Exhibit 10.40
FIRST AMENDMENT TO
SENIOR SECURED CREDIT AGREEMENT
This First Amendment to Senior Secured Credit Agreement (this
"Amendment") is entered into as of June 1, 2000, by and among The Titan
Corporation (the "Borrower"), the financial institutions party hereto (the
"Lenders"), Credit Suisse First Boston, as Lead Arranger and as Administrative
Agent for the Lenders (the "Administrative Agent"), First Union Securities,
Inc., as Co-Arranger and as Syndication Agent (the "Syndication Agent"), and the
Bank of Nova Scotia, as the Documentation Agent (the "Documentation Agent").
RECITALS
A. The Borrower, the Lenders, the Administrative Agent, the
Syndication Agent and the Documentation Agent are parties to that certain Senior
Secured Credit Agreement dated as of February 23, 2000 (the "Credit Agreement").
Capitalized terms used herein without definition have the meanings ascribed to
such terms in the Credit Agreement.
B. The Borrower has requested that the Credit Agreement be
amended to permit the Term C Loan Commitment Amount to be increased from $100
million to $150 million.
C. In addition, the Borrower desires to consummate two
acquisitions. The first acquisition concerns Sakon LLC ("Sakon"). Titan
Wireless, Inc., a wholly owned subsidiary of the Borrower, currently owns 19.9%
of the issued and outstanding Capital Stock of Sakon. Titan Wireless, Inc.
intends to acquire an additional 30% of the issued and outstanding Capital Stock
of Sakon for an aggregate purchase price of $27.5 million (the "Sakon
Acquisition"). Consideration for the Sakon Acquisition will be comprised of (i)
$15 million in cash to be paid on or before July 1, 2000 and (ii) $12.5 million
in cash to be paid upon Sakon's trailing twelve month revenues exceeding $31.4
million, which the Borrower expects will be sometime in the first or second
quarter of 2001.
D. The second acquisition concerns SenCom Corporation, a
Massachusetts "S" corporation ("SenCom"). The Borrower, through its wholly owned
subsidiary Titan Systems Corporation, intends to acquire 100% of the issued and
outstanding common stock of SenCom, for an aggregate purchase price of
approximately $38 million (the "SenCom Acquisition" and, together with the Sakon
Acquisition, the "Acquisitions"). Consideration for the SenCom Acquisition will
be comprised of (i) $34.7 million in cash paid at closing, assuming an
approximate $3 million cash balance and an approximate $5 million debt balance
outstanding, (ii) $1.3 million in cash paid 12 months after closing for accrued
bonuses and (iii) $2 million in cash paid 18 months after closing with interest
of 7% per annum.
E. The Credit Agreement requires the consent of the Required
Lenders for (i) the increase in the Term C Loan Commitment Amount from $100
million to $150 million and (ii) any acquisition which involves an aggregate
purchase price in excess of $25 million.
F. Clause (iii) of the proviso of Section 8.5 of the Credit
Agreement prohibits the Borrower or any Guarantor from consummating acquisitions
after the Closing Date with an aggregate purchase price in excess of $100
million over the remaining term of the Credit Agreement (excluding any
acquisition which has received the prior written consent of the Required
Lenders).
G. The Borrower hereby requests the consent of the Required
Lenders to (i) the increase in the Term C Loan Commitment Amount from $100
million to $150 million and (ii) the Acquisitions.
AGREEMENT
Section 1. AMENDMENT TO SECTION 1.1. The definition of "Term C
Loan Commitment Amount" in Section 1.1 of the Credit Agreement is hereby amended
by replacing the word "$100,000,000" with "$150,000,000".
Section 2. AMENDMENT TO SECTION 2.3. (a) Section 2.3(c)(i) of
the Credit Agreement is hereby amended by replacing the word "$100,000,000" with
"$150,000,000" in the first sentence of such paragraph.
(1) Section 2.3(c)(ii) of the Credit Agreement is
hereby amended by replacing the word "$100,000,000" with "$150,000,000" in the
third sentence of such paragraph.
Section 3. CONSENT. The Required Lenders hereby grant their
consent to the Acquisitions as of the Amendment Effective Date (defined below).
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Section 4. AMENDMENT EFFECTIVE DATE. The Amendment Effective
Date shall be the date on which all of the conditions set forth below have been
satisfied (or waived by the Required Lenders):
(1) The Administrative Agent shall have received
counterparts of this Amendment, executed by the Borrower and the Required
Lenders.
(2) The Administrative Agent shall have received
resolutions of the board of directors of the Borrower, certified by its
Secretary or Assistant Secretary, which authorize the execution, delivery and
performance by the Borrower of this Amendment.
(3) The Administrative Agent shall have received a
certificate from an Authorized Officer of the Borrower stating that (i) each of
SenCom and Sakon is primarily engaged in a similar line of business as the
Borrower, Titan Wireless, Inc. or Titan Systems Corporation as of the Closing
Date; (ii) all or substantially all of the assets owned by SenCom are located in
the United States and SenCom is organized under the laws of the United States or
a state thereof or the District of Columbia; and (iii) immediately before and
after giving effect to this Amendment and the Acquisitions, no Default shall
have occurred and be continuing or would result therefrom (including under
Section 8.1 of the Credit Agreement).
(4) The Administrative Agent shall have received a
Compliance Certificate for the period of four full Fiscal Quarters immediately
preceding the Acquisitions (prepared in good faith and in a manner and using
such methodology which is consistent with the most recent financial statements
delivered pursuant to Section 7.1 of the Credit Agreement) giving PRO FORMA
effect in accordance with the Credit Agreement to the consummation of the
Acquisitions and evidencing compliance with the covenants set forth in Section
8.4 of the Credit Agreement.
(5) The Administrative Agent shall have received a
certificate of an Authorized Officer of the Borrower certifying as to a true and
complete copy of each purchase agreement, and (to the extent available) all
other documents and instruments delivered in connection with the consummation of
the Acquisitions and that are required to be delivered pursuant to the terms of
the relevant purchase agreement and the Administrative Agent shall be satisfied
with all such agreements, documents and instruments and all amendments, waivers
or other modifications of, or other forebearance to exercise any rights with
respect to, any of the terms or provisions of such purchase agreements,
documents and instruments and the exhibits and schedules thereto. To the exent
that certain documents and instruments that are
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required to be delivered pursuant to the terms of the relevant purchase
agreement are not available on the Amendment Effective Date, the Borrower shall
provide such documents and instruments to the Administrative Agent as soon as
they become available.
Section 5. COMPLIANCE WITH SECTION 7.7 OF THE CREDIT
AGREEMENT. Upon the consummation of the Acquisitions, Titan Wireless, Inc.,
Titan Systems Corporation and SenCom shall comply with Section 7.7 of the Credit
Agreement, including, without limitation the following:
(1) SenCom shall execute and deliver to the
Administrative Agent a supplement to each of the Subsidiary Guaranty, the
Subsidiary Security Agreement and the Subsidiary Pledge Agreement and UCC
financing statements with respect to all of its assets pledged pursuant to the
Subsidiary Security Agreement and the Subsidiary Pledge Agreement.
(2) Titan Wireless, Inc. shall deliver to the
Administrative Agent (i) a revised Attachment 1 to the Borrower Pledge
Agreement, indicating that the Capital Stock of Sakon owned by it has been
pledged to the Administrative Agent, (ii) certificates representing all of the
issued and outstanding Capital Stock of Sakon owned by Titan Wireless, Inc. and
(iii) undated stock powers with respect to such certificates, duly executed in
blank.
(3) Titan Systems Corporation shall deliver to the
Administrative Agent (i) a revised Attachment 1 to the Subsidiary Pledge
Agreement, indicating that the Capital Stock of SenCom has been pledged to the
Administrative Agent, (ii) stock certificates representing all of the issued and
outstanding Capital Stock of SenCom and (iii) undated stock powers with respect
to such stock certificates, duly executed in blank.
Section 6. REPRESENTATIONS AND WARRANTIES. The Borrower hereby
represents and warrants to the Administrative Agent and the Lenders that, as of
the date of and after giving effect to this Amendment, (a) the execution,
delivery and performance of this Amendment and any and all other documents
executed and/or delivered in connection herewith have been authorized by all
requisite corporate action on the part of the Borrower and will not violate the
Borrower's articles of incorporation or bylaws, (b) all representations and
warranties set forth in the Credit Agreement and in any other Loan Document are
true and correct as if made again on and as of such date (except those, if any,
which by their terms specifically relate only to a different date), (c) no
Default or Event of Default has occurred and is continuing,
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and (d) the Credit Agreement (as amended by this Amendment) and all other Loan
Documents are and remain legal, valid, binding and enforceable obligations in
accordance with the terms thereof.
Section 7. SURVIVAL OF REPRESENTATIONS AND WARRANTIES. All
representations and warranties made in this Amendment or any other Loan Document
shall survive the execution and delivery of this Amendment and the other Loan
Documents, and no investigation by any of the Credit Agents or the Lenders, or
any closing, shall affect the representations and warranties or the right of the
Credit Agents and the Lenders to rely upon them.
Section 8. REFERENCE TO AGREEMENT. Each of the Loan Documents,
including the Credit Agreement, and any and all other agreements, documents or
instruments now or hereafter executed and/or delivered pursuant to the terms
hereof or pursuant to the terms of the Credit Agreement as amended hereby, are
hereby amended so that any reference in such Loan Documents to the Credit
Agreement, whether direct or indirect, shall mean a reference to the Credit
Agreement as amended hereby.
Section 9. GOVERNING LAW. THIS AMENDMENT SHALL EACH BE DEEMED
TO BE A CONTRACT MADE UNDER AND GOVERNED BY THE INTERNAL LAWS OF THE STATE OF
NEW YORK (INCLUDING FOR SUCH PURPOSE SECTIONS 5-1401 AND 5-1402 OF THE GENERAL
OBLIGATIONS LAW OF THE STATE OF NEW YORK).
Section 10. EXECUTION. This Amendment may be executed in
counterparts, each of which shall be an original and all of which, collectively,
shall constitute one instrument.
Section 11. LIMITED EFFECT. This Amendment relates only to the
specific matters covered herein, shall not be considered to be a waiver of any
rights the Lenders may have under the Credit Agreement, and shall not be
considered to create a course of dealing or to otherwise obligate the Lenders to
execute any amendments or grant any waivers or consents under the same or
similar circumstances in the future.
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IN WITNESS WHEREOF, the parties hereto have caused this
Amendment to be executed by their respective officers thereunto duly authorized
as of the day and year first above written.
THE TITAN CORPORATION
By:
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Name: Xxx X. Xxxxxxxxx
Title: Assistant Treasurer
LENDER:
By:
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Name:
Title:
