EXHIBIT 10.17
AMENDED AND RESTATED REVOLVING LINE OF CREDIT LOAN AGREEMENT,
TERM LOANS AGREEMENT AND SECURITY AGREEMENT
This AMENDED AND RESTATED REVOLVING LINE OF CREDIT LOAN AGREEMENT, TERM
LOANS AGREEMENT AND SECURITY AGREEMENT ("Agreement") is made as of May ___,
2001, by and between On-Site Sourcing, Inc., a Delaware corporation, having an
address for its chief executive office and principal place of business at 0000
Xxxxx Xxxxxxxxxx Xxxxxx, 0xx Xxxxx, Xxxxxxxxx, Xxxxxxxx 00000 (the "Borrower"),
and First Union National Bank, a national banking corporation, having an address
at 0000 Xxxxx Xxxxxx Xxxx, XxXxxx, XX 00000 (the "Lender").
WITNESSETH:
WHEREAS, the Borrower and the Lender entered into a certain Revolving Line
of Credit Loan Agreement, Term Loan Agreement and Security Agreement executed by
the Borrower and the Lender dated as of March 21, 1997, as modified by that
certain First Amendment to Revolving Line of Credit Loan Agreement, Term Loan
Agreement and Security Agreement dated as of June 4, 1997, and as further
modified by that certain First Modification of Revolving Line of Credit Loan
Agreement, Term Loan Agreement and Security Agreement dated as of April 28,
1998, and as further modified by that certain Second Modification of Revolving
Line of Credit Loan Agreement, Term Loan Agreement and Security Agreement dated
as of April 30, 1999, and as further modified by that certain Third Modification
of Revolving Line of Credit Loan Agreement, Term Loan Agreement and Security
Agreement, dated as of April 28, 2000, and as further modified by that certain
Fourth Modification of Revolving Line of Credit Loan Agreement, Term Loan
Agreement and Security Agreement, dated as of June 12, 2000, and as further
modified by that certain Fifth Modification of Revolving Line of Credit Loan
Agreement, Term Loan Agreement and Security Agreement dated as of June 28, 2000,
and as further modified by that certain Sixth Modification of Revolving Line of
Credit Loan Agreement, Term Loan Agreement and Security Agreement dated as of
November 15, 2000, and as further modified by that certain Seventh Modification
of Revolving Line of Credit Loan Agreement, Term Loan Agreement and Security
Agreement dated as of November 29, 2000, and as further modified by that certain
Eighth Modification of Revolving Line of Credit Loan Agreement, Term Loan
Agreement and Security Agreement dated as of January 31, 2001 (as so modified,
the "Original Loan Agreement"), in which the Lender agreed to make a revolving
line of credit facility available to the Borrower under which Lender would
advance and readvance Loans not to exceed an aggregate principal balance of
Seven Million and 00/100 Dollars ($7,000,000.00) outstanding at any time (the
"Revolving Loan"); and
WHEREAS, the Revolving Loan is evidenced by that certain Revolving Note
dated March 21, 1997, as modified by a certain First Modification of Revolving
Note dated as of April 28, 1998, as further modified by a certain Second
Modification of Revolving Note dated as of April 30, 1999, and as further
modified by a certain Third Modification of Revolving Note dated as of April 28,
2000, and as further modified by a certain Fourth Modification of Revolving Note
dated as of November 29, 2000, and as further modified by a certain Fifth
Modification of
Revolving Note dated as of January 31, 2001 (as so modified, the "Original
Revolving Note"); and
WHEREAS, the Original Loan Agreement also governs and secures (1) that
certain term loan to Borrower and North Xxxxx Street Realty Company, LLC, a
Delaware limited liability company ("North Xxxxx"), in the original principal
amount of Five Million Eight Hundred Thousand and 00/100 Dollars
($5,800,000.00), as evidenced by that certain Commercial Note executed by
Borrower and North Xxxxx dated as of November 15, 2000; and (2) that certain
term loan to Borrower in the original principal amount of One Million One
Hundred Twenty Five Thousand and 00/100 Dollars ($1,125,000.00), as evidenced by
that certain Term Note dated June 12, 2000; and
WHEREAS, pursuant to the terms of the Original Loan Agreement and the
Original Revolving Note, and certain other agreements between the parties, the
entire outstanding balance owing on the Revolving Loan became due and payable in
full on May 31, 2001, and Borrower is not entitled to any further advances on
the Revolving Loan after May 31, 2001; and
WHEREAS, Borrower has requested that Lender modify the Original Loan
Agreement to extend the Ending Date, as defined in the Original Loan Agreement,
to May 31, 2002, and to modify the Original Revolving Note to reflect a new
maturity date for the Revolving Loan of May 31, 2002; and
WHEREAS, Lender has agreed to modify the Original Loan Agreement to extend
the Ending Date to May 31, 2002, and for certain other purposes, including
amending and restating the terms and provisions of the Original Loan Agreement
pursuant to the terms and provisions hereafter set forth in this Agreement; and
WHEREAS, Lender has agreed to modify the Original Revolving Note to reflect
the new maturity date of May 31, 2002, and for certain other purposes, and to
enter into an Amended and Restated Revolving Note, of even date, thereby
amending and fully restating the terms and provisions of the Original Revolving
Note; and
WHEREAS, the Borrower and the Lender intend that this Agreement shall
replace, amend, restate and supercede the Original Loan Agreement in its
entirety as the document governing and securing the terms and conditions of the
Revolving Loan and Term Loans.
AGREEMENTS
NOW, THEREFORE, in consideration of the premises, the mutual agreements
herein contained, and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the Borrower and the Lender hereby
agree that the Original Loan Agreement is hereby modified and restated in its
entirety, pursuant to the terms and provisions hereinafter set forth. The
parties agree that the execution and delivery of this Agreement and the
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other documents executed in connection herewith, including without limitation
the Amended and Restate Revolving Note, shall not be construed as a novation of
the Loan Agreement or the other Loan Documents.
ARTICLE 1. DEFINITIONS.
1.1 DEFINED TERMS. Certain capitalized terms not otherwise defined herein
are used in this Agreement with the following meanings, unless the context
otherwise requires:
a. "ACCOUNT" means collectively and includes any of the following, whether
now owned or hereafter acquired by the Borrower: all present and future rights
to payments for goods or other property sold, assigned, leased or otherwise
disposed of, or for services rendered, whether or not earned by performance; all
present and future rights to payments arising out of the licensing of computer
hardware or software and systems; all accounts, contract rights, chattel paper,
instruments and documents; proceeds of any letter of credit of which the
Borrower is a beneficiary; all forms of obligations whatsoever owed to the
Borrower, together with all instruments and documents of title representing any
of the foregoing; all rights in any returned or repossessed goods; all rights,
security and guaranties with respect to any of the foregoing, including, without
limitation, any right of stoppage in transit; together with all property
included within the definitions of "accounts", and "documents" as presently or
hereafter defined in the UCC.
b. "ADVANCE" means an advance of funds under the Revolving Loan.
c. "AFFILIATE" means, with respect to any specified Person, any other
Person which, directly or indirectly, through one or more intermediaries,
controls or is controlled by, or is under common control with, such specified
Person. The term "control" means the possession, directly or indirectly, of the
power to direct or cause the direction of management and policies of a Person,
whether through ownership of common stock, by contract, or otherwise.
d. "AGREEMENT" means this Amended and Restated Revolving Line of Credit
Loan Agreement, Term Loans Agreement and Security Agreement as the same may be
amended, modified or supplemented from time to time.
e. "ALLOWED AMOUNT OF ADVANCES" means the aggregate amount of all Advances
of principal under the Revolving Loan permitted to be outstanding at any
particular time under the Paragraph below titled "Allowed Amount of Advances."
f. "ASSIGNMENT" means a direct assignment of Payments under Government
Contracts, pursuant to and in compliance with the Assignment of Claims Act.
g. "ASSIGNMENT OF CLAIMS ACT" means Xxxxx 00, Xxxxxx Xxxxxx Code ss. 3727,
and Xxxxx 00, Xxxxxx Xxxxxx Code ss. 15, as revised or amended, and any rules or
regulations issued
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pursuant thereto, and also shall be deemed to include any other laws, rules or
regulations governing the assignment of payments under Government Contracts or
claims against a Government.
h. "BILLED" means that Borrower has submitted an invoice to a Customer
requesting payment for goods or services provided by Borrower.
i. "BORROWER" shall refer to On-Site Sourcing, Inc., a Delaware
corporation.
j. "BORROWING BASE" means Seventy Five percent (75%) of Borrower's Eligible
Accounts. In the absence of manifest error, Lender's determination of the amount
of the Borrowing Base shall be conclusive.
k. "BORROWING BASE CERTIFICATE" means a certificate substantially in the
form of Schedule 1.1 attached hereto and made a part hereof (or such subsequent
form as the Lender shall require).
l. "BORROWING DATE" means the date on which an Advance is made.
m. "BUSINESS DAY" means any day that is not a Saturday, Sunday or banking
holiday in the Commonwealth of Virginia.
n. "CAPITAL LEASE" means any lease which has been or should be capitalized
on the books of the lessee in accordance with GAAP.
o. "CASH COLLATERAL ACCOUNT" means an account to be established by Lender
in Borrower's name, with the Lender, for the purpose of receiving Payments,
which shall constitute part of the Collateral unless and until disbursed to the
Borrower or applied for the Borrower's account in accordance with this
Agreement.
p. "CASH FLOW" means the sum of the Borrower's net income, depreciation,
amortization, and interest expense.
q. "CHATTEL PAPER" means collectively and includes all of the following,
whether now owned or hereafter acquired by the Borrower: any writing or
writings, or record or records that evidence both a monetary obligation and any
one or more of the following: a security interest in specific goods, a security
interest in specific goods and software used in the goods, a security interest
in specific goods and license of software used in the goods, a lease of specific
goods, or a lease of specific goods and license of software used in the goods,
together with all other such items which are included within the definition of
"chattel paper" as presently or hereafter defined in the UCC.
r. "CLOSING DATE" means May ___, 2001.
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s. "CODE" means the Internal Revenue Code of the United States, as amended.
t. "COLLATERAL" means all of the personal property of the Borrower,
wherever located, and now owned or hereafter acquired, including without
limitation, all of the following kinds of property, now owned or hereafter
acquired by the Borrower:
1. all Accounts;
2. all payments or rights to payment due or to become due under
any Government Contract to which the Borrower is a party;
3. all Deposit Accounts and other obligations or indebtedness
owed to Borrower from whatever source arising, by Lender or any of Lender's
Affiliates;
4. all rights to receive any payment in money or in kind;
5. all contract rights;
6. all Instruments;
7. all Inventory;
8. all property, plant and Equipment;
9. all Chattel Paper;
10. all General Intangibles;
11. all Letter-of-Credit Rights;
12. all Supporting Obligations;
13. all Investment Property;
14. all books and records and computer hardware, software and
systems;
15. all policies of insurance and the proceeds thereof;
16. all additions and accessions to and replacements of the
collateral described above; and
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17. all products and proceeds of all of the collateral described
above.
u. "COMMERCIAL ACCOUNTS" means all Accounts due from Customers other than
the Government.
v. "COMPLIANCE CERTIFICATE" means a certificate substantially in the form
of Schedule 1.1 attached hereto and made a part hereof
w. "CONTRA ACCOUNT" means an Account due from an account debtor to which
the Borrower owes money.
x. "CUSTOMER" means any governmental entity (federal, state, county,
municipal or otherwise) or business entity (corporation, association,
partnership, limited liability company or partnership, sole proprietorship or
otherwise) or individual to which Borrower provides goods or services for
compensation; however, certain individual agencies of the United States
Government and certain branches of certain major corporations, as determined by
the Lender in its sole discretion, shall be treated as Customers in their own
right, separate and distinct from other such agencies or branches and from the
United States Government or the corporation of which they are a part.
y. "DEBT" means:
1. indebtedness or liability for borrowed money, or for the
deferred purchase price of property or services;
2. obligations as a lessee under a Capital Lease;
3. obligations to reimburse the issuer of letters of credit or
acceptances;
4. all guaranties, endorsements (other than for collection or
deposit in the ordinary course of business), and other contingent
obligations to purchase, to provide funds for payment, to supply funds to
invest in any Person or otherwise to assure a creditor against loss; and
5. obligations secured by any lien or Encumbrance on property
owned by the Borrower.
z. "DEED OF TRUST" means the Deed of Trust and Security Agreement, of even
date, from North Xxxxx Street Realty Company, LLC, a Delaware limited liability
company to certain trustees, encumbering the Real Estate Collateral and securing
the Loans.
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aa. "DEPOSIT ACCOUNT"means collectively and includes all of the following,
whether now owned or hereafter acquired by the Borrower: a demand, time,
savings, passbook, or similar account maintained with a bank, together with all
other such items which are included within the definition of "deposit account"
as presently or hereafter defined in the UCC.
bb. "EBIT" means the Borrower's earnings before interest and taxes.
cc. "EBITDA" means the Borrower's earnings before interest, taxes,
depreciation and amortization.
dd. "ELIGIBLE," when used to describe an Account, means that the Account
conforms to the following criteria:
1. the Account has been Billed;
2. in the case of a Commercial Account, less than ninety-one (91)
days have passed from the original billing date, or, in the case of a
Government Account, less than one hundred and twenty-one (121) days have
passed from the original billing date;;
3. at Lender's option, in the case of a Government Account,
Borrower has made an Assignment of all Payments due or to become due under
the Government Contract giving rise to the Account;
4. the Account arose from a bona fide sale of goods or services
to a Customer; the goods or services have been delivered or provided to the
Customer; Borrower possesses receipts from the Customer acknowledging
delivery of the goods or performance of the services; and Customer has not
returned or rejected the goods or services;
5. the Account is based upon an enforceable written order or
contract for goods or services;
6. the Borrower's title to the Account is absolute and is not
subject to any prior assignment, claim, escrow agreement or amendment; lien
or security interest, and Borrower otherwise has the full and unqualified
right and power to assign and grant a security interest in the Account to
the Lender;
7. the amount shown on the books of Borrower and on any invoice,
certificate, schedule or statement delivered to the Lender regarding the
amount due on the Account is due and owing to Borrower;
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8. the Account is not subject to any claim of reduction,
counterclaim, set-off, recoupment or other defense in law or equity, or any
claim for credits, allowances or adjustments by the Customer because of
returned, inferior or damaged goods, unsatisfactory services or for any
other reason;
9. the Customer has not notified Borrower of any dispute
concerning any of the goods or services giving rise to the Account, nor
made claim that the goods or services fail to conform to the requirements
of the Customer's order or contract, nor notified Borrower to cure any
default under the Customer's order or contract;
10. the Account does not arise out of a Customer's contract or
order that by its terms forbids or makes void or unenforceable the
Borrower's assignment of the Account to the Lender;
11. the Borrower has not received any note, trade acceptance
draft or other instrument tendered in payment of the Account;
12. Borrower has not received any notice of the death of the
Customer or any partner in a Customer that is a partnership; nor has
Borrower received any notice of dissolution, termination of existence,
insolvency, business failure, appointment of a receiver for any part of the
property of, assignment for the benefit of creditors by, or the filing of a
petition in bankruptcy or the commencement of any proceeding under any
bankruptcy or insolvency laws by or against the Customer;
13. the Customer is not incorporated in any jurisdiction outside
the United States and is not conducting its business primarily outside the
United States;
14. Borrower is not indebted in any manner to the Customer;
15. no bond has been issued or is contemplated with respect to
the goods or services furnished by the Borrower or with respect to the
project or contract for which those goods or services were furnished; and
16. the Account is not an Ineligible Account
In the event of any dispute, under the foregoing criteria, as to whether an
Account is, or has ceased to be, an Eligible Account, the Lender's decision
shall control.
ee. "ENCUMBRANCE" means any mortgage, pledge, deed of trust, assignment,
security interest, hypothecation, lien or charge of any kind (including any
conditional sale or other title retention agreement, any financing lease having
substantially the same economic effect as any of the foregoing, and the filing
of, or agreement to give, any financing statement under the Uniform Commercial
Code or comparable law of any jurisdiction).
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ff. "ENDING DATE" means May 31, 2002.
gg. "ENVIRONMENTAL LAWS" mean all laws relating to Hazardous Wastes, Toxic
Substances or materials that might be emitted, released or discharged into the
environment or other laws or regulations protecting the environment.
hh. "EQUIPMENT" means collectively and includes all of the following,
whether now owned or hereafter acquired by the Borrower: all goods (other than
farm products, consumer goods or inventory), equipment and fixtures, including,
without limitation, computer hardware, computer software and systems, furniture,
machinery, vehicles and trade fixtures, together with any and all accessories,
accessions, parts and appurtenances thereto, substitutions therefor and
replacements thereof, together with all other such items which are included
within the definitions of "goods", "equipment" and "fixtures" as presently or
hereafter defined in the UCC.
ii. "ERISA" means the Employee Retirement Income Security Act of 1974, as
amended, and any successor statute thereto, as interpreted by the rules and
regulations thereunder, all as the same may be in effect from time to time.
References to sections of ERISA shall be construed also to refer to any
successor sections.
jj. "ERISA AFFILIATE" means an entity, whether or not incorporated, which
is under common control with the Borrower or any of its subsidiaries within the
meaning of Section 4001(a)(14) of ERISA, or is a member of a group which
includes the Borrower or any of its subsidiaries and which is treated as a
single employer under Sections 414(b), (c), (m), or (o) of the Code.
kk. "EVENT OF DEFAULT" means any one of the events specified as an "Event
of Default" under this Agreement.
ll. "FUNDS FLOW COVERAGE RATIO" means (a) the Borrower's net profit, plus
depreciation, plus amortization, minus dividends, withdrawals and non-cash
income; divided by (b) the sum of the current maturities of long term debt plus
capital lease obligations.
mm. "GAAP" means generally accepted accounting principles in the United
States of America.
nn. "GENERAL INTANGIBLES" means collectively and includes all of the
following, whether now owned or hereafter acquired by the Borrower: choses in
action, causes of action and all other intangible property of every kind and
nature, including, without limitation, all present and future rights to payments
arising out of the licensing of computer hardware and software and systems, all
payment intangibles, any software or computer program and any supporting
information provided in connection with a transaction relating to the program,
corporate or other business records, inventions, designs, patents, patent
applications, trademarks, trademark
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applications, trade names, trade secrets, goodwill, registrations, copyrights,
licenses, franchises, customer lists, tax refunds, tax refund claims, rights of
claims against carriers and shippers, leases and rights to indemnification,
together with all property which is included within the definition of "general
intangibles" as as presently or hereafter defined in the UCC.
oo. "GOVERNANCE DOCUMENTS" means the Borrower's Articles or Certificate of
Incorporation and Bylaws or other documents or agreements affecting the
Borrower's corporate governance.
pp. "GOVERNMENT" means the government of the United States of America or
the departments or agencies of the United States, but does not include the
government of any state or the District of Columbia or any departments or
agencies of any state or of the District of Columbia.
qq. "GOVERNMENT ACCOUNTS" means all Accounts arising out of any Government
Contract.
rr. "GOVERNMENT CONTRACTS" means all contracts with a Government, including
all renewals, extensions, modifications, change orders and amendments thereof
and thereto.
ss. "HAZARDOUS WASTES" mean all waste materials subject to regulation under
the Comprehensive Environmental Response, Compensation, and Liability Act, 42
X.X.X.xx.xx. 9601 et seq., the Resource Conservation and Recovery Act, 42
U.S.C.ss.ss.6901 et seq., or applicable state law and any other applicable
federal, state or local laws and their regulations now in force or hereafter
enacted relating to hazardous wastes.
tt. "INELIGIBLE ACCOUNTS" shall include the following Accounts:
1. Accounts that do not conform with the criteria set forth for
Eligible Accounts;
2. An Account owing by any account debtor for which the Lender
has deemed fifty percent (50%) or more of the account debtor's other
Accounts to be non- Eligible; however, for purposes of this category of
Ineligible Accounts, each Government Contract shall be treated as an
individual Customer;
3. Government Accounts arising under Government Contracts which
contain an express prohibition against assignment of Borrower's rights to
Payment;
4. The last payment due on a Government Account, unless such
Government Account arises from a Government Contract which is a "fixed
price contract" (as defined in the Federal Acquisition Regulations) which
does not include any provision for progress payments, incentive
arrangements or price redetermination;
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5. Contra Accounts;
6. Accounts receivable from Affiliates or subsidiaries of the
Borrower;
7. Unbilled Accounts, including, but not limited to, progress
payments, retainages, milestones and final payments; or
8. Any Account deemed by the Lender, in the exercise of its sole
and absolute discretion, to be an Ineligible Account because of uncertainty
as to the creditworthiness of the Customer or because the Lender otherwise
considers the collateral value thereof to the Lender to be impaired or its
ability to realize such value to be insecure.
However, Borrower may request that Lender regard as Eligible any Account that
would otherwise be classified an Ineligible Account. Lender may grant or deny
any such request in its sole discretion.
uu. "INSTRUMENTS" means collectively and includes all of the following,
whether now owned or hereafter acquired by the Borrower: any promissory note, or
any negotiable instrument or any other writing that evidences a right to payment
of a monetary obligation and is not itself a security agreement or lease, and
may be transferred by delivery with any necessary endorsement or assignment,
together with all property included within the definition of "instruments"as
presently or hereafter defined in the UCC.
vv. "INTELLECTUAL PROPERTY" shall mean all patents, licenses, trade names,
trademarks, copyrights, inventions, service marks, trademark registrations,
service xxxx registrations and copyright registrations, whether domestic or
foreign and applications for any of the foregoing, and all proprietary
technology, know-how, trade secrets or other intellectual property rights owned
or used by the Borrower or any subsidiary in the operation of their respective
businesses.
ww. "INTEREST COVERAGE RATIO" means EBIT divided by the Borrower's interest
expense.
xx. "INVENTORY" means collectively and includes all of the following,
whether now owned or hereafter acquired by the Borrower: all goods held or
intended for sale or lease by the Borrower, or furnished or to be furnished
under contracts of service, all raw materials, work in process, finished goods,
all software or computer programs embedded in goods and all supporting
information provided in connection with a transaction related to the programs,
materials and supplies of every nature used or usable in connection with the
manufacture, packing, shipping, advertising or sale of any such goods, together
with all property included within the definition of "inventory" as presently or
hereafter defined in the UCC.
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yy. "INVESTMENT PROPERTY" means collectively and includes all of the
following, whether now owned or hereafter acquired by the Borrower: all
securities owned by Borrower, whether certificated or uncertificated, and all
securities entitlements, securities accounts, commodity contracts, or commodity
accounts of Borrower, together with all property included within the definition
of "investment property"as presently or hereafter defined in the UCC.
zz. "ITEM" means any "item" as defined in Section 4-104 of the Uniform
Commercial Code, to include, without exclusion or limitation, checks, drafts,
money orders or other media by which Payment may be made.
aaa. "LENDER" means First Union National Bank and its successors and
assigns.
bbb. "LETTER-OF-CREDIT RIGHTS" means collectively and includes all of the
following, whether now owned or hereafter acquired by the Borrower: any and all
rights of Borrower to payment or performance under a letter of credit, together
with all property included within the definition of "letter-of-credit rights"as
presently or hereafter defined in the UCC.
ccc. "LOANS" means the Revolving Loan and the Term Loans.
ddd. "LOAN DOCUMENTS" mean this Agreement, the Revolving Note, the Term
Note #1, the Term Note #2, the Deed of Trust or any other document executed by
the Borrower or any other Person evidencing, securing, guaranteeing or relating
to the Revolving Loan or the Term Loans, as such documents or instruments may be
amended, modified or extended from time to time.
eee. "MAXIMUM REVOLVING COMMITMENT AMOUNT" means Seven Million and 00/100
Dollars ($7,000,000.00), or such lesser amount that Borrower may request as
hereinafter provided.
fff. "MULTIEMPLOYER PLAN" means a Plan which is a multiemployer plan as
defined in Sections 3(37) or 4001(a)(3) of ERISA.
ggg. "MULTIPLE EMPLOYER PLAN" means a Plan which the Borrower or any of its
subsidiaries or any ERISA Affiliate and at least one employer other than the
Borrower or any of its subsidiaries or any ERISA Affiliate are contributing
sponsors.
hhh. "NOTES" mean the Term Notes and Revolving Note.
iii. "OPERATING ACCOUNT" means a demand deposit account to be established
by the Borrower with the Lender for the Borrower's use in connection with its
business operations and with the Revolving Loan.
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jjj. "PAYMENT" or "PAYMENTS" means any check, draft, cash or any other
remittance or credit in payment or on account of any or all of the Accounts.
kkk. "PBGC" means the Pension Benefit Guaranty Corporation established
pursuant to Subtitle A of Title IV of ERISA and any successor thereto.
lll. "PERSON" means any individual, partnership, association, trust,
corporation, limited liability company or partnership, or other entity.
mmm. "PLAN" means any employee benefit plan (as defined in Section 3(3) of
ERISA) which is covered by ERISA and with respect to which the Borrower or any
of its subsidiaries or any ERISA Affiliate is (or, if such plan were terminated
at such time, would under Section 4069 of ERISA be deemed to be) an "employer"
within the meaning of Section 3(5) of ERISA.
nnn. "REAL ESTATE COLLATERAL" means the land and improvements encumbered by
the Deed of Trust, said land and improvements being briefly described as 800,
802, 806, 810, 814, 822, 828, 832, 834, 838 and 000 Xxxxx Xxxxx Xxxxxx,
Xxxxxxxxxx, Xxxxxxxx and more fully described in the Deed of Trust.
ooo. "REPORTABLE EVENT" means a "reportable event" as defined in Section
4043 of ERISA with respect to which the notice requirements to the PBGC have not
been waived.
ppp. "REVOLVING LOAN" means the Revolving Loan facility made available by
Lender to Borrower pursuant to this Agreement in the maximum principal amount of
Seven Million and 00/100 Dollars ($7,000,000.00), evidenced by the Revolving
Note.
qqq. "REVOLVING NOTE" means the Amended and Restated Revolving Note
executed by Borrower, of even date, in the amount of Seven Million and 00/100
Dollars ($7,000,000.00), payable to the order of the Lender, and evidencing
Borrower's obligation to repay the Revolving Loan.
rrr. "SINGLE EMPLOYER PLAN" means any Plan which is covered by Title IV of
ERISA, but which is not a Multiemployer Plan.
sss. "SUPPORTING OBLIGATIONS" means collectively and includes all of the
following, whether now owned or hereafter acquired by the Borrower: any
Letter-of-Credit Right or secondary obligation that supports the payment or
performance of an Account, a Chattel Paper, a document, a General Intangible, an
Instrument, or Investment Property, together with all property included within
the definition of "supporting obligations" as presently or hereafter defined in
the UCC.
ttt. "SWAP AGREEMENT" means the interest rate swap agreement, dated as of
March 7, 1997, by and between the Borrower and the Lender or any Affiliate of
the Lender.
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uuu. "TANGIBLE NET WORTH" means the excess of the Borrower's total assets
over its total liabilities. In determining Tangible Net Worth, total assets
shall exclude (a) treasury stock; (b) obligations of officers, directors,
employees, Affiliates, shareholders or subsidiaries of the Borrower; (c)
intangibles (including, without limitation, patent applications, copyrights,
trademarks, trade names, research and development costs, capitalized software
development costs and organizational expenses); (d) goodwill; and (e) any
investments by Borrower in corporations, limited liability companies or
partnerships, partnerships, joint ventures or any other entities (other than
Borrower's One Hundred Percent (100%) ownership interest in North Xxxxx Street
Realty Company, LLC, a Delaware limited liability company).
vvv. "TERM LOAN #1" means the Term Loan facility made available by Lender
to Borrower and North Xxxxx Street Realty Company, LLC, a Delaware limited
liability company, in the original principal amount of Five Million Eight
Hundred Thousand and 00/100 Dollars ($5,800,000.00) evidenced by Term Note #1.
www. "TERM LOAN #2" means the Term Loan facility made available by Lender
to Borrower, in the original principal amount of One Million One Hundred Twenty
Five Thousand and 00/100 Dollars ($1,125,000.00) evidenced by Term Note #2.
xxx. "TERM LOANS" means Term Loan #1 and Term Loan#2, jointly and
severally.
yyy. "TERM NOTE #1" means the Commercial Note executed by Borrower and
North Xxxxx Street Realty Company, LLC, a Delaware limited liability company,
dated November 15, 2000, in the amount of Five Million Eight Hundred Thousand
and 00/100 Dollars ($5,800,000.00), payable to the order of the Lender, and
evidencing the obligation of Borrower and North Xxxxx Street Realty Company, LLC
to repay Term Loan #1.
zzz. "TERM NOTE #2" means the Term Note executed by Borrower, in the amount
of One Million One Hundred Twenty Five Thousand and 00/100 Dollars
($1,125,000.00), payable to the order of the Lender, and evidencing the
obligation of Borrower to repay Term Loan #2.
aaaa. "TERM NOTES" mean Term Note #1 and Term Note#2, jointly and
severally.
bbbb. "TERMINATION EVENT" means (i) with respect to any Plan, the
occurrence of a Reportable Event or the substantial cessation of operations
(within the meaning of Section 4062(e) of ERISA); (ii) the withdrawal of the
Borrower or any of its subsidiaries or any ERISA Affiliate from a Multiple
Employer Plan during a plan year in which it was a substantial employer (as such
term is defined in Section 4001(a)(2) of ERISA), or the termination of a
Multiple Employer Plan; (iii) the distribution of a notice of intent to
terminate or the actual termination of a Plan pursuant to Section 4041(a)(2) or
4041A of ERISA; (iv) the institution of proceedings to terminate or the actual
termination of a Plan by the PBGC under Section 4042 of ERISA; (v) any event or
condition which might constitute grounds under Section 4042 of ERISA
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for the termination of, or the appointment of a trustee to administer, any Plan;
(vi) the complete or partial withdrawal of the Borrower or any of its
subsidiaries or any ERISA Affiliate from a Multiemployer Plan.
cccc. "TOXIC SUBSTANCES" mean any materials which have been shown to have
significant adverse effects on human health or which are subject to regulation
under the Toxic Substances Control Act, 15 U.S.C. xx.xx. 2601 et seq.,
applicable state law, or any other applicable federal, state or local laws now
in force or hereafter enacted relating to toxic substances. "Toxic Substances"
includes, but is not limited to, asbestos, polychlorinated biphenyls (PCBs),
petroleum products, and lead-based paints.
dddd. "UCC" means the Uniform Commercial Code in effect in the various
state or states as set forth in Section 1.4 of this Agreement.
1.2 ACCOUNTING TERMS. Accounting terms used in this Agreement but not
defined in this Agreement shall have the meanings given to them in accordance
with GAAP in effect on the date of this Agreement. Except as otherwise provided
in this Agreement, all financial computations made pursuant to this Agreement
and all financial reports provided to the Lender shall be made in accordance
with GAAP, consistently applied. Except as otherwise provided in this Agreement,
whenever this Agreement refers to a balance sheet, financial statement or the
information contained in a balance sheet or other financial statement, the
Agreement shall be construed to refer to most recent consolidated balance sheet
or other financial statement that Borrower has provided to the Lender.
1.3 USE OF DEFINED TERMS. All terms defined in this Agreement shall have
the same defined meanings when used in any certificate, report or other document
made or delivered in connection with this Agreement, unless otherwise set forth
therein.
1.4 UCC TERMS. Terms that incorporate definitions provided in the Uniform
Commercial Code shall have such meanings as are mandated by the Uniform
Commercial Code in effect in the state or states applicable for the
determination of such meanings. Terms not otherwise defined herein and not
incorporating a definition under the Uniform Commercial Code of any particular
state, but which are defined in the Uniform Commercial Code as adopted by the
Commonwealth of Virginia, shall have the meanings ascribed to them under the
Uniform Commercial Code as adopted by the Commonwealth of Virginia.
ARTICLE 2. LOANS.
2.1 REVOLVING LINE OF CREDIT. The Lender agrees to extend the Revolving
Loan to Borrower, subject to the terms and conditions of this Agreement. Until
the Ending Date, Borrower may borrow, repay and reborrow Advances in accordance
with this Agreement.
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a. ALLOWED AMOUNT OF ADVANCES. The aggregate principal amount of Advances
outstanding at any time shall not exceed the lesser of (i) the Maximum Revolving
Commitment Amount or (ii) the Borrowing Base.
b. MANDATORY PREPAYMENTS. If the principal outstanding under the Revolving
Loan, at any time exceeds the Allowed Amount of Advances, then Borrower shall
make an immediate payment of principal under the Revolving Loan in an amount
sufficient that the principal outstanding under the Revolving Loan will no
longer exceed the Allowed Amount of Advances.
c. PROCEDURE FOR ADVANCES. Borrower may request Advances by telephone
through its employees or agents, as hereinafter provided. Each Advance request
must be received by Lender not later than 1:00 p.m. (Eastern Standard time) on
the date the Advance is to be made and must specify the amount of the Advance.
Lender shall deposit the Advance into Borrower's Operating Account if Borrower
is entitled to the Advance, subject to the terms and conditions of this
Agreement.
2.2 REPAYMENT OF REVOLVING LOAN. Borrower promises to repay the Revolving
Loan, with interest, at the time and in the manner and in accordance with the
terms provided in the Revolving Note.
2.3 USE OF REVOLVING LOAN PROCEEDS. The proceeds of the Revolving Loan
shall be used for working capital and to finance the performance of Government
Contracts, and for no other purpose.
2.4 REVOLVING LOAN FEES. Borrower promises to pay Lender the following fees
in consideration of entering into this Agreement. These fees are in addition to
interest payable under the Revolving Note or Term Notes:
a. an up front fee of $24,500.00, payable on the Closing Date, with an
additional $10,500.00 fee payable if and at the time that (a) any Event of
Default has occurred under this Agreement or (b) any further modification to
this Agreement is agreed to by the parties; provided that the $10,500.00 fee
shall not be due if both events (a) and (b) fail to occur before December 31,
2001.
b. a fee of $2,500.00 for each field examination performed by the Lender or
its agents, for one (1) field examination per year. However, the Lender shall
have the right to perform such additional field examinations at any time, in its
sole discretion. Each additional field examination will be at Lender's own
expense if no Event of Default has occurred and remains uncured at the time of
the additional field examination, but shall be at the Borrower's expense if an
Event of Default has occurred and remains uncured at the time of the additional
field examination.
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If, prior to the maturity date of the Term Notes, the Revolving Loan is
terminated or not renewed on its Ending Date (as the same may have been extended
from time to time by mutual agreement), then, at Lender's option, the entire
unpaid principal balance under the Term Notes,
together with accrued interest and any other charges under the Term Notes, shall
become immediately due and payable.
2.5 REPAYMENT OF TERM LOANS. The Borrower promises to repay the Term Loans,
with interest, at the time and in the manner provided in the Term Notes.
ARTICLE 3. CONDITIONS PRECEDENT TO LOANS.
3.1 CONDITIONS PRECEDENT TO INITIAL ADVANCE. The obligation of the Lender
to make any Advance under the Revolving Loan is subject to the satisfaction (in
the sole judgment of the Lender) of the following conditions on or before the
Closing Date:
a. REPRESENTATIONS AND WARRANTIES; COMPLIANCE. All representations and
warranties made by Borrower in or in connection with this Agreement or any of
the other Loan Documents or otherwise made in writing in connection with this
Agreement shall be true and correct on the Closing Date, and the Borrower shall
have performed all of the promises or undertakings under this Agreement and
satisfied all of the conditions of this Agreement that the Borrower was required
to perform or to satisfy as of the Closing Date.
b. DOCUMENTS CONCERNING THE BORROWER. Borrower shall deliver to the Lender
copies of all documents requested by the Lender, including a complete, correct
and current copy of the Borrower's Articles of Incorporation, certified by the
Secretary of State of the Borrower's state of incorporation; a complete, correct
and current copy of its Bylaws, certified by Borrower's corporate secretary; a
complete, correct and current copy of all resolutions of Borrower's Board of
Directors authorizing the execution, delivery and performance of this Agreement
and of the other Loan Documents, certified by Borrower's corporate secretary;
and appropriate certificates of incumbency for those officers of Borrower
executing this Agreement or any of the other Loan Documents, certified by
Borrower's corporate secretary and president. In addition, the following
documents and materials shall have been delivered to the Lender, and must be
satisfactory to the Lender in form and substance:
1. all supporting documentation with regard to the Borrower, or
the Revolving Loan or Term Loans as the Lender may require;
2. such additional information, instruments, opinions, documents,
certificates and reports relating to the Borrower or the Collateral as the
Lender may deem necessary; and
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3. such lien releases or termination statements as Lender may
deem necessary to remove any Encumbrances on the Collateral.
c. EXECUTED NOTES AND LOAN DOCUMENTS. Borrower shall deliver to the Lender,
fully executed: this Agreement, the Revolving Note, Assignments of Government
Contracts, UCC-1 Financing Statements and such other documents, instruments and
certificates as the Lender may reasonably require, in form and substance
satisfactory to the Lender. All taxes, fees and charges with respect to the
preparation, filing and recording of the Loan Documents shall have been paid by
Borrower.
d. LANDLORD AND MORTGAGEE WAIVERS. The Lender shall have received such
landlord and mortgagee waivers as it shall request with respect to any of the
Borrower's landlords or mortgagees which could claim an interest in any
Collateral as a remedy for a default under any lease, mortgage or deed of trust.
e. FINANCING STATEMENTS. All Financing Statements deemed necessary by the
Lender to perfect its security interest in the Collateral or any other
collateral securing the Loans.
f. LEGAL OPINION. Borrower shall deliver to the Lender a written opinion or
opinions of legal counsel for Borrower dated the Closing Date and addressed to
the Lender, which opinions must be in form and content satisfactory to the
Lender. Without limiting the generality of the foregoing, the opinion or
opinions must address the Borrower's organization, existence, power, good
standing and authority and as to the validity, binding effect and enforceability
of the Loan Documents, including the existence, validity, enforceability,
attachment, perfection, and binding effect of any security interest, lien or
assignment being granted by Borrower or other Person providing Collateral to
Lender with respect to the Collateral.
g. OPERATING ACCOUNT. The Borrower shall establish the Operating Account
with the Lender.
h. COMPLIANCE WITH COVENANTS. Borrower shall establish to Lender's
satisfaction that the Advance will not cause Borrower to cease to comply with
Borrower's financial covenants as set forth hereinafter.
i. BORROWING BASE CERTIFICATE. Borrower shall deliver to the Lender a
Borrowing Base Certificate dated the Closing Date with supporting schedules
attached thereto, including without limitation, current Accounts Receivable and
Accounts Payable reports.
3.2 FUTURE ADVANCES. The obligation of the Lender to make any Advance under
the Revolving Loan subsequent to the Closing Date is further conditional on:
a. CONDITIONS OF FIRST ADVANCE REMAIN SATISFIED. The Lender shall have
determined, in its sole judgment, that the conditions precedent to the first
Advance are satisfied
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as of the Borrowing Date for the subsequent Advance; the Loan Documents shall
remain in full force and effect; and neither the Borrower nor any Person
providing Collateral or a guaranty shall have purported to terminate any of the
Loan Documents or notified Lender of an intention not to perform under any
applicable Loan Document;
b. BORROWING BASE CERTIFICATE. The Lender shall have received a Borrowing
Base Certificate, executed by a duly authorized officer of the Borrower with
supporting updated schedules attached thereto;
c. REPRESENTATIONS AND WARRANTIES. All representations and warranties
contained herein shall be true and correct at the date of such disbursement;
d. NO MATERIAL ADVERSE CHANGE. The Lender shall have determined, in its
sole discretion, that no material adverse change has occurred in the financial
condition of the Borrower from that disclosed in the most recent financial
statements furnished to the Lender prior to the Closing Date; and
e. NO DEFAULT. No Event of Default has occurred and remains uncured, and no
event has occurred or circumstance exists which, with the passage of time or the
giving of notice or both, would constitute an Event of Default.
3.3 LENDER'S RIGHT TO RELY ON COMMUNICATIONS. The Borrower authorizes the
Lender to accept, rely upon, act upon and comply with, any verbal or written
instructions, requests, confirmations and orders of any employee or agent of the
Borrower. The Borrower acknowledges that the transmission between the Borrower
and the Lender of any such instructions, requests, confirmations and orders
involves the possibility of errors, omissions, mistakes and discrepancies and
agrees to adopt such internal measures and operational procedures as Borrower
deems necessary to protect its interests. The Borrower hereby assumes all risk
of loss arising out of: (i) the Lender's acceptance, reliance on, compliance
with or observation of any such instructions, requests, confirmations or orders
that Lender, in good faith, believes are genuine; and (ii) any such errors,
omissions, mistakes and discrepancies, except those caused by the Lender's gross
negligence or willful misconduct. Borrower agrees to indemnify Lender and to
hold Lender harmless for and from all claims, demands, suits, actions,
judgments, decrees, losses or damages, including attorneys fees and expenses,
that Lender may incur as a result of the foregoing events or occurrences for
which the Borrower has assumed the risk of loss.
ARTICLE 4. SECURITY.
4.1 GRANT OF SECURITY INTEREST. As security for (i) the payment of the
Loans, and any other extensions of credit, loans, letters of credit or other
financial accommodations now or hereafter made by the Lender for the benefit of
the Borrower, and (ii) for the performance of the Borrower's obligations under
or in connection with the Swap Agreement or any other interest rate
19
swap agreement as defined in 11 U.S.C. ss.101 by and between the Borrower and
the Lender or any Affiliate of the Lender (whether absolute or contingent and
whether now or hereafter becoming due or owing), and (iii) for any other
liability or obligation of Borrower to Lender whether now or hereafter existing,
of every kind and description, whether or not evidenced by notes or other
Instruments, and whether or not such liability or obligations are direct or
indirect, fixed or contingent, liquidated or unliquidated, the Borrower hereby
assigns, grants and conveys to the Lender a security interest in the Collateral.
Proceeds of the Collateral shall be allocated PARI PASSU among the Loans and any
outstanding interest rate swap agreements. The Borrower further agrees that the
Lender shall have in respect of the Collateral all of the rights and remedies of
a secured party under the Uniform Commercial Code, other applicable law and this
Agreement. The Borrower covenants and agrees to execute and deliver such
financing statements and other instruments and filings or perform any and all
acts as are necessary in the opinion of the Lender to perfect, maintain and
protect the security interest hereby granted. Except as otherwise set forth in
this Agreement, Lender does not authorize and Borrower agrees that it shall not
take any of the following actions without the prior written consent of Lender:
(a) sell, lease, license, transfer, exchange or otherwise dispose of any of the
Collateral; or (b) mortgage, pledge, lien, assign, grant a security interest or
otherwise encumber any of the Collateral.
4.2 COVENANTS REGARDING INVENTORY AND EQUIPMENT. With regard to Collateral
that constitutes Inventory or Equipment, the Borrower further covenants as
follows:
a. The Borrower shall not permit any of the Equipment or other Collateral
to become a fixture to any real estate unless subordination agreements
satisfactory to the Lender are obtained by any owner or mortgagee of such real
estate.
b. The Lender's security interest shall extend and attach to Inventory
which is presently in existence and is owned by the Borrower or in which the
Borrower purchases or acquires an interest at any time and from time to time in
the future, whether such Inventory is in transit or in the Borrower's
constructive, actual or exclusive occupancy or possession or not, and wherever
the same may be located, including, without limitation, all Inventory which may
be located at the premises of the Borrower or upon the premises of any carriers,
forwarding agents, truckers, warehousemen, vendors, selling agents, finishers,
convertors or other third parties who may have possession of the Inventory.
c. Upon sale, exchange, lease or disposition of the Inventory or Equipment,
the security interest of the Lender shall without break in continuity and
without further formality or act continue in and attach to all cash and non-cash
proceeds of such sale, exchange, lease or disposition, including Inventory
returned or rejected by customers or repossessed by either the Borrower or the
Lender. As to any such sale, exchange, lease or disposition, the Lender shall
have all of the rights of an unpaid seller, including stoppage in transit,
replevin, detinue and reclamation.
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4.3 CERTAIN RIGHTS OF THE LENDER. The Lender shall have the right, but not
the obligation, (i) to pay any taxes or levies on the Collateral or any costs to
repair or to preserve the Collateral; and (ii) to cure any defaults by Borrower
on contracts by the Borrower intended to give rise to Accounts. Such payments
and the costs of curing such defaults shall constitute Advances under the
Revolving Note and shall be secured pursuant to this Agreement, irrespective of
whether the Borrower would then be entitled to such Advances under this
Agreement.
4.4 FINANCING STATEMENTS; POSSESSION OF COLLATERAL BY LENDER; CONTROL. At
the request of the Lender, Borrower will execute financing statements,
continuation statements and other documents with respect to the Collateral
pursuant to the Uniform Commercial Code or otherwise, in form satisfactory to
the Lender, and Borrower will pay the cost of filing the same in all public
offices wherever the Lender deems filing to be necessary or desirable. Borrower
agrees that a carbon, photographic, photostatic or other reproduction of this
Agreement or of a financing statement is sufficient as a financing statement,
provided however, that it shall not limit the obligations of Borrower as
previously set forth herein. Borrower grants the Lender the right, and
irrevocably authorizes the Lender, at the Lender's option, to file any or all
such financing statements, continuation statements and other documents pursuant
to the Uniform Commercial Code and otherwise, without Borrower's signature, and
irrevocably appoints the Lender as Borrower's attorney-in-fact to execute any
such statements and documents in Borrower's name and to perform all other acts
which the Lender deems appropriate to perfect and to continue the security
interests conferred by this Agreement.
In addition, upon request of Lender, Borrower shall immediately deliver to
Lender, or authorize and direct any and all Persons in possession of Collateral,
to immediately deliver to Lender all Collateral for which Lender requires
possession to perfect its security interest in such Collateral, properly
endorsed or acknowledged. Furthermore, Borrower shall take all such actions as
may be requested by Lender to allow Lender to exercise control over any
Collateral for the purpose of allowing Lender to perfect its security interest
in Collateral which Collateral may include Deposit Accounts, Investment
Property, Letter-of-Credit Rights and electronic Chattel Paper. Borrower shall
execute and deliver to Lender, and have any other Persons in possession or
control of Collateral, execute and deliver to Lender, control or other
agreements, in form and substance satisfactory to Lender.
4.5 RECORDS OF COLLATERAL; INFORMATION. Borrower at all times will maintain
accurate books and records covering the Collateral. Borrower immediately will
xxxx all books and records with an entry showing the absolute assignment of and
granting of a security interest in all Collateral to Lender, and hereby grants
the Lender the right to audit the books and records of Borrower relating to
Collateral at any time and from time to time. Borrower shall (i) promptly
furnish the Lender with any information with respect to Collateral requested by
Lender; (ii) allow the Lender or its representatives to inspect the Collateral,
at any time and wherever located and in whomever's possession the Collateral may
be, and to inspect and copy, or furnish the Lender or
21
its representatives with copies of all records relating to the Collateral;
(iii) furnish the Lender or its representatives such information as the Lender
may request to identify the Collateral, at the time and in the form requested by
Lender; and (iv) deliver upon request to Lender shipping and delivery receipts
evidencing the shipment of goods and invoices evidencing the receipt of the
Collateral and payment for the Collateral.
4.6 NO RELEASE. No injury to the Collateral, loss or destruction of the
Collateral, failure to perfect or to continue the perfection of Lender's
security interest in the Collateral, or release of Lender's security interest in
the Collateral, or any part of it, shall relieve Borrower of any obligation
under this Agreement or under any of the other Loan Documents. Borrower
expressly waives all defenses based on suretyship or impairment of collateral,
and shall not be released or discharged of any obligation under the Loan
Documents, in whole or in part, by Lender's failure to protect or preserve the
Collateral. No Person, in deciding to enter into this Loan Agreement, has relied
on the execution of this Loan Agreement or the granting of a security interest
in Collateral by any other Person. Each Person comprised by the term Borrower
waives notice of any change in financial condition of any Person liable for the
Loans or any part thereof, and agrees that maturity of the Loans or any part
thereof may be accelerated, extended or renewed one or more times by Lender in
its discretion, without notice to the Person and without affecting Lender's
security interest in the Collateral. Lender shall not be required to bring any
action against any other Person or to resort to any other security or to any
balance of any deposit account as a condition of enforcing its rights against
any of the Collateral.
4.7 ASSIGNMENT OF PAYMENTS UNDER CERTAIN GOVERNMENT CONTRACTS AND
GOVERNMENT ACCOUNTS. On the Closing Date, and thereafter upon the creation of
any Government Contract or Government Account, Borrower shall, at Lender's
option, execute and deliver to the Lender specific Assignments of Payments due
or to become due with respect to any Government Account designated by the
Lender. Borrower shall execute and deliver any and all documents and take any
and all steps necessary to provide the Lender with an Assignment. The separate
Assignment to the Lender of a right to payment under specific Government
Contracts, as contemplated under this Section, shall not be deemed to limit the
Lender's security interest to Payments under those particular Government
Contracts and the related Government Accounts, but rather the Lender's security
interest, as stated above, shall extend to Payments under any and all Government
Contracts and the related Government Accounts and proceeds thereof, now or
hereafter owned or acquired by Borrower.
4.8 ADDITIONAL REMEDY FOR FAILURE TO ASSIGN PAYMENTS. Borrower acknowledges
that the Lender will be irreparably harmed if Borrower fails to assign Payments
due or to become due under any Government Contract when required by this
Agreement, and that the Lender shall have no adequate remedy at law. Therefore,
the Borrower agrees that the Lender shall be entitled to the following remedies,
in addition to all other remedies allowed by law or under this Agreement,
22
a. an injunction compelling Borrower's compliance with the provisions of
this Agreement requiring the Borrower to assign Payments due or to become due
under any Government Contract;
b. the appointment of a receiver, with instructions that the receiver shall
comply, in the Borrower's name and on its behalf, with the provisions of this
Agreement requiring the Borrower to assign Payments due or to become due under
any Government Contract; and
c. such other or further equitable relief as may be necessary or desirable
to secure to Lender the benefits of the rights of an assignee under the
Assignment of Claims Act.
4.9 INDEMNIFICATION; RISK OF LOSS. In any suit, proceeding or action
brought by or against the Lender relating to the Collateral, the Borrower will
defend, indemnify and keep the Lender harmless from and against all expense,
loss or damage (including reasonable attorneys' fees) suffered by reason of any
defense, set-off, counterclaim, recoupment or reduction of liability whatsoever
of account debtor or other obligor of the Borrower. The foregoing obligation of
the Borrower to indemnify the Lender shall survive the payment of the Loans and
the termination of this Agreement, but shall not extend to any suit, proceeding
or action arising out of the Lender's gross negligence or willful misconduct.
In addition, the risk of any loss or damage associated with the Collateral,
including without limitation, any Collateral in the possession of Lender shall
be borne by the Borrower; provided, that Lender shall be responsible for any
loss resulting from Lender's gross negligence or willful misconduct. In the
event that Lender is in possession of Collateral, (a) Borrower shall be liable
to Lender and shall pay to Lender, upon demand, all reasonable expenses,
including the cost of insurance and payment of taxes or other charges, incurred
in the custody, preservation, use or operation of the Collateral, and all such
expenses shall be secured by the Collateral; and (b) Lender may use and operate
the Collateral, as determined in its sole and absolute discretion, (i) to
preserve the Collateral or its value, (ii) as permitted by an order of a court
having competent jurisdiction, or (iii) as otherwise set forth herein or as
previously or hereafter agreed to by Borrower. Notwithstanding anything in this
Agreement to the contrary, Lender shall have no duty and be under no obligation
to collect any income accruing on the Collateral or to preserve any rights
relating to the Collateral.
ARTICLE 5. BORROWER'S REPRESENTATIONS AND WARRANTIES.
To induce the Lender to enter into this Agreement and to extend the
Revolving Loan to Borrower, Borrower makes the following representations and
warranties to the Lender. These representations and warranties are continuing,
and each request for an Advance shall be deemed to be an affirmation of these
representations and warranties as of the date of the most recent Borrowing Base
Certificate submitted prior to the request.
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5.1 CORPORATE AUTHORITY; SUBSIDIARIES. Each Person encompassed by the
definition of Borrower (i) is a corporation duly organized, validly existing,
and in good standing under the laws of its state of incorporation as shown on
SCHEDULE 5.1-1, and the exact legal name of the Borrower is as set forth above
in the definition of Borrower; (ii) is qualified to do business as a foreign
corporation and is in good standing in all jurisdictions where its activities or
ownership of property require such qualification, and (iii) has the full and
unrestricted power and authority, corporate and otherwise, to own, operate and
lease its properties, to carry on its business as currently conducted, to
execute and deliver and perform the Loan Documents, to incur the obligations
provided for herein and therein, and to perform the transactions contemplated
hereby and thereby (including without limitation, the creation of the lien and
security interest in favor of the Lender in the Collateral, the Assignments and
any other Collateral required by this Agreement), all of which have been duly
and validly authorized by all proper and necessary action (all of which actions
are in full force and effect). Borrower has no subsidiaries other than those
previously disclosed in writing to the Lender. Each of the Persons comprised by
the term Borrower maintains it chief executive office at the location stated in
SCHEDULE 5.1-1 attached hereto and made a part hereof.
5.2 APPROVALS. Borrower has provided Lender with a true and accurate
certificate of a Resolution of the Borrower's Board of Directors authorizing the
loan transactions contemplated by this Agreement. No further approval, consent
or other action by the stockholders of Borrower, by any governmental authority
or by any other Person is or will be necessary to permit the valid execution,
delivery or performance by Borrower of this Agreement or any of the other Loan
Documents.
5.3 BINDING EFFECT, NO VIOLATIONS. Each of the Loan Documents, upon its
execution and delivery, will constitute a legal, valid and binding obligation of
Borrower, enforceable against Borrower in accordance with its terms. The
execution, delivery and performance of the Loan Documents will not (i) violate,
conflict with or constitute a default (with due notice, lapse of time or both)
under any law, regulation, order or any other requirement of any court,
tribunal, arbitrator or governmental authority, any terms of the Articles or
Certificate of Incorporation or Bylaws of Borrower, or any contract, agreement
or other arrangement binding upon or affecting Borrower or any of its
properties, or (ii) result in the creation, imposition or acceleration of any
indebtedness or any Encumbrance of any nature upon, or with respect to, Borrower
or any of its properties, except such Encumbrances in favor of Lender.
5.4 LITIGATION. Except as set forth in SCHEDULE 5.4 attached hereto and
made a part hereof, there is no claim, litigation, proceeding or investigation
pending, threatened or reasonably anticipated against or affecting Borrower, its
properties or business, this Agreement, any of the other Loan Documents, or any
of the transactions contemplated hereby or thereby, before or by any court,
tribunal, arbitrator or governmental authority, and there is no possibility of
any judgment, liability or award which reasonably may be expected to result in
any material adverse change in the business, operations, prospects, properties
or assets or condition, financial or otherwise, of Borrower. Borrower is not in
default with respect to any judgment, order, writ,
24
injunction, decree, rule, award or regulation of any court, governmental
instrumentality or agency, commission, board, bureau, arbitrator or arbitration
panel.
5.5 TITLE TO AND CONDITION OF ASSETS. The Borrower has good, valid and
marketable title to all of its properties and assets (whether real or personal)
and has the power to transfer its rights and interest in the Collateral, and
there exist no Encumbrances on any of Borrower's properties or assets, including
without limitation, the Collateral. All personal property of Borrower is in good
operating condition and repair, and is suitable and adequate for the uses for
which it is being used. Upon the execution and delivery of this Agreement, and
upon (a) the filing of financing statements, (b) the Lender's taking possession
of the Collateral, (c) Lender's receipt of a satisfactory acknowledgment from a
Person in possession of any Collateral that such Collateral is in the possession
of such Person and is being held for the benefit of Lender, or (d) Lender
obtaining satisfactory control over any of the Collateral consisting of
Investment Property, Deposit Accounts, Letter-of-Credit Rights or electronic
Chattel Paper or such other Collateral for which control is required to perfect
a security interest (as control is defined in the UCC), as the case may be, the
Lender will have a good, valid and perfected first priority lien and security
interest in the Collateral, subject to no Encumbrance in favor of any other
Person.
5.6 LOAN APPLICATION. The statements made and the documents delivered by
Borrower to the Lender in connection with its application for the Revolving Loan
and Term Loans and in connection with this Agreement and the other Loan
Documents are true, correct and complete, in all material respects, omit no
material facts, are not misleading, and present fairly the condition (financial
or otherwise) of Borrower. Borrower certifies further that the information set
forth in the Borrower Information Statement attached hereto as SCHEDULE 5.1-1 is
true, accurate and complete as of the date of this Agreement.
5.7 NO CHANGE. No change in the business, operations, properties or
condition (financial or otherwise) of Borrower, or any other event, has occurred
since the date of the most recent financial statements submitted to the Lender
by Borrower, which change might adversely affect the ability of Borrower to
perform or comply with all terms, conditions and agreements to be performed or
complied with by Borrower under this Agreement or under any of the other Loan
Documents, or to perform the transactions contemplated by this Agreement or the
other Loan Documents.
5.8 TAXES. Borrower has timely filed all tax returns and reports required
by any governmental authority to be filed by Borrower, and such returns and
reports are true and correct. Borrower has paid all taxes, assessments and other
government charges imposed upon it or its income, profits or properties, or upon
any part thereof, other than those presently payable without penalty or interest
and Borrower has timely filed all claims for refunds to which Borrower is
entitled. The amounts reserved as a liability for income and other taxes payable
in the most recent financial statements of Borrower provided to the Lender are
sufficient for the payment of all unpaid federal, state, county and local
income, excise, property and other taxes, whether or not disputed, of Borrower
accrued for or applicable to the period and on the dates of such
25
financial statements and all years and periods prior thereto, and for which
Borrower may be liable in its own right or as a transferee of the assets of, or
as successor to, any other Person.
5.9 NO DEFAULT. No Event of Default, and no event which with notice, lapse
of time or other condition would constitute an Event of Default, has occurred
and is continuing.
5.10 COMPLIANCE WITH LAWS, GOVERNANCE DOCUMENTS AND AGREEMENTS. Borrower
has complied and is in full compliance with all applicable laws, ordinances,
rules, regulations, orders and other requirements of any governmental authority
or arbitrator, and with all terms and conditions of its Governance Documents,
and with each agreement binding upon or affecting Borrower or any of its
properties. Borrower is not in default with respect to any Debt. Borrower will
take all necessary actions to remain in full compliance with such laws,
ordinances, rules, regulations, orders and any other requirements, the
Governance Documents and all other agreements. Should Borrower be deemed by any
governmental authority or deem itself to be in violation of any relevant law,
ordinance, rule, regulation, orders or other requirement, Governance Document or
agreement, Borrower shall notify the Lender promptly of such violation and take
all necessary remedial actions. Without limiting the generality of the
foregoing, Borrower represents to Lender that: (1) Borrower has previously
disclosed to Lender all of Borrower's activities that involve the use,
manufacturing, storage, disposal, emission, discharge, generation or
transportation of Hazardous Wastes, Toxic Substances or other materials
regulated by Environmental Laws; (2) Borrower has complied and is in full
compliance with all Environmental Laws; (3) Borrower maintains in full force and
effect all permits required by Environmental Laws; and (4) there exists no
pending or threatened litigation, order, ruling, notice or investigation
regarding the Borrower's use, manufacturing, storage, disposal, emission,
discharge generation or transportation of Hazardous Wastes or Toxic Substances
or regarding any violation or alleged violation of any Environmental Laws.
5.11 LICENSES AND CONTRACTS. All franchises, licenses, trademarks, trade
names, copyrights, patents, permits, certificates, consents, approvals,
authorizations, agreements and contracts necessary to operate Borrower's
business as it currently is being operated and to own or lease Borrower's
property have been obtained, are in effect, have been complied with in all
material respects by Borrower, are free from challenge, and are fully assignable
to the Lender for the purpose of securing the Revolving Loan and Term Loans.
Borrower has no knowledge and has not received any notice to the effect that any
product it manufactures or sells, or any service it renders, or any process,
method, know-how, trade secret, part or material it employs in the manufacture
of any product it makes or sells or any service it renders, or the marketing or
use by it or another of any such product or service, may infringe any trademark,
trade name, copyright, patent, trade secret or legally protected right of any
other Person.
5.12 INTELLECTUAL PROPERTY. The Borrower owns all right, title and interest
in and to all Intellectual Property used in and material to the operation of its
business or, for such Intellectual Property that is not owned, possesses
adequate licenses or other legally enforceable rights to use the same. The
Borrower has no reason to believe that any valid basis exists upon which a claim
26
adversely affecting any such Intellectual Property may be asserted against the
Borrower or any subsidiary. To the best knowledge of the Borrower, no Person is
infringing upon the Intellectual Property used by the Borrower or any subsidiary
material to the operation of their respective businesses. The Borrower has taken
appropriate steps to protect the secrecy, confidentiality and value of its and
all subsidiaries' rights in and to such Intellectual Property and to prevent
others from using such Intellectual Property without consent.
5.13 DISCLOSURE. No representation or warranty of Borrower contained in
this Agreement or any of the Loan Documents and no written statement of fact
furnished or to be furnished by Borrower to the Lender pursuant to this
Agreement or any of the Loan Documents, when viewed together, contains or will
contain any untrue statement of a fact material to the financial condition of
Borrower, or omits or will omit to state any material fact necessary in order to
make the statements contained herein or therein, or furnished herewith or
therewith, not misleading.
5.14 TRADE NAME; MERGER. Except as shown in SCHEDULE 5.1-1 attached hereto
and made a part hereof, during the five years immediately preceding the date of
this Agreement: (1) neither the Borrower nor any predecessor of the Borrower has
used any corporate or fictitious name other than its current corporate name; (2)
Borrower has not changed its name, or been the surviving entity in a merger or
acquired any business; and (3) Borrower has not utilized and does not utilize
any trade name or trade names in the conduct of its business.
5.15 PAYMENT OF EMPLOYEES AND SUBCONTRACTORS. Borrower is not in default
with regard to the payment of any employee or subcontractor.
5.16 ERISA Borrower is in compliance with Borrower's obligations under
ERISA. Without limiting the generality of the foregoing:
a. During the five-year period prior to the date on which this
representation is made or deemed made: (i) no Termination Event has occurred,
and, to the best of the Borrower's knowledge, no event or condition has occurred
or exists as a result of which any Termination Event could reasonably be
expected to occur, with respect to any Plan; (ii) no "accumulated funding
deficiency," as such term is defined in Section 302 of ERISA and Section 412 of
the Code, whether or not waived, has occurred with respect to any Plan; (iii)
each Plan has been maintained, operated and funded in compliance with its own
terms and in material compliance with the provisions of ERISA, the Code, and any
other applicable federal or state laws; and (iv) no lien in favor of the PBGC or
a Plan has arisen or is reasonably likely to arise on account of any Plan.
b. The actuarial present value of all "benefit liabilities" under each
Single Employer Plan (determined within the meaning of Section 401(a)(2) of the
Code, utilizing the actuarial assumptions used to fund such Plans), whether or
not vested, did not, as of the last annual
27
valuation date prior to the date on which this representation is made or deemed
made, exceed the current value of the assets of such Plan allocable to such
accrued liabilities.
c. Neither the Borrower nor any of its subsidiaries nor any ERISA Affiliate
has incurred, or, to the best of the Borrower's knowledge, are reasonably
expected to incur any withdrawal liability under ERISA to any Multiemployer Plan
or Multiple Employer Plan. Neither the Borrower, any of its subsidiaries nor any
ERISA Affiliate has received any notification that any Multiemployer Plan is in
reorganization (within the meaning of Section 4241 of ERISA), is insolvent
(within the meaning of Section 4245 of ERISA), or has been terminated (within
the meaning of Title IV of ERISA), and no Multiemployer Plan is, to the best
knowledge of the Borrower, reasonably expected to be in reorganization,
insolvent or terminated.
d. No prohibited transaction (within the meaning of Section 406 of ERISA or
Section 4975 of the Code) or breach of fiduciary responsibility has occurred
with respect to a Plan which has subjected or may subject the Borrower or any of
its subsidiaries or any ERISA Affiliate to any liability under Sections 406,
409, 502(i), or 502(l) of ERISA or Section 4975 of the Code, or under any
agreement or other instrument pursuant to which the Borrower or any of its
subsidiaries or any ERISA Affiliate has agreed or is required to indemnify any
Person against any such liability.
5.17 GOVERNMENT CONTRACTS. Borrower is not currently in default as to the
terms of any Government Contract, and no Government Contract has been canceled
or terminated by the Government in the past ten years. No Government Contract
for which Payments have been assigned to the Lender as Collateral is dependent
on appropriations, except as previously disclosed to the Lender in writing.
5.18 NO DEBARMENT. Borrower is not subject to any pending or threatened
debarment proceedings.
5.19 ASSIGNMENT OF PAYMENTS. Borrower has the right to assign to Lender all
Payments due or to become due under each of Borrower's Government Contracts
(except Payments under Borrower's Government Contract which are not assignable,
as disclosed in writing by Borrower to Lender [a] prior to the execution of this
Agreement or [b] promptly upon execution of each such Government Contract
entered into after the date of this Agreement), and there exists no uncancelled
prior Assignment of Payments under any of Borrower's Government Contracts.
5.20 ASSIGNMENT OF CLAIMS ACT. Borrower is now in compliance and hereby
covenants and agrees that Borrower will in the future comply with any and all of
the requirements of the Assignment of Claims Act, where such statutes are
applicable to any Government Contract, and shall take all such other action as
may be necessary to facilitate the direct assignment to the
28
Lender of the Payments due or to become due under any Government Contract and
the creation and perfection of the Lender's security interest in such Payments.
ARTICLE 6. BORROWER'S AFFIRMATIVE COVENANTS.
Until all obligations of Borrower under this Agreement and the other Loan
Documents are paid in full and performed, Borrower covenants and agrees that it
shall:
6.1 PAYMENT OF REVOLVING LOAN AND TERM LOANS. Punctually make the payments
on the Revolving Loan and the Term Loans at the times and places and in the
manner specified in the Revolving Note and the Term Notes.
6.2 CORPORATE EXISTENCE. Preserve, maintain and keep in full force and
effect its corporate existence and good standing in the jurisdiction of its
incorporation.
6.3 CORPORATE RIGHTS AND FRANCHISES; QUALIFICATION; ORDERLY CONDUCT OF
BUSINESS. Preserve, maintain and keep in full force and effect all franchises,
licenses, permits, certificates, consents, approvals, authorizations, agreements
and contracts material to the operation of Borrower's business as it currently
is being conducted, whether now existing or hereafter granted to or obtained by
Borrower; qualify and remain qualified as a foreign corporation in each
jurisdiction in which such qualification is necessary or desirable in view of
its activities and ownership of property; continue to engage in a business of
the same general type as now conducted by it; and conduct such business in an
orderly, efficient and regular manner consistent with the conduct of its
business prior to the date of this Agreement.
6.4 TAXES, CHARGES AND OBLIGATIONS. Pay and discharge all taxes,
assessments and governmental charges or levies imposed upon it or upon its
income, profits, properties or any part thereof, prior to the date on which
penalties attach thereto, as well as all claims which, if unpaid, might become
an Encumbrance upon any properties of Borrower, and pay, discharge or otherwise
satisfy at or before maturity or before they become delinquent, as the case may
be, all of the indebtedness and other obligations of whatever nature of
Borrower; however, Borrower shall not be required to pay any such tax,
assessment, charge, levy, claim, indebtedness or obligation so long as (i) the
validity thereof is being contested by Borrower in good faith and by proper
proceedings, (ii) Borrower sets aside on its books adequate reserves therefor,
and (iii) in the case where any such tax, assessment, charge, claim or levy
might become an Encumbrance upon any item of the Collateral or any part thereof,
Borrower makes arrangements acceptable to the Lender to secure the payment
thereof.
6.5 MAINTENANCE OF PROPERTY. Preserve and keep all property used or useful
in its business, including without limitation, the Collateral, in good repair,
working order and condition, and from time to time make all necessary or
desirable repairs, renewals and replacements thereof.
29
6.6 INSURANCE. Maintain and keep in full force and effect, with financially
sound and reputable insurance companies acceptable to the Lender, insurance in
such amounts and covering such risks as is usually carried by companies engaged
in similar businesses and owning similar properties in the same general areas in
which Borrower operates (but in any event, casualty insurance covering the
Borrower's tangible personal property and real estate for their full replacement
value and comprehensive public liability insurance coverage with limits of not
less than One Million and 00/100 Dollars ($1,000,000.00) for any one occurrence
and Three Million and 00/100 Dollars ($3,000,000.00) for the aggregate of all
occurrences during a policy period of no more than one (1) year), all such
insurance policies to be in form and substance satisfactory to the Lender. If
requested by the Lender, Borrower shall also procure, maintain and keep in full
force and effect business interruption insurance in an amount, in form and
issued by companies acceptable to the Lender in all respects. All liability
insurance policies shall name the Lender as an additional insured, and all
casualty insurance or business interruption insurance policies shall name Lender
as the loss payee. All insurance policies shall prohibit cancellation (including
cancellation for nonpayment of premium) or reduction of coverage except with
thirty (30) days' prior written notice to and consent of the Lender. At least
thirty (30) days prior to the expiration date of each and every insurance policy
required by this Agreement, Borrower shall obtain and deliver to the Lender a
renewal or substitution policy in form and substance satisfactory to the Lender.
6.7 CONTRACT OBLIGATIONS. Perform in accordance with its terms every
contract, agreement, obligation or other arrangement to which Borrower is a
party or by which it or any of its property is bound including, without limiting
the generality of the foregoing, Government Contracts, except to the extent that
the contract or agreement is inconsistent with this Agreement. In the event that
any default or performance deficiency occurs, Borrower shall notify the Lender
promptly in writing. Borrower shall provide the Lender promptly with copies of
any cure notices or stop work notices it may receive from the Government on any
Government Contract and detail the proposed corrective action. Borrower shall
provide the Lender promptly with copies of any cure notices or stop work notices
it may receive from the Government on any Government Contract and detail the
proposed corrective action.
6.8 COMPLIANCE WITH LAWS. Comply with all applicable laws, regulations,
orders and other requirements of any court, tribunal, arbitrator or governmental
authority, non-compliance with which could have a material adverse effect on the
business, operations, property or condition (financial or otherwise) of
Borrower. Without limiting the generality of the foregoing, Borrower shall: (1)
comply strictly and in all respects with all Environmental Laws affecting the
Borrower or its property; (2) promptly forward to the Lender copies of all
orders, notices, permits, applications or other communications and reports
finding or alleging that Borrower or its property does not comply with any of
the Environmental Laws; (3) promptly provide a proposed response action, or plan
with respect to any failure to comply with Environmental Laws; and (4) defend
the Lender, indemnify the Lender, and hold the Lender harmless from and against
any claims, demands, suits, actions, judgements, decrees, losses or damages,
including attorneys' fees, arising out of the failure of Borrower of any of its
properties to comply with any
30
of the Environmental Laws. To the extent that Federal or state laws, rules,
regulations or orders establish requirements which relate to the disposition of
property, compliance by Lender with such laws, rules or regulations in any
disposition or sale of the Collateral shall not be deemed to adversely effect
the commercially reasonableness of any such sale or disposition, or otherwise
render the sale or disposition commercially unreasonable.
6.9 BOOKS AND RECORDS. Keep and maintain at its chief executive offices
adequate and proper records and books of account, in which complete entries are
made in accordance with GAAP, consistently applied, and in accordance with all
laws, regulations, orders and other requirements of any court, tribunal,
arbitrator or governmental authority, reflecting all financial and other
transactions of Borrower normally and customarily included in records and books
of account of companies engaged in the same or similar businesses and activities
as Borrower.
6.10 ACCESS TO BORROWER'S PROPERTIES, BOOKS AND RECORDS. Permit the Lender
and any agents or representatives thereof to visit and inspect the Borrower's
properties to examine and make abstracts from any of Borrower's books and
records at any and all reasonable times and as often as the Lender or such
agents or representatives may desire, and to discuss the business, operations,
properties and condition (financial and otherwise) of Borrower with any of the
officers, directors, agents or representatives (including without limitation,
the independent certified public accountants) of Borrower. In addition to having
the right to perform field audits of the Borrower's books and records, Lender
shall have the right, but not the obligation, to contact the contracting officer
under any Government Contract directly to determine Borrower's contract
performance status on the Government Contract.
6.11 FINANCIAL AND OTHER STATEMENTS. Furnish to the Lender the following
statements, which must be satisfactory to the Lender in form and substance, at
the times and in the manner specified below:
a. ANNUAL FINANCIAL STATEMENTS. As soon as available, but in no event more
than ninety (90) days after the close of each of the Borrower's fiscal years,
audited financial statements for that year, stating the Borrower's financial
condition. The financial statements shall be prepared by an independent
certified public accountant acceptable to Lender, in accordance with GAAP,
consistently applied. The financial statements must be acceptable to Lender in
form and substance, and shall contain such detail as Lender may require. The
financial statements shall include a consolidated and consolidating balance
sheet as of the end of such fiscal year, a profit and loss statement and a cash
flow statement. Borrower shall also furnish to Lender projections (budgets) for
the upcoming fiscal year, which projections shall include a balance sheet,
profit and loss statement and cash flow statement. If the Borrower comprises a
parent corporation and its subsidiaries, the financial statements shall state
the financial condition of the parent corporation and those subsidiaries on a
consolidated and consolidating basis.
b. ANNUAL OPINION OF ACCOUNTANT. As soon as available but in no event more
than ninety (90) days after the close of each of the
31
Borrower's fiscal years, an opinion of the independent certified public
accountant who prepared the Borrower's annual financial statements. The opinion
shall be acceptable to Lender in form and substance and shall contain no
qualification that is unacceptable to Lender. The opinion shall state also
whether the accountant's examination of the Borrower's financial condition has
revealed the occurrence of an Event of Default or an event that would constitute
an Event of Default with the giving of notice or the lapse of time or both, and,
if such an Event of Default or event has occurred, shall describe such Event of
Default or event in detail satisfactory to Lender.
c. MANAGEMENT LETTERS. Promptly upon receipt thereof, copies of any reports
submitted to the Borrower by independent certified public accountants in
connection with examination of the financial statements of the Borrower made by
such accountants.
d. QUARTERLY STATEMENTS AND CERTIFICATES. As soon as available but in no
event more than forty-five (45) days after the close of each of the Borrower's
fiscal quarters, the Borrower will provide unaudited financial statements which
shall include a balance statement, profit and loss statement and cash flow
statement;
e. BORROWING BASE CERTIFICATES. Borrower shall submit a fully completed
Borrowing Base Certificate not later than twenty (20) days after the end of each
month, stating the Borrowing Base as of the last day of the preceding month. At
Lender's request, the Borrower shall furnish to the Lender such schedules,
certificates, lists, records, reports, information and documents to enable the
Lender to verify the Borrowing Base.
f. MONTHLY REPORTS. Borrower shall deliver to the Lender as soon as
available, but not later than twenty (20) days after the end of each month, an
accounts receivable aging schedule in intervals of not more than 30 days, with
all supporting schedules and attachments.
g. GOVERNMENT CONTRACT AUDITS. Provide written notice to Lender that
Borrower has received the results of any and all audits by the Defense Contract
Audit Agency, or any other government agency, conducted before the award of a
contract, before the final payment on a contract, or at any other time, said
notice to be delivered to Lender within thirty (30) days of Borrower's receipt
of such audit results. Upon request by Lender, Borrower shall deliver all
written results of such audits to Lender with ten (10) days of a request by
Lender.
h. ADDITIONAL REPORTS AND INFORMATION. With reasonable promptness, such
additional information, reports or statements as the Lender may from time to
time request, including without limitation, independent auditor prepared
management letters to be delivered to Lender promptly following Borrower's
receipt of such letters.
i. COMPLIANCE CERTIFICATE. With the Borrowing Base Certificates to be
provided pursuant to this Agreement, Borrower shall deliver a certificate signed
by a principal financial officer of the Borrower stating whether any Event of
Default has occurred, or any event which, upon notice or lapse of time or both,
would constitute an Event of Default. In addition, within
32
forty five (45) days of the end of each of Borrower's fiscal quarters and within
ninety (90) days of each of Borrower's fiscal year ends, Borrower shall deliver
a certificate signed by a principal financial officer of the Borrower stating
that Borrower is in full compliance with the terms and provisions of this
Agreement and the Loan Documents and that no Event of Default has occurred, nor
any event which upon notice or lapse of time or both, would constitute an Event
of Default. At Lender's request, the Borrower shall furnish to the Lender such
schedules, certificates, lists, records, reports, information and documents to
enable the Lender to verify the Compliance Certificate.
6.12 ACCOUNTS. Upon the creation of Accounts, or from time to time as the
Lender may require, Borrower shall deliver to the Lender schedules of all
outstanding Accounts. Such schedules shall be in form and detail satisfactory to
the Lender, shall show the age of such Accounts in intervals not greater than
thirty (30) days, and shall contain such other information and be accompanied by
such supporting documents as the Lender may from time to time prescribe.
Borrower also shall deliver to the Lender copies of Borrower's invoices,
evidences of shipment or delivery and such other schedules and information as
the Lender may reasonably require. The items to be provided under this Section
are to be prepared and delivered to the Lender from time to time solely for its
convenience in maintaining records of the Collateral, and Borrower's failure to
give any of such items to the Lender shall not affect, terminate, modify or
otherwise limit the Lender's security interest granted in the Accounts. Without
limiting the generality of the foregoing, Borrower shall promptly notify the
Lender when Borrower obtains any new Government Contract or Government Account
for which Payments are to be specifically assigned to the Lender pursuant to
this Agreement, and Borrower shall furnish to the Lender, upon request, a copy
of each Government Contract of Borrower and a copy of each amendment thereto or
modification thereof which changes the price of such contract or the amount
funded to pay for such contract, except to the extent that furnishing such
copies may be prohibited by government security regulations. Borrower shall use
its best efforts and shall take any and all steps necessary to collect its
Accounts, including without limitation, the filing and pursuit of legal action
in furtherance of said collection efforts.
6.13 COLLATERAL. Maintain all tangible Collateral in good condition; insure
insurable Collateral for its full replacement cost under an insurance policy
acceptable to Lender that names Lender as loss payee; execute, deliver and file,
or cause the execution, delivery and filing of, any and all documents (including
without limitation, financing statements, continuation statements or other
writings or records), necessary or desirable for the Lender to create, perfect,
preserve, validate or otherwise protect a first priority lien and security
interest in the Collateral; maintain, or cause to be maintained, at all times,
the Lender's first priority lien and security interest in the Collateral;
immediately upon learning thereof, report to the Lender any reclamation, return
or repossession of any goods forming a part of the Collateral and Real Estate
Collateral, any claim or dispute asserted by any account debtor or other obligor
owing an obligation to Borrower, and any other matters affecting the value or
enforceability or collectibility of any of the Collateral and Real Estate
Collateral; defend the Collateral and Real Estate Collateral against all claims
and demands of all Persons at any time claiming the same or any interest therein
adverse to the
33
Lender, and pay all costs and expenses (including attorneys' fees and
expenses) incurred in connection with such defense; at Borrower's sole cost and
expense (including attorneys' fees and expenses), settle any and all claims,
demands and disputes, and indemnify and protect the Lender against any
liability, loss or expenses arising from any such claims, demands or disputes or
out of any such reclamation, return or repossession of goods forming a part of
the Collateral and Real Estate Collateral; however, if the Lender shall so
elect, the Lender shall have the right at all times to settle, compromise,
adjust or litigate all claims and disputes directly with the Customer or other
obligor owing an obligation to Borrower upon such terms and conditions as the
Lender deems advisable, and all costs and expenses thereof (including attorneys'
fees and expenses) shall be incurred for the account of Borrower and shall
constitute a part of the obligations owed to the Lender and secured pursuant to
this Agreement. The Borrower's Equipment, goods and other tangible personal
property set forth in SCHEDULE 6.13 attached hereto and made a part hereof shall
be kept and maintained at the locations set forth in said SCHEDULE 6.13;
Borrower shall not relocate or move the Equipment, goods or other tangible
personal property without the Lender's prior written consent, which shall not be
unreasonably withheld. If Lender consents to the relocation of certain
Equipment, goods or certain other tangible personal property, Borrower shall
execute, and hereby authorizes the execution by Lender of, all documents,
records or financing statements, and Borrower shall take such action as Lender
may request, to assure that Lender's first priority security interest in the
Equipment, goods or other tangible personal property continues to be perfected
under the Uniform Commercial Code or other applicable laws.
6.14 FINANCIAL COVENANTS. Maintain:
a. TANGIBLE NET WORTH. A minimum Tangible Net Worth of Six Million and
00/100 Dollars ($6,000,000.00) at all times from the date of this Agreement.
b. TOTAL LIABILITIES TO TANGIBLE NET WORTH. A ratio of Total Liabilities to
Tangible Net Worth that does not exceed the following:
1. At all times from the date of this Agreement through December
31, 2001, a ratio of 3.00 to 1.00;
2. At all times from January 1, 2002 through December 31, 2002, a
ratio of 2.50 to 1.00; and
3. At all times from January 1, 2003 and thereafter, a ratio of
2.25 to 1.00.
The Total Liabilities to Tangible Net Worth ration shall be measured at the
end of each of Borrower's fiscal quarters, at the end of each of Borrower's
fiscal years and at such other times as Lender may require as determined by
Lender in its sole and absolute discretion.
34
c. INTEREST COVERAGE RATIO. A minimum Interest Coverage Ratio of 2.0 to 1.0
to be measured at the end of each of Borrower's fiscal quarters, at the end of
each of Borrower's fiscal years and at such other times as Lender may require as
determined by Lender in its sole and absolute discretion.
d. FUNDS FLOW COVERAGE RATIO. A Funds Flow Coverage Ratio of not less than
1.5 to 1.0 at all times. This ratio shall be tested on a rolling four-quarters
basis at the end of each of Borrower's fiscal quarters, at the end of each of
Borrower's fiscal years and at such other times as Lender may require as
determined by Lender in its sole and absolute discretion
Compliance with financial covenants above will be measured on a rolling four
quarter basis. Unless otherwise expressly provided in this Agreement, if the
Borrower comprises a parent corporation and its subsidiaries, the covenants
herein relating to the financial condition of the Borrower refer to the
financial condition of the parent corporation and those subsidiaries stated on a
consolidated and consolidating basis.
6.15 NOTICE OF LITIGATION, DEFAULT AND LOSS. Give immediate notice to the
Lender upon the occurrence of any Event of Default or event which with notice or
lapse of time or otherwise would constitute an Event of Default, and of any loss
or damage to any of the Collateral. Borrower also shall give immediate notice to
the Lender of any action, suit or proceeding at law or in equity or by or before
any governmental instrumentality or agency (domestic or foreign), commission,
board, bureau, arbitrator or arbitration panel which, if adversely determined,
could materially impair or affect the right of Borrower to carry on its business
substantially as now conducted or could materially affect its respective
business, operations, prospects, properties, assets (including the Collateral)
or condition, financial or otherwise. Immediately upon becoming aware that the
holder of any Debt or Encumbrance has given notice or
taken any action with respect to a claimed breach, default or event of default,
a written notice shall be given by Borrower to Lender specifying the notice
given or action taken by such holder and the nature of the claimed breach,
default or event of default by the Borrower thereunder, and the action being
taken or proposed to be taken with respect thereto.
6.16 PROXY STATEMENTS, Etc. Promptly after the sending or filing thereof,
copies of all proxy statements, financial statements and reports which the
Borrower sends to its stockholders, and copies of all regular, periodic and
special reports, and all registration statements which the Borrower files with
the Securities and Exchange Commission or any governmental authority which may
be substituted therefor, or with any national securities exchange.
6.17 ERISA. Give prompt notice to Lender of any of the following: (i)
of any event or condition, including, but not limited to, any Reportable Event,
that constitutes, or might reasonably lead to, a Termination Event; (ii) with
respect to any Multiemployer Plan, the receipt of notice as prescribed in ERISA
or otherwise of any withdrawal liability assessed against the Borrower, any of
its subsidiaries or any of its ERISA Affiliates, or of a determination that any
Multiemployer Plan is in reorganization or insolvent (both within the meaning of
Title IV of
35
ERISA); (iii) the failure to make full payment on or before the due
date (including extensions) thereof of all amounts which the Borrower or any of
its subsidiaries or ERISA Affiliate is required to contribute to each Plan
pursuant to its terms and as required to meet the minimum funding standard set
forth in ERISA and the Code with respect thereto; or (iv) any change in the
funding status of any Plan that could have a material adverse effect on the
Borrower's financial condition; together, with a description of any such event
or condition or a copy of any such notice and a statement by the principal
financial officer of the Borrower briefly setting forth the details regarding
such event, condition, or notice, and the action, if any, which has been or is
being taken or is proposed to be taken by Borrower with respect thereto.
Promptly upon request, the Borrower shall furnish to Lender such additional
information concerning any Plan as may be reasonably requested, including, but
not limited to, copies of each annual report/return (Form 5500 series), as well
as all schedules and attachments thereto required to file with the Department of
Labor or the Internal Revenue Service pursuant to ERISA and the Code,
respectively, for each "plan year" (within the meaning of Section 3(39) of
ERISA). Such notice shall be given in any event within five (5) business days
after the occurrence of any event that Borrower is required to report to Lender
under this clause.
6.18 PLACE OF BUSINESS; LOCATION OF RECORDS. Each of the Persons comprised
by the term Borrower shall maintain its chief executive office, and the office
where its records are kept, at its respective address stated in SCHEDULE 5.1-1
attached hereto and made a part hereof. The Borrower shall provide Lender with
fourteen (14) days' advance written notice of any change in the location of its
chief executive office or the office at which its records are kept.
6.19 PAYMENTS TO BORROWER. If Borrower has assigned Payments under any
Government Contract to the Lender, remit to the Lender promptly any Payments
erroneously sent directly to Borrower by the Government, and until so remitted,
hold those Payments in trust for the Lender.
6.20 DEPOSITORY ACCOUNTS. Maintain primary operating and depository
accounts with Lender, including, without limitation, the Operating Account.
ARTICLE 7. BORROWER'S NEGATIVE COVENANTS.
Until all obligations of Borrower under this Agreement and the other Loan
Documents are paid in full and performed, Borrower covenants and agrees that it
shall not, unless the Lender otherwise consents in advance in writing:
7.1 INDEBTEDNESS AND CONTINGENT OBLIGATIONS. Contract for any additional
Debt; or agree to assume, guarantee, indorse or otherwise in any way be or
become responsible or liable, directly or indirectly, for the obligation of any
other Person. However, notwithstanding the foregoing sentence, Borrower may
incur trade debt in the ordinary course of business.
36
7.2 ENCUMBRANCES. Create, incur, assume or suffer to exist any Encumbrance
upon any of its properties or assets (including without limitation, the
Collateral), whether now owned or hereafter acquired.
7.3 FUNDAMENTAL CHANGES. Amend its Articles or Certificate of Incorporation
by any amendment which would adversely affect Borrower's ability to perform or
comply with any of the terms, conditions or agreements to be performed or
complied with by Borrower hereunder or to perform any of the transactions
contemplated hereby; change its state of incorporation; change its fiscal year,
corporate name or key management; have management of Borrower directly or
indirectly sell, assign, transfer, encumber or otherwise convey more than five
percent (5%) of the stock in the Borrower owned by Borrower's management;
convert its organizational form into another entity form or establish any new
entity to perform the business or similar business of Borrower; reorganize,
consolidate or merge with any other entity, whether in one transaction or a
series of related transactions.
7.4 ACQUISITIONS. Purchase, lease or otherwise acquire the assets,
business, goodwill or securities of any other Person, including, without
limitation, shares of stock in corporations, partnership interests in general or
limited partnerships or membership interests in limited liability companies, or
acquire any other business, except that Borrower may own notes and other
receivables owned in the ordinary course of business.
7.5 TRANSFER OF ASSETS. Sell, lease, assign, pledge or otherwise dispose of
any of its properties, stock or assets (including without limitation, the
Collateral), whether now owned or hereafter acquired, except in the ordinary
course of business and for fair market value; provided, that Borrower may sell
any of its properties, stock or assets which are not part of the Collateral
subject to (a) each such sale being conducted in the ordinary course of
business, for fair market value, (b) each such sale being of property having a
fair market value of no more than $100,000.00, and (c) all sales for any given
fiscal year of Borrower being not b in excess of $500,000, in the aggregate.
7.6 INVESTMENTS. Purchase or hold any stock, or evidence of indebtedness of
any other Person or entity except (a) investments in direct obligations of the
United States Government, repurchase agreements, mutual funds or certificates of
deposit of United States commercial banks insured by the Federal Deposit
Insurance Corporation, or (b) notes evidencing the indebtedness of loans to
employees which do not exceed $150,000 in the aggregate.
7.7 LOANS. Make loans or advances to any Person or Persons that exceed in
the aggregate the sum of Fifty Thousand and 00/100 Dollars ($50,000.00)
outstanding at any time, except reasonable advances for business expenses of
Borrower's employees that would be reimbursable under Borrower's existing
expense reimbursement policy.
7.8 GUARANTY. Guaranty or provide surety or pledge or hypothecate assets
for the obligation of any other Person or Persons.
37
7.9 REPURCHASE OF SECURITIES. Purchase, redeem or otherwise acquire any of
its own capital stock or purchase, acquire, redeem, retire or make any payment
on account of the principal of any indebtedness of Borrower, except at the
stated maturity of such indebtedness, and except payments of indebtedness
incurred under this Agreement.
7.10 USE OF PROCEEDS. Use, or allow the use of, the proceeds of the
Revolving Loan for any purpose which would cause this Agreement to violate any
Regulations of the Board of Governors of the Federal Reserve System; or for any
purpose other than the purposes or purposes specified hereinabove.
7.11 OTHER AGREEMENTS. Enter into any agreement or undertaking containing
any provision which would be violated or breached by Borrower's performance of
its obligations under the Loan Documents.
7.12 SALE AND LEASEBACK. Enter into any arrangement whereby Borrower sells
or transfers all or any substantial part of its fixed assets then owned by it
and thereupon, or within one (1) year thereafter, rents or leases the assets so
sold or transferred from the purchaser or transferor (or their respective
successors in interest). A substantial part of Borrower's fixed assets shall
mean the sale of (a) more than One Hundred Thousand and 00/100 Dollars
($100,000.00) of Borrower's fixed assets at any one time or in any one or more
related transactions or (b) more than Five Hundred Thousand and 00/100 Dollars
($500,000.00) of Borrower's fixed assets in any fiscal year of Borrower.
7.13 CAPITAL EXPENDITURES. Make capital expenditures in excess of Two
Million and 00/100 Dollars ($2,000,000.00) in any fiscal year of Borrower.
7.14 DIVIDENDS. Declare or pay dividends on account of any class of stock
in the Borrower, or make any distribution of assets to Borrower's stockholders,
whether in cash, assets or obligations of Borrower.
7.15 TRANSACTIONS WITH AFFILIATES. Except as specifically permitted by the
terms of this Agreement, enter into any transaction, including without
limitation, the purchase, sale or exchange of property or the rendering of any
service, with any Affiliate, except in the ordinary course of and pursuant to
the reasonable requirements of the Borrower's business and upon fair and
reasonable terms no less favorable to the Borrower than would be applicable in a
comparable arm's-length transaction with a Person not an Affiliate.
ARTICLE 8. COLLECTION, DEPOSIT AND ASSIGNMENT OF PAYMENTS.
8.1 CASH COLLATERAL ACCOUNT. Upon request of Lender, Borrower shall cause
all Payments to be deposited into the Cash Collateral Account. In furtherance of
this covenant, Borrower shall instruct all Customers to make all Payments either
by electronic funds transfer
38
directly to the Cash Collateral Account or by check to a post office box or
other collection facility under Lender's control for deposit into the Cash
Collateral Account. If any Payments are made directly to the Borrower or
otherwise come into the Borrower's possession, the Borrower shall not
commingle any such Payment with the Borrower's other funds or property, but
shall hold the Payment separate and apart in trust for the Lender and shall
promptly deliver the Payment to the Lender (appropriately endorsed, if the
Payment is in the form of a check) for deposit into the Cash Collateral
Account. Interest (if any) earned on sums on deposit in the Cash Collateral
Account shall be added to the Cash Collateral Account. The Borrower hereby
appoints the Lender and any officer, employee or agent of the Lender as the
Lender may from time to time designate as attorneys-in-fact for the Borrower
to endorse and sign the name of the Borrower on all checks, drafts, money
orders or other Items delivered to the Lender for deposit into the Cash
Collateral Account. The Cash Collateral Account shall constitute part of the
Collateral, and funds on deposit in the Cash Collateral Account shall be
disbursed to the Borrower only by a disbursement to the Operating Account as
provided hereafter in this Agreement.
8.2 RELEASE OF FUNDS FROM CASH COLLATERAL ACCOUNT. Except as otherwise may
be agreed in writing by Borrower and Lender, if no Event of Default has occurred
and remains uncured, and there exists no event, occurrence or circumstance that,
with the giving of notice or the passage of time or both, would constitute an
Event of Default, funds on deposit in the Cash Collateral Account shall be
withdrawn by the Lender on the Business Day next following the day on which the
Lender considers such funds to be collected funds, and shall be applied as
follows:
a. late charges under the Revolving Note or Term Notes in such order
as Lender may determine;
b. reimbursement of any amounts advanced by the Lender and not repaid
to cure defaults by the Borrower;
c. any unpaid fees due and payable under the Agreement;
d. accrued interest due and payable under the Revolving Note;
e. any payment due under the Term Notes;
f. unpaid principal indebtedness under the Revolving Note;
g. at Lender's option, principal indebtedness under the Term Notes not
yet due and payable; and
h. the balance, if any, by deposit to the Operating Account.
39
However, if an Event of Default has occurred and remains uncured, Payments
received by Lender shall be applied as the Lender may determine in its sole
discretion. Borrower retains sole responsibility for assuring that Borrower's
Operating Account contains sufficient funds to pay any Items that may be
presented for payment from the Operating Account.
ARTICLE 9. EVENTS OF DEFAULT AND REMEDIES.
9.1 EVENTS OF DEFAULT. The occurrence of any one or more of the following
events shall constitute an Event of Default under this Agreement:
a. Borrower shall fail to pay, when due, any sum payable under the
Revolving Note or the Term Notes, and such failure shall continue for three (3)
Business Days after Lender has sent Borrower written notice of the nonpayment;
or
b. any representation or warranty made by or on behalf of Borrower herein
or in any of the other Loan Documents which, in the Lender's judgment, shall
prove to have been materially incorrect or misleading or breached in any respect
on or as of any date as of which made; or
c. Borrower fails to make timely payment of any amount owed by the Borrower
under the Swap Agreement or otherwise to perform its obligations under the Swap
Agreement at the time and in the manner required by the Swap Agreement; or
d. a decree or order for relief of Borrower shall be entered by a court of
competent jurisdiction in any involuntary case involving Borrower under any
bankruptcy, insolvency or similar law now or hereafter in effect, or a receiver,
liquidator or other similar agent for Borrower or for any substantial part of
Borrower's assets or property shall be appointed, or the winding up or
liquidation of Borrower's affairs shall be ordered, or any action by any
creditor (other than the Lender) of Borrower preparatory to or for the purpose
of commencing any such involuntary case, appointment, winding up or liquidation
shall be taken, and such proceeding shall not have been dismissed within thirty
(30) days after the date it commenced; or
e. Borrower shall commence a voluntary case under any bankruptcy,
insolvency or similar law now or hereafter in effect, or Borrower shall consent
to the entry of an order for relief in an involuntary case under any such law or
to the appointment of or taking possession by a receiver, liquidator or other
similar agent for Borrower or for any substantial part of Borrower's assets or
property, or Borrower shall make any general assignment for the benefit of
creditors, or Borrower shall take any action preparatory to or otherwise in
furtherance of any of the foregoing, or Borrower shall fail generally to pay its
debts as such debts come due; or
f. there shall be a default or event of default under any indebtedness or
obligation of Borrower to any third party in excess of Fifty Thousand and 00/100
($50,000.00) for a single third party or in excess of One Hundred Thousand and
00/100 Dollars ($100,000.00) in the
40
aggregate, that causes that third party to declare such indebtedness or other
obligation due prior to its scheduled date of maturity; or
g. one or more judgments or decrees in an amount of more than Fifty
Thousand and 00/100 Dollars ($50,000.00) for any one judgment or in the amount
of more than One Hundred Thousand and 00/100 Dollars ($100,000.00) for judgments
in the aggregate shall be entered against Borrower (not paid or fully covered by
insurance) and all such judgments or decrees have not been vacated, discharged,
stayed or bonded pending appeal within sixty (60) days from the entry thereof,
or any attachment or garnishment shall be issued against Borrower or Borrower's
property which is for an amount in excess of Fifty Thousand and 00/100 Dollars
($50,000.00); or
h. any material change in the business, operations, property, assets or
condition (financial or otherwise) of Borrower shall occur which adversely
affects the ability of Borrower to meet and carry out its obligations under this
Agreement or any of the other Loan Documents or to perform the transactions
contemplated herein or thereby, the materiality of such change to be determined
by the Lender in its sole discretion; or
i. any investigative proceeding, audit or other action shall be initiated
by or on behalf of any Customer, which is based upon a claim or contest with
respect to any Government Contract or Government Account that, if adversely
determined to the Borrower, would have a material adverse effect on the
Borrower's financial condition, as determined by the Lender in its sole
discretion; or
j. the issuance to the Borrower of any cure notice, show-cause notice, or
notice of whole or partial termination, for default or alleged default, under
any contract which is either a Government Contract or is a subcontract (at any
tier) which is related to a contract between a third party and the Government;
or
k. with respect to the Borrower, the occurrence of any debarment or
suspension from contracting or subcontracting with the Government; or
l. any material default by Borrower occurs under the terms of any
Government Contract or any breach in Borrower's performance obligations occurs
under any Government Contract; or
m. any Government Contract is terminated for default; or
n. any loss, theft, damage or destruction of any material portion of the
Collateral for which there is either no insurance coverage or for which, in the
opinion of the Lender, there is insufficient insurance coverage; or
41
o. More than five percent (5%) of the total stock owned by Borrower's
management and their family members is directly or indirectly sold, assigned,
transferred, encumbered or otherwise conveyed without the prior written consent
of the Lender; or
p. any of the following events or conditions shall occur: (1) any
"accumulated funding deficiency," as such term is defined in Section 302 of
ERISA and Section 412 of the Code, whether or not waived, shall exist with
respect to any Plan, or any lien shall arise on the assets of the Borrower or
any of its subsidiaries or any ERISA Affiliate in favor of the PBGC or a Plan;
(2) a Termination Event shall occur with respect to a Single Employer Plan,
which, in the Lender's opinion, is likely to result in the termination of such
Plan for purposes of Title IV of ERISA; (3) a Termination Event shall occur with
respect to a Multiemployer Plan or Multiple Employer Plan, which in the Lender's
opinion, is likely to result in (i) the termination of such Plan for purposes of
Title IV of ERISA, or (ii) the Borrower or any of its subsidiaries or any ERISA
Affiliate incurring any liability in connection with a withdrawal from,
reorganization of (within the meaning of Section 4241 of ERISA), or insolvency
or (within the meaning of Section 4245 of ERISA) such Plan; or (4) any
prohibited transaction (within the meaning of Section 406 of ERISA or Section
4975 of the Code) or breach of fiduciary responsibility shall occur which may
subject the Borrower or any of its subsidiaries or any ERISA Affiliate to any
liability under Section 406, 409, 502(i), or 502(l) of ERISA or Section 4975 of
the Code, or under any agreement or other instrument pursuant to which the
Borrower or any of its subsidiaries or any ERISA Affiliate has agreed or is
required to indemnify any Person against any such liability; or
q. Borrower or Lender shall receive at any time while this Agreement or the
other Loan Documents are in effect a search report from any person or entity
searching the financing statement and other records of any Federal, state or
local filing office or any other written evidence which indicates that the
Lender's security interest is not a first priority perfected security interest
against the Collateral, senior to all security and other interests reflected in
such report or written evidence.
r. Borrower or any other Person standing as a Guarantor for the Loans or
providing security for the Loans shall fail to observe or perform any other
term, covenant or agreement contained in this Agreement or in any other Loan
Document or in any other agreement (including, without limitation, any Swap
Agreement) with the Lender or any of Lender's Affiliates to be observed or
performed on its part and such default shall continue unremedied for a period of
ten (10) Business Days after written notice of the existence of such default is
given by Lender. The cure period described in this paragraph is inapplicable to
the Events of Default listed in the paragraphs above.
If one of the foregoing events or circumstances occurs to which a cure period
applies, Lender will not exercise its rights and remedies under this Agreement
to collect the Loans except as Lender reasonably deems necessary to protect its
interests in the Collateral, but Lender shall not be required to make any new
Loans or other financial accommodations unless and until the default is timely
cured under this Agreement. Notwithstanding anything in this Agreement to the
42
contrary, any right to cure a default is applicable only to defaults for which a
cure period has been provided, and only to the occurrence of a single default
during any one calendar year period. Borrower shall have no right to cure more
than one default in any one calendar year period, nor shall Borrower have the
right at any time to cure any default for which no cure period has been
provided.
9.2 RIGHTS AND REMEDIES OF THE LENDER. Upon the occurrence of any Event of
Default, the Lender may, at its option, exercise any one or more of the
following rights and remedies:
a. Declare this Agreement and the Lender's obligation to make or extend any
Advances on the Revolving Loan or Term Loans to be terminated, and declare the
entire unpaid principal amounts of the Revolving Loan and Term Loans, all
interest accrued and unpaid thereon, and all other amounts payable under this
Agreement and the other Loan Documents to be accelerated, and to be immediately
due and payable (except that upon the occurrence of an Event of Default arising
out of voluntary or involuntary bankruptcy proceedings in which the Borrower is
the debtor, such acceleration shall occur automatically and immediately without
any declaration or other action on the part of the Lender) whereupon the
Revolving Loan and Term Loans, all such accrued interest, and all such amounts
shall become and be immediately due and payable, without presentment, demand,
protest or further notice of any kind, all of which are hereby expressly waived
by Borrower, anything contained herein or in any of the other Loan Documents to
the contrary notwithstanding;
b. Take possession or control of, store, lease, operate, manage, sell or
otherwise dispose of all or any part of the Collateral in accordance with the
remedies provided to secured parties under the Uniform Commercial Code, this
Agreement, the Loan Documents or other applicable law. In taking possession of
the Collateral, the Lender may enter the Borrower's premises and otherwise
proceed without legal process, and the Borrower shall on the Lender's demand,
promptly assemble and make the Collateral available to the Lender at a place
designated by the Lender. The Lender shall be entitled to immediate possession
of all books and records evidencing or pertaining to any of the Collateral. In
the event of any sale or other disposition of the Collateral, Lender may
disclaim any warranty relating to title, possession, quiet enjoyment or any
other warranty of the like, including without limitation, any warranty of
merchantability or fitness for a particular purpose.
c. Notify any or all Customers to make any Payments due to Borrower from
such Customers directly to the Lender and render performance to or for the
benefit of Lender of any obligations of such Customer(s) to Borrower. To
facilitate direct collection, Borrower hereby appoints the Lender and any
officer or employee of the Lender, as the Lender may from time to time
designate, as attorney-in-fact for Borrower to (i) receive, open and dispose of
all mail addressed to Borrower and take therefrom any Payments on or proceeds of
Accounts; (ii) take over Borrower's post office boxes or make such other
arrangements, in which Borrower shall cooperate, to receive Borrower's mail,
including notifying the post office authorities to change
43
the address for delivery of mail addressed to Borrower to such address as the
Lender shall designate; (iii) endorse the name of Borrower in favor of the
Lender upon any and all checks, drafts, money orders, notes, acceptances or
other evidences of payment or Collateral that may come into the Lender's
possession; (iv) sign and endorse the name of Borrower on any invoice or xxxx of
lading relating to any of the Accounts, on verifications of Accounts sent to any
Customer, to drafts against any Customer, to assignments of Accounts, and to
notices to any Customer; and (v) do all acts and things necessary to carry out
this Agreement and the transactions contemplated hereby, including signing the
name of Borrower on any instruments required by law in connection with the
transactions contemplated hereby and on financing statements as permitted under
the Uniform Commercial Code of any appropriate state. Borrower hereby ratifies
and approves all acts of such attorneys-in-fact, and neither the Lender nor any
other such attorney-in- fact shall be liable for any acts of commission or
omission, or for any error of judgment or mistake of fact or law of any such
attorney-in-fact. This power, being coupled with an interest and given to secure
an obligation, is irrevocable so long as the Revolving Loan or Term Loans remain
unsatisfied, or any Loan Document remains effective, as solely determined by the
Lender. Lender shall have no obligation or duty to pursue any Person other than
Borrower for the amounts owing under or in connection with the Revolving Loan,
Term Loans, this Agreement or the other Loan Documents, including without
limitation any guarantors or Persons pledging property to secure the Loans. To
the extent such rights may now or hereafter exist, Borrower waives the right to
require Lender to pursue any Persons other than Borrower to pay the amounts
owing under the Revolving Note, Term Notes, Loan Agreement or other Loan
Documents;
d. In the Lender's own name, or in the name of Borrower, demand, collect,
receive, xxx for and give receipts and releases for, any and all amounts due on
Accounts, but the Lender shall not, under any circumstances, be liable for any
error or omission or delay of any kind occurring in the settlement, collection
or payment of any Accounts or any instrument received in payment thereof or for
any damage resulting therefrom;
e. Endorse as the agent of Borrower any Chattel Paper, documents or
Instruments forming all or any part of the Collateral;
f. Make formal application for the transfer of all of Borrower's permits,
licenses, approvals, agreements and the like relating to the Collateral or the
Real Estate Collateral or to Borrower's business to the Lender or to any
assignee of the Lender or to any purchaser of any of the Collateral or the Real
Estate Collateral;
g. Obtain appointment of a receiver for all or any of the Collateral or the
Real Estate Collateral, Borrower hereby consenting to the appointment of such a
receiver and agreeing not to oppose any such appointment. Any receiver so
appointed shall have such powers as may be conferred by the appointing authority
including any or all of the powers, rights and remedies which the Lender is
authorized to exercise by the Loan Documents, and shall have the right to
44
incur such obligations and to issue such certificates therefor as the appointing
authority shall authorize;
h. Take any other action which the Lender deems necessary or desirable to
protect and realize upon its security interest in the Collateral or the Real
Estate Collateral;
i. File any legal action or lawsuit and obtain a judgement for any and all
amounts owing under the Revolving Note, the Terms Notes, this Agreement or the
other Loan Documents, and in conjunction with any such action, Lender may pursue
any ancillary remedies provided by law, including without limitation,
attachment, garnishment, execution and levy.
j. Borrower acknowledges that any failure to comply with its obligation
regarding the Collateral, including (without limiting the generality of the
foregoing) granting of Assignments and collection of the Accounts, shall cause
irreparable harm to the Lender for which the Lender has no adequate remedy at
law, and agrees that the Lender shall be entitled to specific performance, an
injunction or other equitable relief to enforce the Borrower's obligations under
this Agreement; and
k. In addition to the foregoing, and not in substitution therefor, exercise
any one or more of the rights and remedies exercisable by the Lender under other
provisions of this Agreement, under any of the other Loan Documents, or provided
by applicable law (including, without limiting the generality of the foregoing,
the Uniform Commercial Code), including without limitation, generally enforcing
any or all of Borrower's rights and remedies against any Customers; provided,
that Lender shall be under no obligation to do so.
9.3 APPLICATION OF PROCEEDS. Any proceeds from the collection or sale or
other disposition of the Collateral shall be applied in the following order of
priority:
FIRST, to the payment of all expenses of retaking, holding, preparing
for disposition, processing, collecting, storing, leasing, operating, managing,
selling or disposing of the Collateral, and to the payment of all sums which the
Lender may be required or may elect to pay, if any, for taxes, assessments,
insurance and other charges upon such Collateral or any part thereof, and of all
other payments which the Lender may be required or authorized to make under any
provision of this Agreement or of any other Loan Document (including in each
such case legal costs and attorneys' fees and expenses);
SECOND, to the payment of all obligations on the Revolving Loan or
Term Loans under this Agreement, and under the other Loan Documents, and to the
payment of any other obligations due to the Lender, in such order as the Lender
may determine in its sole discretion; and
45
THIRD, if required by the UCC or other applicable law, to the
satisfaction of obligations secured by any subordinate security interest in or
other subordinate lien on the Collateral or as otherwise directed by a court of
competent jurisdiction; and
FOURTH, to the payment of any surplus then remaining to Borrower;
provided that Borrower shall be liable for any deficiency if the proceeds of the
Collateral are insufficient to satisfy all obligations due to the Lender.
9.4 COLLECTION/ENFORCEMENT COSTS. Borrower shall pay all costs and expenses
incurred by Lender in connection with the enforcement of its rights under this
Agreement and the other Loan Documents, including without limitation, legal
costs and attorneys' fees (whether or not suit is instituted), paralegal and
expert witness fees and costs, and arbitration fees and costs, and in connection
with the collection of any sums from Borrower.
ARTICLE 10. MISCELLANEOUS PROVISIONS.
10.1 ADDITIONAL ACTIONS AND DOCUMENTS. Borrower shall take or cause to be
taken such further actions, shall execute, deliver and file or cause to be
executed, delivered and filed such further documents and instruments, and shall
obtain such consents as may be necessary or as the Lender may reasonably request
in order fully to effectuate the purposes, terms and conditions of this
Agreement and the other Loan Documents, whether before, at or after the closing
of transactions contemplated hereby and thereby or the occurrence of an Event of
Default hereunder, including without limitation, executing such documents and
taking such further actions as requested by Lender to evidence or perfect the
security interest(s) granted in accordance with this Agreement, to maintain a
first priority security interest in the Collateral for the benefit of Lender, or
to effectuate the rights of Lender hereunder.
10.2 EXPENSES. Borrower shall, whether or not the transactions contemplated
hereby are consummated, (i) reimburse the Lender and save the Lender harmless
against liability for the payment of all out-of-pocket expenses arising in
connection with: (a) the preparation, execution, delivery or filing of this
Agreement or any of the Loan Documents; or (b) the administration or enforcement
of this Agreement or any of the Loan Documents; or (c) the preservation or
exercise of any rights (including the right to collect and dispose of the
Collateral) under this Agreement or any of the other Loan Documents; and (ii)
pay and hold the Lender and each subsequent holder of the Note harmless from and
against, any and all present and future stamp taxes or similar document taxes or
recording taxes and any and all charges with respect to or resulting from any
delay in paying, or failure to pay, such taxes. Without limiting the generality
of the foregoing, the expenses covered by this paragraph include the Lender's
legal fees, the costs of audits or examinations conducted by the Lender's
employees and any arbitration fees or court costs.
10.3 NOTICES. Except as may otherwise be provide herein, all notices,
demands, requests or other communications provided for herein or in the other
Loan Documents shall be in writing and shall be deemed to be effective one (1)
day after dispatch if sent by Federal Express
46
or any other commercially recognized overnight delivery service or two (2) days
after dispatch if sent by registered or certified mail, return receipt requested
and addressed as follows:
If to Borrower:
On-Site Sourcing, Inc.
0000 Xxxxx Xxxxxxxxxx Xxxxxx, 0xx Xxxxx
Xxxxxxxxx, Xxxxxxxx 00000
Attention: Xxxxxxxxxxx X. Xxxxxx, President and Chief Executive Officer
If to Lender:
First Union National Bank
Portfolio Management
0000 Xxxxx Xxxxxx Xxxx
XxXxxx, XX 00000
Attention: Xxxxxx Xxxxxx, Vice President
With copy to:
Xxxxxx X. Xxxxxx
Bean, Xxxxxx & Xxxxxx, P.C.
0000 X. 00xx Xxxxxx, Xxxxx 000
Xxxxxxxxx, Xxxxxxxx 00000
If the Borrower comprises more than one Person, notice to the Borrower at the
address specified above in this section for On-Site Sourcing, Inc. shall
constitute notice to all such Persons, and each Person signing below as the
Borrower hereby irrevocably appoints On-Site Sourcing, Inc. as that Person's
agent to receive notices from the Lender under this Agreement or the other Loan
Documents.
Each party may designate by notice in writing a new address to which any notice,
demand, request or communication thereafter may be so given, served or sent.
Each notice, demand, request or communication which is mailed, delivered or
transmitted in the manner described above shall be deemed sufficiently given,
served, sent or received for all purposes at such time as it is delivered: (i)
to the United States Postal Service, in the case of a notice given by certified
mail; (ii) to Federal Express or any other commercially recognized overnight
delivery service, in accordance with the terms and procedures for such delivery.
Any notices required under the Uniform Commercial Code with respect to the sale
or other disposition of the Collateral shall be deemed reasonable if mailed by
the Lender to the Persons
47
entitled thereto at their last known address at least
ten (10) days prior to disposition of the Collateral.
10.4 SEVERABILITY. If fulfillment of any provision of the Loan Documents or
performance of any transaction related thereto, at the time such fulfillment or
performance shall be due, shall involve transcending the limit of validity
prescribed by law, then the obligation to be fulfilled or performed shall be
reduced to the limit of such validity; and if any clause or provision contained
in any Loan Document operates or would operate prospectively to invalidate any
Loan Document, in whole or in part, then such clause or provision only shall be
held ineffective, as though not herein or therein contained, and the remainder
of the Loan Documents shall remain operative and in full force and effect.
10.5 SURVIVAL. It is the express intention and agreement of the parties
hereto that all covenants, agreements, statements, representations, warranties
and indemnities made by Borrower in the Loan Documents shall survive the
execution and delivery of the Loan Documents and the making of all Advances and
extensions of credit thereunder.
10.6 WAIVERS. No waiver by the Lender of, or consent by the Lender to, a
variation from the requirements of any provision of the Loan Documents shall be
effective unless made in a written instrument duly executed on behalf of the
Lender by its duly authorized officer, and any such waiver shall be limited
solely to those rights or conditions expressly waived.
10.7 RIGHTS CUMULATIVE. The rights and remedies of the Lender described in
any of the Loan Documents are cumulative and not exclusive of any other rights
or remedies which the Lender or the then holder of the Revolving Note or Term
Notes otherwise would have at law or in equity or otherwise. No notice to or
demand on Borrower in any case shall entitle Borrower to any other notice or
demand in similar or other circumstances.
10.8 ENTIRE AGREEMENT; MODIFICATION; BENEFIT. This Agreement, the Schedules
hereto, and the other Loan Documents constitute the entire agreement of the
parties hereto with respect to the matters contemplated herein, supersede all
prior oral and written agreements with respect to the matters contemplated
herein, and may not be modified, deleted or amended except by written instrument
executed by the parties. All terms of this Agreement and of the other Loan
Documents shall be binding upon, and shall inure to the benefit of and be
enforceable by, the parties hereto and their respective successors and assigns;
however, Borrower may not assign or transfer any of its rights or obligations
hereunder without the prior written consent of the Lender. In the event of any
conflict between the terms of this Agreement and the terms of the other Loan
Documents, the terms of this Agreement shall control.
10.9 SETOFF. In addition to any rights or remedies of the Lender provided
by law, upon the occurrence of any Event of Default hereunder, or any event or
circumstance which, with the giving of notice or the passage of time or both,
would constitute an Event of Default hereunder, the Lender is irrevocably
authorized, at any time or times without prior notice to Borrower,
48
to set off, appropriate and apply any and all deposits, credits, indebtedness or
claims at any time held or owing by the Lender to or for the credit or the
account of Borrower, in such amounts as the Lender may elect, against and on
account of the obligations and liabilities of Borrower to the Lender hereunder
or under any of the other Loan Documents, whether or not the Lender has made any
demand for payment, and although such obligations and liabilities may be
contingent or unmatured.
10.10 CONSTRUCTION. This Agreement and the other Loan Documents, the rights
and obligations of the parties hereto, and any claims or disputes relating
thereto shall be governed by and construed in accordance with the laws of the
Commonwealth of Virginia (excluding the choice of law rules thereof) except to
the extent that the UCC provides for (a) the application of the laws of the
state in which Borrower maintains its chief executive office, (b) the
application of the laws of the state in which the collateral is located, (c) the
application of the laws of the state in which the Borrower is located, or (d)
otherwise mandates the application of the laws of another state or jurisdiction.
Each party hereto hereby acknowledges that all parties hereto participated
equally in the negotiation and drafting of this Agreement and that, accordingly,
no court construing this Agreement shall construe it more stringently against
one party than against the other.
10.11 PRONOUNS. All pronouns and any variations thereof shall be deemed to
refer to the masculine, feminine, neuter, singular or plural, as the identity of
the Person may require.
10.12 HEADINGS. Article, section and subsection headings contained in this
Agreement are inserted for convenience of reference only, shall not be deemed to
be a part of this Agreement for any purpose, and shall not in any way define or
affect the meaning, construction or scope of any of the provisions hereof.
10.13 PAYMENTS. If any payment or performance of any of the obligations
under this Agreement or any of the other Loan Documents becomes due on a day
other than a Business Day, the due date shall be extended to the next succeeding
Business Day, and interest thereon (if applicable) shall be payable at the then
applicable rate during such extension.
10.14 EXECUTION. To facilitate execution, this Agreement and any of the
other Loan Documents may be executed in as many counterparts as may be required;
and it shall not be necessary that the signature of, or on behalf of, each
party, or the signatures of all Persons required to bind any party, appear on
each counterpart; but it shall be sufficient that the signature of, or on behalf
of, each party, or the signatures of the Persons required to bind any party,
appear on one or more of the counterparts. All counterparts shall collectively
constitute a single agreement. It shall not be necessary in making proof of this
Agreement or any other Loan Document to produce or account for any particular
number of counterparts; but rather any number of counterparts shall be
sufficient so long as those counterparts contain the respective signatures of,
or on behalf of, all of the parties hereto.
49
10.15 CONSENT TO JURISDICTION. Subject to any provision of this Agreement
requiring that disputes be submitted to arbitration, the Borrower irrevocably
consents to the jurisdiction of any state or federal court sitting in the
Commonwealth of Virginia over any suit, action, or proceeding arising out of or
relating to this Agreement or the other Loan Documents. The Borrower irrevocably
waives, to the fullest extent permitted by law, any objection that the Borrower
may now or hereafter have to the laying of venue of any such suit, action, or
proceeding brought in any such court, or any claim that any such suit, action,
or proceeding brought in any such court has been brought in an inconvenient
forum. Final judgment in any such suit, action, or proceeding brought in any
such court shall be conclusive and binding upon the Borrower.
10.16 SERVICE OF PROCESS. The Borrower consents to process being served in
any suit, action or proceeding by mailing a copy thereof by registered or
certified mail postage prepaid, return receipt requested, to the Borrower's
address specified in or designated in this Agreement. The Borrower agrees that
such service (i) shall be deemed in every respect effective service of process
upon the Borrower in any such suit, action or proceeding and (ii) shall, to the
fullest extent permitted by law, be taken and held to be valid personal service
upon and personal delivery to the Borrower. Nothing in this Section shall affect
the right of the Lender to serve process in any manner permitted by law, or
limit any right that the Lender may have to bring proceedings against the
Borrower in the courts of any jurisdiction or to enforce in any lawful manner a
judgment obtained in one jurisdiction in any other jurisdiction.
10.17 ASSIGNMENT; SALE OF LOAN DOCUMENTS; DISCLOSURE OF INFORMATION.
Borrower hereby consents to and agrees that Lender may disclose to any Person
any and all information connected with or related to the Revolving Loan , Term
Loans or other Loan Documents for the purpose of selling or assigning any rights
of Lender in the Loan Documents. The information which may be disclosed by
Lender includes but is not limited to all Loan Documents, credit files and
correspondence files and all other writings and oral communications which Lender
wishes to disclose, in its sole and absolute discretion. Borrower also hereby
consents to and agrees that Lender may sell or assign any rights of Lender in
any or all of the Loan Documents pursuant to such terms and conditions as may be
acceptable to Lender in its sole and absolute discretion, to any interested
Person, and nothing in this Agreement or the other Loan Documents shall prevent,
delay or otherwise impede or effect the right of Lender to immediately sell or
assign any rights of Lender in the Loan Documents on such terms as it deems
acceptable. Furthermore, Borrower waives and agrees not to assert against any
Person assigned any rights of Lender in the Loan Documents any claims, defenses
or set-offs which Borrower may have been entitled to assert against Lender,
except such defenses which may not be waived by operation of law.
Borrower shall not be entitled to assign its interest in this Agreement without
the prior written consent of Lender, and any such attempt of Borrower to assign
its interest without the prior written consent of Lender shall be null and void.
50
10.18 WAIVER OF JURY TRIAL. BORROWER AND THE LENDER HEREBY WAIVE, TO THE
FULLEST EXTENT PERMITTED BY LAW, TRIAL BY JURY IN ANY LITIGATION BETWEEN THE
LENDER AND BORROWER ARISING OUT OF THE LOAN DOCUMENTS AND THE TRANSACTIONS
CONTEMPLATED THEREBY OR WITH RESPECT TO THE CONDUCT OF THE RELATIONSHIP BETWEEN
BORROWER AND LENDER. THE PARTIES MAKE THIS WAIVER KNOWINGLY, WILLINGLY AND
VOLUNTARILY FOR THE PURPOSE OF EXPEDITING THE RESOLUTION OF ANY DISPUTES THAT
MAY ARISE BETWEEN THEM AND REDUCING THE COST OF RESOLVING SUCH DISPUTES. THE
PARTIES WARRANT AND REPRESENT TO EACH OTHER THAT EACH OF THEM HAS BEEN ADVISED
BY INDEPENDENT LEGAL COUNSEL OF THE CONSEQUENCES OF THIS WAIVER PRIOR TO SIGNING
THIS AGREEMENT.
10.19 ARBITRATION. UPON DEMAND OF ANY PARTY HERETO, WHETHER MADE BEFORE OR
AFTER INSTITUTION OF ANY JUDICIAL PROCEEDING, ANY CONTROVERSY OR CLAIM ARISING
OUT OF OR RELATING TO THE LOAN DOCUMENTS BETWEEN PARTIES HERETO (A "DISPUTE")
SHALL BE RESOLVED BY BINDING ARBITRATION CONDUCTED UNDER AND GOVERNED BY THE
COMMERCIAL FINANCIAL DISPUTES ARBITRATION RULES (THE "ARBITRATION RULES") OF THE
AMERICAN ARBITRATION ASSOCIATION ("AAA") AND THE FEDERAL ARBITRATION ACT.
DISPUTES MAY INCLUDE, WITHOUT LIMITATION, TORT CLAIMS, COUNTERCLAIMS, A DISPUTE
AS TO WHETHER A MATTER IS SUBJECT TO ARBITRATION, CLAIMS BROUGHT AS CLASS
ACTIONS, OR CLAIMS ARISING FROM DOCUMENTS EXECUTED IN THE FUTURE. A JUDGMENT
UPON THE AWARD MAY BE ENTERED IN ANY COURT HAVING JURISDICTION. NOTWITHSTANDING
THE FOREGOING, THIS ARBITRATION PROVISION DOES NOT APPLY TO DISPUTES UNDER OR
RELATED TO SWAP AGREEMENTS. ALL ARBITRATION HEARINGS SHALL BE CONDUCTED IN THE
CITY OR COUNTY WHERE THE LENDER'S OFFICE, AS FIRST STATED ABOVE, IS LOCATED, OR
AT SUCH OTHER PLACE AS THE PARTIES MAY IN WRITING AGREE. A HEARING SHALL BEGIN
WITHIN 90 DAYS OF DEMAND FOR ARBITRATION AND ALL HEARINGS SHALL CONCLUDE WITHIN
120 DAYS OF DEMAND FOR ARBITRATION. THESE TIME LIMITS MAY NOT BE EXTENDED UNLESS
A PARTY SHOWS CAUSE FOR EXTENSION AND THEN FOR NO MORE THAN A TOTAL OF 60 DAYS.
THE EXPEDITED PROCEDURES SET FORTH IN RULE 51, ET SEQ., OF THE ARBITRATION RULES
SHALL APPLY TO DISPUTES IN WHICH THE CLAIM IS LESS THAN $1,000,000.00.
ARBITRATORS SHALL BE LICENSED ATTORNEYS SELECTED FROM THE COMMERCIAL FINANCIAL
DISPUTE ARBITRATION PANEL OF THE AAA. THE PARTIES DO NOT WAIVE APPLICABLE
FEDERAL OR STATE SUBSTANTIVE LAW EXCEPT AS PROVIDED HEREIN. NOTWITHSTANDING THE
PRECEDING BINDING ARBITRATION PROVISIONS, THE PARTIES AGREE TO PRESERVE WITHOUT
DIMINUTION, CERTAIN REMEDIES THAT ANY PARTY MAY EXERCISE BEFORE OR AFTER AN
ARBITRATION PROCEEDING IS BROUGHT. THE PARTIES SHALL HAVE
51
THE RIGHT TO PROCEED IN ANY COURT OF PROPER JURISDICTION OR BY SELF HELP TO
EXERCISE OR PROSECUTE THE FOLLOWING REMEDIES, AS APPLICABLE: (1) ALL RIGHTS TO
FORECLOSE AGAINST ANY REAL OR PERSONAL PROPERTY OR OTHER SECURITY BY EXERCISING
A POWER OF SALE OR UNDER APPLICABLE LAW BY JUDICIAL FORECLOSURE INCLUDING A
PROCEEDING TO CONFIRM THE SALE; (2) ALL RIGHTS OF SELF HELP, INCLUDING WITHOUT
LIMITATION, PEACEFUL OCCUPATION OF REAL PROPERTY AND COLLECTION OF RENTS,
SETOFF, AND PEACEFUL POSSESSION OF PERSONAL PROPERTY; (3) OBTAINING PROVISIONAL
OR ANCILLARY REMEDIES INCLUDING INJUNCTIVE RELIEF, SEQUESTRATION, GARNISHMENT,
ATTACHMENT, APPOINTMENT OF RECEIVER AND FILING AN INVOLUNTARY BANKRUPTCY
PROCEEDING; AND (4) WHEN APPLICABLE, A JUDGMENT BY CONFESSION OF JUDGMENT. ANY
CLAIM OR CONTROVERSY WITH REGARD TO ANY PARTY'S ENTITLEMENT TO SUCH REMEDIES IS
A DISPUTE. THE PARTIES AGREE THAT THEY SHALL NOT HAVE A REMEDY OF PUNITIVE OR
EXEMPLARY DAMAGES AGAINST OTHER PARTIES IN ANY DISPUTE, AND THEY HEREBY WAIVE
ANY RIGHT OR CLAIM TO PUNITIVE OR EXEMPLARY DAMAGES THEY MAY NOW HAVE OR WHICH
MAY ARISE IN THE FUTURE IN CONNECTION WITH ANY DISPUTE WHETHER THE DISPUTE IS
RESOLVED BY ARBITRATION OR JUDICIALLY.
IN WITNESS WHEREOF, the undersigned have duly executed this Agreement, or have
caused this Agreement to be duly executed on their behalf, as of the day and
year first hereinabove set forth.
ON-SITE SOURCING, INC., a Delaware corporation
By:
------------------------------
Xxxxx Xxxxxx
Chief Financial Officer
FIRST UNION NATIONAL BANK
By:
------------------------------
Xxxxxx Xxxxxx
Vice President
52
State of Virginia )
County of ______________ ) To Wit:
Acknowledged before me by ________________________________ as
___________________ of On-Site Sourcing, Inc., a Delaware corporation, this ___
day of May___, 2001.
[SEAL] ---------------------------
Notary Public
My commission expires: ___________________________
CONSENT OF NORTH XXXXX STREET REALTY COMPANY, LLC
TO AMENDMENT AND RESTATEMENT OF LOAN DOCUMENTS
North Xxxxx Street Realty Company, LLC, a Delaware limited liability
company ("North Xxxxx"), the grantor under that certain Deed of Trust,
Assignment of Rents and Security Agreement dated as of November 15, 2000 (the
"Deed of Trust"), provided for the benefit of First Union National Bank ("First
Union") to secure, among other things, that Commercial Note executed and made
payable by On-Site Sourcing, Inc., a Delaware corporation and North Xxxxx to
First Union in the original principal amount of Five Million Eight Hundred
Thousand and 00/100 Dollars ($5,800,000.00), does hereby acknowledge, consent
and agree to the annexed Amended and Restated Revolving Line of Credit Loan
Agreement, Term Loans Agreement and Security Agreement (the "Amended and
Restated Loan Agreement"), and all documents executed in connection with the
Amended and Restated Loan Agreement, including without limitation, that certain
Amended and Restated Revolving Note executed by On-Site of even date herewith
(the "Amended and Restated Note"), and North Xxxxx represents, warrants, affirms
and agrees that the Amended and Restated Loan Agreement constitutes a "Loan
Agreement", as defined in the Deed of Trust.
NORTH XXXXX STREET REALTY COMPANY,
LLC, a Delaware limited liability company, by ON-
53
SITE SOURCING, INC., a Delaware corporation,
as its sole manager and sole member
By:
------------------------------[SEAL]
Name:
----------------------------
Title:
---------------------------
State of Virginia )
County of ______________ ) To Wit:
Acknowledged before me by ________________________________ as
___________________ of On-Site Sourcing, Inc., a Delaware corporation, as the
sole manager and member of North Xxxxx Street Realty Company, LLC, a Delaware
limited liability company this ___ day of May, 2001.
[SEAL] ---------------------------
Notary Public
My commission expires: ___________________________
54
SCHEDULE 1.1
------------
BORROWING BASE CERTIFICATE
First Union National Bank Report No. 1
------------------------- Billed Government Eligible DATE 2
Commercial
-------------------------
Receivables Receivables OTHER TOTALS
----------- ----------- ----- ------
Billed receivables per last certificate 3
------------------------------------------------
(+) New billed receivables 4
------------------------------------------------
(-) Credit memos/Returns 5
------------------------------------------------
(+) Miscellaneous debits 6
------------------------------------------------
(-) Miscellaneous credits 7
------------------------------------------------
(-) Receivables collected 8
------------------------------------------------
(-) Discounts 9
------------------------------------------------
Total Net Receivables 10
------------------------------------------------
Less:
-----------------------------------------------------------
(-) Over 90 day receivables 11
-----------------------------------------------------------
(-) Escrow receivables 12
-----------------------------------------------------------
(-) Bonded receivables 12
-----------------------------------------------------------
(-) At-Risk, final close-outs 12
-----------------------------------------------------------
(-) Other: 12
-----------------------------------------------------------
Eligible Billed Receivables 13
-----------------------------------------------------------
Loan Limits (for each receivables 13(a) Lesser of Lesser of Lesser of
group)
CAP= $0 $0
OR 13(b) 0% 0% 0% 0%
-----------------------------------------------------------
Borrowing Bases 14
-----------------------------------------------------------
Gross Borrowing Base 15
---------------
Less: Reserves/ Letters of Credit 16
---------------
TOTAL NET BORROWING BASE 17
---------------
MAXIMUM LOAN AMOUNT 18 Existing Loan Balance per Last 19
Certificate
--------------- -------
(Lesser of Total Net Borrowing Base or Payments 20
-------
$______________) Advance Request 21
-------
New Loan Balance (after Advance 22
Req'd)
-------
Net Availability (after Advance 23
-------
Req'd)
CERTIFICATION
Re:
Revolving Line of Credit Loan Agreement, Term Loans Agreement and Security
Agreement (the "Agreement") dated 24 between the Borrower and Lender.
Capitalized terms used in this Certificate and not defined herein are defined in
the Agreement. I do hereby certify to the Lender, that I am familiar with the
terms of the Agreement. A current review of the activities of the Borrower has
been made to determine compliance by the Borrower with its obligations under the
Agreement and the continuing validity of the representations and warranties of
the Borrower contained in the Agreement. This review has included, if necessary,
interviews with officers and employees of the Borrower whose duties require them
to have personal knowledge of certifications made herein. My analysis of the
books and records of the Borrower reveals the information set forth in the table
above, upon which you are authorized to rely. All representations and warranties
in the Agreement and the other Loan Documents are true and correct with the same
force and effect as though such representations and warranties had been made on
the date of this Certification. The Borrower is in compliance with all terms and
provisions of the Agreement and other Loan Documents, and no default or event of
default exists under the Loan Documents, and no condition, event or act that,
with the passage of time or giving or notice or both, would constitute an event
of default under the Loan Documents exists. Borrower requests an advance in
accordance with the Agreement and other Loan Documents in the amount of 25 as
set forth above.
BORROWER'S NAME 26
By: 27
--------------------------------
Name:
-----------------------------
Title:
-----------------------------
56
SCHEDULE 5.1-1
[ATTACH SCHEDULE(S) HERE]
SCHEDULE 5.4
LITIGATION AND CLAIMS SCHEDULE
(Description of Litigation and Amount Claimed)
NONE
SCHEDULE 6.13
EQUIPMENT AND OTHER PROPERTY LIST AND LOCATION
