlotte, North Carolina. The expedited procedures set forth in
Rule 51, et seq. of the Arbitration Rules shall be applicable to claims of less
than $1,000,000. All applicable statutes of limitation shall apply to any
Dispute. A judgment upon the award may be entered in any court having
jurisdiction. Notwithstanding anything foregoing to the contrary, any
arbitration proceeding demanded hereunder shall begin within ninety (90) days
after such demand thereof and shall be concluded within one hundred twenty (120)
days after such demand. These time limitations may not be extended unless a
party hereto shows cause for extension and then such extension shall not exceed
a total of sixty (60) days. The panel from which all arbitrators are selected
shall be comprised of licensed attorneys. The single arbitrator selected for
expedited procedure shall be a retired judge from the highest court of general
jurisdiction, state or federal, of the state where the hearing will be
conducted. The parties hereto do not waive any applicable Federal or state
substantive law except as provided herein. Notwithstanding the foregoing, this
paragraph shall not apply to any Hedging Agreement that is a Loan Document.
(b) Jury Trial. THE ADMINISTRATIVE AGENT, THE COLLATERAL AGENT, EACH LENDER
AND EACH BORROWER HEREBY ACKNOWLEDGE THAT BY AGREEING TO BINDING ARBITRATION
THEY HAVE IRREVOCABLY WAIVED THEIR RESPECTIVE RIGHTS TO A JURY TRIAL WITH
RESPECT TO ANY ACTION, CLAIM OR OTHER PROCEEDING ARISING OUT OF ANY DISPUTE IN
CONNECTION WITH THIS AGREEMENT, THE NOTES OR THE OTHER LOAN DOCUMENTS, ANY
RIGHTS OR OBLIGATIONS HEREUNDER OR THEREUNDER, OR THE PERFORMANCE OF SUCH RIGHTS
AND OBLIGATIONS.
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(c) Preservation of Certain Remedies. Notwithstanding the preceding binding
arbitration provisions, the parties hereto and the other Loan Documents
preserve, without diminution, certain remedies that such Persons may employ or
exercise freely, either alone, in conjunction with or during a Dispute. Each
such Person shall have and hereby reserves the right to proceed in any court of
proper jurisdiction or by self help to exercise or prosecute the following
remedies: (i) all rights to foreclose against any real or personal property or
other security by exercising a power of sale granted in the Loan Documents or
under applicable law or by judicial foreclosure and sale, (ii) all rights of
self help including peaceful occupation of property and collection of rents, set
off, and peaceful possession of property, (iii) obtaining provisional or
ancillary remedies including injunctive relief, sequestration, garnishment,
attachment, appointment of receiver and in filing an involuntary bankruptcy
proceeding, and (iv) when applicable, a judgment by confession of judgment.
Preservation of these remedies does not limit the power of an arbitrator to
grant similar remedies that may be requested by a party in a Dispute.
SECTION 14.7 Reversal of Payments. To the extent any Borrower makes a
payment or payments to any Agent for the ratable benefit of the Lenders or any
Agent receives any payment or proceeds of the collateral which payments or
proceeds or any part thereof are subsequently invalidated, declared to be
fraudulent or preferential, set aside and/or required to be repaid to a trustee,
receiver or any other party under any bankruptcy law, state or federal law,
common law or equitable cause, then, to the extent of such payment or proceeds
repaid, the Obligations or part thereof intended to be satisfied shall be
revived and continued in full force and effect as if such payment or proceeds
had not been received by such Agent.
SECTION 14.8 Injunctive Relief; Punitive Damages.
(a) The Borrowers recognize that, in the event any Borrowers fails to
perform, observe or discharge any of its obligations or liabilities under this
Agreement, any remedy of law may prove to be inadequate relief to the Lenders.
Therefore, each Borrower agrees that the Lenders, at the Lenders' option, shall
be entitled to temporary and permanent injunctive relief in any such case
without the necessity of proving actual damages.
(b) Each Agent, each Lender and each Borrower (on behalf of itself and its
Subsidiaries) hereby agree that no such Person shall have a remedy of punitive
or exemplary damages against any other party to a Loan Document and each such
Person hereby waives any right or claim to punitive or exemplary damages that
they may now have or may arise in the future in connection with any Dispute,
whether such Dispute is resolved through arbitration or judicially.
(c) The parties agree that they shall not have a remedy of punitive or
exemplary damages against any other party in any Dispute and hereby waive any
right or claim to punitive or exemplary damages they have now or which may arise
in the future in connection with any Dispute whether the Dispute is resolved by
arbitration or judicially.
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SECTION 14.9 Accounting Matters. All financial and accounting
calculations, measurements and computations made for any purpose relating to
this Agreement, including, without limitation, all computations utilized by any
Borrower or any Subsidiary thereof to determine compliance with any covenant
contained herein, shall, except as otherwise expressly contemplated hereby or
unless there is an express written direction by the Administrative Agent to the
contrary agreed to by the Borrowers, be performed in accordance with GAAP as in
effect on the Closing Date. In the event that after the Closing Date changes in
GAAP shall be mandated by the Financial Accounting Standards Board, or any
similar accounting body of comparable standing, or changes shall be recommended,
consented to or concurred in by the certified public accountants of the
Borrowers, to the extent that such changes would modify such accounting terms or
the interpretation or computation thereof, such changes shall be followed in
defining such accounting terms only from and after the date the Borrowers and
the Lenders shall have amended this Agreement to the extent necessary to reflect
any such changes in the financial covenants and other terms and conditions of
this Agreement.
SECTION 14.10 Successors and Assigns; Participations.
(a) Benefit of Agreement. This Agreement shall be binding upon and inure to
the benefit of the Borrowers, the Agents and the Lenders, all future holders of
the Notes, and their respective successors and assigns, except that the
Borrowers shall not assign or transfer any of their rights or obligations under
this Agreement without the prior written consent of each Lender.
(b) Assignment by Lenders. Each Lender may, with the consent of the
Borrowers (so long as no Default or Event of Default has occurred and is
continuing) and the consent of the Administrative Agent, which consents shall
not be unreasonably withheld, assign to one or more Eligible Assignees all or a
portion of its interests, rights and obligations under this Agreement
(including, without limitation, all or a portion of the Extensions of Credit at
the time owing to it and the Notes held by it); provided that:
(i) each such assignment shall be of a constant, and not a varying,
percentage of all the assigning Lender's rights and obligations under this
Agreement;
(ii) if less than all of the assigning Lender's Commitment is to be
assigned, the Commitment so assigned shall not be less than $5,000,000;
(iii) the parties to each such assignment shall execute and deliver to the
Administrative Agent, for its acceptance and recording in the Register, an
Assignment and Acceptance in the form of Exhibit H attached hereto (an
"Assignment and Acceptance"), together with any Note or Notes subject to such
assignment;
(iv) such assignment shall not, without the consent of the Borrowers,
require any Borrower to file a registration statement with the Securities and
Exchange Commission or apply to or qualify the Loans or the Notes under the blue
sky laws of any state; and
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(v) the assigning Lender shall pay to the Administrative Agent an
assignment fee of $3,000 upon the execution by such Lender of the Assignment and
Acceptance; provided that no such fee shall be payable upon any assignment by a
Lender to an Affiliate thereof.
Upon such execution, delivery, acceptance and recording, from and after the
effective date specified in each Assignment and Acceptance, which effective date
shall be at least five (5) Business Days after the execution thereof, (A) the
assignee thereunder shall be a party hereto and, to the extent provided in such
Assignment and Acceptance, have the rights and obligations of a Lender hereby
and (B) the Lender thereunder shall, to the extent provided in such assignment,
be released from its obligations under this Agreement.
(c) Rights and Duties Upon Assignment. By executing and delivering an
Assignment and Acceptance, the assigning Lender thereunder and the assignee
thereunder confirm to and agree with each other and the other parties hereto as
set forth in such Assignment and Acceptance.
(d) Register. The Administrative Agent shall maintain a copy of each
Assignment and Acceptance delivered to it and a register for the recordation of
the names and addresses of the Lenders and the amount of the Extensions of
Credit with respect to each Lender from time to time (the "Register"). The
entries in the Register shall be conclusive, in the absence of manifest error,
and the Borrowers, the Administrative Agent and the Lenders may treat each
person whose name is recorded in the Register as a Lender hereunder for all
purposes of this Agreement. The Register shall be available for inspection by
the Borrowers or Lender at any reasonable time and from time to time upon
reasonable prior notice.
(e) Issuance of New Notes. Upon its receipt of an Assignment and Acceptance
executed by an assigning Lender and an Eligible Assignee together with any Note
or Notes subject to such assignment and the written consent to such assignment,
the Administrative Agent shall, if such Assignment and Acceptance has been
completed and is substantially in the form of Exhibit G:
(i) accept such Assignment and Acceptance;
(ii) record the information contained therein in the Register;
(iii) give prompt notice thereof to the Lenders and the Borrowers; and
(iv) promptly deliver a copy of such Assignment and Acceptance to the
Borrowers.
Within five (5) Business Days after receipt of notice, the Borrowers shall
execute and deliver to the Administrative Agent, in exchange for the surrendered
Note or Notes, a new Note or Notes to the order of such Eligible Assignee in
amounts equal to the Commitment assumed by it pursuant to such Assignment and
Acceptance and a new Note or Notes to the order of the assigning Lender in an
amount equal to the Commitment retained by it hereunder. Such new Note or Notes
shall be in an aggregate principal amount equal to the aggregate principal
amount of such surrendered Note or Notes, shall be dated the effective date of
such Assignment and Acceptance and shall otherwise be in substantially the form
of the assigned Notes delivered to the assigning Lender. Each surrendered Note
or Notes shall be canceled and returned to the Borrowers.
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(f) Participations. Each Lender may sell participations to one or more
banks or other entities in all or a portion of its rights and obligations under
this Agreement (including, without limitation, all or a portion of its
Extensions of Credit and the Notes held by it); provided that:
(i) each such participation shall be in an amount not less than $3,000,000;
(ii) such Lender's obligations under this Agreement (including, without
limitation, its Commitment) shall remain unchanged;
(iii) such Lender shall remain solely responsible to the other parties
hereto for the performance of such obligations;
(iv) such Lender shall remain the holder of the Notes held by it for all
purposes of this Agreement;
(v) the Borrowers, the Administrative Agent and the other Lenders shall
continue to deal solely and directly with such Lender in connection with such
Lender's rights and obligations under this Agreement;
(vi) such Lender shall not permit such participant the right to approve any
waivers, amendments or other modifications to this Agreement or any other Loan
Document other than waivers, amendments or modifications which would reduce the
principal of or the interest rate on any Loan or Reimbursement Obligation,
extend the term or increase the amount of the Commitment, reduce the amount of
any fees to which such participant is entitled, extend any scheduled payment
date for principal of any Loan or, except as expressly contemplated hereby or
thereby, release substantially all of the Collateral; and
(vii) any such disposition shall not, without the consent of the Borrowers,
require any Borrower to file a registration statement with the Securities and
Exchange Commission to apply to qualify the Loans or the Notes under the blue
sky law of any state.
(g) Disclosure of Information; Confidentiality. The Agents and the Lenders
shall hold all non-public information with respect to the Borrowers obtained
pursuant to the Loan Documents in accordance with their customary procedures for
handling confidential information; provided, that the Agents may disclose
information relating to this Agreement to Gold Sheets and other similar bank
trade publications, such information to consist of deal terms and other
information customarily found in such publications and provided further, that
the Agents and Lenders may disclose any such information to the extent such
disclosure is required by law or requested by any regulatory authority. Any
Lender may, in connection with any assignment, proposed assignment,
participation or proposed participation pursuant to this Section 14.10, disclose
to the assignee, participant, proposed assignee or proposed participant, any
information relating to the Borrowers furnished to such Lender by or on behalf
of the Borrowers; provided, that prior to any such disclosure, each such
assignee, proposed assignee, participant or proposed participant shall agree
with the Borrowers or such Lender to preserve the confidentiality of any
confidential information relating to the Borrowers received from such Lender.
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(h) Certain Pledges or Assignments. Nothing herein shall prohibit any
Lender from pledging or assigning any Note to any Federal Reserve Bank in
accordance with Applicable Law.
SECTION 14.11 Amendments, Waivers and Consents. Except as set forth below,
any term, covenant, agreement or condition of this Agreement or any of the other
Loan Documents (other than any Hedging Agreement, the terms and conditions of
which may be amended, modified or waived by the parties thereto) may be amended
or waived by the Lenders, and any consent given by the Lenders, if, but only if,
such amendment, waiver or consent is in writing signed by the Required Lenders
(or by the Administrative Agent or Collateral Agent, as applicable, with the
written consent of the Required Lenders) and delivered to the Administrative
Agent and, in the case of an amendment, signed by the Borrowers; provided, that
no amendment, waiver or consent shall:
(a) (i) increase the Revolving Credit Commitment of any Lender, (ii) reduce
the rate of, or forgive any, interest or fees payable on any Revolving Credit
Loan or Reimbursement Obligation, (iii) reduce or forgive the principal amount
of any Revolving Credit Loan or Reimbursement Obligation, (iv) extend the
originally scheduled time or times of payment of the principal of any Revolving
Credit Loan or Reimbursement Obligation or the time or times of payment of
interest on any Revolving Credit Loan or Reimbursement Obligation or any fee or
commission with respect thereto, (v) permit any subordination of the principal
or interest on, or any Lien securing, any Revolving Credit Loan or Reimbursement
Obligation or (vi) extend the time of the obligation of the Revolving Commitment
Lenders to make or issue or participate in Letters of Credit, in any case,
without the written consent of each Lender holding Revolving Credit Loans or a
Revolving Credit Commitment;
(b) (i) increase the Term A Loan Commitment of any Lender, (ii) reduce the
rate of, or forgive any, interest or fees payable on any Term A Loan, (iii)
reduce or forgive the principal amount of any Term A Loan, (iv) permit any
subordination of the principal or interest on, or any Lien securing, any Term A
Loan or (v) extend the originally scheduled time or times of payment of the
principal of any Term A Loan or the time or times of payment of interest on any
Term A Loan or any fee or commission with respect thereto, in any case, without
the written consent of each Lender holding a Term A Loan or a Term A Loan
Commitment;
(c) (i) increase the Term B Loan Commitment of any Lender, (ii) reduce the
rate of, or forgive any, interest or fees payable on any Term B Loan, (iii)
reduce or forgive the principal amount of any Term B Loan, (iv) permit any
subordination of the principal or interest on, or any Lien securing, any Term B
Loan or (v) extend the originally scheduled time or times of payment of the
principal of any Term B Loan or the time or times of payment of interest on any
Term B Loan or any fee or commission with respect thereto, in any case, without
the written consent of each Lender holding a Term B Loan or a Term B Loan
Commitments; or
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(d) release any material portion of the Collateral or release any Security
Document (other than in connection with a sale of assets permitted pursuant to
Section 11.6 or as otherwise specifically permitted in this Agreement or the
applicable Security Document), amend the provisions of this Section 14.11, amend
any provision pertaining to allocation of prepayments under Section 4.4, amend
the requirement for the approval of all Lenders specified in the parenthetical
to Section 11.4(c)(iii), or amend the definition of Required Lenders without the
written consent of each Lender.
In addition, no amendment, waiver or consent to the provisions of (a) Article
XIII shall be made without the written consent of each Agent, (b) any Security
Document shall be made without the written consent of the Collateral Agent and
(c) Article III without the written consent of the Issuing Lender.
SECTION 14.12 Performance of Duties. The obligations of the Borrowers
under this Agreement and each of the Loan Documents shall be performed by the
Borrowers at their sole cost and expense.
SECTION 14.13 All Powers Coupled with Interest. All powers of attorney and
other authorizations granted to the Lenders, the Agents and any Persons
designated by the Agents or any Lender pursuant to any provisions of this
Agreement or any of the other Loan Documents shall be deemed coupled with an
interest and shall be irrevocable so long as any of the Obligations remain
unpaid or unsatisfied or the Credit Facility has not been terminated.
SECTION 14.14 Survival of Indemnities. Notwithstanding any termination of
this Agreement, the indemnities to which the Agents and the Lenders are entitled
under the provisions of this Article XIV and any other provision of this
Agreement and the Loan Documents shall continue in full force and effect and
shall protect the Agents and the Lenders against events arising after such
termination as well as before.
SECTION 14.15 Titles and Captions. Titles and captions of Articles,
Sections and subsections in this Agreement are for convenience only, and neither
limit nor amplify the provisions of this Agreement.
SECTION 14.16 Severability of Provisions. Any provision of this Agreement
or any other Loan Document which is prohibited or unenforceable in any
jurisdiction shall, as to such jurisdiction, be ineffective only to the extent
of such prohibition or unenforceability without invalidating the remainder of
such provision or the remaining provisions hereof or thereof or affecting the
validity or enforceability of such provision in any other jurisdiction.
SECTION 14.17 Counterparts. This Agreement may be executed in any number
of counterparts and by different parties hereto in separate counterparts, each
of which when so executed shall be deemed to be an original and shall be binding
upon all parties, their successors and assigns, and all of which taken together
shall constitute one and the same agreement.
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SECTION 14.18 Term of Agreement. This Agreement shall remain in effect
from the Closing Date through and including the date upon which all Obligations
shall have been indefeasibly and irrevocably paid and satisfied in full. The
Collateral Agent is hereby permitted to release all Liens on the Collateral in
favor of the Collateral Agent, for the ratable benefit of the Agents and the
Lenders, upon repayment of the outstanding principal of and all accrued interest
on the Loans, payment of all outstanding fees and expenses hereunder and the
termination of the Lender's Commitments. No termination of this Agreement shall
affect the rights and obligations of the parties hereto arising prior to such
termination.
SECTION 14.19 GTS as Agent for Borrowers; Obligations Joint and Several
Contributions and Indemnity.
(a) The Borrowers hereby irrevocably appoint and authorize GTS (i) to
provide the Agents with all notices with respect to Loans and Letters of Credit
obtained for the benefit of any Borrower and all other notices and instructions
under this Agreement and (ii) to take such action on behalf of the Borrowers as
GTS deems appropriate on its behalf to obtain Loans and Letters of Credit and to
exercise such other powers as are reasonably incidental thereto to carry out the
purposes of this Agreement.
(b) All of the Borrowers shall be jointly and severally liable for the
Obligations, however incurred. References to the Borrowers with respect to the
Obligations or any portion thereof shall mean each Borrower on a joint and
several basis.
(c) To the extent any Borrower is required, by reason of its Obligations
hereunder, to pay to the Administrative Agent and the Lenders an amount greater
than the amount of Loans actually made available to or for the account of such
Borrower, such Borrower shall have an enforceable right of contribution against
the remaining Borrowers, and the remaining Borrowers shall be jointly and
severally liable, for repayment of the full amount of such excess payment.
Subject only to the subordination provided in the following subsection (f), such
Borrower further shall be subrogated to any and all rights of the Administrative
Agent and the Lenders against the remaining Borrowers to the extent of such
excess payment.
(d) To the extent that any Borrower would, but for the operation of this
Section 14.19 and by reason of its Obligations hereunder or its obligations to
other Subsidiaries under this Section 14.19, be rendered insolvent for any
purpose under Applicable Law, each of the Borrowers hereby agrees to indemnify
such Borrower in an amount at least equal to the amount necessary to prevent
such Borrower from having been rendered insolvent by reason of the incurring of
any such obligations.
(e) To the extent that any Borrower would, but for the operation of this
Section 14.19, be rendered insolvent under any Applicable Law by reason of its
incurring of obligations to any other Borrower under the foregoing subsections
(c) and (d) above, such Borrower shall, in turn, have rights of contribution and
indemnity, to the full extent provided in the foregoing subsections (c) and (d)
above, against the remaining Borrowers, such that all Obligations of all of the
Borrowers hereunder and under this Section 14.19 shall be allocated in a manner
such that no Borrower shall be rendered insolvent for any purpose under
Applicable Law by reason of its incurring of such obligations.
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(f) The rights of any Borrower to contribution, subrogation and indemnity
under this Section 14.19 or under Applicable Law shall in all events and all
respects be subject and subordinate to the rights of the Administrative Agent
and the Lenders under this Agreement and subject to the prior full, final and
indefeasible payment to the Administrative Agent and the Lenders of all
Obligations and no such right may be exercised until all of such Obligations
have been fully, finally and indefeasibly paid and such payments are in no event
subject to avoidance under Title 11 of the United States Code or any other
Applicable Law.
SECTION 14.20 Inconsistencies with Other Documents; Covenants. In the
event there is a conflict or inconsistency between this Agreement and any other
Loan Document, the terms of this Agreement shall control; provided, that any
provision of the Security Documents which imposes additional burdens on any
Borrower or any Subsidiary thereof or further restricts the rights of any
Borrower or any Subsidiary thereof or gives the Agents or Lenders additional
rights shall not be deemed to be in conflict or inconsistent with this Agreement
and shall be given full force and effect.
[Signature pages to follow]
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed under seal by their duly authorized officers, all as of the day and
year first written above.
[CORPORATE SEAL] GTS DURATEK, INC., as Borrower
[CORPORATE SEAL] GTS DURATEK BEAR CREEK, INC.,
as Borrower
[CORPORATE SEAL] GTS DURATEK COLORADO, INC., as Borrower
[CORPORATE SEAL] HITTMAN TRANSPORT SERVICES, INC.,
as Borrower
[CORPORATE SEAL] GTS INSTRUMENT SERVICES,
INCORPORATED, as Borrower
[CORPORATE SEAL] GENERAL TECHNICAL SERVICES, INC.,
as Borrower
[CORPORATE SEAL] ANALYTICAL RESOURCES, INC., as Borrower
[CORPORATE SEAL] GTSD SUB III, INC., as Borrower
By:
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Name:
-----------------------------------------
Title:
----------------------------------------
FIRST UNION NATIONAL BANK,
as Collateral Agent and as Administrative Agent
for the Lenders and Issuing Lender
By:
----------------------------------------------
Name:
-----------------------------------------
Title:
----------------------------------------
FIRST UNION COMMERCIAL CORPORATION,
as Swingline Lender and Lender
By:
----------------------------------------------
Name:
-----------------------------------------
Title:
----------------------------------------
NATIONAL BANK OF CANADA, a Canadian
Chartered Bank, as Lender
By:
----------------------------------------------
Name:
-----------------------------------------
Title:
----------------------------------------
By:
----------------------------------------------
Name:
-----------------------------------------
Title:
-----------------------------------------
WACHOVIA BANK, N.A., as Lender
By:
----------------------------------------------
Name:
-----------------------------------------
Title:
----------------------------------------
