Exhibit (c)(3)
CREDIT AGREEMENT
AS OF APRIL 18, 1997
AMONG
GTS DURATEK, INC.
THE SCIENTIFIC ECOLOGY GROUP, INC.
SEG COLORADO, INC.
HITTMAN TRANSPORT SERVICES, INC.
GTS INSTRUMENT SERVICES, INCORPORATED
GENERAL TECHNICAL SERVICES, INC.
ANALYTICAL RESOURCES, INC.
AND
FIRST UNION NATIONAL BANK OF MARYLAND
FIRST UNION NATIONAL BANK OF NORTH CAROLINA
TABLE OF CONTENTS*
Page
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ARTICLE I
DEFINITIONS
Section 1.01 Definitions................................................. 1
Section 1.02 Accounting Terms and Determinations......................... 1
ARTICLE II
THE CREDITS
Section 2.01 Commitments to Lend......................................... 1
Section 2.02 Methods of Borrowing........................................ 3
Section 2.03 Funding of Revolving Loans.................................. 4
Section 2.04 Note........................................................ 4
Section 2.05 Interest Rates.............................................. 4
Section 2.06 Fees........................................................ 5
Section 2.07 Maturity and Repayment of Revolving Loans................... 6
Section 2.08 General Provisions as to Payments........................... 8
Section 2.09 Computation of Interest and Fees............................ 8
Section 2.10 Letters of Credit........................................... 8
ARTICLE III
CONDITIONS
Section 3.01 Conditions to Closing.......................................13
Section 3.02 Conditions to all Credit Events.............................16
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
Section 4.01 Corporate Existence and Power...............................17
Section 4.02 Corporate and Governmental Authorization; No Contravention..17
Section 4.03 Binding Effect..............................................18
Section 4.04 Financial Condition.........................................18
Section 4.05 Litigation..................................................19
Section 4.06 Regulation U; Use of Proceeds...............................19
Section 4.07 Regulatory Restrictions on Borrowing........................19
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*The Table of Contents is not a part of the Credit Agreement.
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Section 4.08 Subsidiaries................................................19
Section 4.09 Full Disclosure.............................................20
Section 4.10 Tax Returns and Payments....................................20
Section 4.11 Compliance with ERISA.......................................20
Section 4.12 Intellectual Property.......................................20
Section 4.13 No Burdensome Restrictions..................................21
Section 4.14 Environmental Matters.......................................21
Section 4.15 Accounts....................................................21
Section 4.16 Fair Labor Standards Act....................................22
ARTICLE V
COVENANTS
Section 5.01 Information.................................................22
Section 5.02 Payment of Obligations......................................26
Section 5.03 Maintenance of Property; Insurance..........................26
Section 5.04 Conduct of Business and Maintenance of Existence............27
Section 5.05 Compliance with Laws........................................27
Section 5.06 Accounting; Inspection of Property, Books and Records.......27
Section 5.07 Collection of Accounts......................................28
Section 5.08 Notification to Account Debtors.............................28
Section 5.09 Restriction on Liens........................................29
Section 5.10 Limitation on Debt..........................................30
Section 5.11 Limitation on Guarantees....................................30
Section 5.12 Consolidated Capital Expenditures...........................30
Section 5.13 Consolidations, Mergers and Sales of Assets.................31
Section 5.14 Investments; Line of Business...............................31
Section 5.15 Dividends, etc..............................................31
Section 5.16 Use of Proceeds.............................................32
Section 5.17 Transactions with Other Persons.............................33
Section 5.18 Minimum Consolidated Tangible Net Worth.....................33
Section 5.19 Minimum Liquidity...........................................33
Section 5.20 SEG Deferred Revenue Turnover...............................33
Section 5.21 XX Xxxx Collateral Account..................................33
Section 5.22 Independence of Covenants...................................33
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ARTICLE VI
DEFAULTS
Section 6.1 Events of Default...........................................34
Section 6.2 Cash Cover..................................................36
ARTICLE VII
THE AGENTS
Section 7.01 Appointment and Authorization...............................36
Section 7.02 Individual Capacity.........................................37
Section 7.03 Delegation of Duties........................................37
Section 7.04 Reliance by the Agents......................................37
Section 7.05 Notice of Default...........................................38
Section 7.06 Non-Reliance on the Agents and Other Banks..................38
Section 7.07 Exculpatory Provisions......................................38
Section 7.08 Indemnification.............................................39
Section 7.09 Resignation; Successors.....................................39
ARTICLE VIII
CHANGE IN CIRCUMSTANCES
Section 8.01 Increased Cost and Reduced Return...........................40
ARTICLE IX
MISCELLANEOUS
Section 9.01 Notices.....................................................41
Section 9.02 No Waivers..................................................42
Section 9.03 Expenses; Indemnification...................................42
Section 9.04 Amendments and Waivers......................................43
Section 9.05 Successors and Assigns......................................43
Section 9.06 Right to Set-Off............................................44
Section 9.07 Governing Law...............................................44
Section 9.08 Arbitration; Submission to Jurisdiction.....................44
Section 9.09 Counterparts; Integration; Effectiveness....................45
Section 9.10 Confidentiality.............................................46
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Exhibit A-1 - Form of Tennessee Letter of Credit ($12,270,000)
Exhibit A-2 - Form of Tennessee Letter of Credit ($3,000,000)
Exhibit B - Form of Revolving Note
Exhibit C - Form of Notice of Issuance for Performance Letters of Credit
Exhibit D - Form of Opinion of Counsel for the Borrowers
Exhibit E-1 - Form of Security Agreement (Parent Company and Subsidiaries)
Exhibit E-2 - Form of Security Agreement (SEG and Subsidiaries)
Exhibit F - Form of Assignment of Patents and Trademarks
Exhibit G - Form of Notice of Assignment of Government Contracts
Schedule 4.05 - Litigation
Schedule 4.08 Subsidiaries
Schedule 5.09 Liens
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CREDIT AGREEMENT dated as of April 18, 1997 among GTS DURATEK, INC., a
Delaware corporation, THE SCIENTIFIC ECOLOGY GROUP, INC., a Tennessee
corporation, SEG COLORADO, INC., a Delaware corporation, HITTMAN TRANSPORT
SERVICES, INC., a Delaware corporation, GTS INSTRUMENT SERVICES, INCORPORATED, a
Maryland corporation, GENERAL TECHNICAL SERVICES, INC., a Maryland corporation,
ANALYTICAL RESOURCES, INC., a Pennsylvania corporation, and FIRST UNION NATIONAL
BANK OF MARYLAND, a national banking association, and FIRST UNION NATIONAL BANK
OF NORTH CAROLINA, a national banking association.
The parties hereto agree as follows:
ARTICLE I
DEFINITIONS
SECTION 1.01 DEFINITIONS. All capitalized terms used in this
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Agreement or in any Appendix, Schedule or Exhibit hereto which are not otherwise
defined herein or therein shall have the respective meanings set forth in the
Appendix attached hereto identified as the Definitions Appendix. The Definitions
Appendix is incorporated herein by reference in its entirety and is a part of
this Agreement to the same extent as if it had been set forth in this Section
1.01 in full.
SECTION 1.02 ACCOUNTING TERMS AND DETERMINATIONS. Unless otherwise
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specified herein, all accounting terms used herein shall be interpreted, all
accounting determinations hereunder shall be made, and all financial statements
required to be delivered hereunder shall be prepared, in accordance with
generally accepted accounting principles in the United States of America as in
effect from time to time, applied on a basis consistent (except for changes
concurred in by the Borrowers' independent public accountants) with the most
recent audited consolidated financial statements of the Parent Company and its
Consolidated Subsidiaries delivered to the Bank; provided that until such time
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as the Bank has received audited consolidated financial statements of SEG or
audited consolidated financial statements of the Parent Company which include
SEG as a Consolidated Subsidiary, such determinations with respect to SEG shall
be consistent with the most recent unaudited consolidated financial statements
of SEG delivered to the Bank.
ARTICLE II
THE CREDITS
SECTION 2.01 COMMITMENTS TO LEND.
(a) Revolving Loans. The Bank agrees, on the terms and conditions set
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forth in this Agreement, to make advances (each a "Revolving Loan") to the
Borrowers pursuant to this Section 2.01(a) from time to time during the
Revolving Credit Period in amounts such that the
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aggregate principal amount of Revolving Loans at any one time outstanding will
not exceed the lesser of (i) the Revolving Loan Commitment and (ii) the
Borrowing Base. Within the foregoing limit, the Borrowers may borrow under this
Section 2.01(a), prepay and reborrow Revolving Loans at any time during the
Revolving Credit Period
The Revolving Loan Commitment shall be initially $8,800,000. Upon a
decrease in the Tennessee Letter of Credit Liabilities pursuant to Section
2.01(b) and if no Default has occurred and is continuing hereunder, the
Revolving Loan Commitment may be increased from time to time, at the discretion
of the Parent Company, in an amount equal to the amount by which the Tennessee
Letter of Credit Liabilities have decreased (rounded downward to the nearest
$1,000); provided that such increases in the Revolving Loan Commitment shall not
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exceed $4,000,000 in the aggregate. The Parent Company may exercise its right to
so increase the Revolving Loan Commitment by written notice to the Bank within
30 Business Days of the related decrease in the Tennessee Letter of Credit
Liabilities.
Upon an increase in the Tennessee Letter of Credit Liabilities
pursuant to Section 2.01(b), the Revolving Loan Commitment shall be decreased
automatically, without any further action by the Bank, in an amount equal to the
amount by which the Tennessee Letter of Credit Liabilities have increased
(rounded upward to the nearest $1,000); provided that such decreases in the
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Revolving Loan Commitment shall not exceed $4,000,000 in the aggregate.
(b) Tennessee Letter of Credit. The North Carolina Bank agrees, on the
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terms and conditions set forth in this Agreement, to issue letters of credit
(collectively, the "Tennessee Letter of Credit") on the Closing Date
substantially in the form of Exhibit A-1 and A-2 hereto in the aggregate stated
amount not to exceed the Tennessee Letter of Credit Commitment naming the State
of Tennessee, or a division thereof, as beneficiary, for the account of SEG, as
required by the State of Tennessee pursuant to Chapter 1200, Section 2-10.12 of
the Official Compilation Rules and Regulations of the State of Tennessee, to
provide security for such Borrower's obligation to reclaim its facility located
in Oak Ridge, Tennessee upon the closure of such facility. The Borrowers
acknowledge that the North Carolina Bank will assign, and does hereby assign, to
the Bank a 100% participation interest in the Tennessee Letter of Credit
Liabilities and the Tennessee Reimbursement Obligations.
The Tennessee Letter of Credit Commitment shall be initially
$15,270,000. Upon written notice to SEG that the State of Tennessee has
increased the amount required to secure SEG's reclamation obligations described
above (and delivery of such notice to the Administrative Agent) and deposit with
the Collateral Agent of funds to the XX Xxxx Collateral Account required to
maintain the balance of such account at 38% (or greater) of the Tennessee Letter
of Credit Liabilities, the Tennessee Letter of Credit Commitment shall increase
by an amount required to satisfy the requirements of the State of Tennessee;
provided that such increases shall not exceed $4,000,000 in the aggregate. Upon
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such an increase in the Tennessee Letter of Credit Commitment, the North
Carolina Bank shall, subject to the terms of this Agreement, either (i) issue an
additional letter of credit in a stated amount equal to the Tennessee Letter of
Credit Commitment less the amount of the Tennessee Letter of Credit Liabilities
then outstanding or (ii)
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upon delivery to the Administrative Agent of a Tennessee Letter of Credit for
cancellation, issue a replacement letter of credit in a stated amount equal to
the sum of (A) the stated amount of such Tennessee Letter of Credit plus (B) the
Tennessee Letter of Credit Commitment less the amount of the Tennessee Letter of
Credit Liabilities then outstanding (after giving effect to such cancellation),
in either case for the benefit of the State of Tennessee and in the form of an
existing Tennessee Letter of Credit or such cancelled Tennessee Letter of Credit
or such other form as is required by the State of Tennessee and is reasonably
acceptable to the North Carolina Bank.
Upon delivery to the Administrative Agent of (x) written notice to SEG
that the State of Tennessee has decreased the amount required to secure SEG's
reclamation obligations described above and (y) the Tennessee Letter of Credit
related to such decrease, the Administrative Agent shall cancel such Tennessee
Letter of Credit and the Tennessee Letter of Credit Commitment shall then
decrease by the amount equal to the stated amount of such canceled Tennessee
Letter of Credit. Upon such decrease in the Tennessee Letter of Credit
Commitment, (a) the North Carolina Bank shall, subject to the terms of this
Agreement, issue a replacement letter of credit in a stated amount equal to the
Tennessee Letter of Credit Commitment less the amount of the Tennessee Letter of
Credit Liabilities (after giving effect to such cancellation) for the benefit of
the State of Tennessee and in the form of such cancelled Tennessee Letter of
Credit or such other form as is required by the State of Tennessee and is
reasonably acceptable to the North Carolina Bank and (b) the Collateral Agent
shall release those funds from the XX Xxxx Collateral Account by which the
balance in such account exceeds 38% of the Tennessee Letter of Credit
Liabilities.
(c) Performance Letters of Credit. The Bank agrees, on the terms and
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conditions set forth in this Agreement, to issue Performance Letters of Credit
hereunder from time to time before the 30th day before the Revolving Loan
Termination Date for the account, and upon the request, of any Borrower and in
support of (i) performance obligations of such Borrower under the Borrower's
contracts and (ii) such other obligations of the Borrower as are acceptable to
the Bank; provided that, immediately after each Performance Letter of Credit is
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issued, the aggregate amount of the Performance Letter of Credit Liabilities
shall not exceed the lesser of (i) the Performance Letter of Credit Commitment
and (ii) the Borrowing Base.
SECTION 2.02 METHODS OF BORROWING.
(a) Operating Account Overdrafts. If on any day Items are presented to the
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Bank for payment against the Operating Account which Items, in the aggregate,
would, if paid in full, cause the Available Balance in the Operating Account on
such day to be less than $100,000, such presentation shall be deemed to be a
request by the Borrowers for a Revolving Loan on the date of such presentation
in an amount equal to the amount (rounded upward to the nearest $1,000) required
to cause such Available Balance to equal $100,000.
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(b) Overdrafts in Other Accounts. The Bank may, at its option, pay any
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Item which will cause any deposit account maintained by any Borrower with the
Bank to become overdrawn, and such payment shall be deemed a Revolving Loan
hereunder.
SECTION 2.03 FUNDING OF REVOLVING LOANS. The proceeds of each
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Revolving Loan deemed to be requested under Section 2.02 shall be disbursed by
the Bank by way of direct payment of the relevant Item or by way of deposit to
the Operating Account of the amount set forth in Section 2.02(a), as the case
may be.
SECTION 2.04 NOTE.
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(a) Evidence of Revolving Loans. The Revolving Loans shall be evidenced by
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a single Revolving Note substantially in the form of Exhibit B hereto made by
the Borrowers payable to the order of the Bank in an amount equal to the
aggregate unpaid principal amount of the Revolving Loans.
(b) Records of Amounts Due. The Bank shall record the date and amount of
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each Revolving Loan made by it and the date and amount of each payment of
principal made by the Borrowers with respect thereto, and may, if the Bank so
elects in connection with any transfer or enforcement of the Note, endorse on
the schedule forming a part thereof appropriate notations to evidence the
foregoing information with respect to each such Revolving Loan then outstanding;
provided that the failure of the Bank to make any such recordation or
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endorsement shall not affect the obligations of the Borrowers hereunder or under
the Note. The Bank is hereby irrevocably authorized by the Borrowers so to
endorse the Note and to attach to and make a part of the Note a continuation of
any such schedule as and when required.
SECTION 2.05 INTEREST RATES.
(a) LIBOR Market Index Rate. Each Revolving Loan shall bear interest on
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the outstanding principal amount thereof, for each day from the date such
Revolving Loan is made until it becomes due, at a rate per annum equal to the
LIBOR Market Index Rate for such day. Such interest shall be payable for each
month in arrears on the first day of the immediately succeeding calendar month.
The "Adjusted London Interbank Offered Rate" means on any day a rate
per annum equal to the quotient obtained (rounded upward, if necessary, to the
next higher 1/100 of 1%) by dividing (i) the London Interbank Offered Rate for
such day by (ii) 1.00 minus the Euro-Dollar Reserve Percentage.
"LIBOR Market Index Rate" means for any day, the sum of (i) the
Adjusted London Interbank Offered Rate for such day plus (ii) 2.00%.
The "London Interbank Offered Rate" means the rate per annum
designated as the British Bankers' Association settlement rate as of 11:00 A.M.
(London time) for one month deposits in Dollars in the London interbank market
that appears on the display on page 3750
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(under the caption "USD" of the Telerate Services, Incorporated screen (the
"Telerate Screen") (or on such other display as may replace such page on the
Telerate Screen) at such time) each Euro-Dollar Business Day; provided that if
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no offered quotations appear on the Telerate Screen or if quotations are not
given on the Telerate Screen for such one month period, then the London
Interbank Offered Rate shall mean the rate per annum determined by the Bank at
which United States Dollars in the amount of $5,000,000 are being offered to
leading banks in the London interbank market for Dollar deposits at
approximately 11:00 A.M. London time two Euro-Dollar Business Days prior to such
day for settlement in immediately available funds by leading banks in the London
interbank market for a one month period.
"Euro-Dollar Reserve Percentage" means for any day that percentage
(expressed as a decimal) which is in effect on such day, as prescribed by the
Board of Governors of the Federal Reserve System (or any successor) for
determining the maximum reserve requirement for a member bank of the Federal
Reserve System in New York City with deposits exceeding five billion dollars in
respect of "Eurocurrency liabilities" (or in respect of any other category of
liabilities which includes deposits by reference to which the interest rate on
Revolving Loans is determined or any category of extensions of credit or other
assets which includes loans by a non-United States office of the Bank to United
States residents). The Adjusted London Interbank Offered Rate shall be adjusted
automatically on and as of the effective date of any change in the Euro-Dollar
Reserve Percentage.
The LIBOR Market Index Rate may change from day to day with changes to
occur on the date the London Interbank Offered Rate changes on the Telerate
Screen, or if such rate is not available, by reference to the rate being offered
to leading banks.
(b) Overdue Amounts. Any overdue principal of or interest on any Revolving
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Loan shall bear interest, payable on demand, for each day from and including the
date payment thereof was due to but excluding the date of actual payment, at a
rate per annum equal to the sum of 2.00% plus the LIBOR Market Index Rate
applicable to such Revolving Loan on such day.
(c) Determination of Interest Rates. The Bank shall determine each
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interest rate applicable to the Revolving Loans hereunder, and its determination
thereof shall be conclusive in the absence of manifest error.
SECTION 2.06 FEES.
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(a) Revolving Loan Commitment Fee. The Borrowers shall pay to the Bank a
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facility fee for each month of the Revolving Loan Commitment (the "Facility
Fee") in an amount equal to the product of (i) the amount of the Revolving Loan
Commitment as of the first day of such month multiplied by (ii) 35 basis points
per annum. Such Facility Fee shall be payable in advance for each month on the
first day of such month; provided that if on any day the Revolving Loan
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Commitment is increased pursuant to Section 2.01(a), the Borrowers shall pay to
the Bank on such day for each day remaining in the month in which such increase
occurs an amount equal
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to the product of (i) the amount of such increase in the Revolving Loan
Commitment multiplied by (ii) 35 basis points per annum.
(b) Servicing Fee. The Borrowers shall pay to the Bank a monthly servicing
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fee (the "Servicing Fee") equal to $300. The Servicing Fee shall accrue from and
including the Effective Date to but excluding the Revolving Loan Termination
Date (or earlier date of termination of the Revolving Loan Commitment in its
entirety) and shall be payable for each month in arrears on the first day of the
immediately succeeding calendar month.
(c) Tennessee Letter of Credit Fee. The Borrowers shall pay to the North
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Carolina Bank a letter of credit fee (the "Tennessee Letter of Credit Fee") at a
rate per annum equal to the product of (i) 1.00% multiplied by (ii) the
aggregate amount available for drawing under the Tennessee Letter of Credit.
Such fee shall be payable in advance on the Effective Date and on each
anniversary of the Effective Date for so long as the Tennessee Letter of Credit
is outstanding; provided that if any Tennessee Letter of Credit shall be
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canceled prior to its stated expiration date, the Administrative Agent will
remit to the Parent Company a percentage of the related Tennessee Letter of
Credit Fee equal to the fraction (expressed as a percentage) of (y) the number
of months (or any portion thereof) remaining on the term of such canceled
Tennessee Letter of Credit as of the end of the month during which such
cancellation occurs over (z) 12 . The Borrowers agree to pay to the
Administrative Agent, upon each issuance of, payment under and/or amendment of
the Tennessee Letter of Credit, such amount as shall at the time of such
issuance, payment or amendment be the administrative charges and expenses which
the Bank is customarily charging for issuances of, payments under or amendments
to letters of credit issued by it.
(d) Performance Letter of Credit Fees. The Borrowers shall pay to the Bank
---------------------------------
a letter of credit fee (the "Performance Letter of Credit Fee") for each day at
a rate per annum equal to the product of (i) 1.50% multiplied by (ii) the
aggregate amount available for drawing under any Performance Letter of Credit
issued and outstanding on such day. Such fee shall be payable, for each
Performance Letter of Credit, in advance on the day such Performance Letter of
Credit is issued. The Borrowers agree to pay to the Bank, upon each issuance of,
payment under and/or amendment of a Performance Letter of Credit, such amount as
shall at the time of such issuance, payment or amendment be the administrative
charges and expenses which the Bank is customarily charging for issuances of,
payments under or amendments to letters of credit issued by it.
SECTION 2.07 MATURITY AND REPAYMENT OF REVOLVING LOANS.
(a) Maturity at Revolving Loan Termination Date. Each Revolving Loan shall
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mature on the Revolving Loan Termination Date and any Revolving Loans then
outstanding (together with accrued interest thereon) shall be due and payable on
such date.
(b) Mandatory Prepayments of Revolving Loans. If on any day the Credit
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Agreement Liabilities exceed the Borrowing Base, the Borrowers shall prepay, and
there shall become due
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and payable, on such date the principal amount of the Revolving Loans equal to
such excess, together with interest thereon to the date of repayment.
(c) Mandatory Repayments from Operating Account.
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(i) Deposits of Proceeds to Operating Account. The Borrowers
------------------------------------------
shall instruct all Account Debtors and other Persons obligated in respect
of Accounts and other Collateral to make all payments in respect of the
Accounts or other Collateral directly to a post office box which shall be
in the name and under the control of the Bank. Except as provided in
Section 3.03 of the Security Agreements, all such payments made to the Bank
shall be deposited in the Operating Account. In addition to the foregoing,
the Borrowers agree that if the proceeds of any Collateral (including the
payments made in respect of Accounts) shall be received by it, the
Borrowers shall, unless Section 3.03 of the Security Agreement shall
require otherwise, as promptly as possible deposit such proceeds to the
Operating Account. Until so deposited, all such proceeds shall be held in
trust by the Borrowers for and as the property of the Bank and shall not be
commingled with any other funds or property of the Borrowers. The Borrowers
hereby irrevocably authorize and empower the Bank, its officers, employees
and authorized agents to endorse and sign its name on all checks, drafts,
money orders or other media of payment so delivered, and such endorsements
or assignments shall, for all purposes, be deemed to have been made by the
Borrowers prior to any endorsement or assignment thereof by the Bank. The
Bank may use any convenient or customary means for the purpose of
collecting such checks, drafts, money orders or other media of payment.
(ii) Revolving Loans Due to Extent of Available Balance. Each
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Business Day, the principal amount of the Revolving Loans which equals the
amount by which the then Available Balance exceeds $100,000 shall become
due and payable.
(iii) Withdrawals from Operating Account to Pay Revolving Loans.
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The amount by which the then Available Balance exceeds $100,000, or so much
thereof as is necessary to pay in full the principal amount of Revolving
Loans referred to in this Section 2.07(c)(iii), shall be withdrawn by the
Bank each Business Day and applied to repay the principal amount of
Revolving Loans which is then due and payable (including those principal
amounts which become due and payable on such date pursuant to subsection
(ii) above).
(d) Optional Prepayments of Revolving Loans. The Borrowers may prepay any
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Revolving Loan, in whole at any time, or from time to time in part, by paying
the principal amount to be prepaid together with accrued interest thereon to the
date of prepayment. Each prepayment of a Revolving Loan shall be applied to such
Revolving Loan or Revolving Loans as the Borrowers may designate (or, failing
such designation, as determined by the Bank).
SECTION 2.08 GENERAL PROVISIONS AS TO PAYMENTS. The Borrowers shall
---------------------------------
make each payment of principal of and interest on the Revolving Loans and of
fees hereunder not later
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than 12:00 Noon (local time in Baltimore, Maryland) on the date when due,
without set-off, counterclaim or other deduction, in Federal or other funds
immediately available in Baltimore, Maryland, to the Administrative Agent at its
address referred to in Section 9.01. The Administrative Agent will promptly
distribute such payments to the Banks, or either of them, as shall be entitled
thereto. The Borrowers hereby irrevocably authorize the Administrative Agent to
deduct from the Operating Account at any time such amount as may then be
necessary to pay Obligations then due and payable. If the Available Balance for
any day is greater than $0 and the Administrative Agent does not deduct amounts
from the Operating Account which are due and payable on such day pursuant to
Sections 2.05(a), 2.06 or 2.07(b), such amounts shall become due and payable
upon 5 days prior written notice to the Parent Company. Whenever any payment of
principal of, or interest on, the Revolving Loans or Letter of Credit
Liabilities or of fees shall be due on a day which is not a Business Day, the
date for payment thereof shall be extended to the next succeeding Business Day.
If the date for any payment of principal is extended by operation of law or
otherwise, interest thereon shall be payable for such extended time.
Each of the Obligations of the Borrowers hereunder is senior to the
obligations of the Parent Company, General Technical Services, Inc. and GTS
Instrument Services, Incorporated under a certain Convertible Debenture dated
November 7, 1995 issued to BNFL Inc. in the principal amount of $10,000,000 and
to any and all renewals and replacements thereof and modifications and
amendments thereto.
SECTION 2.09 COMPUTATION OF INTEREST AND FEES. Interest on Revolving
--------------------------------
Loans, Letter of Credit Liabilities and fees shall be computed on the basis of a
year of 360 days and paid for the actual number of days elapsed (including the
first day but excluding the last day).
SECTION 2.10 LETTERS OF CREDIT.
(a) Method of Issuance of Performance Letters of Credit. The Parent
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Company shall give the Bank notice substantially in the form of Exhibit C hereto
(a "Notice of Issuance") of the requested issuance or extension of a Performance
Letter of Credit prior to 1:00 P.M. (local time in Baltimore, Maryland) at least
three Business Days (or such shorter period as may be agreed by the Bank in any
particular instance) prior to the proposed date of issuance or extension (which
shall be a Business Day), specifying the date such Performance Letter of Credit
is to be issued or extended, the Borrower which shall be the account party
thereunder, and describing the terms of such Performance Letter of Credit and
the nature of the transactions to be supported thereby. The issuance by the Bank
of each Performance Letter of Credit shall, in addition to the conditions
precedent set forth in Article III, be subject to the conditions precedent that
such Performance Letter of Credit shall be in such form and contain such terms
as shall be satisfactory to the Bank and that the Borrowers shall have executed
and delivered such other instruments and agreements relating to such Performance
Letter of Credit as the Bank shall have reasonably requested. The extension or
renewal of any Performance Letter of Credit shall be deemed to be an issuance of
such Performance Letter of Credit, and if any Performance Letter of Credit
contains a provision pursuant to which it is deemed to be extended unless notice
of termination is given by the Bank, the Bank shall timely give such notice of
termination unless it has theretofore
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timely received a Notice of Issuance and the other conditions to issuance of a
Performance Letter of Credit have also theretofore been met with respect to such
extension. No Performance Letter of Credit shall have a term of more than one
year; provided that a Performance Letter of Credit may contain a provision
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pursuant to which it is deemed to be extended on an annual basis unless notice
of termination is given by the Bank; provided further that no Performance Letter
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of Credit shall have a term extended or be so extendable beyond one year
following the Revolving Loan Termination Date.
(b) Conditions to Issuance of Performance Letters of Credit. The Bank
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shall not issue any Performance Letter of Credit unless (i) such Performance
Letter of Credit shall be satisfactory in form and substance to the Bank, (ii)
the Borrowers shall have executed and delivered such other instruments and
agreements relating to such Performance Letter of Credit as the Bank shall have
reasonably requested, (iii) the Bank shall have confirmed on the date of such
issuance that neither the Performance Letter of Credit Commitment nor the
Borrowing Base will be exceeded immediately after such Performance Letter of
Credit is issued and (iv) the Bank shall not have been notified by a Borrower or
otherwise have become aware that any condition specified in Section 3.02(iii),
(iv) or (v) is not satisfied on the date such Performance Letter of Credit is to
be issued.
(c) Drawings and Reimbursements of Letters of Credit . Upon receipt from
-------------------------------------------------
the beneficiary of any Letter of Credit of any notice of a drawing under such
Letter of Credit, the Issuing Bank shall determine in accordance with the terms
of such Letter of Credit whether such drawing should be honored. If the Issuing
Bank determines that any such drawing shall be honored, the Issuing Bank shall
make available to such beneficiary in accordance with the terms of such Letter
of Credit the amount of the drawing and shall notify the Parent Company as to
the amount to be paid as a result of such drawing and the payment date. The
Borrowers shall be irrevocably and unconditionally obligated immediately upon
any such drawing to reimburse the Issuing Bank for any amounts paid by the
Issuing Bank under any Letter of Credit, together with any and all reasonable
charges and expenses which the Issuing Bank may pay or incur relative to such
drawing and interest on the amount drawn at the LIBOR Market Index Rate for each
day from and including the date such amount is drawn to but excluding the date
such reimbursement payment is due and payable (collectively, the "Reimbursement
Obligations"). Such Reimbursement Obligations shall be due and payable (i) at or
before 1:00 P.M. (local time in Baltimore, Maryland) on the date the Issuing
Bank notifies the Parent Company of such drawing, if such notice is given at or
before 10:00 A.M. (local time in Baltimore, Maryland) on such date or (ii) at or
before 10:00 A.M. (local time in Baltimore, Maryland) on the immediately
succeeding Business Day; provided that no payment otherwise required by this
--------
sentence to be made by the Borrowers at or before 1:00 P.M. (local time in
Baltimore, Maryland) on any day shall be overdue hereunder if arrangements for
such payment satisfactory to the Issuing Bank, in its reasonable discretion,
shall have been made by the Borrowers at or before 1:00 P.M. (local time in
Baltimore, Maryland) on such day and such payment is actually made at or before
3:00 P.M. (local time in Baltimore, Maryland) on such day. In addition, the
Borrowers agree to pay to the Issuing Bank interest on any and all Reimbursement
Obligations not paid by the Borrowers to
-9-
the Issuing Bank when due under this subsection (c), for each day from and
including the date when such amount becomes due to but excluding the date such
amount is paid in full, whether before or after judgment, payable on demand, at
a rate per annum equal to the sum of 2.00% plus the LIBOR Market Index Rate for
such day (such interest to constitute an additional Reimbursement Obligation).
Each payment to be made by the Borrowers pursuant to this subsection (c) shall
be made to the Issuing Bank in Federal or other funds immediately available to
it at its address referred to in Section 9.01.
If on any day, following the application of Section 2.07(b), the
Credit Agreement Liabilities exceed the Borrowing Base, the Borrowers shall pay
to the Collateral Agent an amount in immediately available funds (which shall be
held as Collateral and applied pursuant to the Security Agreements) equal to the
amount of such excess.
(d) Purchase and Sale of Tennessee Letter of Credit Participation. Upon
-------------------------------------------------------------
the issuance by the North Carolina Bank of the Tennessee Letter of Credit, the
North Carolina Bank shall be deemed, without further action by any party hereto,
to have transferred to the Bank and the Bank shall be deemed without further
action by any party hereto, to have purchased from he North Carolina Bank,
without recourse or warranty, a 100% undivided participation interest in the
Tennessee Letter of Credit and the related Tennessee Letter of Credit
Liabilities.
(e) Duties of North Carolina Bank to the Bank; Reliance. In determining
---------------------------------------------------
whether to pay under the Tennessee Letter of Credit, the North Carolina Bank
shall not have any obligation relative to the Bank or the related Tennessee
Letter of Credit Liabilities other than to determine that any document required
to be delivered under such Tennessee Letter of Credit or that any documents
required to be delivered under such Tennessee Letter of Credit have been
delivered and that they substantially comply on their face with the requirements
of such Tennessee Letter of Credit. Any action taken or omitted to be taken by
the North Carolina Bank under or in connection with the Tennessee Letter of
Credit shall not create for the North Carolina Bank any resulting liability if
taken or omitted in the absence of gross negligence or willful misconduct. The
North Carolina Bank shall be entitled (but not obligated) to rely, and shall be
fully protected in relying, on the representation and warranty by the Borrowers
set forth in the last sentence of Section 3.02 to establish whether the
conditions specified in clause (v) of Section 3.02 are met in connection with
any issuance or extension of the Tennessee Letter of Credit. The North Carolina
Bank shall be entitled to rely, and shall be fully protected in relying, upon
advice and statements of legal counsel, independent accountants and other
experts selected by the North Carolina Bank and upon the Tennessee Letter of
Credit, draft, writing, resolution, notice, consent, certificate, affidavit,
letter, cablegram, telegram, telecopier, telex or teletype message, statement,
order or other document believed by it in good faith to be genuine and correct
and to have been signed, sent or made by the proper Person or Persons, and may
accept documents that appear on their face to be in order, without
responsibility for further investigation, regardless of any notice or
information to the contrary unless the beneficiary and the Borrowers shall have
notified the North Carolina Bank that such documents do not comply with the
terms and conditions of the Tennessee Letter of Credit. The North Carolina Bank
shall be fully justified in refusing to take any action requested of it under
this Section in respect of any Tennessee Letter of Credit unless it
-10-
shall first have received such advise or concurrence of the Bank as it
reasonably deems appropriate or it shall first be indemnified to its reasonable
satisfaction by the Bank against any and all liability and expense which may be
incurred by it by reason of taking or continuing to take, or omitting or
continuing to omit, any such action. Notwithstanding any other provision of this
Section, the North Carolina Bank shall in all cases be fully protected in
acting, or in refraining from acting, under this Section in respect of any
Tennessee Letter of Credit in accordance with a request of the Bank, and such
request and any action taken or failure to act pursuant hereto shall be binding
upon the Bank; provided that this sentence shall not affect any rights the
--------
Borrowers may have against the Bank that make such request.
(f) Obligations of the Bank to Reimburse the North Carolina Bank for Unpaid
-----------------------------------------------------------------------
Drawings Under Tennessee Letter of Credit. If the North Carolina Bank makes any
-----------------------------------------
payment under any Tennessee Letter of Credit and the Borrowers shall not have
reimbursed such amount in full to the North Carolina Bank, the North Carolina
Bank shall promptly notify the Bank, and the Bank shall promptly and
unconditionally pay the North Carolina Bank, the amount of such payment under
the Tennessee Letter of Credit made by the North Carolina Bank; provided,
--------
however, that the Bank shall not be obligated to pay to the North Carolina Bank
for any wrongful payment made by the North Carolina Bank under the Tennessee
Letter of Credit as a result of acts or omissions constituting willful
misconduct or gross negligence by the North Carolina Bank. Upon payment in full
of all amounts payable by the Bank under this subsection, the Bank shall be
subrogated to the rights of the North Carolina Bank against the Borrowers.
(g) Obligations in Respect of Letters of Credit Unconditional. The
---------------------------------------------------------
obligations of the Borrowers and the Issuing Bank under this Section shall be
absolute, unconditional and irrevocable, and shall be performed strictly in
accordance with the terms of this Agreement, under all circumstances whatsoever,
including without limitation the following circumstances:
(i) any lack of validity or enforceability of this Agreement
or any Letter of Credit or any document related hereto or thereto;
(ii) any amendment or waiver of or any consent to departure
from all or any of the provisions of this Agreement or any Letter of Credit
or any document related hereto or thereto;
(iii) the use which may be made of any Letter of Credit by, or
any acts or omission of, a beneficiary of any Letter of Credit (or any
Person for whom the beneficiary may be acting);
(iv) the existence of any claim, set-off, defense or other
rights that any Borrower may have at any time against a beneficiary of a
Letter of Credit (or any Person for whom the beneficiary may be acting),
the Issuing Bank or any other Person, whether in connection with this
Agreement or any Letter of Credit or any document related hereto or thereto
or any unrelated transaction;
-11-
(v) any statement or any other document presented under a
Letter of Credit proving to be forged, fraudulent or invalid in any respect
or any statement therein being untrue or inaccurate in any respect
whatsoever;
(vi) payment under a Letter of Credit against presentation to
the Issuing Bank of a draft or certificate that does not comply with the
terms of such Letter of Credit, provided that the Issuing Bank's
--------
determination that documents presented under such Letter of Credit comply
with the terms thereof shall not have constituted gross negligence or
willful misconduct of the Issuing Bank; or
(vii) any other act or omission to act or delay of any kind by
the Issuing Bank or any other Person or any other event or circumstance
whatsoever that might, but for the provisions of this subsection (vii),
constitute a legal or equitable discharge of any Borrower's or the Issuing
Bank's obligations hereunder.
Nothing in this subsection (g) is intended to limit the right of the Borrowers
to make a claim against the Issuing Bank for damages as contemplated by the
proviso to the first sentence of subsection (h).
-------
(h) Indemnification in Respect of Letters of Credit. Each Borrower hereby
-----------------------------------------------
indemnifies and holds harmless the Issuing Bank and its successors and assigns
from and against any and all claims, damages, losses, liabilities, costs or
expenses which they may incur and neither the Issuing Bank nor its successors
and assigns, nor any of their officers or directors or employees or agents shall
be liable or responsible, by reason of or in connection with the execution and
delivery or transfer of or payment or failure to pay under any Letter of Credit,
including without limitation (i) any error, omission, interruption or delay in
transmission or delivery of any messages, by mail, cable, telegraph, telex or
otherwise, (ii) any error in interpretation of technical terms, (iii) any loss
or delay in the transmission of any document required in order to make a drawing
under a Letter of Credit, (iv) any consequences arising from causes beyond the
control of the Bank, including without limitation any government acts, or any
other circumstances whatsoever in making or failing to make payment under such
Letter of Credit; provided that the Borrowers shall not be required to indemnify
--------
the Issuing Bank or its successors and assigns for any claims, damages, losses,
liabilities, costs or expenses, and the Borrowers shall have a claim against the
Issuing Bank for direct (but not consequential) damage suffered by it, to the
extent found by a court of competent jurisdiction to have been caused by (x) the
willful misconduct or gross negligence of the Issuing Bank in determining
whether a request presented under any Letter of Credit issued by it complied
with the terms of such Letter of Credit or (y) the Issuing Bank's failure to pay
under any Letter of Credit issued by it after the presentation to it of a
request strictly complying with the terms and conditions of such Letter of
Credit. Nothing in this subsection (h) is intended to limit the obligations of
the Borrowers under any other provision of this Agreement.
(i) In the event that any term or provision contained in this Agreement
shall conflict with or be inconsistent with the terms and provisions of any
letter of credit application executed
-12-
and delivered by a Borrower in connection with a Letter of Credit, the terms and
provisions of this Agreement shall govern.
ARTICLE III
CONDITIONS
SECTION 3.01 CONDITIONS TO CLOSING. The obligation of the Banks to
---------------------
make the first Revolving Loan or issue the first Letter of Credit hereunder is
subject to the satisfaction of the following conditions:
(a) Effectiveness. This Agreement shall have become effective in
-------------
accordance with Section 9.09.
(b) Note. On or prior to the Closing Date, the Bank shall have received a
----
duly executed Revolving Note dated on or before the Closing Date complying with
the provisions of Section 2.04.
(c) Other Loan Documents. Each of the Loan Documents to be executed on or
--------------------
before the Closing Date shall be in form and substance satisfactory to the
Agents and shall have been duly executed and delivered to the Agents by each of
the parties thereto.
(d) Deposit to XX Xxxx Collateral Account. On or prior to the Closing
-------------------------------------
Date, the Collateral Agent shall have received the deposit required pursuant to
Section 3.05 of the Security Agreement executed and delivered by the Parent
Company.
(e) Adverse Change, etc. On the Closing Date, nothing shall have occurred
-------------------
(and the Administrative Agent shall not have become aware of any facts or
conditions not previously known) which the Administrative Agent shall determine
has, or could reasonably be expected to have, a Material Adverse Effect.
(f) Officer's Certificate. The Administrative Agent shall have received a
---------------------
certificate dated the Closing Date signed on behalf of each Borrower by the
Chairman of the Board, the President, any Vice President or the Treasurer of
such Borrower stating that (x) on the Closing Date and after giving effect to
the Revolving Loans being made on the Closing Date, no Default or Event of
Default shall have occurred and be continuing and (y) to the best knowledge and
belief of such officer, the representations and warranties of such Borrower
contained in the Loan Documents are true and correct on and as of the Closing
Date.
(g) Opinion of Borrowers' Counsel. On the Closing Date, the Administrative
-----------------------------
Agent shall have received from counsel to the Borrowers an opinion addressed to
the Administrative Agent, dated the Closing Date, substantially in the form of
Exhibit D hereto.
(h) Corporate Proceedings. On the Closing Date, the Administrative Agent
---------------------
shall have received (i) a copy of each Borrower's articles or certificate of
incorporation (or analogous organizational documents), as amended, certified by
the appropriate agency of the state of such
-13-
Borrower's incorporation; (ii) for each Borrower, a certificate of the
appropriate agency of the state of such Borrower's incorporation, dated as of a
recent date, as to the good standing and if available listing in long-form the
charter or similar organizational documents of such Borrower on file; and (iii)
a certificate of the Secretary or an Assistant Secretary of each Borrower dated
the Closing Date and certifying (A) that the articles or certificate of
incorporation of such Borrower have not been amended since the date of the last
amendment thereto indicated on the certificate furnished pursuant to clause (ii)
above, (B) as to the absence of dissolution or liquidation proceedings by or
against such Borrower, (C) that attached thereto is a true and complete copy of
the by-laws of such Borrower as in effect on the date of such certification and
all other times relevant to the transactions contemplated hereby, (D) that
attached thereto is a true, correct and complete copy of resolutions adopted by
the board of directors of such Borrower authorizing the execution, delivery and
performance of this Agreement, the Note and such Borrower's Security Agreement
and each other document delivered in connection herewith or therewith and that
said resolutions have not been amended and are in full force and effect on the
date of such certificate, (E) as to the incumbency and specimen signatures of
each officer of such Borrower executing this Agreement, the Note and such
Borrower's Security Agreement or any other document delivered in connection
herewith or therewith and (F) certifying as to the names and respective
jurisdictions of incorporation of all Subsidiaries of such Borrower existing on
the Closing Date.
All corporate and legal proceedings and instruments and agreements
relating to the transactions contemplated by this Agreement or in any other
document delivered in connection therewith shall be satisfactory in form and
substance to the Administrative Agent and its counsel, and the Administrative
Agent shall have received all information and copies of all documents and
papers, including records of corporate proceedings, governmental approvals, good
standing certificates, which the Administrative Agent reasonably may have
requested in connection therewith, such documents and papers where appropriate
to be certified by proper corporate or governmental authorities.
(i) Perfection of Security Interests; Search Reports. On or prior to the
------------------------------------------------
Closing Date, the Collateral Agent shall have received:
(i) a Perfection Certificate of each Borrower, substantially in
the form of Exhibit A to each of the Security Agreements;
(ii) Notices of Assignment with respect to Government Contracts
identified in any Perfection Certificate duly executed by the Borrower
party to such contract in compliance with the Assignment of Claims Act;
(iii) Assignments of Security Interest in United States Patents
and Trademarks for Patents and Trademarks identified in any Perfection
Certificate duly executed by the appropriate Borrower and in form
appropriate for filing at the United States Patent and Trade Xxxx Office;
-14-
(iv) appropriate Financing Statements (Form UCC-1 or such other
financing statements or similar notices as shall be required by local law)
fully executed for filing under the Uniform Commercial Code or other
applicable local law of each jurisdiction in which the filing of a
financing statement or giving of notice may be required, or reasonably
requested by the Collateral Agent, to perfect the security interests
purported to be created by the Loan Documents;
(v) copies of reports from an independent search service
reasonably satisfactory to the Collateral Agent listing all effective
financing statements that name any Borrower (under its present name and any
previous name and, if requested by the Bank, under any trade names) as
debtor or seller that are filed in the jurisdictions referred to in such
Borrower's Perfection Certificate, together with copies of such other
financing statements (none of which shall cover the Collateral except to
the extent evidencing Permitted Liens or for which the Collateral Agent
shall have received termination statements (Form UCC-3) or such other
termination statements as shall be required by local law) fully executed
for filing; and
(vi) evidence of the completion of all other filings and
recordings of, or with respect to, the Loan Documents as may be necessary
or, in the opinion of the Collateral Agent, desirable to perfect the
security interests intended to be created by the Loan Documents.
The obligation of the Bank to make the first Revolving Loan shall be
subject to the additional condition that the Collateral Agent shall have
received copies of reports from an independent search service reasonably
satisfactory to the Collateral Agent indicating that, from and including
February 13, 1997 to one Business Day after the Effective Date, no financing
statements were filed with the Secretary of State of Tennessee or at the
Maryland State Department of Assessments and Taxation that name SEG or Hittman
Transport Services, Inc. as debtor or seller with respect to any of their
respective Accounts or General Intangibles (as defined in the Security
Agreements).
(j) Closing Date Borrowing Base Certificate. On the Closing Date, the
---------------------------------------
Parent Company shall have delivered to the Bank its initial Borrowing Base
Certificate meeting the requirements of Section 5.01(f).
(k) Payment of Fees. All costs, fees and expenses due to the Banks on or
---------------
before the Closing Date (including, without limitation, all audit fees incurred
with respect to audits performed prior to the Closing Date, and all legal fees
and expenses) shall have been paid.
(l) Counsel Fees. The Banks shall have received payment from the
------------
Borrowers of the fees and expenses of McGuire, Woods, Battle & Xxxxxx, L.L.P.,
described in Section 9.03 which are billed through the Closing Date.
-15-
(m) Consummation of the Acquisition. On or prior to the Closing Date,
-------------------------------
there shall have been delivered to the Administrative Agent true and correct
copies of all Acquisition Documents, certified as such by an officer of the
Parent Company, and all terms and conditions of the Acquisition Documents shall
be in form and substance satisfactory to the Administrative Agent and shall not
be amended without the consent of the Administrative Agent. The Acquisition,
including all of the terms and conditions thereof, shall have been duly approved
by the board of directors and (if required by applicable law) the shareholders
of the Parent Company, and all Acquisition Documents shall have been duly
executed and delivered by the parties thereto and shall be in full force and
effect. The representations and warranties of the Parent Company and, to the
knowledge of the Borrowers, the representations and warranties of Westinghouse
set forth in the Acquisition Documents shall be true and correct in all material
respects as if made on and as of the Closing Date. Each of the conditions
precedent to the Parent Company's obligation to consummate the Acquisition as
set forth in the Acquisition Documents shall have been satisfied to the
reasonable satisfaction of the Administrative Agent or waived with the consent
of the Administrative Agent, and the Acquisition shall have been consummated in
accordance with all applicable laws and the Acquisition Documents (without
giving effect to any amendment or modification thereof or waiver with respect
thereto unless consented to by the Administrative Agent).
The Banks shall promptly notify the Parent Company of the Closing Date, and such
notice shall be conclusive and binding on all parties hereto. The documents
referred to in this Section shall be delivered to the Banks or the Agents, as
appropriate, no later than the Closing Date. The certificates and opinion
referred to in this Section shall be dated the Closing Date.
SECTION 3.02 CONDITIONS TO ALL CREDIT EVENTS. The obligation of the
-------------------------------
Bank to make each Revolving Loan and the obligation of the Issuing Bank to issue
(or renew or extend the term of) any Letter of Credit are subject to the
satisfaction of the following conditions:
(i) the fact that the Closing Date shall have occurred;
(ii) in the case of Performance Letters of Credit, receipt by
the Bank of a Notice of Issuance;
(iii) the fact that, immediately after such Credit Event, (A)
the aggregate outstanding principal amount of all Revolving Loans shall not
exceed the lesser of (w) the Revolving Loan Commitment and (x) the
Borrowing Base, (B) the aggregate amount of Performance Letter of Credit
Liabilities will not exceed the lesser of (y) the Performance Letter of
Credit Commitment and (z) the Borrowing Base, and (C) the aggregate amount
of Credit Agreement Liabilities will not exceed the Borrowing Base (after
giving effect to the application of the proceeds of any Revolving Loan then
being made or Letter of Credit being issued);
(iv) the fact that, immediately before and after such Credit
Event, no Default shall have occurred and be continuing; and
-16-
(v) the fact that the representations and warranties of the
Borrowers contained in this Agreement and the other Loan Documents shall be
true on and as of the date of such Credit Event.
Each Credit Event hereunder shall be deemed to be a representation and warranty
by each Borrower on the date of such Credit Event as to the facts specified in
clauses (iii), (iv) and (v) of this Section.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
Each Borrower represents and warrants that:
SECTION 4.01 CORPORATE EXISTENCE AND POWER. Each Borrower and each
-----------------------------
of its Subsidiaries is a corporation duly incorporated, validly existing and in
good standing under the laws of the jurisdiction of its incorporation, and has
all corporate powers and all material governmental licenses, authorizations,
consents and approvals required to carry on its business as now conducted. Each
Borrower and each of its Subsidiaries is duly qualified as a foreign corporation
and in good standing in each jurisdiction where qualification is required by the
nature of its business or the character and location of its property, business
or customers and in which the failure to so qualify, in the aggregate, could
have a Material Adverse Effect.
SECTION 4.02 CORPORATE AND GOVERNMENTAL AUTHORIZATION; NO
CONTRAVENTION. The execution, delivery and performance by each Borrower of the
Loan Documents to which it is a party are within the corporate powers of such
Borrower, have been duly authorized by all necessary corporate action, require
no action by or in respect of, or filing with, any governmental body, agency or
official (except for any such action or filing as shall have been taken or made
and that is in full force and effect from and after the Closing Date) and do not
contravene, or constitute (with or without the giving of notice or lapse of time
or both) a default under, any provision of applicable law or of the articles or
certificate of incorporation or by-laws (or analogous organizational documents)
of such Borrower or any of its Subsidiaries or of any agreement, judgment,
injunction, order, decree or other instrument binding upon or affecting such
Borrower or any or its Subsidiaries or result in the creation or imposition of
any Lien on any asset of such Borrower or any of its Subsidiaries.
SECTION 4.03 BINDING EFFECT. Each Loan Document (other than the
--------------
Note) to which a Borrower is a party constitutes a valid and binding agreement
of such Borrower and the Note, when executed and delivered in accordance with
this Agreement, will constitute valid and binding obligations of each Borrower,
in each case enforceable against each Borrower in accordance with its terms
except in each case as such enforceability may be limited by (i) bankruptcy,
insolvency or similar laws affecting creditors' rights generally and (ii)
equitable principles of general applicability (regardless of whether such
enforceability is considered in a proceeding in equity or at law).
-17-
SECTION 4.04 FINANCIAL CONDITION.
(a) Audited Financial Statements. The consolidated balance sheet of the
----------------------------
Parent Company as of December 31, 1996, and the Parent Company's related
consolidated statements of income and cash flows for the fiscal year then ended,
reported on by KPMG Peat Marwick LLP, copies of which have been delivered to the
Bank, fairly present, in conformity with generally accepted accounting
principles, the consolidated financial position of the Parent Company as of such
date and its consolidated results of operations and cash flows for such fiscal
year. To the knowledge of the Parent Company, the unaudited consolidated
balance sheet of SEG as of December 31, 1996, and the unaudited consolidated
statement of income of SEG for the fiscal year ended December 31, 1996, copies
of which have been delivered to the Bank, fairly present, in conformity with
generally accepted accounting principles, the consolidated financial position of
SEG as of such date and SEG's consolidated results of operation for such fiscal
year. As of the date of such financial statements, no Borrower had any material
contingent obligation, contingent liability or liability for taxes, long-term
lease or unusual forward or long-term commitment, which is not reflected in any
of such financial statements or notes thereto.
(b) Material Adverse Change. Since December 31, 1996, there has been no
-----------------------
material adverse change in the condition (financial or otherwise), results of
operations, properties, assets, or business of the Parent Company and its
Consolidated Subsidiaries, considered as a whole except as disclosed in the
financial statements of the Parent Company referred to in subsection (a) above
(including, without limitation, changes disclosed in such financial statements
with respect to the M-Area Contract) and in Schedule 2.6 of the Acquisition
Agreement.
(c) Solvency. On and as of the Closing Date, on a pro-forma basis after
--------
giving effect to the transactions contemplated hereby and to all Debt incurred,
and to be incurred, and Liens created, and to be created, by the Borrowers in
connection therewith, (i) the sum of the assets, at fair valuation, of the
Parent Company and its Consolidated Subsidiaries, taken as a whole, will exceed
Debts (without duplication) of the Parent Company and its Consolidated
Subsidiaries, taken as a whole, (ii) each Borrower will not have unreasonably
small capital with which to conduct its business, and (iii) the Parent Company
and its Consolidated Subsidiaries, taken as a whole, will not have incurred or
intended to, or believe that they will, incur Debts beyond their ability to pay
as such Debts mature.
SECTION 4.05 LITIGATION. Except as disclosed in Schedule 4.05, there
----------
is no action, suit, proceeding or investigation pending against, or to the
knowledge of any Borrower threatened against, contemplated or affecting, any
Borrower or any of its Subsidiaries before any court, arbitrator or any
governmental body, agency or official which has, or, if adversely determined,
could reasonably be expected to have, a Material Adverse Effect, or which in any
manner draws into question the validity or enforceability of this Agreement, the
Note or any of the other Loan Documents and there is no basis known to any
Borrower or any of its Subsidiaries for any such action, suit, proceeding or
investigation.
-18-
SECTION 4.06 REGULATION U; USE OF PROCEEDS. No Borrower nor any of
-----------------------------
the Borrowers' Subsidiaries own any "margin stock" as such term is defined in
Regulation U. The proceeds of the Revolving Loans will be used by the Borrowers
only for the purposes set forth in Section 5.16 hereof.
SECTION 4.07 REGULATORY RESTRICTIONS ON BORROWING. No Borrower nor
------------------------------------
any of the Borrowers' Subsidiaries is an "investment company" within the
meaning of the Investment Company Act of 1940, as amended, a "holding company"
within the meaning of the Public Utility Holding Company Act of 1935, as
amended, or otherwise subject to any regulatory scheme which restricts its
ability to incur debt.
SECTION 4.08 SUBSIDIARIES. Part I of Schedule 4.08 (as such Schedule
------------
may be supplemented by a writing delivered by the Borrowers to the Bank from
time to time after the Effective Date) hereto lists all Subsidiaries of the
respective Borrowers (and the direct and indirect ownership interests of the
Borrowers therein), in each case existing on the Effective Date. Except as set
forth on Part 1 of such Schedule 4.08 (as supplemented from time to time), each
such Subsidiary existing on the date hereof is, and, in the case of any
additional corporate Subsidiaries formed after the Effective Date, each of such
additional corporate Subsidiaries will be at each time that this representation
is made or deemed to be made after the Effective Date, a wholly-owned Subsidiary
that is a corporation duly incorporated, validly existing and, to the extent
relevant in such jurisdiction, in good standing under the laws of its
jurisdiction of incorporation, and has all corporate powers and all material
governmental licenses, authorizations, consents and approvals required to carry
on its business as now conducted. Except as listed on Part 2 of Schedule 4.08
(as such Schedule may be supplemented by a writing delivered by the Borrowers to
the Bank from time to time after the Effective Date), no Borrower nor any of the
Borrowers' Subsidiaries is engaged in any joint venture or partnership with any
other Person.
SECTION 4.09 FULL DISCLOSURE. All factual information (taken as a
---------------
whole) furnished by or on behalf of the Borrowers or any of the Borrowers'
Subsidiaries in writing to the Bank for purposes of or in connection with this
Agreement or any transaction contemplated hereby is true and accurate in all
material respects on the date as of which such information is dated or certified
and is not incomplete by omitting to state any material fact necessary to make
such information (taken as a whole) not misleading at such time in light of the
circumstances under which such information was provided. Except for economic
trends generally known to the public affecting generally the industry in which
the Borrowers and the Borrowers' Subsidiaries conduct their business, the
Borrowers have disclosed to the Bank in writing any and all facts which
materially and adversely affect or may materially and adversely affect (to the
extent the Borrowers can now reasonably foresee), the business, operations or
financial condition of the Borrowers, taken as a whole, or the ability of any
Borrower to perform its obligations under this Agreement.
SECTION 4.10 TAX RETURNS AND PAYMENTS. Each Borrower and each of its
------------------------
Subsidiaries has filed all United States Federal income tax returns and all
other material tax
-19-
returns, domestic and foreign, required to be filed by it and has paid all taxes
and assessments payable by it which have become due pursuant to such returns or
pursuant to any assessment received by such Borrower or such Subsidiary, other
than those not yet delinquent and except for those contested in good faith. Each
Borrower and each of its Subsidiaries has paid, or has provided adequate
reserves (in good faith judgment of the management of such Borrower) for the
payment of, all federal, state and foreign income taxes applicable for all prior
fiscal years and for the current fiscal year to the date hereof.
SECTION 4.11 COMPLIANCE WITH ERISA. Each member of the ERISA Group
---------------------
has fulfilled its obligations under the minimum funding standards of ERISA and
the Internal Revenue Code with respect to each Plan and is in compliance in all
material respects with the presently applicable provisions of ERISA and the
Internal Revenue Code with respect to each Plan. No member of the ERISA Group
has (i) sought a waiver of the minimum funding standard under Section 412 of the
Internal Revenue Code in respect of any Plan, (ii) failed to make any
contribution or payment to any Plan or Multiemployer Plan or in respect of any
Benefit Arrangement, or made any amendment to any Plan or Benefit Arrangement,
which has resulted or could result in the imposition of a Lien or the posting of
a bond or other security under ERISA or the Internal Revenue Code or (iii)
incurred any liability under Title IV of ERISA other than a liability to the
PBGC for premiums under Section 4007 of ERISA.
SECTION 4.12 INTELLECTUAL PROPERTY. Except as disclosed in Schedule
---------------------
2.15.3 to the Acquisition Agreement, each Borrower and its Subsidiaries owns or
possesses or holds under valid licenses all Patents, Trademarks, service marks,
trade names, copyrights, Licenses and other intellectual property rights that
are necessary for the operation of their respective properties and businesses,
and no Borrower nor any of the Borrowers' Subsidiaries is in violation of any
provision thereof. Each Borrower and its Subsidiaries conduct their respective
businesses without infringement or claim of infringement of any material
license, patent, trademark, trade name, service xxxx, copyright, trade secret or
any other intellectual property right of others and there is no infringement or
claim of infringement by others of any material license, patent, trademark,
trade name, service xxxx, copyright, trade secret or other intellectual property
right of any Borrower or its Subsidiaries, other than such infringement or claim
which is disclosed in Schedule 2.15.3 of the Acquisition Agreement.
SECTION 4.13 NO BURDENSOME RESTRICTIONS. No contract, lease,
--------------------------
agreement or other instrument to which any Borrower or its Subsidiaries is a
party or by which any of their property is bound or affected, no charge,
corporate restriction, judgment, decree or order and no provision of applicable
law or governmental regulation has had or is reasonably expected to have a
Material Adverse Effect.
SECTION 4.14 ENVIRONMENTAL MATTERS. In the ordinary course of its
---------------------
business, each Borrower conducts an ongoing review of the effect of
Environmental Laws on the business, operations and properties of such Borrower
and its Subsidiaries, in the course of which it identifies and evaluates
associated liabilities and costs (including, without limitation, any capital or
operating expenditures required for clean-up or closure of properties presently
or previously
-20-
owned, any capital or operating expenditures required to achieve or maintain
compliance with environmental protection standards imposed by law or as a
condition of any license, permit or contract, any related constraints on
operating activities, including any periodic or permanent shutdown of any
facility or reduction in the level of or change in the nature of operations
conducted at any such facility, any costs or liabilities in connection with off-
site disposal of wastes or Hazardous Substances, and any actual or potential
liabilities to third parties, including employees, and any related costs and
expenses). On the basis of this review, each Borrower has reasonably concluded
that such associated liabilities and costs, including the costs of compliance
with Environmental Laws, are unlikely to have a material adverse effect on the
business, financial condition, results of operations or prospects of such
Borrower and its Consolidated Subsidiaries, considered as a whole.
SECTION 4.15 ACCOUNTS. With respect to each Eligible Account, all
--------
records, papers and documents relating thereto (if any) are genuine and in all
respects what they purport to be, and all papers and documents (if any) relating
thereto: (i) represent legal, valid and binding obligations of the respective
Account Debtor, subject to adjustments customary in the business of the
Borrowers, with respect to unpaid indebtedness incurred by such Account Debtor
in respect of the performance of labor or services or the sale or lease and
delivery of the merchandise listed therein, or both, (ii) are the only original
writings evidencing and embodying such obligation of the Account Debtor named
therein (other than copies created for general accounting purposes) and are in
compliance with all applicable federal, state and local laws and applicable laws
of any relevant foreign jurisdiction.
SECTION 4.16 FAIR LABOR STANDARDS ACT. All Inventory has or will
------------------------
have been produced in compliance with the applicable requirements of the Fair
Labor Standards Act, as amended from time to time, or any successor statute, and
regulations promulgated thereunder.
ARTICLE V
COVENANTS
The Borrowers agree that, so long as the Bank has any Commitment
hereunder or any Obligation remains unpaid:
SECTION 5.01 INFORMATION. The Borrowers will deliver or cause to be
-----------
delivered to the Administrative Agent:
(a) Annual Financial Statements. As soon as available and in any event
---------------------------
within 120 days after the end of each fiscal year:
(i) copies of the Parent Company's Annual Report to Shareholders
and, as soon as available and in any event within 90 days after the end of
each fiscal year, copies of the Parent Company's Annual Report on Form 10-K
for such fiscal year, such reports to include a consolidated balance sheet
of the Parent Company and its Consolidated Subsidiaries as of the end of
such fiscal year and the related consolidated statements of
-21-
income and cash flows for such fiscal year, setting forth in each case in
comparative form the figures for the previous fiscal year, all in
reasonable detail and accompanied by an opinion thereon by KPMG Peat
Marwick LLP or other independent public accountants satisfactory to the
Bank, which opinion shall not be qualified as to the scope of the audit and
which shall state that such consolidated financial statements present
fairly the consolidated financial position of the Parent Company and its
Consolidated Subsidiaries as of the date of such financial statements and
the results of their operations for the period covered by such financial
statements in conformity with generally accepted accounting principles
applied on a consistent basis (except for changes in the application of
which such accountants concur) and shall not contain any "going concern" or
like qualification or exception or qualification arising out of the scope
of the audit; and
(ii) copies of reports of (x) the Parent Company and its
Consolidated Subsidiaries (excluding SEG and its Consolidated Subsidiaries)
and (y) SEG and its Consolidated Subsidiaries which include for each such
entity and its Consolidated Subsidiaries (A) a consolidated balance sheet
for such entity and its Consolidated Subsidiaries as of the end of such
fiscal year, (B) consolidated statements of income and cash flows for such
entity and its Consolidated Subsidiaries for such fiscal year, and (C)
statements of income indicating revenue and expenses generated by each
business line of such entity and its Consolidated Subsidiaries for such
fiscal year, all in reasonable detail and certified (subject to normal
year-end audit adjustments) as complete and correct by the chief financial
officer or chief accounting officer of the Parent Company.
(b) Quarterly Financial Statements. As soon as available and in any event
------------------------------
within 45 days after the end of each of the first three fiscal quarters of each
fiscal year:
(i) copies of the Parent Company's Quarterly Report on Form 10-Q
for such quarter, such report to include all financial statements and
financial information required by Rule 10-01 of Regulation S-X (which
includes a consolidated balance sheet of the Parent Company and its
Consolidated Subsidiaries, and the related consolidated statements of
income and cash flows for such fiscal quarter and the portion of such year
ended at the end of such quarter, setting forth in each case in comparative
form the figures for the corresponding quarter of the previous fiscal year
and for the corresponding portion of the previous fiscal year, all in
reasonable detail and certified (subject to normal year-end audit
adjustments) as complete and correct by the chief financial officer or
chief accounting officer of the Parent Company; and
(ii) copies of reports of (x) the Parent Company and its
Consolidated Subsidiaries (excluding SEG and its Consolidated Subsidiaries)
and (y) SEG and its Consolidated Subsidiaries which include for each such
entity and its Consolidated Subsidiaries (A) a consolidated balance sheet
for such entity and its Consolidated Subsidiaries as of the end of such
fiscal quarter and (B) consolidated statements of income for such entity
and its Consolidated Subsidiaries for such fiscal quarter, all in
reasonable detail and certified (subject to normal year-end audit
adjustments) as complete
-22-
and correct by the chief financial officer or chief accounting officer of
the Parent Company.
(c) Officer's Certificate. Simultaneously with the delivery of each set
---------------------
of financial statements referred to in subsections (a)(i) and (b)(i) above, a
certificate of the chief financial officer or chief accounting officer of the
Parent Company, (i) if applicable, setting forth in reasonable detail the
calculations required to establish whether the Borrowers were in compliance with
the requirements of Sections 5.18 and 5.19 on the date of such financial
statements, (ii) stating whether there exists on the date of such certificate
any Default and, if any Default then exists, setting forth the details thereof
and the action which the Borrowers are taking or propose to take with respect
thereto and (iii) stating whether, since the date of the most recent previous
delivery of financial statements pursuant to subsections (a)(i) and (b)(i) of
this Section, there has been any material adverse change in the condition
(financial or otherwise), results of operations, properties, assets or business
of the Parent Company and its Consolidated Subsidiaries, considered as a whole,
and, if so, the nature of such material adverse change.
(d) Accountant's Certificate. If requested by the Administrative Agent,
------------------------
simultaneously with the delivery of each set of financial statements referred to
in subsection (a) above (or at such other time as the Administrative Agent may
specify), a statement of the firm of independent public accountants which
reported on such statements (x) whether anything has come to their attention to
cause them to believe that any Default existed on the date of such statements
and (y) confirming the calculations set forth in the officer's certificate
delivered simultaneously therewith pursuant to subsection (c) above.
(e) Waste Tracking Report. As soon as available and in any event within
---------------------
45 days after the end of each fiscal quarter, a report from SEG setting forth
the amount of waste then held or being processed by SEG, the average number of
days required for SEG to process waste received (on a per unit basis) and such
other information as the Bank may reasonably require.
(f) Borrowing Base Certificate. As soon as available and in any event
--------------------------
within 25 days after the end of each calendar month, a Borrowing Base
Certificate executed by the chief financial officer or chief accounting officer
of the Parent Company setting forth the Borrowing Base as of the last Business
Day of such month.
(g) Accounts Receivables Agings. As soon as available and in any event
---------------------------
within 25 days after the end of each calendar month, a report listing all
Accounts of the Borrowers as of the last Business Day of such month, which
report shall include the amount and age of each Account, the name of each
Account Debtor and such other information as the Bank may require in order to
verify the Eligible Accounts, all in reasonable detail and in form satisfactory
to the Bank. The Borrowers shall deliver annually on the first day of the
second quarter of each fiscal year and within 5 days of the Bank's request the
name and mailing address of each Account Debtor.
(h) Accounts Payable Agings. As soon as available and in any event within
-----------------------
45 days after the end of each fiscal quarter, a report listing all accounts
payable of the Borrowers as of the
-23-
last Business Day of such quarter, which report shall include the amount and age
of each account payable, the name of each payee and such other information as
the Bank may require, all in reasonable detail and in form satisfactory to the
Bank.
(i) Environmental Database Reports. Written notice to the Administrative
------------------------------
Agent of the existence and location of any new facility of any Borrower at which
Hazardous Substances will be processed for disposal or reclamation; and a risk
portfolio or environmental database report for each such facility, obtained by
the Administrative Agent at the Borrowers' expense upon notice of each new
facility and at least every two years with respect to all such facilities, and
prepared by an entity and in detail satisfactory to the Administrative Agent;
and copies of all state inspections, including updates, and all internally
prepared environmental audits relating to any such facility on an annual basis.
(j) Default. Forthwith upon the occurrence of any Default, a certificate
-------
of the chief financial officer or chief accounting officer of the Parent Company
setting forth the details thereof and the action which the Borrowers are taking
or proposes to take with respect thereto.
(k) Litigation. As soon as reasonably practicable after obtaining
----------
knowledge of the commencement of, or of a material threat of the commencement
of, an action, suit, proceeding or investigation against any Borrower or any of
its Subsidiaries which could materially adversely affect the condition
(financial or otherwise), results of operations, properties, assets or business
of any Borrower or the Parent Company and its Consolidated Subsidiaries,
considered as a whole, or could otherwise have a Material Adverse Effect or
which in any manner questions the validity of this Agreement or any of the other
transactions contemplated hereby or thereby, an explanation of the nature of
such pending or threatened action, suit, proceeding or investigation and such
additional information as may be reasonably requested by the Bank.
(l) Auditors' Management Letters. Promptly upon receipt thereof, copies
----------------------------
of each report submitted to any Borrower or its Consolidated Subsidiaries by
independent public accountants in connection with any annual, interim or special
audit made by them of the books of such Borrower or its Consolidated
Subsidiaries including, without limitation, each report submitted to such
Borrower or its Consolidated Subsidiaries concerning its accounting practices
and systems and any final comment letter submitted by such accountants to
management in connection with the annual audit of such Borrower and its
Consolidated Subsidiaries.
(m) Tax Returns. Upon request (excluding such returns or reports for SEG
-----------
or any of its Consolidated Subsidiaries for any period prior to the period in
which the Closing Date occurs), copies of (i) all federal, state and local
income tax returns filed by any Borrower or its Subsidiaries, (ii) all quarterly
reports by any Borrower or its Subsidiaries on Form 941 and (iii) all annual
FUTA tax returns of any Borrower or its Subsidiaries.
(n) ERISA Matters. If and when any member of the ERISA Group (i) gives or
-------------
is required to give notice to the PBGC of any "reportable event" (as defined in
Section 4043 of ERISA) with respect to any Plan which might constitute grounds
for a termination of such Plan
-24-
under Title IV of ERISA, or knows that the plan administrator of any Plan has
given or is required to give notice of any such reportable event, a copy of the
notice of such reportable event given or required to be given to the PBGC; (ii)
receives notice of complete or partial withdrawal liability under Title IV of
ERISA or notice that any Multiemployer Plan is in reorganization, is insolvent
or has been terminated, a copy of such notice; (iii) receives notice from the
PBGC under Title IV of ERISA of an intent to terminate, impose liability (other
than for premiums under Section 4007 of ERISA) in respect of, or appoint a
trustee to administer any Plan, a copy of such notice; (iv) applies for a waiver
of the minimum funding standard under Section 412 of the Internal Revenue Code,
a copy of such application; (v) gives notice of intent to terminate any Plan
under Section 4041(c) of ERISA, a copy of such notice and other information
filed with the PBGC; (vi) gives notice of withdrawal from any Plan pursuant to
Section 4063 of ERISA, a copy of such notice; or (vii) fails to make any
payment-or contribution to any Plan or Multiemployer Plan or in respect of any
Benefit Arrangement or makes any amendment to any Plan or Benefit Arrangement
which has resulted or could reasonably be expected to result in the imposition
of a Lien or the posting of a bond or other security, a certificate of the chief
financial officer or the chief accounting officer of the Parent Company setting
forth details as to such occurrence and action, if any, which any Borrower or
applicable member of the ERISA Group is required or proposes to take.
(o) Environmental Matters. Promptly, upon receipt of any complaint,
---------------------
order, citation, notice or other written communication from any Person with
respect to, or upon any Borrower's obtaining knowledge of, (A) the existence or
alleged existence of a violation of any applicable Environmental Law in
connection with any property now or previously owned, leased or operated by a
Borrower or any of its Subsidiaries, (B) any release on such property or any
part thereof in a quantity that is reportable under any applicable Environmental
Law and (c) any pending or threatened proceeding for the termination, suspension
or non-renewal of any permit required under any applicable Environmental Law, in
each case in which there is a reasonable likelihood of an adverse decision or
determination which could result in a Material Adverse Effect.
(p) Major Contracts. Written notice immediately upon the award to any
---------------
Borrower of, or the termination, lapse or nonrenewal of, any contract or
agreement providing for aggregate payments to such Borrower over the term
thereof in excess of $10,000,000.
(q) UCC Search Reports. As soon as reasonably practicable but in no event
------------------
later than 15 Business Days after the Effective Date, copies of reports from an
independent search service reasonably satisfactory to the Collateral Agent
indicating that, from and including February 13, 1997 to one Business Day after
the Effective Date, no financing statements were filed with the Secretary of
State of Tennessee or at the Maryland State Department of Assessments and
Taxation that name SEG or Hittman Transport Services, Inc. as debtor or seller
with respect to any of their respective Accounts or General Intangibles (as
defined in the Security Agreements).
-25-
(r) Other Information. From time to time such additional financial or
-----------------
other information regarding the condition (financial or otherwise), results of
operations, properties, assets or business of any Borrower or its Subsidiaries
as the Bank may reasonably request.
SECTION 5.02 PAYMENT OF OBLIGATIONS. The Borrowers will pay and
----------------------
discharge, and will cause each of their respective Subsidiaries to pay and
discharge, as the same shall become due and payable, (i) all their respective
obligations and liabilities, including all claims or demands of materialmen,
mechanics, carriers, warehousemen, landlords and other like persons which, in
any such case, if unpaid, might by law give rise to a Lien upon any of their
properties or assets and (ii) all lawful taxes, assessments and charges or
levies made upon their properties or assets, by any governmental body, agency or
official, except where any of the items in clause (i) or (ii) of this Section
5.02 may be diligently contested in good faith by appropriate proceedings and
the related Borrower or Subsidiary shall have set aside on its books, if
required under generally accepted accounting principles, appropriate reserves
for the accrual of any such items.
SECTION 5.03 MAINTENANCE OF PROPERTY; INSURANCE.
(a) Maintenance of Properties. The Borrowers will keep, and will cause
-------------------------
each of their respective Subsidiaries to keep, all property useful and necessary
in their respective businesses in good working order and condition, subject to
ordinary wear and tear.
(b) Insurance. The Borrowers will maintain, and will cause each of their
---------
respective Subsidiaries to maintain, insurance with financially sound and
responsible companies in such amounts (and with such risk retentions) and
against such risks as is usually carried by owners of similar businesses and
properties in the same general areas in which the respective Borrowers and their
Subsidiaries operate. The Borrowers will deliver to the Collateral Agent upon
request from time to time full information as to the insurance carried.
SECTION 5.04 CONDUCT OF BUSINESS AND MAINTENANCE OF EXISTENCE. The
------------------------------------------------
Borrowers will continue, and will cause each of their respective Subsidiaries to
continue, to engage in business of the same general type as now conducted by the
Borrowers and such Subsidiaries, and will preserve, renew and keep in full force
and effect, and will cause each of their respective Subsidiaries to preserve,
renew and keep in full force and effect, their respective corporate existence
and their respective rights, privileges and franchises necessary or desirable in
the normal conduct of business; provided that nothing in this Section 5.04 shall
--------
prohibit (i) the merger of a Subsidiary into a parent Borrower or another
Subsidiary if after giving effect thereto, no Default shall have occurred and be
continuing or (ii) the termination of the corporate existence of any Subsidiary
if the Parent Company in good faith determines that such termination is in the
best interest of the Borrowers and is not materially disadvantageous to the
Banks.
SECTION 5.05 COMPLIANCE WITH LAWS. The Borrowers will comply, and
--------------------
will cause each of their respective Subsidiaries to comply, with all applicable
laws, ordinances, rules, regulations, and requirements of governmental
authorities (including, without limitation, Environmental Laws, ERISA and the
rules and regulations thereunder) except (i) where the
-26-
necessity of compliance therewith is contested in good faith by appropriate
proceedings or (ii) where noncompliance could not reasonably be expected to have
a Material Adverse Effect.
SECTION 5.06 ACCOUNTING; INSPECTION OF PROPERTY, BOOKS AND RECORDS.
The Borrowers will keep, and will cause each of their respective Subsidiaries to
keep, proper books of record and account in which full, true and correct entries
in conformity with generally accepted accounting principles shall be made of all
dealings and transactions in relation to their respective businesses and
activities, will maintain, and will cause each of their respective Subsidiaries
to maintain, their respective fiscal reporting periods on the present basis and
will permit, and will cause each of their respective Subsidiaries to permit,
representatives of the Bank to visit and inspect any of their respective
properties, to examine and make copies from any of their respective books and
records and to discuss their respective affairs, finances and accounts with
their officers, employees and independent public accountants, all at such
reasonable times and as often as may reasonably be desired. Each of the
Borrowers acknowledge that the Collateral Agent will be conducting an audit of
each Borrower's books and records and a field examination of each Borrower's
facilities within six months of the Closing Date and that the first $6,000 of
expense incurred in connection with such audits and field exams will be borne by
the Borrowers (and will constitute an Obligation hereunder).
SECTION 5.07 COLLECTION OF ACCOUNTS. The Borrowers shall use their
----------------------
best efforts to cause to be collected from each Account Debtor, as and when due,
any and all amounts owing under or on account of each Account (including,
without limitation, Accounts which are delinquent, such Accounts to be collected
in accordance with lawful collection procedures) and shall apply forthwith upon
receipt thereof all such amounts as are so collected to the outstanding balance
of such Account. No Borrower shall rescind or cancel any indebtedness or
obligation evidenced by any Account, modify, make adjustments to, extend, renew,
compromise or settle any material dispute, claim, suit or legal proceeding
relating to or sell or assign any Account, or interest therein, without the
prior written consent of the Collateral Agent, except that, subject to the
rights of the Banks under the Loan Documents, as long as a Default or an Event
of Default shall not have occurred and be continuing, a Borrower may allow in
the ordinary course of business as adjustments to amounts owing under its
Accounts (i) an extension or renewal of the time or times of payment, or
settlement for less than the total unpaid balance, which the Borrower finds
appropriate in accordance with sound business judgment and (ii) a refund or
credit due as a result of discounts, over-xxxxxxxx and miscellaneous credits,
all in accordance with the Borrower's ordinary course of business consistent
with its historical collection practices. The costs and expenses (including,
without limitation, attorneys' fees) of collection, whether incurred by a
Borrower or any of the Banks, shall be borne by the Borrowers.
SECTION 5.08 NOTIFICATION TO ACCOUNT DEBTORS. Upon the effectiveness
-------------------------------
of this Agreement, the Borrowers will promptly notify each Account Debtor in
respect of any Account or Instrument that any payments due or to become due in
respect of such Collateral are to be made in the name of the related Borrower to
such address and post office box as shall be specified by the Collateral Agent;
provided that such notification with respect to any Account or Instrument owned
--------
by SEG or any of its Consolidated Subsidiaries shall be given to each related
-27-
Account Debtor as soon as practicable but in no event later than 120 days after
the Effective Date. Except as set forth in Section 3.03 of the Security
Agreement, each such payment shall, upon receipt by the Collateral Agent, be
deposited in the Operating Account in accordance with Section 2.07(c). Upon the
occurrence and continuation of an Event of Default, the Borrowers will promptly
notify (and the Borrowers hereby authorize the Collateral Agent so to notify)
each Account Debtor in respect of any Account or Instrument that such Collateral
has been assigned to the Collateral Agent and that any payments due or to become
due in respect of such Collateral are to be made directly to the Collateral
Agent in accordance with Section 3.03 of the Security Agreement.
SECTION 5.09 RESTRICTION ON LIENS. The Borrowers will not, and will
--------------------
not permit any of their respective Subsidiaries to, create, incur, assume or
suffer to exist any Lien upon or with respect to any property or assets of any
kind (real or personal, tangible or intangible) of the Borrowers or any such
Subsidiary whether now owned or hereafter acquired, or sell any such property or
assets subject to an understanding or agreement, contingent or otherwise, to
repurchase such property or assets (including sales of accounts receivable or
notes with recourse to a Borrower or its Subsidiaries) or assign any right to
receive income, or file or permit the filing of any financing statement under
the Uniform Commercial Code as in effect in any applicable jurisdiction or any
other similar notice of Lien under any similar recording or notice statute;
provided that the provisions of this Section 5.09 shall not prevent the
--------
creation, incurrence, assumption or existence of the following (with such Liens
described below being herein referred to as "Permitted Liens"):
(i) Liens existing on the date of this Agreement, described in
Schedule 5.09 hereto, securing Debt outstanding on the date of this
Agreement and then in an aggregate principal or face amount not exceeding
$500,000;
(ii) any purchase money security interest (including the interest
of a lessor under a Capital Lease) on any capital asset of any Borrower if
such purchase money security interest attaches to such capital asset
concurrently with the acquisition thereof and if the Debt secured by such
purchase money security interest does not exceed the lesser of the cost or
fair market value as of the time of acquisition of the asset covered
thereby to such Borrower; provided, that the aggregate amount of Debt
--------
secured by such Liens which is incurred by SEG as a result of the
Acquisition does not exceed $2,000,000 in the aggregate at any one time
outstanding and that all other Debt secured by such Liens does not exceed
$1,000,000 in the aggregate at any one time outstanding, and provided
--------
further, that no such purchase money security interest shall extend to or
-------
cover any property or asset of such Borrower other than the related asset;
(iii) any Lien existing on an asset prior to the acquisition
thereof by a Borrower or any Subsidiary and not created in contemplation
of such acquisition;
(iv) Liens created by the Loan Documents;
-28-
(v) any Lien arising out of the refinancing, extension,
renewal or refunding of any Debt secured by any Lien permitted by any of
the foregoing clauses of this Section, provided that the principal amount
--------
of such Debt is not increased and such Debt is not secured by any
additional assets;
(vi) Liens for taxes not yet due or Liens for taxes being
contested in good faith and by appropriate proceedings for which adequate
reserves (in the good faith judgment of the management of the Parent
Company) have been established;
(vii) Liens imposed by law securing the charges, claims, demands
or levies of carriers, warehousemen, mechanics and other like persons which
were incurred in the ordinary course of business which (A) do not in the
aggregate materially detract from the value of the property or assets
subject to such Lien or materially impair the use thereof in the operation
of the business of any Borrower or Subsidiary or (B) are being contested in
good faith by appropriate proceedings, which proceedings have the effect of
preventing the forfeiture or sale of the property or assets subject to such
lien;
(viii) Liens (other than any Liens imposed by ERISA or pursuant
to any Environmental Law) not securing Debt or Derivatives Obligations
incurred or deposits made in the ordinary course of business in connection
with workers' compensation, unemployment insurance and other types of
social security, or to secure the performance of tenders, statutory
obligations, surety bonds (other than appeal bonds), bids, leases,
government contracts, performance and return-of-money bonds and other
similar obligations incurred in the ordinary course of business;
(ix) Liens constituting easements, rights of way and similar
charges, title defects or other irregularities with respect to real
property which do not result in a Material Adverse Effect and which do not
affect the marketability of the property subject thereto;
(x) leases or subleases of any of the Borrowers' owned or
leased real property which leases or subleases do not result in a Material
Adverse Effect or the retention of title by a lessor which has entered into
an operating lease with a Borrower; and
(xi) Liens arising from the rendering of a final judgment or
order against any Borrower which does not give rise to any Event of
Default.
SECTION 5.10 LIMITATION ON DEBT. The Borrowers will not, and will
------------------
not permit any of their respective Subsidiaries to, incur or to become liable
with respect to any Debt except (i) Debt outstanding under this Agreement and
the Revolving Note, (ii) Debt secured by a Permitted Lien, and (iii) Debt
existing on the Closing Date which is disclosed on the financial statements of
the Borrowers referenced in Section 4.04.
-29-
SECTION 5.11 LIMITATION ON GUARANTEES. No Borrower nor any of its
------------------------
Subsidiaries shall Guarantee any Debt of any Person or Persons, except Debt
permitted under Section 5.10.
SECTION 5.12 CONSOLIDATED CAPITAL EXPENDITURES. Consolidated Capital
---------------------------------
Expenditures will not, for any fiscal year of the Borrowers, exceed $6,000,000.
SECTION 5.13 CONSOLIDATIONS, MERGERS AND SALES OF ASSETS. No
-------------------------------------------
Borrower will (i) consolidate or merge with or into any other Person or (ii)
sell, lease or otherwise transfer, directly or indirectly, all or substantially
all of the assets of such Borrower to any other Person or Persons.
SECTION 5.14 INVESTMENTS; LINE OF BUSINESS.
(a) Investments. No Borrower nor any Subsidiary will hold, make or
-----------
acquire any Investment in any Person, except:
(i) each Borrower and any Subsidiary may invest in cash and
Cash Equivalents;
(ii) each Borrower and any Subsidiary may acquire and hold
receivables owing to them, if created or acquired in the ordinary course of
business and payable or dischargeable in accordance with customary trade
terms;
(iii) each Borrower and any Subsidiary may acquire and own
investments (including Debt obligations) received in connection with the
bankruptcy or reorganization of suppliers and customers and in settlement
of delinquent obligations of, and other disputes with, customers and
suppliers arising in the ordinary course of business;
(iv) the Borrowers may make loans and advances to and investments
in joint ventures which, in the aggregate for all Borrowers, do not exceed
at any time $9,000,000; and, in addition, the Borrowers may make loans and
advances to employees in the ordinary course of business, which, in the
aggregate for all Borrowers, do not exceed at any time $2,000,000;
(b) Asset Acquisitions. The Borrowers will not, and will not permit any
------------------
of their respective Subsidiaries to, acquire all or substantially all of the
Assets of any Person or make any acquisition of assets outside the ordinary
course of business.
(c) Joint Ventures and Similar Arrangements. Except to the extent
---------------------------------------
permitted by Section 5.14(a)(iv), the Borrowers will not, and will not permit
any of their respective Subsidiaries to, enter into any joint venture or
partnership agreement or arrangement or any other agreement or arrangement with
any Person involving the sharing of profits or joint or coordinated purchasing
or distribution.
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SECTION 5.15 DIVIDENDS, ETC.
(a) Limitation on Dividends. The Borrowers will not, and will not permit
-----------------------
any of their respective Subsidiaries to, declare or pay any dividends (other
than dividends payable solely in capital stock of such Person) or return any
capital to, its stockholders or authorize or make any other distribution,
payment or delivery of property or cash to its stockholders as such, or redeem,
retire, purchase or otherwise acquire, directly or indirectly, for
consideration, any shares of any class of its capital stock now or hereafter
outstanding (or any warrants for or options or stock appreciation rights in
respect of any of such shares), or set aside any funds for any of the foregoing
purposes, or permit any of such Subsidiaries to purchase or otherwise acquire
for consideration any shares of any class of the capital stock of a Borrower or
any other Subsidiary, as the case may be, now or hereafter outstanding (or any
options or warrants or stock appreciation rights issued by such Person with
respect to its capital stock) (all of the foregoing "Dividends"), except that:
(i) any Subsidiary of a Borrower may pay Dividends to such
Borrower;
(ii) the Parent Company may pay Dividends in an amount not to
exceed $1,280,000 in any fiscal year of the Parent Company; and
(iii) the Parent Company may redeem or purchase shares of its
capital stock (A) as necessary if Westinghouse exercises its option under
Section 5.8(b) of the Acquisition Agreement to require that the Parent
Company purchase certain of its shares owned by Westinghouse; provided that
--------
such redemption or purchase shall occur not later than 135 days after the
Effective Date and the number of shares so redeemed or purchased and the
aggregate amount paid therefor shall not exceed 156,986 shares and
$2,000,000, respectively or (B) upon the written consent of the
Administrative Agent, which consent shall not be unreasonably withheld.
(b) Restrictions with Respect to Intercorporate Transfers. The Borrowers
-----------------------------------------------------
will not, and will not permit any of their respective Subsidiaries to, create or
otherwise cause or suffer to exist any encumbrance or restriction which
prohibits or otherwise restricts (A) the ability of any Subsidiary to (a) pay
dividends or make other distributions or pay any Debt owed to a Borrower or any
Subsidiary, (b) make loans or advances to a Borrower or any Subsidiary, (c)
transfer any of its properties or assets to a Borrower or any Subsidiary or (B)
the ability of a Borrower or any Subsidiary of such Borrower to create, incur,
assume or suffer to exist any Lien upon its property or assets to secure the
Obligations, other than prohibitions or restrictions existing under or by reason
of:
(i) this Agreement and the other Loan Documents;
(ii) applicable law;
(iii) customary non-assignment provisions entered into in the
ordinary course of business and consistent with past practices; and
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(iv) Liens permitted under Section 5.09 and any documents or
instruments governing the terms of any Debt or other obligations secured by
any such Liens, provided that such prohibitions or restrictions apply only
--------
to the assets subject to such Liens.
SECTION 5.16 USE OF PROCEEDS. The proceeds of the Revolving Loans
---------------
made under this Agreement will be used by the Borrowers for general corporate
purposes. No such use of the proceeds for general corporate purposes will be,
directly or indirectly, for the purpose, whether immediate, incidental or
ultimate, of buying or carrying any "margin stock" within the meaning of
Regulation U.
SECTION 5.17 TRANSACTIONS WITH OTHER PERSONS. The Borrowers will
-------------------------------
not, and will not permit any of their respective Subsidiaries to, enter into any
agreement with any Person whereby any of them shall agree to any restriction on
the right of a Borrower or any of its Subsidiaries to amend or waive any of the
provisions of this Agreement or any other Loan Document.
SECTION 5.18 MINIMUM CONSOLIDATED TANGIBLE NET WORTH. Consolidated
---------------------------------------
Tangible Net Worth will not be less than $30,000,000 on any March 31, June 30,
September 30 or December 31. The minimum Consolidated Tangible Net Worth
required on each such date shall increase effective as of June 30, 1997 by an
amount equal to the sum of (y) $6,000,000 minus the amount of operating loss or
non-cash write-off of equipment recognized by the Parent Company prior to June
30, 1997 in connection with the M-Area Contract plus (z) $8,000,000 minus the
portion of the purchase price paid in connection with the Acquisition which is
allocated to Intangible Assets prior to June 30, 1997; provided that in no event
--------
shall (a) the increase in the required minimum Consolidated Tangible Net Worth
resulting from this sentence exceed $36,000,000 or (b) the application of this
sentence result in a reduction of the required minimum Consolidated Tangible Net
Worth.
SECTION 5.19 MINIMUM LIQUIDITY. The ratio of the Parent Company's
-----------------
(i) consolidated cash, Cash Equivalents, other marketable securities and
Accounts to (ii) Consolidated Current Liabilities will not at any time be less
than 1.0 to 1.0.
SECTION 5.20 SEG DEFERRED REVENUE TURNOVER. The number of days equal
-----------------------------
to (A) the ratio of (i) SEG's deferred revenue as of the end of a month to (ii)
the portion of SEG's gross revenue for the 12 months preceding such month end
generated from Deferred Revenue Contracts multiplied by (B) 360 days shall be
less than 120 days as of the end of at least one of every three consecutive
months and shall not be greater than 240 days as of the end of any month.
SECTION 5.21 XX XXXX COLLATERAL ACCOUNT. The amount on deposit in
--------------------------
the XX Xxxx Collateral Account shall at all times equal or exceed 38% of the
Tennessee Letter of Credit Liabilities.
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SECTION 5.22 INDEPENDENCE OF COVENANTS. All covenants contained
-------------------------
herein shall be given independent effect so that if a particular action or
condition is not permitted by any of such covenants, the fact that such action
or condition would be permitted by an exception to, or otherwise be within the
limitations of another covenant shall not avoid the occurrence of a Default if
such action is taken or condition exists.
ARTICLE VI
DEFAULTS
SECTION 6.1 EVENTS OF DEFAULT. If one or more of the following
-----------------
events ("Events of Default") shall have occurred and be continuing:
(i) the Borrowers shall fail to pay when due any principal of
the Revolving Loans or to reimburse when due any drawing under any Letter
of Credit or shall fail to pay any interest on the Revolving Loans, any fee
or any other amount payable hereunder or under the Note;
(ii) any Borrower shall fail to observe or perform any covenant
contained in Article V (other than those contained in Sections 5.01(a)
through (e), Sections 5.01(h) and (i), 5.03(a), and 5.05);
(iii) any Borrower shall fail to observe or perform any covenant
or agreement contained in this Agreement (other than those covered by
clauses (i) or (ii) above) for 15 days after notice thereof has been given
to the Borrowers by the Bank;
(iv) any representation, warranty, certification or statement
made by any Borrower in any Loan Document or in any certificate, financial
statement or other document delivered pursuant hereto or thereto shall
prove to have been incorrect in any material respect when made;
(v) any Borrower or its Subsidiaries shall fail to make any
payment or perform any collateralization obligation in respect of any
Material Financial Obligations when due or within any applicable grace
period;
(vi) any event or condition shall occur which results in the
acceleration of the maturity of any Material Debt of a Borrower or any of
its Subsidiaries or enables (or, with the giving of notice or lapse of time
or both, would enable) the holder of such Material Debt or any Person
acting on such holder's behalf to accelerate the maturity thereof;
(vii) any Borrower or any of its Subsidiaries shall commence a
voluntary case or other proceeding seeking liquidation, reorganization or
other relief with respect to itself or its debts under any bankruptcy,
insolvency or other similar law now or hereafter in effect or seeking the
appointment of a trustee, receiver, liquidator, custodian or other similar
official of it or any substantial part of its property, or shall consent to
any such relief or to the appointment of or taking possession by any such
official in an involuntary case or other proceeding commenced against it,
or shall make a general assignment for the benefit of creditors, or shall
fail generally to pay its debts as they become due, or shall take any
corporate action to authorize any of the foregoing;
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(viii) an involuntary case or other proceeding shall be
commenced against any Borrower or any of its Subsidiaries seeking
liquidation, reorganization or other relief with respect to it or its debts
under any bankruptcy, insolvency or other similar law now or hereafter in
effect or seeking the appointment of a trustee, receiver, liquidator,
custodian or other similar official of it or any substantial part of its
property, and such involuntary case or other proceeding shall remain
undismissed and unstayed for a period of 60 days; or an order for relief
shall be entered against any Borrower or any of its Subsidiaries under the
federal Bankruptcy laws as now or hereafter in effect;
(ix) any member of the ERISA Group shall fail to pay when due
an amount or amounts aggregating in excess of $100,000 which it shall have
become liable to pay under Title IV of ERISA; or notice of intent to
terminate a Material Plan shall be filed under Title IV of ERISA by any
member of the ERISA Group, any plan administrator or any combination of the
foregoing; or the PBGC shall institute proceedings under Title IV of ERISA
to terminate, to impose liability (other than for premiums under Section
4007 of ERISA) in respect of, or to cause a trustee to be appointed to
administer any Material Plan; or a condition shall exist by reason of which
the PBGC would be entitled to obtain a decree adjudicating that any
Material Plan must
(x) be terminated; or there shall occur a complete or partial
withdrawal from, or default, within the meaning of Section 4219(c)(5) of
ERISA, with respect to, one or more Multiemployer Plans which could
reasonably be expected to cause one or more members of the ERISA Group to
incur a current payment obligation in excess of $100,000;
(xi) one or more judgments or orders for the payment of money
in excess of $500,000 in the aggregate shall be rendered against any
Borrower or any of its Subsidiaries and such judgments or orders shall
continue unsatisfied and unstayed for a period of 30 days;
(xii) a Change of Control shall have occurred;
(xiii) (A) any Loan Document shall fail for any reason to be in
full force and effect or shall cease to be effective to grant a perfected
security interest in the Collateral with the priority stated to be created
thereby or such security interest shall at any time fail to constitute a
valid and (to the extent required by the Loan Documents) perfected Lien
with the priority stated to be created by the Loan Documents, or any Loan
Document shall be contested by a Borrower or any of its Subsidiaries or a
Borrower or any of its Subsidiaries shall deny that it has any further
liability or obligation under a Loan Document to which it is a party, or a
Borrower or any of its Subsidiaries shall fail to perform any of its
obligations under the Loan Documents or (B) any creditor of a Borrower or
any of its Subsidiaries (other than a creditor having a Lien permitted by
Section 5.09(i) or (ii) and then solely with respect to the related asset)
shall obtain possession of any of the Collateral by any means, including,
without limitation, levy, distraint, replevin or self-help, or any such
creditor shall establish or obtain any right in the Collateral which is
equal to or senior to the security interests of the Collateral Agent, for
the benefit of the Banks, in such Collateral; or
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(xiv) (A) an event or condition shall have occurred since the
Effective Date which has had a material adverse effect upon the condition
(financial or otherwise), results of operations, properties, assets or
business of the Parent Company and its Consolidated Subsidiaries, taken as
a whole, the ability of the Parent Company and its Consolidated
Subsidiaries to perform their obligations under this Agreement and the
Note, or the rights and remedies of the Bank under this Agreement and the
Note, which event or condition is not corrected within 15 days after notice
from the Administrative Agent to the Borrower of the occurrence of such
event or condition, or (B) the Banks shall reasonably suspect that one or
more Events of Default have occurred, and the Parent Company, upon 30 days'
notice thereof by the Administrative Agent, shall have failed to provide
reasonably satisfactory evidence to the Banks that such Events of Default
have not in fact occurred;
then, and in every such event, while such event is continuing, the
Administrative Agent may (A) by notice to the Parent Company terminate the
Commitments and they shall thereupon terminate, and (B) by notice to the Parent
Company declare the Revolving Loans and Letter of Credit Liabilities (together
with accrued interest thereon) to be, and the Revolving Loans and Letter of
Credit Liabilities shall thereupon become, immediately due and payable without
presentment, demand, protest or other notice of any kind (except as set forth in
clause (A) above), all of which are hereby waived by each Borrower; provided
--------
that in the case of any Default or any Event of Default specified in clause
6.1(vii) or 6.1(viii) above with respect to any Borrower, without any notice to
any Borrower or any other act by the Administrative Agent or the Banks, the
Commitments shall thereupon terminate and the Revolving Loans and Letter of
Credit Liabilities (together with accrued interest and accrued and unpaid fees
thereon) shall become immediately due and payable without presentment, demand,
protest or other notice of any kind, all of which are hereby waived by each
Borrower.
SECTION 6.2 CASH COVER. The Borrowers agree, in addition to the
----------
provisions of Section 6.01 hereof, that upon the occurrence and during the
continuance of any Event of Default, it shall, if requested by the
Administrative Agent, pay to the Collateral Agent an amount in immediately
available funds (which shall be held as Collateral and applied pursuant to the
Security Agreements) equal to the aggregate amount available for drawing under
all Letters or Credit then outstanding; provided that, upon the occurrence of
--------
any Event of Default specified in Section 6.01(vii) or 6.01(viii) with respect
to any Borrower, the Borrowers shall pay such amount forthwith without any
notice or demand or any other act by the Administrative Agent or the Banks.
ARTICLE VII
THE AGENTS
SECTION 7.01 APPOINTMENT AND AUTHORIZATION. Each of the Banks hereby
-----------------------------
irrevocably designates and appoints each Agent as the Agent of each of the Banks
to act as specified herein and in the other Loan Documents and to take such
action on its behalf under the provisions of this Agreement and the other Loan
Documents and perform such duties as are
-35-
expressly delegated to such Agent by the terms of this Agreement and the other
Loan Documents, together with such other powers as are reasonably incidental
thereto. Each Agent agrees to act as such upon the express conditions contained
in this Article VII. Notwithstanding any provision to the contrary elsewhere in
this Agreement, neither Agent shall have any duties or responsibilities, except
those expressly set forth herein or in the other Loan Documents, or any
fiduciary relationship with the Banks, and no implied covenants, functions,
responsibilities, duties, obligations or liabilities shall be read into this
Agreement or otherwise exist against either Agent. The provisions of this
Article VII are solely for the benefit of the Agents and Banks, and the
Borrowers shall not have any rights as third party beneficiaries of any of the
provisions hereof.
SECTION 7.02 INDIVIDUAL CAPACITY. Each Agent and its Affiliates may
-------------------
make loans to, accept deposits from and generally engage in any kind of business
with the Borrowers as though such Agent were not an Agent. With respect to the
Revolving Loans made by it and all Obligations owing to it, each Agent shall
have the same rights and powers under this Agreement as the Banks and may
exercise the same as though it were not the Agent, and the term "Banks" shall
include such Agent in its individual capacity.
SECTION 7.03 DELEGATION OF DUTIES. Either Agent may execute any of
--------------------
its duties under this Agreement or any other Loan Document by or through agents
or attorneys-in-fact. Neither Agent shall be responsible for the negligence or
misconduct of any agents or attorneys-in-fact selected by it with reasonable
care except to the extent otherwise required by Section 7.07.
SECTION 7.04 RELIANCE BY THE AGENTS. The Agents shall be entitled to
----------------------
rely, and shall be fully protected in relying, upon any note, writing,
resolution, notice, consent, certificate, affidavit, letter, telecopy or other
electronic facsimile transmission, telex, telegram, cable, teletype, electronic
transmission by modem, computer disk or any other message, statement, order or
other writing or conversation believed by it to be genuine and correct and to
have been signed, sent or made by the proper Person or Persons and upon advice
and statements of legal counsel (including, without limitation, counsel to the
Borrowers), independent accountants and other experts selected by such Agent.
Each Agent shall be fully justified in failing or refusing to take any action
under this Agreement or any other Loan Document unless it shall first receive
such advice or concurrence of such of the Banks as it deems appropriate or it
shall first be indemnified to its satisfaction by the Banks against any and all
liability and expense which may be incurred by it by reason of taking or
continuing to take any such action. Each Agent shall in all cases be fully
protected in acting, or in refraining from acting, under this Agreement and the
other Loan Documents in accordance with a request of the Banks, and such request
and any action taken or failure to act pursuant thereto shall be binding upon
the Banks.
SECTION 7.05 NOTICE OF DEFAULT. Neither Agent shall be deemed to
-----------------
have knowledge or notice of the occurrence of any Default or Event of Default
hereunder unless such Agent has received notice from one of the Banks or
Borrowers referring to this Agreement, describing such Default or Event of
Default and stating that such notice is a "notice of default".
-36-
If an Agent receives such a notice, such Agent shall give prompt notice thereof
to the Banks. Each Agent shall take such action with respect to such Default or
Event of Default as shall be reasonably directed by the Banks, provided that,
--------
unless and until such Agent shall have received such directions, such Agent may
(but shall not be obligated to) take such action, or refrain from taking such
action, with respect to such Default or Event of Default as it shall deem
advisable in the best interests of Banks.
SECTION 7.06 NON-RELIANCE ON THE AGENTS AND OTHER BANKS. Each of the
------------------------------------------
Banks expressly acknowledges that neither Agent nor any of their respective
officers, directors, employees, agents, attorneys-in-fact or affiliates have
made any representations or warranties to it and that no act by either Agent
hereinafter taken, including any review of the affairs of the Borrowers or any
of their Subsidiaries, shall be deemed to constitute any representation or
warranty by such Agent to the Banks. Each of the Banks represents to the Agents
that it has, independently and without reliance upon either Agent or the other
Bank, and based on such documents and information as it has deemed appropriate,
made its own appraisal of and investigation into the business, assets,
operations, property, financial and other condition, prospects and
creditworthiness of the Borrowers and made its own decision to make to enter
into this Agreement. Each of the Banks also represents that it will,
independently and without reliance upon either Agent or the other Bank, and
based on such documents and information as it shall deem appropriate at the
time, continue to make its own credit analysis, appraisals and decisions in
taking or not taking action under this Agreement, and to make such investigation
as it deems necessary to inform itself as to the business, assets, operations,
property, financial and other condition, prospects and creditworthiness of the
Borrowers. Neither Agent shall have any duty or responsibility to provide the
Banks with any credit or other information concerning the business, operations,
assets, property, financial and other condition, prospects or creditworthiness
of the Borrowers which may come into the possession of such Agent or any of its
officers, directors, employees, agents, attorneys-in-fact or affiliates.
SECTION 7.07 EXCULPATORY PROVISIONS. Neither Agent, nor any of
----------------------
either Agent's officers, directors, employees, agents, attorneys-in-fact or
affiliates, shall (i) be liable for any action lawfully taken or omitted to be
taken by it or such Person under or in connection with this Agreement or any
other Loan Document (except for its or such Person's own gross negligence,
willful misconduct or bad faith) or (ii) be responsible in any manner to the
Banks for any recitals, statements, representations or warranties made by any
Borrower or any of its officers contained in this Agreement, any other Loan
Document or in any certificate, report, statement or other document referred to
or provided for in, or received by such Agent under or in connection with, this
Agreement or any other Loan Document or for any failure of any Borrower or any
of its officers to perform its obligations hereunder or thereunder. Neither
Agent shall be under any obligation to the Banks to ascertain or to inquire as
to the observance or performance of any of the agreements contained in, or
conditions of, this Agreement or any other Loan Document, or to inspect the
properties, books or records of the Borrowers. Neither Agent shall be
responsible to the Banks for the effectiveness, genuineness, validity,
enforceability, collectibility or sufficiency of this Agreement or any Loan
Document or for any representations, warranties, recitals or
-37-
statements made by any other Person herein or therein or made by any other
Person in any written or oral statement or in any financial or other statements,
instruments, reports, certificates or any other documents in connection herewith
or therewith furnished or made by such Agent to the Banks or by or on behalf of
any Borrower to such Agent or the Banks or be required to ascertain or inquire
as to the performance or observance of any of the terms, conditions, provisions,
covenants or agreements contained herein or therein or as to the use of the
proceeds of the Revolving Loans or of the existence or possible existence of any
Default or Event of Default.
SECTION 7.08 INDEMNIFICATION. The Banks agree to indemnify each
---------------
Agent in its capacity as such from and against any and all liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
reasonable expenses or disbursements of any kind whatsoever which may at any
time (including, without limitation, at any time following the payment of the
obligations of the Borrowers hereunder) be imposed on, incurred by or asserted
against such Agent in its capacity as such in any way relating to or arising out
of this Agreement or any other Loan Document, or any documents contemplated by
or referred to herein or the transactions contemplated hereby or any action
taken or omitted to be taken by such Agent under or in connection with any of
the foregoing, but only to the extent that any of the foregoing is not paid by
the Borrowers; provided that the Banks shall be liable to either Agent for the
--------
payment of any portion of such liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, costs, expenses or disbursements resulting
solely from the gross negligence, willful misconduct or bad faith of such Agent.
If any indemnity furnished to an Agent for any purpose shall, in the opinion of
such Agent be insufficient or become impaired, such Agent may call for
additional indemnity and cease, or not commence, to do the acts indemnified
against until such additional indemnity is furnished. The agreement in this
Section 7.08 shall survive the payment of all Revolving Loans, fees and other
Obligations of the Borrowers arising hereunder.
SECTION 7.09 RESIGNATION; SUCCESSORS. Either Agent may resign as an
-----------------------
Agent upon 20 days' notice to Banks. Upon the resignation of an Agent, the
Banks shall appoint a successor to such Agent, subject to prior approval by the
Borrower and the consent of each Bank (such approval or consent, as the case may
be, not to be unreasonably withheld), whereupon such successor Agent shall
succeed to the rights, powers and duties of the retiring Agent, and the term
"Agent" shall include such successor Agent effective upon its appointment, and
the retiring Agent's rights, powers and duties as an Agent shall be terminated,
without any other or further act or deed on the part of such former Agent or any
of the parties to this Agreement. After the retiring Agent's resignation
hereunder as an Agent, the provisions of this Article VII shall inure to its
benefit as to any actions taken or omitted to be taken by it while it was an
Agent under this Agreement.
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ARTICLE VIII
CHANGE IN CIRCUMSTANCES
SECTION 8.01 INCREASED COST AND REDUCED RETURN.
(a) Increased Costs. If on or after the date hereof, the adoption of any
---------------
applicable law, rule or regulation, or any change in any applicable law, rule or
regulation, or any change in the interpretation or administration thereof by any
governmental authority, central bank or comparable agency charged with the
interpretation or administration thereof, or compliance by the Banks with any
request or directive (whether or not having the force of law) of any such
authority, central bank or comparable agency:
(i) shall subject the Bank to any tax, duty or other charge with
respect to the Revolving Loans, the Note or its obligation to make
Revolving Loans, or shall change the basis of taxation of payments to the
Bank of the principal of or interest on the Revolving Loans or any other
amounts due under this Agreement in respect of the Revolving Loans or its
obligation to make Revolving Loans (except for changes in the rate of tax
on the overall net income of the Bank); or
(ii) shall impose, modify or deem applicable any reserve
(including, without limitation, any such requirement imposed by the Board
of Governors of the Federal Reserve System, but excluding any such
requirement included in an applicable Euro-Dollar Reserve Percentage),
special deposit, insurance assessment or similar requirement against assets
of, deposits with or for the account of, letters of credit issued or
participated in by, or other credit extended by, an Issuing Bank or shall
impose on the Bank or an Issuing Bank or on the United States market for
certificates of deposit or the London interbank market any other condition
affecting the Revolving Loans, the Note or its obligation to make Revolving
Loans or its obligations hereunder in respect of Letters of Credit;
and the result of any of the foregoing is to increase the cost to the Bank or an
Issuing Bank of making or maintaining any Revolving Loan, or of issuing any
Letter of Credit, or to reduce the amount of any sum received or receivable by
the Bank or an Issuing Bank under this Agreement or under the Note with respect
thereto, by an amount deemed by the Bank or an Issuing Bank to be material,
then, within 15 Business Days after demand by the Bank, the Borrowers shall pay
to such Bank or Issuing Bank such additional amount or amounts, as determined by
such Bank or Issuing Bank in good faith, as will compensate such Bank or Issuing
Bank for such increased cost or reduction.
(b) Capital Adequacy. If the Bank or an Issuing Bank shall have determined
----------------
that, after the date hereof, the adoption of any applicable law, rule or
regulation regarding capital adequacy, or any change in any such law, rule or
regulation, or any change in the interpretation or administration thereof by any
governmental authority, central bank or comparable agency charged with the
interpretation or administration thereof, or any request or directive regarding
-39-
capital adequacy (whether or not having the force of law) of any such authority,
central bank or comparable agency, has or would have the effect of reducing the
rate of return on capital of the Bank or an Issuing Bank (or such Bank's or
Issuing Bank's Parent) as a consequence of such Bank's or such Issuing Bank's
obligations hereunder to a level below that which such Bank or Issuing Bank (or
such Bank's or Issuing Bank's Parent) could have achieved but for such adoption,
change, request or directive (taking into consideration its policies with
respect to capital adequacy) by an amount deemed by such Bank or such Issuing
Bank to be material, then from time to time, within 15 Business Days after
demand by such Bank or such Issuing Bank, the Borrowers shall pay to such Bank
or such Issuing Bank such additional amount or amounts as will compensate such
Bank or such Issuing Bank (or such Bank's or such Issuing Bank's Parent) for
such reduction.
(c) Notices. The Bank or such Issuing Bank will promptly notify the Parent
-------
Company of any event of which it has knowledge, occurring after the date hereof,
that will entitle the Bank or the Issuing Bank to compensation pursuant to this
Section. A certificate of the Bank or such Issuing Bank claiming compensation
under this Section and setting forth in reasonable detail the additional amount
or amounts to be paid to it hereunder shall be conclusive in the absence of
manifest error. In determining such amount, the Bank and such Issuing Bank may
use any reasonable averaging and attribution methods.
ARTICLE IX
MISCELLANEOUS
SECTION 9.01 NOTICES. Unless otherwise specified herein, all
-------
notices, requests and other communications to a party hereunder shall be in
writing (including bank wire, telex, facsimile transmission or similar writing)
and shall be given to such party: (i) at its address, facsimile number or telex
number set forth on the signature pages hereof, or (ii) at such other address,
facsimile number or telex number as such party may hereafter specify for the
purpose of communication hereunder by notice to the other party hereto. Each
such notice, request or other communication shall be effective (i) if given by
telex, when such telex is transmitted to the telex number specified in this
Section and the appropriate answer back is received, (ii) if given by facsimile
transmission, when transmitted to the facsimile number specified in this Section
and confirmation of receipt is received, (iii) if given by mail, 48 hours after
such communication is deposited in the mails, certified mail, return receipt
requested, with appropriate first class postage prepaid, addressed as specified
in this Section or (iv) if given by any other means, when delivered at the
address specified in this Section 9.01. Notwithstanding anything herein to the
contrary, any notice or other communication from the Bank to the Parent Company
shall be deemed effective as to each of the Borrowers when given to the Parent
Company in accordance with this Section 9.01. Rejection or refusal to accept,
or the inability to deliver because of a changed address of which no notice was
given shall not affect the validity of notice given in accordance with this
Section.
SECTION 9.02 NO WAIVERS. No failure by the Banks, the Administrative
----------
Agent or the Collateral Agent to exercise, no course of dealing with respect to,
and no delay in
-40-
exercising any right, power or privilege hereunder or under the Note shall
operate as a waiver thereof nor shall any single or partial exercise thereof
preclude any other or further exercise thereof or the exercise of any other
right, power or privilege. The rights and remedies provided herein shall be
cumulative and not exclusive of any rights or remedies provided by law.
SECTION 9.03 EXPENSES; INDEMNIFICATION.
(a) Expenses. The Borrowers shall pay (i) all out-of-pocket expenses of
--------
the Banks, Administrative Agent and Collateral Agent, including reasonable fees
and disbursements of special and local counsel therefor, in connection with the
preparation and administration of this Agreement and the other Loan Documents,
any waiver or consent thereunder or any amendment thereof or any Default or
alleged Default thereunder and (ii) if an Event of Default occurs, all
reasonable out-of-pocket expenses incurred by the Banks, Administrative Agent
and Collateral Agent, including (without duplication) the fees and disbursements
of outside counsel, in connection with such Event of Default and collection,
bankruptcy, insolvency and other enforcement proceedings resulting therefrom.
(b) Indemnity in Respect of Loan Documents. Each Borrower agrees to
--------------------------------------
indemnify the Banks, the Agents, their affiliates and their respective
directors, officers, trustees, agents and employees of the foregoing (each an
"Indemnitee") and hold each Indemnitee harmless from and against any and all
liabilities, losses, damages, costs and expenses of any kind, including, without
limitation, the reasonable fees and disbursements of counsel, which may be
incurred by such Indemnitee in connection with any investigative, administrative
or judicial proceeding (whether or not such Indemnitee shall be designated a
party thereto) brought or threatened relating to or arising out of this
Agreement or any actual or proposed use of proceeds of Revolving Loans or of
Letters of Credit hereunder; provided that no Indemnitee shall have the right to
--------
be indemnified hereunder for such Indemnitee's own gross negligence or willful
misconduct as determined by a court of competent jurisdiction.
(c) Indemnity in Respect of Environmental Liabilities. Each Borrower
-------------------------------------------------
hereby indemnifies the Banks and the Agents from and against and agrees to hold
each of them harmless from any and all liabilities, losses, damages, costs and
expenses of any kind (including without limitation reasonable expenses of
investigation by engineers, environmental consultants and similar technical
personnel and reasonable fees and disbursements of counsel) of any of the Banks
or the Agents arising out of, in respect of or in connection with any and all
Environmental Liabilities. Without limiting the generality of the foregoing,
each Borrower hereby waives all rights for contribution or any other rights of
recovery with respect to liabilities, losses, damages, costs and expenses
arising under or related to Environmental Liabilities that it might have by
statute or otherwise against any of the Banks or the Agents.
SECTION 9.04 AMENDMENTS AND WAIVERS. Any provision of this Agreement or
----------------------
the Note may be amended or waived if, but only if, such amendment or waiver is
in writing and is signed by the Borrowers, the Banks and the Agents.
-41-
SECTION 9.05 SUCCESSORS AND ASSIGNS.
(a) Successors and Assigns. The provisions of this Agreement shall be
----------------------
binding upon and inure to the benefit of the parties hereto and their respective
successors and assigns, except that no Borrower may assign or otherwise transfer
any of its rights under this Agreement without the prior written consent of the
Banks and the Agents.
(b) Assignments and Participations by the Banks. The Banks may at any time
-------------------------------------------
assign any or all of their rights under this Agreement or grant to one or more
banks or other financial institutions (each a "Participant") participating
interests in their Commitments or any or all of the Revolving Loans. In the
event of any such assignment or grant by any of the Banks of rights hereunder or
of a participating interest to a Participant, whether or not upon notice to the
Borrowers, such Bank shall remain responsible for the performance of its
obligations hereunder, and the Borrowers shall continue to deal solely and
directly with such Bank in connection with such Bank's rights and obligations
under this Agreement. Any agreement pursuant to which such Bank may grant such
a participating interest shall provide that such Bank shall retain the sole
right and responsibility to enforce the obligations of the Borrowers hereunder
including, without limitation, the right to approve any amendment, modification
or waiver of any provision of this Agreement. The Borrowers agree that each
Participant shall, to the extent provided in its participation agreement, be
entitled to the benefits of Article VII with respect to its participating
interest to the same extent as if it were the Bank, subject to the same
limitations.
(c) Certain Limitations on Rights of Participants. No Participant shall be
---------------------------------------------
entitled to receive any greater payment under Section 8.01 than the Bank would
have been entitled to receive with respect to the rights transferred, unless
such transfer is made with the Parent Company's prior written consent.
(d) Assignments to Federal Reserve Banks. Any Bank may at any time assign
------------------------------------
all or any portion of its rights under this Agreement and the Revolving Note to
a Federal Reserve Bank. No such assignment shall release the transferor Bank
from its obligations hereunder.
SECTION 9.06 RIGHT TO SET-OFF. Upon the occurrence and during the
----------------
continuance of any Event of Default, the Banks hereby authorized at any time and
from time to time, to the fullest extent permitted by law, to set off and apply
any and all deposits (general or special, time or demand, provisional or final)
at any time held and other indebtedness at any time owing by any of the Banks to
or for the credit or the account of any Borrower against any and all of the
obligations of the Borrowers now or hereafter existing under this Agreement, the
Revolving Note, or any other Loan Documents irrespective of whether or not such
Bank or an Agent shall have made any demand under this Agreement, the Revolving
Note any other Loan Documents. The rights of the Banks under this Section are
in addition to all other rights and remedies (including, without limitation,
other rights of set-off) which the Banks may have.
SECTION 9.07 GOVERNING LAW. This Agreement and the Revolving Note
-------------
shall be governed by and construed in accordance with the laws of the State of
Maryland.
-42-
SECTION 9.08 ARBITRATION; SUBMISSION TO JURISDICTION.
(a) Upon demand of any party hereto, whether made before or after
institution of any judicial proceeding, any dispute, claim or controversy
arising out of, connected with or relating to this Agreement, the Note or any
other Loan Document ("Disputes") between parties to this Agreement shall be
resolved by binding arbitration as provided herein. Institution of a judicial
proceeding by a party does not waive the right of that party to demand
arbitration hereunder. Disputes may include, without limitation, tort claims,
counterclaims, disputes as to whether a matter is subject to arbitration, claims
brought as class actions, claims arising from loan documents executed in the
future, or claims arising out of or connected with the transaction reflected by
this Agreement.
Arbitration shall be conducted under and governed by the Commercial
Financial Disputes Arbitration Rules (the "Arbitration Rules") of the American
Arbitration Association (the "AAA") and Title 9 of the U.S. Code. All
arbitration hearings shall be conducted in the city in which is located the
office of the Bank identified in Section 9.01 as the place where notices are to
be sent to the Bank. The expedited procedures set forth in Rule 51 et seq. of
-------
the Arbitration Rules shall be applicable to claims of less than $1,000,000.
All applicable statutes of limitation shall apply to any Dispute. A judgment
upon the award may be entered in any court having jurisdiction. The panel from
which all arbitrators are selected shall be comprised of licensed attorneys.
The single arbitrator selected for expedited procedure shall be a retired judge
from the highest court of general jurisdiction, state or federal, of the state
where the hearing will be conducted or if such person is not available to serve,
the single arbitrator may be a licensed attorney. Notwithstanding the
foregoing, this arbitration provision does not apply to disputes under or
related to Derivatives Obligations.
(b) Notwithstanding the preceding binding arbitration provisions, the
Banks, the Agents and the Borrowers agree to preserve, without diminution,
certain remedies that any party hereto may employ or exercise freely,
independently or in connection with an arbitration proceeding or after an
arbitration action is brought. The Bank and the Borrowers shall have the right
to proceed in any court of proper jurisdiction or by self-help to exercise or
prosecute the following remedies, as applicable: (i) all rights to foreclose
against any real or personal property or other security by exercising a power of
sale granted under any Loan Document or under applicable law or by judicial
foreclosure and sale, including a proceeding to confirm the sale; (ii) all
rights of self-help including peaceful occupation of real property and
collection of rents, set-off, and peaceful possession of personal property;
(iii) obtaining provisional or ancillary remedies including injunctive relief,
sequestration, garnishment, attachment, appointment of receiver and filing an
involuntary bankruptcy proceeding; and (iv) when applicable, a judgment by
confession of judgment. Preservation of these remedies does not limit the power
of an arbitrator to grant similar remedies that may be requested by a party in a
Dispute.
The Borrowers, the Banks and the Agents agree that they shall not have a
remedy of punitive or exemplary damages against the other in any Dispute and
hereby waive any right or
-43-
claim to punitive or exemplary damages they have now or which may arise in the
future in connection with any Dispute whether the Dispute is resolved by
arbitration or judicially.
(c) Any legal action or proceeding with respect to this Agreement, the Note
or any other Loan Document or any document related hereto or thereto may be
brought in the courts of the State of Maryland in Baltimore, Maryland or of the
United States of America for the District of Maryland, and by execution and
delivery of this Agreement each Borrower hereby accepts for itself and in
respect of its property, generally and unconditionally, the nonexclusive
jurisdiction of the aforesaid courts. Each Borrower hereby irrevocably and
unconditionally waives any objection, including without limitation, any
objection to the laying of venue or based on the grounds of the forum non
----- ---
conveniens which it now or hereafter may have to the bringing of any action or
----------
proceeding in such respective jurisdictions. Service of process in any such
case may be had against any Borrower by delivery in accordance with the notice
provisions herein or as otherwise permitted by law, and the Borrowers agree that
such service shall be valid in all respects for establishing personal
jurisdiction over it.
SECTION 9.09 COUNTERPARTS; INTEGRATION; EFFECTIVENESS. This
----------------------------------------
Agreement may be signed in any number of counterparts, each of which shall be an
original, with the same effect as if the signatures thereto and hereto were upon
the same instrument. This Agreement and the other Loan Documents constitute the
entire agreement and understanding among the parties hereto and supersedes any
and all prior agreements and understandings, oral or written, relating to the
subject matter hereof. This Agreement shall become effective upon receipt by
the Administrative Agent of counterparts hereof signed by each of the parties
hereto.
SECTION 9.10 CONFIDENTIALITY. The Banks and the Agents agree to hold
---------------
all non-public information obtained pursuant to the requirements of this
Agreement in accordance with its customary procedure for handling confidential
information of this nature and in accordance with safe and sound banking
practices, provided that nothing herein shall prevent any of them from
--------
disclosing such information (i) to any other Person if reasonably incidental to
the administration of the Revolving Loans or the Letters of Credit, (ii) upon
the order of any court or administrative agency, (iii) upon the request or
demand of any regulatory agency or authority, (iv) which had been publicly
disclosed other than as a result of a disclosure by any of them prohibited by
this Agreement, (v) in connection with any litigation to which any of them or
any of their subsidiaries or parent may be a party, (vi) to the extent necessary
in connection with the exercise of any remedy hereunder, (vii) to any assignee
of any of their rights and obligations hereunder or any Participant and (viii)
to their legal counsel and independent auditors. Subject to the consent of the
Parent Company, the Banks, the Agents and McGuire, Woods, Battle & Xxxxxx,
L.L.P., may circulate promotional materials and place advertisements in
financial and other newspapers and periodicals or on a home page or similar
place for dissemination of information on the Internet or worldwide web after
the closing of the transactions contemplated by this Agreement in the form of a
"tombstone" or otherwise describing the name of the Borrowers and the amount,
type and closing date of such transactions, all at their sole expense.
-44-
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed under seal by their respective authorized officers as of the
day and year first above written.
GTS DURATEK, INC., a
Delaware corporation
By:/s/ Xxxxx X. Xxxxxxxx
----------------------------------
Name:Xxxxx X. Xxxxxxxx
Title: Treasurer
00000 Xxx Xxxxxxxx Xxxx
Xxxxxxxx, Xxxxxxxx 00000
Attention: President
Phone: (000) 000-0000
Fax: (000) 000-0000
GTS INSTRUMENT SERVICES,
INCORPORATED, a Maryland corporation
By:/s/ Xxxxx X. Xxxxxxxx
----------------------------------
Name:Xxxxx X. Xxxxxxxx
Title: Treasurer
00000 Xxx Xxxxxxxx Xxxx
Xxxxxxxx, Xxxxxxxx 00000
Attention: President
Phone: (000) 000-0000
Fax: (000) 000-0000
GENERAL TECHNICAL SERVICES, INC.,
a Maryland corporation
By:/s/ Xxxxx X. Xxxxxxxx
----------------------------------
Name:Xxxxx X. Xxxxxxxx
Title: Treasurer
00000 Xxx Xxxxxxxx Xxxx
Xxxxxxxx, Xxxxxxxx 00000
Attention: President
Phone: (000) 000-0000
Fax: (000) 000-0000
ANALYTICAL RESOURCES, INC.,
a Pennsylvania corporation
By:/s/ Xxxxx X. Xxxxxxxx
----------------------------------
Name:Xxxxx X. Xxxxxxxx
Title: Treasurer
00000 Xxx Xxxxxxxx Xxxx
Xxxxxxxx, Xxxxxxxx 00000
Attention: President
Phone: (000) 000-0000
Fax: (000) 000-0000
THE SCIENTIFIC ECOLOGY GROUP, INC.,
a Tennessee corporation
By:/s/ Xxxxx X. Xxxxxxxx
----------------------------------
Name:Xxxxx X. Xxxxxxxx
Title: Treasurer
00000 Xxx Xxxxxxxx Xxxx
Xxxxxxxx, Xxxxxxxx 00000
Attention: President
Phone: (000) 000-0000
Fax: (000) 000-0000
SEG COLORADO, INC.,
a Delaware corporation
By:/s/ Xxxxx X. Xxxxxxxx
----------------------------------
Name:Xxxxx X. Xxxxxxxx
Title: Treasurer
00000 Xxx Xxxxxxxx Xxxx
Xxxxxxxx, Xxxxxxxx 00000
Attention: President
Phone: (000) 000-0000
Fax: (000) 000-0000
HITTMAN TRANSPORT SERVICES, INC.,
a Delaware corporation
By:/s/ Xxxxx X. Xxxxxxxx
----------------------------------
Name:Xxxxx X. Xxxxxxxx
Title: Treasurer
00000 Xxx Xxxxxxxx Xxxx
Xxxxxxxx, Xxxxxxxx 00000
Attention: President
Phone: (000) 000-0000
Fax: (000) 000-0000
FIRST UNION NATIONAL BANK OF
MARYLAND, a national banking association
By:/s/ Xxxxxx X. Xxxxx
----------------------------------
Name: Xxxxxx X. Xxxxx
Title: Vice President
First Union National Bank of Maryland
Portfolio Management Department
0000 Xxxxx Xxxxxx Xxxx, XX0000
XxXxxx, Xxxxxxxx 00000
Phone: (000) 000-0000
Fax: (000) 000-0000
FIRST UNION NATIONAL BANK OF
MARYLAND, a national banking association,
as Administrative Agent
By:/s/ Xxxxxx X. Xxxxx
----------------------------------
Name: Xxxxxx X. Xxxxx
Title: Vice President
First Union National Bank of Maryland
Portfolio Management Department
0000 Xxxxx Xxxxxx Xxxx, XX0000
XxXxxx, Xxxxxxxx 00000
Phone: (000) 000-0000
Fax: (000) 000-0000
FIRST UNION NATIONAL BANK OF
MARYLAND, a national banking association,
as Collateral Agent
By:/s/ Xxxxxx X. Xxxxx
----------------------------------
Name: Xxxxxx X. Xxxxx
Title: Vice President
First Union National Bank of Maryland
Portfolio Management Department
0000 Xxxxx Xxxxxx Xxxx, XX0000
XxXxxx, Xxxxxxxx 00000
Phone: (000) 000-0000
Fax: (000) 000-0000
FIRST UNION NATIONAL BANK OF
NORTH CAROLINA, a national
banking association
By:/s/ Xxxxxxx Xxxx Xxxxxxx
----------------------------------
Name: Xxxxxxx Xxxx Xxxxxxx
Title: Senior Vice President
First Union National Bank of North Carolina
Attn: International Division
000 Xxxxx Xxxxx Xxxxxx, X0
Xxxxxxxxx, Xxxxx Xxxxxxxx 00000-0000
Phone: (000) 000-0000
Fax: (000) 000-0000
with a copy to:
First Union National Bank of Maryland
Portfolio Management Department
0000 Xxxxx Xxxxxx Xxxx, XX0000
XxXxxx, Xxxxxxxx 00000
Phone: (000) 000-0000
Fax: (000) 000-0000
