Exhibit 4.1
CREDIT AGREEMENT, dated as of the 28th day of September, 2001, by and
among DRS TECHNOLOGIES, INC., a Delaware corporation, as Borrower, the lenders
who are or may become a party to this Agreement, as Lenders, FIRST UNION
NATIONAL BANK, a national banking association, as Administrative Agent for the
Lenders, TD SECURITIES (USA) INC., as Syndication Agent and MELLON BANK, N.A.,
as Documentation Agent.
STATEMENT OF PURPOSE
The Borrower has requested, and the Lenders have agreed, to extend certain
credit facilities to the Borrower on the terms and conditions of this Agreement.
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged by the parties hereto, such parties
hereby agree as follows:
ARTICLE I
DEFINITIONS
SECTION 1.1 Definitions. The following terms when used in this Agreement
shall have the meanings assigned to them below:
"Account Debtor" means, with respect to any Account, any Person obligated
to make payment thereunder, including, without limitation, any account debtor
thereon.
"Accounts" means all "accounts" (as now or hereafter defined in the UCC)
of the Borrower or any of its Restricted Subsidiaries, including, without
limitation, all present or future accounts receivable, all rights to payment of
a monetary obligation, whether or not earned by performance, for property sold,
leased, licensed, assigned or otherwise disposed of or to be sold, leased,
licensed, assigned or otherwise disposed of, for services rendered or to be
rendered, for a policy of insurance issued or to be issued, for a secondary
obligation incurred or to be incurred, for energy provided or to be provided,
for the use or hire of a vessel under a charter or other contract, or arising
out of the use of a credit card or charge card or information contained on or
for use with the card, all rights in any merchandise or goods which any of the
same may represent, all notes receivable, health care insurance receivables (as
now or hereafter defined in the UCC), book debts, notes, bills, drafts,
acceptances, and all sums of money due or to become due thereon and all proceeds
thereof and all rights, title, security interests and guarantees with respect to
each of the foregoing.
"Acquisition" means the acquisition of the assets and business of Sensors
by the Borrower from The Boeing Company pursuant to the terms of the Asset
Purchase Agreement.
"Additional Term Loan" has the meaning assigned thereto in Section 4.6.
"Additional Term Loan Effective Date" means the date, which shall be a
Business Day, on or before the Additional Term Loan Termination Date, but no
earlier than thirty (30) days
after any Increase Notification Date, on which the Term Lenders make Additional
Term Loans to the Borrower pursuant to Section 4.6.
"Administrative Agent" means First Union in its capacity as Administrative
Agent hereunder, and any successor thereto appointed pursuant to Section 13.9.
"Administrative Agent's Office" means the office of the Administrative
Agent specified in or determined in accordance with the provisions of Section
14.1(c).
"Affiliate" means, with respect to any Person, any other Person (other
than a Subsidiary of such Person) which directly or indirectly through one or
more intermediaries, controls, or is controlled by, or is under common control
with, such first Person or any of its Subsidiaries. The term "control" means (a)
the power to vote ten percent (10%) or more of the securities or other equity
interests of a Person having ordinary voting power, or (b) the possession,
directly or indirectly, of any other power to direct or cause the direction of
the management and policies of a Person, whether through ownership of voting
securities, by contract or otherwise.
"Aggregate Commitment" means the aggregate amount of the Lenders'
Commitments hereunder, as such amount may be increased, reduced or otherwise
modified at any time or from time to time pursuant to the terms hereof. On the
Closing Date, the Aggregate Commitment shall be Two Hundred Forty Million
Dollars ($240,000,000).
"Agreement" means this Credit Agreement, as amended, restated,
supplemented or otherwise modified from time to time.
"Applicable Law" means all applicable provisions of constitutions, laws,
statutes, ordinances, rules, treaties, regulations, permits, licenses,
approvals, interpretations and orders of courts or Governmental Authorities and
all orders and decrees of all courts and arbitrators.
"Applicable Margin" shall have the meaning assigned thereto in Section
5.1(c).
"Application" means an application, in the form specified by the Issuing
Lender from time to time, requesting the Issuing Lender to issue a Letter of
Credit.
"Approved Fund" means any Person (other than a natural Person), including,
without limitation, any special purpose entity, that is (or will be) engaged in
making, purchasing, holding or otherwise investing in commercial loans and
similar extensions of credit in the ordinary course of its business; provided,
that with respect to any assignment of any Revolving Credit Commitment, such
Approved Fund must be administered by (a) a Lender, (b) an Affiliate of a Lender
or (c) an entity or an Affiliate of an entity that administers or manages a
Lender.
"Arbitration Rules" shall have the meaning assigned thereto in Section
14.6(a).
"Asset Coverage Ratio" means as of any date of determination, the ratio of
(a) the sum of (i) Available Cash plus (ii) the gross book value of all Accounts
of the Borrower and its Restricted Subsidiaries on such date determined in
accordance with GAAP plus (iii) the gross
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book value of all Inventory of the Borrower and its Restricted Subsidiaries on
such date determined in accordance with GAAP to (b) the aggregate outstanding
amount of all Extensions of Credit as of such date.
"Asset Purchase Agreement" means the Asset Purchase Agreement by and
between The Boeing Company and the Borrower dated as of August 3, 2001, together
with all exhibits, schedules and all other documents and agreements executed in
relation thereto, as amended, modified or otherwise supplemented with the
consent of the Administrative Agent, which consent is not to be unreasonably
withheld.
"Asset Sale Proceeds" shall have the meaning assigned thereto in Section
4.4(b)(iii).
"Assignment and Acceptance" shall have the meaning assigned thereto in
Section 14.10.
"Available Cash" means, as of any date of determination, without
duplication, calculated in accordance with GAAP, the aggregate amount of all
cash and Cash Equivalents of the Borrower and its Restricted Subsidiaries, which
such cash or Cash Equivalents are readily marketable and available without
restriction or limitation for the immediate payment or repayment of Debt as of
such date of determination.
"Base Rate" means, at any time, the higher of (a) the Prime Rate and (b)
the Federal Funds Rate plus 1/2 of 1%; each change in the Base Rate shall take
effect simultaneously with the corresponding change or changes in the Prime Rate
or the Federal Funds Rate.
"Base Rate Loan" means any Loan bearing interest at a rate based upon the
Base Rate as provided in Section 5.1(a).
"Benefited Lender" shall have the meaning assigned thereto in Section 5.6.
"Bonding Obligations" means, with respect to the Borrower or any
Restricted Subsidiary thereof, without duplication, the face amount (including,
without limitation, any contingent obligations arising in connection therewith),
of any surety, performance or other bond issued at the request of or delivered
by the Borrower or any Restricted Subsidiary thereof in the ordinary course of
business to any other Person owed any contractual or other obligation (other
than for borrowed money or other Debt) by such Borrower or Restricted Subsidiary
thereof to secure the performance of such contractual or other obligations or
otherwise benefit such Person to whom such contractual or other obligations are
owed. All outstanding Bonding Obligations as of the Closing Date are set forth
on Schedule 7.1(t).
"Borrower" means DRS Technologies, Inc., a Delaware corporation.
"Borrowing Base" means at any date of determination thereof, an amount
equal to the sum of (a) ninety percent (90%) of Eligible Accounts Receivable,
plus (b) fifty percent (50%) of Eligible Unbilled Receivables, plus (c) fifty
percent (50%) of Eligible Inventory.
"Borrowing Base Certificate" means each certificate delivered by the
Borrower
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substantially in the form of Exhibit K.
"Borrowing Limit" means, at any date of determination thereof, an amount
equal to the lesser of (a) the Borrowing Base and (b) the Revolving Credit
Commitment of all Lenders.
"Business Day" means (a) for all purposes other than as set forth in
clause (b) below, any day other than a Saturday, Sunday or legal holiday on
which banks in Charlotte, North Carolina and New York, New York, are open for
the conduct of their commercial banking business, and (b) with respect to all
notices and determinations in connection with, and payments of principal and
interest on, any LIBOR Rate Loan, any day that is a Business Day described in
clause (a) and that is also a day for trading by and between banks in Dollar
deposits in the London interbank market.
"Calculation Date" shall have the meaning assigned thereto in Section
5.1(c).
"Capital Asset" means, with respect to the Borrower and its Restricted
Subsidiaries, any asset that should, in accordance with GAAP, be classified and
accounted for as a capital asset on a Consolidated balance sheet of the Borrower
and its Restricted Subsidiaries.
"Capital Expenditures" means with respect to the Borrower and its
Restricted Subsidiaries for any period, the aggregate cost of all Capital Assets
acquired by the Borrower and its Restricted Subsidiaries during such period, as
determined in accordance with GAAP.
"Capital Lease" means any lease of any property by the Borrower or any of
its Restricted Subsidiaries, as lessee, that should, in accordance with GAAP, be
classified and accounted for as a capital lease on a Consolidated balance sheet
of the Borrower and its Restricted Subsidiaries.
"Cash Equivalents" shall have the meaning assigned thereto in Section
11.3(b).
"Change in Control" shall have the meaning assigned thereto in Section
12.1(i).
"Closing Date" means the date of this Agreement or such later Business Day
upon which each condition described in Section 6.2 shall be satisfied or waived
in all respects in a manner acceptable to the Administrative Agent, in its sole
discretion.
"Code" means the Internal Revenue Code of 1986, and the rules and
regulations thereunder, each as amended or modified from time to time.
"Collateral" shall mean the collateral security for the Obligations
pledged or granted pursuant to the Security Documents.
"Collateral Agreement" means the collateral agreement of even date
herewith executed by the Borrower and its Domestic Subsidiaries that are
Restricted Subsidiaries in favor of the Administrative Agent for the ratable
benefit of itself and the Lenders, substantially in the form of Exhibit I, as
amended, restated, supplemented or otherwise modified from time to time
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"Commitment" means, as to any Lender, the sum of such Lender's Revolving
Credit Commitment and Term Loan Commitment as set forth opposite such Lender's
name on Schedule 1 hereto, as such Commitment may be increased, reduced or
otherwise modified at any time or from time to time pursuant to the terms
hereof.
"Commitment Percentage" means, as to any Lender at any time, the ratio of
(a) the amount of the Commitment of such Lender to (b) the Aggregate Commitment
of all the Lenders.
"Consolidated" means, when used with reference to financial statements or
financial statement items of the Borrower and its Subsidiaries, such statements
or items on a consolidated basis in accordance with applicable principles of
consolidation under GAAP.
"Credit Facility" means, collectively, the Revolving Credit Facility, the
Term Loan Facility and the L/C Facility.
"Debt" means, with respect to the Borrower and its Restricted Subsidiaries
at any date and without duplication, the sum of the following calculated in
accordance with GAAP: (a) all liabilities, obligations and indebtedness for
borrowed money including, but not limited to, obligations evidenced by bonds,
debentures, notes or other similar instruments of any such Person, (b) all
obligations to pay the deferred purchase price of property or services of any
such Person (including, without limitation, all obligations under
non-competition agreements), except trade payables arising in the ordinary
course of business not more than ninety (90) days past due, (c) all obligations
of any such Person as lessee under Capital Leases to the extent such obligations
are required to be capitalized in accordance with GAAP, (d) all Debt of any
other Person secured by a Lien on any asset of any such Person, (e) all Guaranty
Obligations of any such Person, (f) all obligations, contingent or otherwise, of
any such Person relative to the face amount of letters of credit, whether or not
drawn, including, without limitation, any Reimbursement Obligation, and banker's
acceptances issued for the account of any such Person, (g) all obligations of
any such Person to redeem, repurchase, exchange, defease or otherwise make
payments in respect of capital stock or other securities or partnership
interests of such Person and, (h) all net payment obligations incurred by any
such Person pursuant to Hedging Agreements; provided, however, that Bonding
Obligations shall not be considered Debt.
"Default" means any of the events specified in Section 12.1 which with the
passage of time, the giving of notice or any other condition, would constitute
an Event of Default.
"Disputes" shall have the meaning set forth in Section 14.6.
"Dollars" or "$" means, unless otherwise qualified, dollars in lawful
currency of the United States.
"Dollar Equivalent" means, at any time of determination, (a) with respect
to any L/C Obligation denominated in Dollars, the amount thereof and (b) with
respect to any L/C Obligation denominated in a currency other than Dollars, the
amount of Dollars which is equivalent to the amount of such L/C Obligation at
the most favorable spot exchange rate determined by the Administrative Agent to
be available to it at such time of determination.
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"Domestic Subsidiary" means any direct or indirect subsidiary of the
Borrower organized under the laws of the United States, the law of any State
thereof or the laws of Puerto Rico.
"EBITDA" means, for any period, the sum of the following determined on a
Consolidated basis, without duplication, for the Borrower and its Restricted
Subsidiaries in accordance with GAAP: (a) Net Income for such period plus (b)
the sum of the following to the extent deducted in determining Net Income: (i)
income and franchise taxes, (ii) Interest Expense, (iii) amortization and
depreciation, (iv) expenses related to the transactions contemplated under this
agreement, (v) extraordinary losses, (vi) non-cash losses from the sale of
assets, (vii) in connection with the Acquisition, a one-time non-cash write-off
relating to "in process" research and development of Sensors and (viii) non-cash
minority interest deductions, less (c) interest income and any extraordinary
gains, plus (d) Pro Forma EBITDA; provided, that as of the fiscal quarters
ending on the dates set forth below, EBITDA for the four (4) consecutive fiscal
quarter period ending on such date shall be adjusted to reflect historical
EBITDA attributable to Sensors by the below amount corresponding to such fiscal
quarter end:
DATE AMOUNT
---- ------
September 30, 2001 $5,200,000
December 31, 2001 $3,900,000
March 31, 2002 $2,600,000
June 30, 2002 $1,300,000
"Eligible Assignee" means, with respect to any assignment of the rights,
interest and obligations of a Lender hereunder, a Person that is at the time of
such assignment (a) a commercial bank organized under the laws of the United
States or any state thereof, having combined capital and surplus in excess of
$500,000,000, (b) a commercial bank organized under the laws of any other
country that is a member of the Organization of Economic Cooperation and
Development, or a political subdivision of any such country, having combined
capital and surplus in excess of $500,000,000, (c) a finance company, insurance
company or other financial institution which in the ordinary course of business
extends credit of the type extended hereunder and that has total assets in
excess of $500,000,000, (d) already a Lender hereunder (whether as an original
party to this Agreement or as the assignee of another Lender), (e) the successor
(whether by transfer of assets, merger or otherwise) to all or substantially all
of the commercial lending business of the assigning Lender, (f) any Affiliate of
the assigning Lender, (g) any Approved Fund or (h) any other Person that has
been approved in writing as an Eligible Assignee by the Borrower (other than
upon the occurrence and during the continuance of any Default or Event of
Default) and the Administrative Agent.
"Eligible Accounts Receivable" means, at any date of determination
thereof, any bona fide Account created or acquired by the Borrower or any
Restricted Subsidiary thereof in the ordinary course of their business as
presently conducted, for which the Account Debtor has been billed and which
Account satisfies and continues to satisfy the following requirements:
(i) The Account is a bona fide existing obligation of the named
Account Debtor arising from the rendering of services or the sale and
delivery of
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merchandise to such Account Debtor in the ordinary course of business on
terms that are normal and customary in the business of the Borrower or its
Restricted Subsidiaries and is actually and absolutely owing to the
Borrower or a Restricted Subsidiary of the Borrower and is not contingent
for any reason and such Borrower or such Restricted Subsidiary has lawful
and absolute title to such Account;
(ii) The Account does not arise out of transactions with an
employee, officer, agent, director, stockholder or other Affiliate of the
Borrower or any Restricted Subsidiary thereof;
(iii) The Account is evidenced by an invoice and has not remained
unpaid for a period exceeding ninety (90) days or more beyond the invoice
date of the invoice;
(iv) The Account is not due from an Account Debtor whose debt on
Accounts that are unpaid ninety (90) days or more after the invoice date
of the respective invoices exceeds fifty percent (50%) of such Account
Debtor's total debt to the Borrower and its Restricted Subsidiaries;
(v) The Account is a valid, legally enforceable obligation of the
Account Debtor and no offset (including without limitation discounts,
advertising allowances, counterclaims or contra accounts) or other defense
on the part of such Account Debtor or any claim on the part of such
Account Debtor denying liability thereunder has been asserted; provided,
however, that if the Account is subject to any such offset, defense or
claim, or any inventory related thereto has been returned, such account
shall not be an Eligible Accounts Receivable only to the extent of the
maximum amount of such offset, defense, claim or return and the balance of
such Account, if it otherwise represents a valid, uncontested and legally
enforceable obligation of the Account Debtor and meets all of the other
criteria for eligibility set forth herein, shall be considered an Eligible
Account Receivable;
(vi) The Account Debtor is not the subject of any bankruptcy or
insolvency proceeding of any kind;
(vii) The services have been performed (unless billing prior to such
services having been performed is permitted under the agreement with the
Account Debtor) or the subject merchandise has been shipped or delivered
on open Account to the named Account Debtor on an absolute sale basis and
not on a xxxx-and-hold, consignment, sale on approval or subject to any
other repurchase or return agreement and no material part of the subject
goods has been returned;
(viii) Other than pursuant to the Security Documents, the Account is
not subject to any Lien or security interest whatsoever, including any
Account owed pursuant to any contractual or other obligation of the
Borrower or any Restricted Subsidiary thereof subject to any Bonding
Obligation;
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(ix) The Account is not evidenced by chattel paper or an instrument
of any kind;
(x) The Account is not due from an Account Debtor, except for the
United States government, its branches and its agencies, whose total debt
to the Borrower and its Restricted Subsidiaries, on a Consolidated basis,
on Accounts exceeds fifteen percent (15%) of the aggregate amount of the
Eligible Accounts Receivable; provided, however, that the Account shall
not be an Eligible Account Receivable only to the extent of such excess,
if it otherwise represents a valid, uncontested and legally enforceable
obligation of the Account Debtor and meets all of the other criteria for
eligibility set forth herein;
(xi) The Account is not due pursuant to a Governmental Contract with
respect to which the aggregate amount of all Accounts due under such
Governmental Contract to the Borrower and its Subsidiaries, on a
Consolidated basis, exceeds fifteen percent (15%) of the aggregate amount
of the Eligible Accounts Receivable; provided, however, that the Account
shall not be an Eligible Account Receivable only to the extent of such
excess, if it otherwise represents a valid, uncontested and legally
enforceable obligation of the Account Debtor and meets all of the other
criteria for eligibility set forth herein;
(xii) The Account has not been turned over to any Person that is not
a Restricted Subsidiary or Affiliate of the Borrower for collection;
(xiii) The Administrative Agent has not determined, in good faith in
its reasonable discretion in accordance with its internal credit policies
and after fifteen (15) days notice to the Borrower that (A) collection of
the Account is insecure or (B) the Account may not be paid by reason of
the Account Debtor's financial inability to pay;
(xiv) The Account is not with a customer located in any state
denying creditors access to said state's courts in the absence of a notice
of business activities report or other similar filing, unless the
Borrower, its Restricted Subsidiaries and Affiliates have either qualified
as a foreign corporation authorized to transact business in such state or
has filed a notice of business activities report or similar filing with
the applicable state agency for the then current year;
(xv) With respect to any Account, which is payable to a Foreign
Subsidiary (any such Account, a "Foreign Account"), the amount of such
Foreign Account is reported in Dollars (irrespective of the currency in
which such Account is payable) on the applicable Borrowing Base
Certificate; provided that no more than thirty percent (30%) of the
aggregate amount of all Eligible Accounts Receivable at any one time shall
be Foreign Accounts; and
(xvi) In addition to the foregoing, with respect to Accounts arising
out of a Governmental Contract, the Administrative Agent is satisfied as
to the absence of setoffs, counterclaims and other defenses to payment on
the part of the United States or
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such state governmental authority.
"Eligible Inventory" means, at any date of determination, any Inventory of
the Borrower or any Restricted Subsidiary thereof that satisfies and continues
to satisfy each of the following requirements:
(a) Any warranty or representation contained in this Agreement or
any of the other Loan Documents applicable either to Inventory in general or to
any specific Inventory remains true and correct in all material respects with
respect to such Inventory;
(b) If the Inventory is located in a public warehouse, the
Administrative Agent shall have received a control agreement, in form and
substance reasonably satisfactory to the Administrative Agent;
(c) The Inventory is not under consignment to or from any Person;
(d) The Inventory is free from defects which would materially and
adversely affect the market value thereof;
(e) The Inventory meets in all material respects all standards
imposed by any Governmental Authority having regulatory authority over such
Inventory, its use or sale, and is either currently useable or currently
saleable in the normal course of the Borrower's or any Restricted Subsidiary's
business;
(f) The Inventory was produced in accordance with the Fair Labor
Standards Act and is not subject to the "hot goods" provisions contained in 29
U.S.C.Section 215 or any successor statute or section;
(g) The Inventory is not obsolete or currently unfit for use or sale
in the ordinary course of the business of the Borrower or any Restricted
Subsidiary thereof;
(h) Other than pursuant to the Security Documents, the Inventory is
not subject to any Lien or security interest whatsoever; provided that for
purposes hereof, any Inventory subject to a progress payment shall not be
considered to be subject to a Lien or security interest.
(i) If the Inventory has been purchased with a trade letter of
credit, all reimbursement and similar obligations with respect to such trade
letter of credit has been paid in full;
(j) With respect to any Inventory located outside of the United
States (any such Inventory, "Foreign Inventory"), no more than thirty percent
(30%) of the aggregate amount of all Eligible Inventory at any one time shall be
Foreign Inventory; and
(k) The Administrative Agent has not determined, in good faith in
its reasonable discretion in accordance with its internal credit policies, that
the Inventory is
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otherwise ineligible.
"Eligible Unbilled Receivables" means, at any date of determination
thereof, any Account (i) which is an Eligible Accounts Receivable, but for the
fact such Account has not been invoiced (a) as a result of normal frequency of
billing under the particular contract, or (b) as a result of government delays
in the preparation of contract documents and (ii) which will be invoiced within
ninety (90) days of the "as of" date of the particular Borrowing Base
Certificate setting forth such Account.
"Employee Benefit Plan" means any employee benefit plan within the meaning
of Section 3(3) of ERISA which (a) is maintained for employees of the Borrower
or any ERISA Affiliate or (b) has at any time within the preceding six (6) years
been maintained for the employees of the Borrower or any current or former ERISA
Affiliate.
"Environmental Claims" means any and all administrative, regulatory or
judicial actions, suits, demands, demand letters, claims, liens, allegations,
notices of noncompliance or violation, investigations (other than internal
reports prepared by any Person in the ordinary course of business and not in
response to any third party action or request of any kind) or proceedings
relating in any way to any actual or alleged violation of or liability under any
Environmental Law or any permit issued, or any approval given, under any such
Environmental Law, including, without limitation, any and all claims by
Governmental Authorities for enforcement, cleanup, removal, response, remedial
or other actions or damages, contribution, indemnification cost recovery,
compensation or injunctive relief resulting from Hazardous Materials or arising
from alleged injury or threat of injury to human health or the environment.
"Environmental Laws" means any and all federal, foreign, state, provincial
and local laws, statutes, ordinances, rules, regulations, permits, licenses,
approvals, interpretations and orders of courts or Governmental Authorities,
relating to the protection of human health or the environment, including, but
not limited to, requirements pertaining to the manufacture, processing,
distribution, use, treatment, storage, disposal, transportation, handling,
reporting, licensing, permitting, investigation or remediation of Hazardous
Materials.
"ERISA" means the Employee Retirement Income Security Act of 1974, and the
rules and regulations thereunder, each as amended or modified from time to time.
"ERISA Affiliate" means any Person who, together with the Borrower, is
treated as a single employer within the meaning of Section 414(b), (c), (m) or
(o) of the Code or Section 4001(b) of ERISA.
"Eurodollar Reserve Percentage" means, for any day, the percentage
(expressed as a decimal and rounded upwards, if necessary, to the next higher
1/100th of 1%) which is in effect for such day as prescribed by the Federal
Reserve Board (or any successor) for determining the maximum reserve requirement
(including, without limitation, any basic, supplemental or emergency reserves)
in respect of eurocurrency liabilities or any similar category of liabilities
for a member bank of the Federal Reserve System in New York City.
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"Event of Default" means any of the events specified in Section 12.1,
provided that any requirement for passage of time, giving of notice, or any
other condition, has been satisfied.
"Excess Cash Flow" means, for any period of determination, the sum of (a)
EBITDA for such period (determined by adding back thereto any amounts deducted
in determining Net Income for such period that were paid, incurred or accrued by
Borrower or any of its Restricted Subsidiaries in violation of any of the other
provisions of this Agreement), minus (b) income and franchise taxes (paid or
payable in cash) and (to the extent permitted hereunder) Interest Expense (paid
or payable in cash) minus (c) all principal payments made in respect of Debt
during such period, to the extent permitted hereunder (excluding Excess Cash
Flow Payments pursuant to Section 4.4(b)(vii)) minus (d) all Capital
Expenditures made in cash during such period, to the extent permitted hereunder,
minus (e) non-scheduled principal payments of Term Loans (excluding Excess Cash
Flow Payments pursuant to Section 4.4(b)(v)) and plus or minus (as applicable)
(f) changes in working capital.
"Excess Proceeds" shall have the meaning assigned thereto in Section
4.4(b)(vii).
"Existing Facility" means the credit facility established by the Amended
and Restated Revolving Credit Loan and Term Loan Agreement by and among the
Borrower, DRS Technologies Canada Company, DRS Technologies Canada, Inc., DRS
EO, Inc. and DRS FPA, L.P., as Co-Borrowers, Mellon Bank, N.A., as Agent, Mellon
Bank Canada, as Lender and the other Lenders signatory thereto, as Lenders,
dated as of October 20, 1998 as amended from time to time.
"Existing Foreign Currency Letters of Credit" means (a) letter of credit
number 866287 issued by Mellon Bank, N.A. in the face amount of L750,000 and (b)
letter of credit number 869397 issued by Mellon Bank, N.A. in the face amount of
CDN $1,000,000.
"Existing Letters of Credit" means those letters of credit issued by
Mellon Bank, N.A. and existing on the Closing Date and identified on Schedule
7.1(t).
"Extensions of Credit" means, as to any Lender at any time, (a) an amount
equal to the sum of (i) the aggregate principal amount of all Revolving Credit
Loans made by such Lender then outstanding, (ii) such Lender's Revolving Credit
Commitment Percentage of the L/C Obligations then outstanding, (iii) such
Lender's Revolving Credit Commitment Percentage of the Swingline Loans then
outstanding and (iv) the aggregate principal amount of all Term Loans made by
such Lender then outstanding, or (b) the making of any Loan or participation in
any Letter of Credit by such Lender, as the context requires.
"FDIC" means the Federal Deposit Insurance Corporation, or any successor
thereto.
"Federal Funds Rate" means, the rate per annum (rounded upwards, if
necessary, to the next higher 1/100th of 1%) representing the daily effective
federal funds rate as quoted by the Administrative Agent and confirmed in
Federal Reserve Board Statistical Release H.15 (519) or any successor or
substitute publication selected by the Administrative Agent. If, for any reason,
such rate is not available, then "Federal Funds Rate" shall mean a daily rate
which is determined,
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in the opinion of the Administrative Agent, to be the rate at which federal
funds are being offered for sale in the national federal funds market at 9:00
a.m. (Charlotte time). Rates for weekends or holidays shall be the same as the
rate for the most immediately preceding Business Day.
"First Union" means First Union National Bank, a national banking
association, and its successors.
"Fiscal Year" means the fiscal year of the Borrower and its Restricted
Subsidiaries ending on March 31.
"Fixed Charges" means, for any period, the sum of the following determined
on a Consolidated basis, without duplication, for the Borrower and its
Restricted Subsidiaries in accordance with GAAP: (a) Interest Expense (paid in
cash), (b) scheduled principal payments with respect to Debt, and (c) cash
taxes.
"Foreign Accounts" shall have the meaning assigned thereto in clause (vii)
of the definition of Eligible Accounts Receivable.
"Foreign Subsidiary" means any direct or indirect subsidiary of the
Borrower that is not a Domestic Subsidiary.
"GAAP" means United States generally accepted accounting principles, as
recognized by the American Institute of Certified Public Accountants and the
Financial Accounting Standards Board, consistently applied and maintained on a
consistent basis for the Borrower and its Subsidiaries throughout the period
indicated.
"Governmental Approvals" means all authorizations, consents, approvals,
licenses and exemptions of, registrations and filings with, and reports to, all
Governmental Authorities.
"Governmental Authority" means any nation, province, state or political
subdivision thereof, and any government or any Person exercising executive,
legislative, regulatory or administrative functions of or pertaining to
government, and any corporation or other entity owned or controlled, through
stock or capital ownership or otherwise, by any of the foregoing.
"Governmental Contract" means a contract between the Borrower and an
agency, department or instrumentality of the United States or any state
Governmental Authority in the United States where such Borrower is the prime
contractor.
"Guaranty Obligation" means, with respect to the Borrower and its
Restricted Subsidiaries, without duplication, any obligation, contingent or
otherwise, of any such Person pursuant to which such Person has directly or
indirectly guaranteed any Debt or other obligation of any other Person and,
without limiting the generality of the foregoing, any obligation, direct or
indirect, contingent or otherwise, of any such Person (a) to purchase or pay (or
advance or supply funds for the purchase or payment of) such Debt or other
obligation (whether arising by virtue of partnership arrangements, by agreement
to keep well, to purchase assets, goods, securities or services, to take-or-pay,
or to maintain financial statement condition or otherwise) or (b) entered
12
into for the purpose of assuring in any other manner the obligee of such Debt or
other obligation of the payment thereof or to protect such obligee against loss
in respect thereof (in whole or in part); provided, that the term Guaranty
Obligation shall not include (i) endorsements for collection or deposit in the
ordinary course of business or (ii) guarantees by the Borrower or any Restricted
Subsidiary thereof of any non-Debt obligations of the Borrower or any Restricted
Subsidiary thereof.
"Hazardous Materials" means any substances or materials (a) which are or
become defined as hazardous wastes, hazardous substances, pollutants,
contaminants, chemical substances or mixtures or toxic substances under any
Environmental Law, (b) which are toxic, explosive, corrosive, flammable,
infectious, radioactive, carcinogenic, mutagenic or otherwise harmful to human
health or the environment and are or become regulated by any Governmental
Authority, (c) the presence of which require investigation or remediation under
any Environmental Law or common law, (d) the discharge or emission or release of
which requires a permit or license under any Environmental Law or other
Governmental Approval, (e) which are deemed to constitute a nuisance or a
trespass which pose a health or safety hazard to Persons or neighboring
properties, or (f) which contain, without limitation, asbestos, polychlorinated
biphenyls, urea formaldehyde foam insulation, petroleum hydrocarbons, petroleum
derived substances or waste, crude oil, nuclear fuel, natural gas or synthetic
gas.
"Hedging Agreement" means any agreement with respect to any Interest Rate
Contract, forward rate agreement, commodity swap, forward foreign exchange
agreement, currency swap agreement, cross-currency rate swap agreement, currency
option agreement or other agreement or arrangement designed to alter the risks
of any Person arising from fluctuations in interest rates, currency values or
commodity prices, all as amended, restated, supplemented or otherwise modified
from time to time.
"Increase Notification" means the written notice by the Borrower of its
desire to increase the Term Loan Commitment pursuant to Section 4.6.
"Increase Notification Date" means the date on which the Increase
Notification is received by the Administrative Agent.
"Insurance and Condemnation Proceeds" shall have the meaning assigned
thereto in Section 4.4(b)(iv).
"Interest Expense" means, with respect to the Borrower and its Restricted
Subsidiaries for any period, the gross interest expense (including, without
limitation, interest expense attributable to Capital Leases and all net payment
obligations pursuant to Hedging Agreements) of the Borrower and its Restricted
Subsidiaries, all determined for such period on a Consolidated basis, without
duplication, in accordance with GAAP.
"Interest Period" shall have the meaning assigned thereto in Section
5.1(b).
"Interest Rate Contract" means any interest rate swap agreement, interest
rate cap agreement, interest rate floor agreement, interest rate collar
agreement, interest rate option or any
13
other agreement regarding the hedging of interest rate risk exposure executed in
connection with hedging the interest rate exposure of any Person and any
confirming letter executed pursuant to such agreement, all as amended, restated,
supplemented or otherwise modified from time to time.
"Inventory" means all "inventory" (as now or hereafter defined in the UCC)
of the Borrower or any Restricted Subsidiary, including, without limitation, all
raw materials, inventory and other materials and supplies, work-in-process,
finished goods, all accessions thereto, documents therefor and any products made
or processed therefrom and all substances, if any, commingled therewith or added
thereto.
"ISP98" means the International Standby Practices (1998 Revision,
effective January 1, 1999), International Chamber of Commerce Publication No.
590.
"Issuing Lender" means (a) with respect to Letters of Credit issued
hereunder after the Closing Date, First Union, in its capacity as issuer
thereof, or any successor thereto and (b) with respect to the Existing Letters
of Credit, Mellon Bank, N.A.
"L/C Commitment" means the lesser of (a) Thirty-Five Million Dollars
($35,000,000) and (b) the Revolving Credit Commitment.
"L/C Facility" means the letter of credit facility established pursuant to
Article III.
"L/C Obligations" means at any time, an amount equal to the sum of (a) the
aggregate undrawn and unexpired amount of the then outstanding Letters of Credit
and (b) the aggregate amount of drawings under Letters of Credit which have not
then been reimbursed pursuant to Section 3.5.
"L/C Participants" means the collective reference to all the Lenders other
than the Issuing Lender.
"Lender" means each Person executing this Agreement as a Lender
(including, without limitation, the Issuing Lender and the Swingline Lender
unless the context otherwise requires) set forth on the signature pages hereto
and each Person that hereafter becomes a party to this Agreement as a Lender
pursuant to Section 4.6 or Section 14.10.
"Lending Office" means, with respect to any Lender, the office of such
Lender maintaining such Lender's Revolving Credit Commitment Percentage or Term
Loan Percentage, as applicable, of the Extensions of Credit.
"Letters of Credit" means the collective reference to letters of credit
issued pursuant to Section 3.1 and the Existing Letters of Credit.
"LIBOR" means the rate of interest per annum determined on the basis of
the rate for deposits in Dollars in minimum amounts of at least $5,000,000 for a
period equal to the applicable Interest Period which appears on the Dow Xxxxx
Market Screen 3750 at approximately 11:00 a.m. (London time) two (2) Business
Days prior to the first day of the applicable Interest
14
Period (rounded upward, if necessary, to the nearest 1/100th of 1%). If, for any
reason, such rate does not appear on Dow Xxxxx Market Screen 3750, then "LIBOR"
shall be determined by the Administrative Agent to be the arithmetic average of
the rate per annum at which deposits in Dollars in minimum amounts of at least
$5,000,000 would be offered by first class banks in the London interbank market
to the Administrative Agent at approximately 11:00 a.m. (London time) two (2)
Business Days prior to the first day of the applicable Interest Period for a
period equal to such Interest Period. Each calculation by the Administrative
Agent of LIBOR shall be conclusive and binding for all purposes, absent manifest
error.
"LIBOR Rate" means a rate per annum (rounded upwards, if necessary, to the
next higher 1/100th of 1%) determined by the Administrative Agent pursuant to
the following formula:
LIBOR Rate = LIBOR
----------------------------------
1.00-Eurodollar Reserve Percentage
"LIBOR Rate Loan" means any Loan bearing interest at a rate based upon the
LIBOR Rate as provided in Section 5.1(a).
"Lien" means, with respect to any asset, any mortgage, leasehold mortgage,
lien, pledge, charge, security interest, hypothecation or encumbrance of any
kind in respect of such asset. For the purposes of this Agreement, a Person
shall be deemed to own subject to a Lien any asset which it has acquired or
holds subject to the interest of a vendor or lessor under any conditional sale
agreement, Capital Lease or other title retention agreement relating to such
asset.
"Loan Documents" means, collectively, this Agreement, the Notes, the
Applications, the Security Documents, each joinder agreement executed pursuant
to Section 9.11 and each other document, instrument, certificate and agreement
executed and delivered by the Borrower or any Subsidiary thereof in connection
with this Agreement or otherwise referred to herein or contemplated hereby
(excluding any Hedging Agreement), all as may be amended, restated, supplemented
or otherwise modified from time to time.
"Loans" means the collective reference to the Revolving Credit Loans, the
Term Loans, the Swingline Loans, and "Loan" means any of such Loans.
"Material Adverse Effect" means, with respect to the Borrower or any of
its Restricted Subsidiaries or Sensors, a material adverse effect on (i) the
properties, business, prospects, operations or condition (financial or
otherwise) of such Persons, taken as a whole, or (ii) the ability of such
Persons, taken as a whole, to perform their obligations under the Loan Documents
in each case to which they are parties.
"Material Contract" means (a) any contract or other agreement, written or
oral, of the Borrower or any of its Restricted Subsidiaries involving monetary
liability of or to any Person in an amount in excess of $5,000,000 per annum, or
(b) any other contract or agreement, written or oral, of the Borrower or any of
its Restricted Subsidiaries the failure to comply with which could reasonably be
expected to have a Material Adverse Effect.
15
"Multiemployer Plan" means a "multiemployer plan" as defined in Section
4001(a)(3) of ERISA to which the Borrower or any ERISA Affiliate is making, or
is accruing an obligation to make, or has accrued an obligation to make
contributions within the preceding six (6) years.
"Net Cash Proceeds" means, as applicable, (a) with respect to any sale or
other disposition of assets, the gross cash proceeds received by the Borrower or
any of its Restricted Subsidiaries from such sale less the sum of (i) all income
taxes and other taxes assessed (or reasonably anticipated to be payable) by a
Governmental Authority as a result of such sale and any other fees and expenses
incurred in connection therewith, (ii) net reserves required in accordance with
GAAP in connection with such sale and (iii) the principal amount of, premium, if
any, and interest on any Debt secured by a Lien on the asset (or a portion
thereof) sold, which Debt is required to be repaid in connection with such sale,
(b) with respect to any offering of capital stock or issuance of Debt, the gross
cash proceeds received by the Borrower or any of its Restricted Subsidiaries
therefrom less all reasonable legal, underwriting and other reasonable fees and
expenses incurred in connection therewith and (c) with respect to any payment
under an insurance policy or in connection with a condemnation proceeding, the
amount of cash proceeds received by the Borrower or its Restricted Subsidiaries
from an insurance company or Governmental Authority, as applicable, net of all
reasonable expenses of collection.
"Net Income" means, with respect to the Borrower and its Restricted
Subsidiaries, for any period of determination, the net income (or loss) of the
Borrower and its Restricted Subsidiaries for such period, determined on a
Consolidated basis in accordance with GAAP; provided that there shall be
excluded from Net Income the net income (or loss) of any Person accrued prior to
the date it becomes a Restricted Subsidiary of such Person or is merged into or
consolidated with such Person or any of its Restricted Subsidiaries or that
Person's assets are acquired by such Person or any of its Restricted
Subsidiaries.
"New Lender" shall have the meaning assigned thereto in Section 4.6(b).
"Notes" means the collective reference to the Revolving Credit Notes, the
Term Notes and Swingline Notes, and "Note" means any of such Notes.
"Notice of Account Designation" shall have the meaning assigned thereto in
Section 2.3(b).
"Notice of Borrowing" shall have the meaning assigned thereto in Section
2.3(a).
"Notice of Conversion/Continuation" shall have the meaning assigned
thereto in Section 5.2.
"Notice of Prepayment" shall have the meaning assigned thereto in Section
2.4(c).
"Obligations" means, in each case, whether now in existence or hereafter
arising: (a) the principal of and interest on (including interest accruing after
the filing of any bankruptcy or similar petition) the Loans, (b) the L/C
Obligations, (c) all existing or future payment and other obligations owing by
the Borrower under any Hedging Agreement (which such Hedging
16
Agreement is permitted hereunder) with any Person that is a Lender hereunder at
the time such Hedging Agreement is executed, (all such obligations with respect
to any such Hedging Agreement, "Hedging Obligations") and (d) all other fees and
commissions (including attorneys' fees), charges, indebtedness, loans,
liabilities, financial accommodations, obligations, covenants and duties owing
by the Borrower or any of its Restricted Subsidiaries to the Lenders or the
Administrative Agent, in each case under or in respect of this Agreement, any
Note, any Letter of Credit or any of the other Loan Documents of every kind,
nature and description, direct or indirect, absolute or contingent, due or to
become due, contractual or tortious, liquidated or unliquidated, and whether or
not evidenced by any note.
"Officer's Compliance Certificate" shall have the meaning assigned thereto
in Section 8.2.
"Other Taxes" shall have the meaning assigned thereto in Section 5.11(b).
"PBGC" means the Pension Benefit Guaranty Corporation or any successor
agency.
"Pension Plan" means any Employee Benefit Plan, other than a Multiemployer
Plan, which is subject to the provisions of Title IV of ERISA or Section 412 of
the Code and which (a) is maintained for the employees of the Borrower or any
ERISA Affiliates or (b) has at any time within the preceding six (6) years been
maintained for the employees of the Borrower or any of its current or former
ERISA Affiliates.
"Performance Based Letters of Credit" means standby Letters of Credit
issued to ensure the performance of services and/or delivery of goods by or on
behalf of the Borrower.
"Permitted Acquisition" means any acquisition permitted by Section
11.3(d).
"Permitted Acquisition Consideration" means the aggregate amount of the
purchase price (including, but not limited to, any assumed debt, earn-outs
(valued at the maximum amount payable thereunder), deferred payments, or capital
stock of the Borrower, net of the applicable acquired company's cash (including
Cash Equivalents) balance as shown on its most recent financial statements
delivered in connection with the applicable Permitted Acquisition) to be paid on
a singular basis in connection with any applicable Permitted Acquisition as set
forth in the applicable Permitted Acquisition Documents executed by the Borrower
or any of its Restricted Subsidiaries in order to consummate the applicable
Permitted Acquisition.
"Permitted Acquisition Documents" means the merger, stock and/or asset
purchase documents entered into in connection with any Permitted Acquisition.
"Permitted Lien" means any Lien permitted pursuant to Section 11.2 hereof.
"Person" means an individual, corporation, limited liability company,
partnership, association, trust, business trust, joint venture, joint stock
company, pool, syndicate, sole proprietorship, unincorporated organization,
Governmental Authority or any other form of entity or group thereof.
17
"Pledge Agreement" means the collective reference to the pledge agreements
executed by the Borrower (or applicable Restricted Subsidiary thereof) in favor
of the Administrative Agent for the ratable benefit of itself and the Lenders,
substantially in the form of Exhibit L hereto, as amended, restated,
supplemented or otherwise modified.
"Prime Rate" means, at any time, the rate of interest per annum publicly
announced from time to time by First Union as its prime rate. Each change in the
Prime Rate shall be effective as of the opening of business on the day such
change in such prime rate occurs. The parties hereto acknowledge that the rate
announced publicly by First Union as its prime rate is an index or base rate and
shall not necessarily be its lowest or best rate charged to its customers or
other banks.
"Pro Forma EBITDA" means with respect to any Person acquired in connection
with a Permitted Acquisition consummated during any calculation period, EBITDA
of such acquired Person calculated on a pro forma basis as of the first day of
such calculation period.
"Purchasing Lender" shall have the meaning assigned thereto in Section
14.10.
"Register" shall have the meaning assigned thereto in Section 14.10(d).
"Reimbursement Obligation" means the obligation of the Borrower to
reimburse the Issuing Lender pursuant to Section 3.5 for amounts drawn under
Letters of Credit.
"Required Lenders" means, at any date, any combination of Lenders holding
at least fifty-one percent (51%) of each of (a) the Revolving Credit Commitment
(or, if the Revolving Credit Facility has been terminated, any combination of
Lenders holding at least fifty-one percent (51%) of the aggregate outstanding
Extensions of Credit thereunder) and (b) the aggregate outstanding Extensions of
Credit under the Term Loan Facility.
"Responsible Officer" means any of the following: the chief executive
officer, chief financial officer or corporate controller of the Borrower or any
other officer of the Borrower reasonably acceptable to the Administrative Agent.
"Restricted Subsidiaries" means all Subsidiaries of the Borrower other
than the Unrestricted Subsidiaries.
"Revolving Credit Commitment" means (a) as to any Lender, the obligation
of such Lender to make Revolving Credit Loans to the account of the Borrower
hereunder in an aggregate principal amount at any time outstanding not to exceed
the amount set forth opposite such Lender's name on Schedule 1 hereto as such
amount may be reduced or modified at any time or from time to time pursuant to
the terms hereof and (b) as to all Lenders, the aggregate commitment of all
Lenders to make Revolving Credit Loans, as such amount may be reduced at any
time or from time to time pursuant to the terms hereof. The Revolving Credit
Commitment of all Lenders on the Closing Date shall be $100,000,000.
"Revolving Credit Commitment Percentage" means, as to any Lender at any
time, the
18
ratio of (a) the amount of the Revolving Credit Commitment of such Lender to (b)
the Revolving Credit Commitments of all Lenders.
"Revolving Credit Facility" means the revolving credit facility
established pursuant to Article II.
"Revolving Credit Loans" means any revolving loan made to the Borrower
pursuant to Section 2.1, and all such revolving loans collectively as the
context requires.
"Revolving Credit Notes" means the collective reference to the Revolving
Credit Notes made by the Borrower payable to the order of each Lender,
substantially in the form of Exhibit A-1 hereto, evidencing the Revolving Credit
Facility, and any amendments, supplements and modifications thereto, any
substitutes therefor, and any replacements, restatements, renewals or extension
thereof, in whole or in part; "Revolving Credit Note" means any of such
Revolving Credit Notes.
"Revolving Credit Maturity Date" means the earliest of the dates referred
to in Section 2.7.
"Security Documents" means the collective reference to the Subsidiary
Guaranty Agreement, the Collateral Agreement, the Pledge Agreement, and each
other agreement or writing pursuant to which the Borrower or any Restricted
Subsidiary thereof purports to pledge or grant a security interest in any
property or assets securing the Obligations or any such Person purports to
guaranty the payment and/or performance of the Obligations, in each case, as
amended, restated, supplemented or otherwise modified from time to time.
"Sensors" means the collective reference to the assets and business which,
immediately prior to the Closing Date, comprise the Sensors and Electronic
Systems Organization business unit of The Boeing Company.
"Solvent" means, as to the Borrower and its Restricted Subsidiaries on a
particular date, that any such Person (a) has capital sufficient to carry on its
business and transactions and all business and transactions in which it is about
to engage and is able to pay its debts as they mature, (b) owns property having
a value, both at fair valuation and at present fair saleable value, greater than
the amount required to pay its probable liabilities (including contingencies),
and (c) does not believe that it will incur debts or liabilities beyond its
ability to pay such debts or liabilities as they mature.
"Subordinated Debt" means the collective reference to any Debt of the
Borrower or any Restricted Subsidiary subordinated in right and time of payment
to the Obligations and containing such other terms and conditions, in each case
as are reasonably satisfactory to the Required Lenders.
"Subsidiary" means as to any Person, any corporation, partnership, limited
liability company or other entity of which more than fifty percent (50%) of the
outstanding capital stock or other ownership interests having ordinary voting
power to elect a majority of the board of
19
directors or other managers of such corporation, partnership, limited liability
company or other entity is at the time owned by or the management is otherwise
controlled by such Person (irrespective of whether, at the time, capital stock
or other ownership interests of any other class or classes of such corporation,
partnership, limited liability company or other entity shall have or might have
voting power by reason of the happening of any contingency). Unless otherwise
qualified, references to "Subsidiary" or "Subsidiaries" herein shall refer to
those of the Borrower.
"Subsidiary Guaranteed Obligations" means the collective reference to the
guaranteed obligations of each of the Restricted Subsidiaries party to the
Subsidiary Guaranty Agreement.
"Subsidiary Guarantors" means the collective reference to the Domestic
Subsidiaries of the Borrower who are Restricted Subsidiaries executing the
Subsidiary Guaranty Agreement.
"Subsidiary Guaranty Agreement" means the unconditional guaranty agreement
of even date herewith executed by each of the Subsidiary Guarantors in favor of
the Administrative Agent for the ratable benefit of itself and the Lenders,
substantially in the form of Exhibit H, as amended, restated, supplemented or
otherwise modified from time to time.
"Swingline Commitment" means the lesser of (a) Five Million Dollars
($5,000,000) and (b) the Revolving Credit Commitment.
"Swingline Facility" means the swingline facility established pursuant to
Section 2.2.
"Swingline Lender" means First Union in its capacity as swingline lender
hereunder.
"Swingline Loan" means any swingline loan made by the Swingline Lender to
the Borrower pursuant to Section 2.2, and all such swingline loans collectively
as the context requires.
"Swingline Note" means the Swingline Note made by the Borrower payable to
the order of the Swingline Lender, substantially in the form of Exhibit A-2
hereto, evidencing the Swingline Loans, and any amendments, supplements and
modifications thereto, any substitutes therefor, and any replacements,
restatements, renewals or extensions thereof, in whole or in part.
"Swingline Termination Date" means the first to occur of (a) the
resignation of First Union as Administrative Agent in accordance with Section
13.9 and (b) the Revolving Credit Maturity Date.
"Taxes" shall have the meaning assigned thereto in Section 5.11(a).
"Term Loan Commitment" means (a) as to any Lender, the obligation of such
Lender to make the Term Loans to the account of the Borrower hereunder in an
aggregate principal amount not to exceed the amount set forth opposite such
Lender's name on Schedule 1 hereto, as such amount may be increased, reduced or
modified at any time or from time to time pursuant to the terms hereof and (b)
as to all Lenders, the aggregate commitment to make Term Loans. The
20
Term Loan Commitment of all Lenders as of the Closing Date shall be
$140,000,000.
"Term Loan Facility" shall mean the term loan facility established
pursuant to Article IV.
"Term Loan Increase Termination Date" means the first to occur of (a)
September 30, 2003, (b) the date of termination by the Administrative Agent on
behalf of the Lenders pursuant to Section 12.2(a), or (c) the date of
termination pursuant to Section 4.4.
"Term Loan Maturity Date" means the first to occur of (a) September 30,
2008, or (b) the date of termination by the Administrative Agent on behalf of
the Lenders pursuant to Section 12.2(a).
"Term Loan Percentage" means, as to any Lender, after the Term Loans are
made, the ratio of (i) the outstanding principal balance of the Term Loan of
such Lender to (ii) the aggregate outstanding principal balance of the Term
Loans of all Lenders.
"Term Loans" shall mean the term loans to be made to the Borrower by the
Lenders pursuant to Section 4.1 and all Additional Term Loans made to the
Borrower pursuant to Section 4.6.
"Term Notes" means the Term Notes made by the Borrower payable to the
order of each of the Lenders, substantially in the form of Exhibit A-3 hereto,
evidencing the Debt incurred by the Borrower pursuant to the Term Loan Facility,
and any amendments, modifications and supplements thereto, any substitute
therefor, and any replacement, restatements, renewals or extensions thereof, in
whole or in part.
"Termination Event" means except for any such event or condition that
could not reasonably be expected to have a Material Adverse Effect: (a) a
"Reportable Event" described in Section 4043 of ERISA for which the notice
requirement has not been waived by the PBGC, or (b) the withdrawal of the
Borrower or any ERISA Affiliate from a Pension Plan during a plan year in which
it was a "substantial employer" as defined in Section 4001(a)(2) of ERISA, or
(c) the termination of a Pension Plan, the filing of a notice of intent to
terminate a Pension Plan or the treatment of a Pension Plan amendment as a
termination, under Section 4041 of ERISA, if the plan assets are not sufficient
to pay all plan liabilities, or (d) the institution of proceedings to terminate,
or the appointment of a trustee with respect to, any Pension Plan by the PBGC,
or (e) any other event or condition which would constitute grounds under Section
4042(a) of ERISA for the termination of, or the appointment of a trustee to
administer, any Pension Plan, or (f) the imposition of a Lien pursuant to
Section 412 of the Code or Section 302 of ERISA, or (g) the partial or complete
withdrawal of the Borrower or any ERISA Affiliate from a Multiemployer Plan if
withdrawal liability is asserted by such plan, or (h) any event or condition
which results in the reorganization or insolvency of a Multiemployer Plan under
Sections 4241 or 4245 of ERISA, or (h) any event or condition which results in
the termination of a Multiemployer Plan under Section 4041A of ERISA or the
institution by PBGC of proceedings to terminate a Multiemployer Plan under
Section 4042 of ERISA.
"Total Leverage Ratio" shall have the meaning assigned thereto in Section
10.1.
21
"Uniform Customs" means the Uniform Customs and Practice for Documentary
Credits (1993 Revision), effective January, 1994 International Chamber of
Commerce Publication No. 500.
"Unrestricted Subsidiary" means any Subsidiary of the Borrower set forth
on Schedule 2 hereto.
"UCC" means the Uniform Commercial Code as in effect in the State of New
York, as amended or modified from time to time.
"United States" means the United States of America.
"Wholly-Owned" means, with respect to a Subsidiary, that all of the shares
of capital stock or other ownership interests of such Subsidiary are, directly
or indirectly, owned or controlled by the Borrower and/or one or more of its
Wholly-Owned Subsidiaries (except for directors' qualifying shares or other
shares required by Applicable Law to be owned by a Person other than the
Borrower).
SECTION 1.2 General. Unless otherwise specified, a reference in this
Agreement to a particular article, section, subsection, Schedule or Exhibit is a
reference to that article, section, subsection, Schedule or Exhibit of this
Agreement. Wherever from the context it appears appropriate, each term stated in
either the singular or plural shall include the singular and plural, and
pronouns stated in the masculine, feminine or neuter gender shall include the
masculine, the feminine and the neuter. Any reference herein to "Charlotte time"
shall refer to the applicable time of day in Charlotte, North Carolina.
SECTION 1.3 Other Definitions and Provisions.
(a) Use of Capitalized Terms. Unless otherwise defined therein, all
capitalized terms defined in this Agreement shall have the defined meanings when
used in this Agreement, the Notes and the other Loan Documents or any
certificate, report or other document made or delivered pursuant to this
Agreement.
(b) Miscellaneous. The words "hereof", "herein" and "hereunder" and words
of similar import when used in this Agreement shall refer to this Agreement as a
whole and not to any particular provision of this Agreement.
ARTICLE II
REVOLVING CREDIT FACILITY
SECTION 2.1 Revolving Credit Loans. Subject to the terms and conditions of
this Agreement, and in reliance upon the representations and warranties set
forth herein, each Lender severally agrees to make Revolving Credit Loans to the
Borrower from time to time from
22
the Closing Date through, but not including, the Revolving Credit Maturity Date
as requested by the Borrower in accordance with the terms of Section 2.3;
provided, that (a) the sum of the aggregate amount of all outstanding Revolving
Credit Loans (after giving effect to the amount requested and the use of the
proceeds thereof to repay Extensions of Credit hereunder), Swingline Loans and
L/C Obligations from any Lender to the Borrower shall at no time exceed such
Lender's Revolving Credit Commitment and (b) no borrowing of Revolving Credit
Loans shall be made if, immediately after giving effect thereto and the use of
the proceeds thereof to repay Extensions of Credit hereunder, the aggregate
principal amount of Revolving Credit Loans then outstanding plus (i) all
outstanding Swingline Loans plus (ii) the aggregate principal amount of all
outstanding L/C Obligations would exceed the then applicable Borrowing Limit.
Each Revolving Credit Loan by a Lender shall be in a principal amount equal to
such Lender's Revolving Credit Commitment Percentage of the aggregate principal
amount of Revolving Credit Loans requested on such occasion. Subject to the
terms and conditions hereof, the Borrower may borrow, repay and reborrow
Revolving Credit Loans hereunder until the Revolving Credit Maturity Date.
SECTION 2.2 Swingline Loans.
(a) Availability. Subject to the terms and conditions of this Agreement,
the Swingline Lender agrees to make Swingline Loans to the Borrower from time to
time from the Closing Date through, but not including, the Swingline Termination
Date; provided, that the Swingline Lender shall have no obligation to make any
Swingline Loan, if, after giving effect to any amount requested and the use of
the proceeds thereof to repay Extensions of Credit hereunder, (a) the aggregate
principal amount of all Swingline Loans then outstanding would exceed the
Swingline Commitment or (b) the aggregate principal amount of all Revolving
Credit Loans then outstanding plus the aggregate principal amount of all
Swingline Loans then outstanding plus the L/C Obligations then outstanding would
exceed the then applicable Borrowing Limit.
(b) Refunding.
(i) Swingline Loans shall be refunded by the Lenders (which for such
purpose shall include the Swingline Lender in its capacity as a Lender
having a Revolving Credit Commitment) on demand by the Swingline Lender.
Subject to clause (a) of the proviso to the initial sentence of Section
2.1 hereof, such refundings shall be made by the Lenders in accordance
with their respective Revolving Credit Commitment Percentages and shall
thereafter be reflected as Revolving Credit Loans of the Lenders on the
books and records of the Administrative Agent. Each Lender shall fund its
respective Revolving Credit Commitment Percentage of Revolving Credit
Loans as required to repay Swingline Loans outstanding to the Swingline
Lender upon demand to such Lender by telecopier (or by telephone promptly
confirmed by telecopier) by the Swingline Lender but in no event later
than 2:00 p.m. (Charlotte time) on the next succeeding Business Day after
such demand is made. No Lender's obligation to fund its respective
Revolving Credit Commitment Percentage of a Swingline Loan shall be
affected by any other Lender's failure to fund its Revolving Credit
Commitment Percentage of a Swingline Loan, nor shall any Lender's
Revolving Credit Commitment Percentage be
23
increased as a result of any such failure of any other Lender to fund its
Revolving Credit Commitment Percentage of a Swingline Loan.
(ii) The Borrower shall pay to the Swingline Lender on demand the
amount of such Swingline Loans to the extent amounts received from the
Lenders are not sufficient to repay in full the outstanding Swingline
Loans requested or required to be refunded. In addition, the Borrower
hereby authorizes the Administrative Agent to charge any account
maintained by the Borrower with the Swingline Lender (up to the amount
available therein) in order to immediately pay the Swingline Lender the
amount of such Swingline Loans to the extent amounts received from the
Lenders are not sufficient to repay in full the outstanding Swingline
Loans requested or required to be refunded. If any portion of any such
amount paid to the Swingline Lender shall be recovered by or on behalf of
the Borrower from the Swingline Lender in bankruptcy or otherwise, the
loss of the amount so recovered shall be ratably shared among all the
Lenders in accordance with their respective Revolving Credit Commitment
Percentages (unless the amounts so recovered by or on behalf of the
Borrower pertain to a Swingline Loan extended after the occurrence and
during the continuance of an Event of Default of which the Administrative
Agent has received notice in the manner required pursuant to Section 13.5
and which such Event of Default has not been waived by the Required
Lenders or the Lenders, as applicable).
(iii) Each Lender acknowledges and agrees that its obligation to
refund Swingline Loans in accordance with the terms of this Section 2.2 is
absolute and unconditional and shall not be affected by any circumstance
whatsoever, including, without limitation, non-satisfaction of the
conditions set forth in Article VII. Further, each Lender agrees and
acknowledges that if prior to the refunding of any outstanding Swingline
Loans pursuant to this Section 2.2, one of the events described in Section
12.1(j) or (k) shall have occurred, each Lender will (subject to clause
(a) of the proviso to the initial sentence of Section 2.1 hereof), on the
date the applicable Revolving Credit Loan would have been made, purchase
an undivided participating interest in the Swingline Loan to be refunded
in an amount equal to its Revolving Credit Commitment Percentage of the
aggregate amount of such Swingline Loan. Each Lender will immediately
transfer to the Swingline Lender, in immediately available funds at the
office of the Swingline Lender, the amount of its participation and upon
receipt thereof the Swingline Lender will deliver to such Lender a
certificate evidencing such participation dated the date of receipt of
such funds and for such amount. Whenever, at any time after the Swingline
Lender has received from any Lender such Lender's participating interest
in a Swingline Loan, the Swingline Lender receives any payment on account
thereof, the Swingline Lender will promptly distribute to such Lender its
participating interest in such amount (appropriately adjusted, in the case
of interest payments, to reflect the period of time during which such
Lender's participating interest was outstanding and funded).
SECTION 2.3 Procedure for Advances of Revolving Credit and Swingline
Loans.
(a) Requests for Borrowing. The Borrower shall give the Administrative
Agent
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irrevocable prior written notice substantially in the form attached hereto as
Exhibit B (a "Notice of Borrowing") not later than 11:00 a.m. (Charlotte time)
(i) on the same Business Day as each Base Rate Loan and each Swingline Loan and
(ii) at least three (3) Business Days before each LIBOR Rate Loan, of its
intention to borrow, specifying (A) the date of such borrowing, which shall be a
Business Day, (B) the amount of such borrowing, which shall be (x) with respect
to Base Rate Loans (other than Swingline Loans) in an aggregate principal amount
of $2,500,000 or a whole multiple of $100,000 in excess thereof, (y) with
respect to LIBOR Rate Loans in an aggregate principal amount of $2,500,000 or a
whole multiple of $100,000 in excess thereof and (z) with respect to Swingline
Loans in an aggregate principal amount of $50,000 or a whole multiple of $50,000
in excess thereof, (C) whether such Loan is to be a Revolving Credit Loan or
Swingline Loan, (D) whether the Loans are to be LIBOR Rate Loans or Base Rate
Loans, and (E) in the case of a LIBOR Rate Loan, the duration of the Interest
Period applicable thereto. A Notice of Borrowing received after 11:00 a.m.
(Charlotte time) shall be deemed received on the next Business Day. The
Administrative Agent shall promptly notify the Lenders of each Notice of
Borrowing by telecopier (or by telephone promptly confirmed by telecopier).
(b) Disbursement of Revolving Credit and Swingline Loans. Not later than
2:00 p.m. (Charlotte time) on the proposed borrowing date, subject to the terms
and conditions of this Agreement, (i) each Lender will make available to the
Administrative Agent, for the account of the Borrower, at the office of the
Administrative Agent in funds immediately available to the Administrative Agent,
such Lender's Revolving Credit Commitment Percentage of the Revolving Credit
Loans to be made on such borrowing date and (ii) the Swingline Lender will make
available to the Administrative Agent, for the account of the Borrower, at the
office of the Administrative Agent in funds immediately available to the
Administrative Agent, the Swingline Loans to be made on such borrowing date;
provided that no Lender shall be responsible for any default by any other Lender
in that other Lender's obligation to make a Loan requested hereunder nor shall
the commitment of any Lender to make the particular type of Loan requested be
increased or decreased as a result of a default by any other Lender in that
other Lender's obligation to make a Loan requested hereunder. The Borrower
hereby irrevocably authorizes the Administrative Agent to disburse the proceeds
of each borrowing requested pursuant to this Section 2.3 in immediately
available funds by crediting or wiring such proceeds to the deposit account of
the Borrower identified in the most recent notice substantially in the form of
Exhibit C hereto (a "Notice of Account Designation") delivered by the Borrower
to the Administrative Agent or as may be otherwise agreed upon by the Borrower
and the Administrative Agent from time to time. Subject to Section 5.7 hereof,
the Administrative Agent shall not be obligated to disburse the portion of the
proceeds of any Revolving Credit Loan requested pursuant to this Section 2.3 to
the extent that any Lender has not made available to the Administrative Agent
its Revolving Credit Commitment Percentage of such Loan. Revolving Credit Loans
to be made for the purpose of refunding Swingline Loans shall be made by the
Lenders as provided in Section 2.2(b).
SECTION 2.4 Repayment of Loans.
(a) Repayment on Termination Date. The Borrower hereby agrees to repay the
outstanding principal amount of (i) all Revolving Credit Loans in full on the
Revolving Credit Maturity Date, and (ii) all Swingline Loans in accordance with
Section 2.2(b), together, in each
25
case, with all accrued but unpaid interest thereon.
(b) Mandatory Repayment of Revolving Credit Loans.
(i) If at any time the Asset Coverage Ratio as set forth on the most
recently delivered Borrowing Base Certificate and adjusted on a pro forma
basis for all Extensions of Credit made and/or repaid since the date of
the financial information used to determine such Asset Coverage Ratio is
less than 1.00 to 1.00, the Borrower agrees to immediately repay the
principal amount of outstanding Revolving Credit Loans in an amount
sufficient to cause the Asset Coverage Ratio (determined on a pro forma
basis after giving effect to such payment) to equal or exceed 1.00 to
1.00.
(ii) If at any time the outstanding principal amount of all
Revolving Credit Loans plus the sum of all outstanding Swingline Loans and
L/C Obligations exceeds the Borrowing Limit, the Borrower agrees to repay
immediately upon notice from the Administrative Agent, by payment to the
Administrative Agent for the account of the Lenders Extensions of Credit
in an amount equal to such excess with each such repayment applied first
to the principal amount of outstanding Swingline Loans, second to the
principal amount of outstanding Revolving Credit Loans and third, with
respect to any Letters of Credit then outstanding, a payment of cash
collateral into a cash collateral account opened by the Administrative
Agent, for the benefit of the Lenders in an amount equal to the aggregate
then undrawn and unexpired Dollar Equivalent amount of such Letters of
Credit (such cash collateral to be applied in accordance with Section
12.2(b)).
(c) Optional Repayments. The Borrower may at any time and from time to
time repay the Loans, in whole or in part, upon at least three (3) Business
Days' irrevocable notice to the Administrative Agent with respect to LIBOR Rate
Loans and one (1) Business Day irrevocable notice with respect to Base Rate
Loans and Swingline Loans, substantially in the form attached hereto as Exhibit
D (a "Notice of Prepayment") specifying the date and amount of repayment and
whether the repayment is of LIBOR Rate Loans, Base Rate Loans, Swingline Loans
or a combination thereof, and, if of a combination thereof, the amount allocable
to each. Upon receipt of such notice, the Administrative Agent shall promptly
notify each Lender by telecopier (or by telephone promptly confirmed by
telecopier). If any such notice is given, the amount specified in such notice
shall be due and payable on the date set forth in such notice. Partial
repayments shall be in an aggregate amount of $2,500,000 or a whole multiple of
$100,000 in excess thereof with respect to Base Rate Loans (other than Swingline
Loans), $2,500,000 or a whole multiple of $100,000 in excess thereof with
respect to LIBOR Rate Loans and $50,000 or a whole multiple of $50,000 in excess
thereof with respect to Swingline Loans. Each such repayment shall be
accompanied by an amount required to be paid pursuant to Section 5.9 hereof.
(d) Limitation on Repayment of LIBOR Rate Loans. The Borrower may not
repay any LIBOR Rate Loan on any day other than on the last day of the Interest
Period applicable thereto unless such repayment is accompanied by any amount
required to be paid pursuant to Section 5.9 hereof.
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(e) Hedging Agreements. No repayment or prepayment pursuant to this
Section 2.4 shall affect any of the Borrower's obligations under any Hedging
Agreement.
SECTION 2.5 Notes.
(a) Revolving Credit Notes. Except as otherwise provided in Section 14.10
(a) - (e), each Lender's Revolving Credit Loans and the obligation of the
Borrower to repay such Revolving Credit Loans shall be evidenced by a separate
Revolving Credit Note executed by the Borrower payable to the order of such
Lender.
(b) Swingline Notes. The Swingline Loans and the obligation of the
Borrower to repay such Swingline Loans shall be evidenced by a Swingline Note
executed by the Borrower payable to the order of the Swingline Lender.
SECTION 2.6 Permanent Reduction of the Revolving Credit Commitment.
(a) Voluntary Reduction. The Borrower shall have the right at any time and
from time to time, upon at least five (5) Business Days prior written notice to
the Administrative Agent, to permanently reduce, without premium or penalty, (i)
the entire Revolving Credit Commitment at any time or (ii) portions of the
Revolving Credit Commitment, from time to time, in an aggregate principal amount
not less than $2,000,000 or any whole multiple of $1,000,000 in excess thereof.
Upon receipt of such notice, the Administrative Agent shall promptly notify each
of the Lenders thereof by telecopier (or by telephone promptly confirmed by
telecopier). The amount of each partial permanent reduction shall permanently
reduce the Lenders' Revolving Credit Commitments pro rata in accordance with
their respective Revolving Credit Commitment Percentages.
(b) Mandatory Reduction. The Revolving Credit Commitment shall be
permanently reduced on the date of the required prepayment under Section
4.4(b)(vii) by an amount equal to the amount of such Excess Proceeds, to the
extent a corresponding prepayment was made pursuant to 4.4(b)(iii).
(c) Corresponding Payment. Each permanent reduction permitted or required
pursuant to this Section 2.6 shall be accompanied by a payment of principal
sufficient to reduce the aggregate outstanding Revolving Credit Loans, Swingline
Loans and L/C Obligations, as applicable, after such reduction to the Revolving
Credit Commitment as so reduced and if the Revolving Credit Commitment as so
reduced is less than the aggregate amount of all outstanding Letters of Credit,
the Borrower shall be required to deposit cash collateral in a cash collateral
account opened by the Administrative Agent in an amount equal to the aggregate
then undrawn and unexpired Dollar Equivalent amount of such Letters of Credit.
Such cash collateral shall be applied in accordance with Section 12.2(b). Any
reduction of the Revolving Credit Commitment to zero shall be accompanied by
payment of all outstanding Revolving Credit Loans and Swingline Loans (and
furnishing of cash collateral satisfactory to the Administrative Agent for all
L/C Obligations) and shall result in the termination of the Revolving Credit
Commitment and the Swingline Commitment and the Revolving Credit Facility. Such
cash collateral shall be applied in accordance with Section 12.2(b). If the
reduction of the Revolving Credit
27
Commitment requires the repayment of any LIBOR Rate Loan, such repayment shall
be accompanied by any amount required to be paid pursuant to Section 5.9 hereof.
SECTION 2.7 Termination of Revolving Credit Facility. The Revolving Credit
Facility shall terminate on the earliest of (a) September 30, 2006, (b) the date
of termination by the Borrower pursuant to Section 2.6, or (c) the date of
termination by the Administrative Agent on behalf of the Lenders pursuant to
Section 12.2(a).
ARTICLE III
LETTER OF CREDIT FACILITY
SECTION 3.1 L/C Commitment. Subject to the terms and conditions hereof,
the Issuing Lender, in reliance on the agreements of the other Lenders set forth
in Section 3.4(a), agrees to issue standby Letters of Credit for the account of
the Borrower on any Business Day from the Closing Date through but not including
the Revolving Credit Maturity Date in such form as may be approved from time to
time by the Issuing Lender; provided, that the Issuing Lender shall have no
obligation to issue any Letter of Credit if, after giving effect to such
issuance, (a) the L/C Obligations would exceed the L/C Commitment or (b) the
aggregate principal amount of outstanding Revolving Credit Loans, plus the
aggregate principal amount of outstanding Swingline Loans, plus the aggregate
amount of L/C Obligations would exceed the then applicable Borrowing Limit. Each
Letter of Credit shall (i) be denominated in Dollars in a minimum amount of
$100,000 (other than the Existing Foreign Currency Letters of Credit), (ii) be a
standby letter of credit issued to support obligations of the Borrower or any of
its Restricted Subsidiaries, contingent or otherwise, incurred in the ordinary
course of business, (iii) expire on a date satisfactory to the Issuing Lender,
which date shall be no later than ninety (90) Business Days prior to the
Revolving Credit Maturity Date and (iv) be subject to the Uniform Customs and/or
ISP98, as set forth in the Application or as determined by the Issuing Lender
and, to the extent not inconsistent therewith, the laws of the State of North
Carolina. The Issuing Lender shall not at any time be obligated to issue any
Letter of Credit hereunder if such issuance would conflict with, or cause the
Issuing Lender or any L/C Participant to exceed any limits imposed by, any
Applicable Law. References herein to "issue" and derivations thereof with
respect to Letters of Credit shall also include extensions or modifications of
any existing Letters of Credit, unless the context otherwise requires.
SECTION 3.2 Procedure for Issuance of Letters of Credit. The Borrower may
from time to time request that the Issuing Lender issue a Letter of Credit by
delivering to the Issuing Lender at the Administrative Agent's Office an
Application therefor, completed to the satisfaction of the Issuing Lender, and
such other certificates, documents and other papers and information as the
Issuing Lender may request. Upon receipt of any Application, the Issuing Lender
shall process such Application and the certificates, documents and other papers
and information delivered to it in connection therewith in accordance with its
customary procedures and shall, subject to Section 3.1 and Article VII hereof,
promptly issue the Letter of Credit requested thereby (but in no event shall the
Issuing Lender be required to issue any Letter of Credit earlier than three (3)
Business Days after its receipt of the Application therefor and all
28
such other certificates, documents and other papers and information relating
thereto) by issuing the original of such Letter of Credit to the beneficiary
thereof or as otherwise may be agreed by the Issuing Lender and the Borrower.
The Issuing Lender shall promptly furnish to the Borrower a copy of such Letter
of Credit and promptly notify each Lender of the issuance and upon request by
any Lender, furnish to such Lender a copy of such Letter of Credit and the
amount of such Lender's L/C Participation therein by telecopier (or by telephone
promptly confirmed by telecopier).
SECTION 3.3 Commissions and Other Charges.
(a) The Borrower shall pay to the Administrative Agent, for the account of
the Issuing Lender and the L/C Participants, a letter of credit commission with
respect to each Letter of Credit in an amount equal to the face amount of such
Letter of Credit multiplied by the Applicable Margin with respect to Revolving
Credit Loans that are LIBOR Rate Loans (determined on a per annum basis). Such
commission shall be payable quarterly in arrears on the last Business Day of
each calendar quarter and on the Revolving Credit Maturity Date. The
Administrative Agent shall, promptly following its receipt thereof, distribute
to the Issuing Lender and the L/C Participants all commissions received pursuant
to this Section 3.3(a) in accordance with their respective Revolving Credit
Commitment Percentages.
(b) In addition to the foregoing commission, the Borrower shall pay the
Issuing Lender an issuance fee with respect to each Letter of Credit in an
amount equal to the face amount of such Letter of Credit multiplied by 0.125%
per annum; provided, that such issuance shall not be payable with respect to the
Existing Letter of Credit. Such issuance fee shall be payable quarterly in
arrears on the last Business Day of each calendar quarter and on the Revolving
Credit Maturity Date.
(c) In addition to the foregoing fees and commissions, the Borrower shall
pay or reimburse the Issuing Lender for such normal and customary costs and
expenses as are incurred or charged by the Issuing Lender in issuing, effecting
payment under, amending or otherwise administering any Letter of Credit.
SECTION 3.4 L/C Participations.
(a) The Issuing Lender irrevocably agrees to grant and hereby grants to
each L/C Participant, and, to induce the Issuing Lender to issue Letters of
Credit hereunder, each L/C Participant irrevocably agrees (subject to clause (a)
of the proviso to the initial sentence of Section 2.1 hereof) to accept and
purchase and hereby accepts and purchases from the Issuing Lender, on the terms
and conditions hereinafter stated, for such L/C Participant's own account and
risk an undivided interest equal to the Dollar Equivalent of such L/C
Participant's Revolving Credit Commitment Percentage in the Issuing Lender's
obligations and rights under and in respect of each Letter of Credit issued
hereunder and the amount of each draft paid by the Issuing Lender thereunder.
Each L/C Participant unconditionally and irrevocably agrees with the Issuing
Lender that, if a draft is paid under any Letter of Credit for which the Issuing
Lender is not reimbursed in full by the Borrower through a Revolving Credit Loan
or otherwise in accordance with the terms of this Agreement, such L/C
Participant shall (subject to clause (a) of
29
the proviso to the initial sentence of Section 2.1 hereof) pay to the Issuing
Lender upon demand at the Issuing Lender's address for notices specified herein
an amount equal to the Dollar Equivalent of such L/C Participant's Revolving
Credit Commitment Percentage of the amount of such draft, or any part thereof,
which is not so reimbursed.
(b) Upon becoming aware of any amount required to be paid by any L/C
Participant to the Issuing Lender pursuant to Section 3.4(a) in respect of any
unreimbursed portion of any payment made by the Issuing Lender under any Letter
of Credit, the Issuing Lender shall notify each L/C Participant by telecopier
(or by telephone promptly confirmed by telecopier) of the amount and due date
(which shall not be less than one (1) Business Day after the giving of such
notice) of such required payment and such L/C Participant shall pay to the
Issuing Lender the amount specified on the applicable due date. If any such
amount is paid to the Issuing Lender after the date such payment is due, such
L/C Participant shall pay to the Issuing Lender on demand, in addition to such
amount, the product of (i) such amount, times (ii) the daily average Federal
Funds Rate as determined by the Administrative Agent during the period from and
including the date such payment is due to the date on which such payment is
immediately available to the Issuing Lender, times (iii) a fraction the
numerator of which is the number of days that elapse during such period and the
denominator of which is 360. A certificate of the Issuing Lender with respect to
any amounts owing under this Section 3.4(b) shall be conclusive in the absence
of manifest error. With respect to payment to the Issuing Lender of the
unreimbursed amounts described in this Section 3.4(b), if the L/C Participants
receive notice that any such payment is due (A) prior to 1:00 p.m. (Charlotte
time) on any Business Day, such payment shall be due that Business Day, and (B)
after 1:00 p.m. (Charlotte time) on any Business Day, such payment shall be due
on the following Business Day.
(c) Whenever, at any time after the Issuing Lender has made payment under
any Letter of Credit and has received from any L/C Participant its Revolving
Credit Commitment Percentage of such payment in accordance with this Section
3.4, the Issuing Lender receives any payment related to such Letter of Credit
(whether directly from the Borrower or otherwise, or any payment of interest on
account thereof, the Issuing Lender will promptly distribute to such L/C
Participant its pro rata share thereof; provided, that in the event that any
such payment received by the Issuing Lender shall be required to be returned by
the Issuing Lender, such L/C Participant shall return to the Issuing Lender the
portion thereof previously distributed by the Issuing Lender to it.
SECTION 3.5 Reimbursement Obligation of the Borrower. In the event of any
drawing under any Letter of Credit, the Borrower agrees to reimburse (either
with the proceeds of a Revolving Credit Loan or a Swingline Loan as provided for
in this Section 3.5 or with funds from other sources), in same day funds, the
Issuing Lender on each date on which the Issuing Lender notifies the Borrower of
the date and amount of a draft paid under any Letter of Credit for the Dollar
Equivalent amount of (a) such draft so paid and (b) any amounts referred to in
Section 3.3(c) incurred by the Issuing Lender in connection with such payment.
Unless the Borrower shall immediately notify the Issuing Lender that the
Borrower intends to reimburse the Issuing Lender for such drawing from other
sources or funds, the Borrower shall be deemed to have timely given a Notice of
Borrowing to the Administrative Agent requesting that the Lenders make a
Revolving Credit Loan or, if less than the minimum amount for such Loan, a
Swingline
30
Loan, bearing interest at the Base Rate on such date in the Dollar Equivalent
amount of (a) such draft so paid and (b) any amounts referred to in Section
3.3(c) incurred by the Issuing Lender in connection with such payment, and (not
later than one (1) Business Day after being given notice thereof by the
Administrative Agent by telecopier (or by telephone promptly confirmed by
telecopier)) the Lenders shall make a Revolving Credit Loan or, if less than the
minimum amount for such Loan, a Swingline Loan, bearing interest at the Base
Rate in such amount, the proceeds of which shall be applied to reimburse the
Issuing Lender for the amount of the related drawing and costs and expenses.
Each Lender acknowledges and agrees that its obligation to fund a Revolving
Credit Loan or, if less than the minimum amount for such Loan, a Swingline Loan,
in accordance with this Section 3.5 to reimburse the Issuing Lender for any
draft paid under a Letter of Credit is absolute and unconditional and shall not
be affected by any circumstance whatsoever, including, without limitation,
non-satisfaction of the conditions set forth in Section 2.3(a) or Article VII.
If the Borrower has elected to pay the amount of such drawing with funds from
other sources and shall fail to reimburse the Issuing Lender as provided above,
the unreimbursed amount of such drawing shall bear interest at the rate which
would be payable on any outstanding Base Rate Loans which were then overdue from
the date such amounts become payable (whether at stated maturity, by
acceleration or otherwise) until payment in full.
SECTION 3.6 Obligations Absolute. The Borrower's obligations under this
Article III (including, without limitation, the Reimbursement Obligation) shall
be absolute and unconditional under any and all circumstances and irrespective
of any set-off, counterclaim or defense to payment which the Borrower may have
or have had against the Issuing Lender or any beneficiary of a Letter of Credit
or any other Person. The Borrower also agrees that the Issuing Lender and the
L/C Participants shall not be responsible for, and the Borrower's Reimbursement
Obligation under Section 3.5 shall not be affected by, among other things, the
validity or genuineness of documents or of any endorsements thereon, even though
such documents shall in fact prove to be invalid, fraudulent or forged, or any
dispute between or among the Borrower and any beneficiary of any Letter of
Credit or any other party to which such Letter of Credit may be transferred or
any claims whatsoever of the Borrower against any beneficiary of such Letter of
Credit or any such transferee. The Issuing Lender shall not be liable for any
error, omission, interruption or delay in transmission, dispatch or delivery of
any message or advice, however transmitted, in connection with any Letter of
Credit, except for errors or omissions caused by the Issuing Lender's gross
negligence or willful misconduct. The Borrower agrees that any action taken or
omitted by the Issuing Lender under or in connection with any Letter of Credit
or the related drafts or documents, if done in the absence of gross negligence
or willful misconduct, shall be binding on the Borrower and shall not result in
any liability of the Issuing Lender or any L/C Participant to the Borrower. The
responsibility of the Issuing Lender to the Borrower in connection with any
draft presented for payment under any Letter of Credit shall, in addition to any
payment obligation expressly provided for in such Letter of Credit, be limited
to determining that the documents (including each draft) delivered under such
Letter of Credit in connection with such presentment are in conformity with such
Letter of Credit.
SECTION 3.7 Effect of Application. To the extent that any provision of any
Application related to any Letter of Credit is inconsistent with the provisions
of this Article III, the provisions of this Article III shall apply.
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SECTION 3.8 Existing Foreign Currency Letters of Credit. For purposes of
calculating the amount of L/C Obligations with respect to Existing Foreign
Currency Letters of Credit under (a) Section 2.1, Section 2.2(a), Section 2.4(b)
and Section 3.1, such L/C Obligations shall be calculated at the Dollar
Equivalent amount of such L/C Obligations as of the first Business Day of the
current calendar month and (b) for all other purposes based on the Dollar
Equivalent amount as of the Business Day immediately preceding such date of
determination.
ARTICLE IV
TERM LOAN FACILITY
SECTION 4.1 Term Loans. Subject to the terms and conditions of this
Agreement, each Lender severally agrees to make Term Loans to the Borrower on
the Closing Date. The Term Loans shall be funded by each Lender in a principal
amount equal to such Lender's Term Loan Percentage of the aggregate principal
amount of the Term Loans made on the Closing Date, which aggregate principal
amount shall equal the total Term Loan Commitment as of the Closing Date.
SECTION 4.2 Procedure for Advance of Term Loan. The Borrower shall give
the Administrative Agent an irrevocable Notice of Borrowing prior to 11:00 a.m.
(Charlotte time) on the Closing Date requesting that the Lenders make the Term
Loans as Base Rate Loans on such date. Upon receipt of such Notice of Borrowing
from the Borrower, the Administrative Agent shall promptly notify each Lender
thereof by telecopier (or by telephone promptly confirmed by telecopier). Not
later than 2:00 p.m. (Charlotte time) on the Closing Date, each Lender will make
available to the Administrative Agent for the account of the Borrower, at the
office of the Administrative Agent in immediately available funds, the amount of
such Term Loan to be made by such Lender on such borrowing date. The Borrower
hereby irrevocably authorizes the Administrative Agent to disburse the proceeds
of the Term Loans in immediately available funds by wire transfer to such Person
or Persons as may be designated by the Borrower.
SECTION 4.3 Repayment of Term Loan. The Borrower shall repay the aggregate
outstanding principal amount of the Term Loans in consecutive quarterly
installments on the last Business Day of each of March, June, September and
December commencing December 31, 2001 as set forth below, except as the amounts
of individual installments may be adjusted pursuant to Section 4.4 hereof:
32
PAYMENT DATE PRINCIPAL TERM LOAN AMOUNT
If the Payment Date specified is INSTALLMENT ($)
not a Business Day, the ($)
Payment Date shall be deemed
to be the Business Day
immediately preceding the date.
-------------------------------- ----------- ----------------
December 31, 2001 350,000 139,650,000
March 31, 2002 350,000 139,300,000
June 30, 2002 350,000 138,950,000
September 30, 2002 350,000 138,600,000
December 31, 2002 350,000 138,250,000
March 31, 2003 350,000 137,900,000
June 30, 2003 350,000 137,550,000
September 30, 2003 350,000 137,200,000
December 31, 2003 350,000 136,850,000
March 31, 2004 350,000 136,500,000
June 30, 2004 350,000 136,150,000
September 30, 2004 350,000 135,800,000
December 31, 2004 350,000 135,450,000
March 31, 2005 350,000 135,100,000
June 30, 2005 350,000 134,750,000
September 30, 2005 350,000 134,400,000
December 31, 2005 350,000 134,050,000
March 31, 2006 350,000 133,700,000
June 30, 2006 350,000 133,350,000
September 30, 2006 350,000 133,000,000
December 31, 2006 350,000 132,650,000
March 31, 2007 350,000 132,300,000
June 30, 2007 350,000 131,950,000
September 30, 2007 350,000 131,600,000
December 31, 2007 32,900,000 98,700,000
March 31, 2008 32,900,000 65,800,000
June 30, 2008 32,900,000 32,900,000
September 30, 2008 32,900,000 0
If not sooner paid, the Term Loans shall be paid in full, together with accrued
interest thereon, on the Term Loan Maturity Date.
SECTION 4.4 Prepayments of Term Loan.
(a) Optional Prepayment of Term Loans. The Borrower shall have the right
at any time and from time to time, upon delivery to the Administrative Agent of
a Notice of Prepayment at least three (3) Business Days prior to any repayment,
to prepay the Term Loans in whole or in part without premium or penalty except
as provided in Section 5.9. The Administrative Agent shall promptly give each of
the Lenders notice of any such proposed
33
prepayment by telecopier (or by telephone promptly confirmed by telecopier).
Each optional prepayment of the Term Loans hereunder shall be in an aggregate
principal amount of at least $2,000,000 or any whole multiple of $1,000,000 in
excess thereof and shall be applied to the outstanding principal installments of
the Term Loans in inverse order of maturity thereof. Each repayment shall be
accompanied by any amount required to be paid pursuant to Section 5.9 hereof.
(b) Mandatory Prepayment of Term Loan.
(i) Debt Proceeds. The Borrower shall make mandatory principal
prepayments of the Term Loans in the manner set forth in Section
4.4(b)(vii) below in amounts equal to one hundred percent (100%) of the
aggregate Net Cash Proceeds from any incurrence of Debt (excluding Debt
permitted pursuant to Section 11.1) by the Borrower or any of its
Restricted Subsidiaries. Such prepayment shall be made within three (3)
Business Days after the date of receipt of Net Cash Proceeds of any such
transaction.
(ii) Equity Proceeds. If at any time the Total Leverage Ratio
exceeds 2.00 to 1.00, the Borrower shall make mandatory principal
prepayments of the Term Loans in the manner set forth in Section
4.4(b)(vii) below in amounts equal to fifty percent (50%) of the aggregate
Net Cash Proceeds from any offering of equity securities by the Borrower
or any of its Restricted Subsidiaries (excluding (A) offerings of equity
securities made in connection with employee stock option or incentive
plans or made in connection with compensation or incentive plans for
directors and officers, in each case entered into in the ordinary course
of business and (B) the exercise of warrants existing on the Closing Date
and set forth on Schedule 7.1(b)). Such prepayment shall be made within
three (3) Business Days after the date of receipt of Net Cash Proceeds of
any such transaction.
(iii) Asset Sale Proceeds. No later than one hundred eighty (180)
days following the Borrower's or applicable Restricted Subsidiary's
receipt thereof, the Borrower shall make mandatory principal prepayments
of the Term Loans in the manner set forth in Section 4.4(b)(vii) below in
amounts equal to one hundred percent (100%) of the aggregate Net Cash
Proceeds from the sale or other disposition or series of related sales or
other dispositions of assets, excluding asset sales and dispositions
permitted by Section 11.5(a) through and including Section 11.5(d) (the
"Asset Sale Proceeds") by the Borrower or any of its Restricted
Subsidiaries which have not been reinvested as of such date in similar
replacement assets unless such Asset Sale Proceeds have been committed to
be reinvested within such one hundred eighty (180) day period and are
thereafter actually reinvested within two hundred seventy (270) days after
receipt of such Asset Sale Proceeds. If such Asset Sale Proceeds are not
actually reinvested in accordance with the terms of this Section
4.4(b)(iii) by the date which is two hundred seventy (270) days after the
receipt thereof, the Borrower shall make a mandatory prepayment in an
amount equal to such Asset Sale Proceeds as described above on such date.
Notwithstanding any of the foregoing to the contrary, upon and during the
continuance of an Event of Default and upon notice from the Administrative
Agent, all Asset Sale Proceeds, received by the
34
Borrower and its Restricted Subsidiaries shall be applied to make
prepayments of the Term Loans pursuant to Section 4.4(b)(vii), such
prepayments to be made within three (3) Business Days after the Borrower's
receipt of such Asset Sale Proceeds.
(iv) Insurance and Condemnation Proceeds. No later than one hundred
eighty (180) days following the date of receipt by the Borrower or any of
its Restricted Subsidiaries of any Net Cash Proceeds under any of the
insurance policies maintained pursuant to Section 9.3 or from any
condemnation proceeding (the "Insurance and Condemnation Proceeds") which
have not been reinvested as of such date in similar replacement assets,
the Borrower shall make mandatory principal prepayments of the Term Loans
in the manner set forth in Section 4.4(b)(vii) below in amounts equal to
one hundred percent (100%) of the aggregate amount of such Insurance and
Condemnation Proceeds received by the Borrower or any of its Restricted
Subsidiaries unless such Insurance and Condemnation Proceeds have been
committed to be reinvested within such one hundred eighty (180) day period
and are thereafter actually reinvested within two hundred seventy (270)
days after receipt of such Insurance and Condemnation Proceeds. If such
Insurance and Condemnation Proceeds are not actually reinvested in
accordance with the terms of this Section 4.4(b)(iv) by the date which is
two hundred seventy (270) days after the receipt thereof, the Borrower
shall make a mandatory prepayment in an amount equal to such Insurance and
Condemnation Proceeds as described above on such date. Notwithstanding any
of the foregoing to the contrary, upon and during the continuance of an
Event of Default and upon notice from the Administrative Agent, all
Insurance and Condemnation Proceeds, received by the Borrower and its
Restricted Subsidiaries shall be applied to make prepayments of the Term
Loans, such prepayments to be made within three (3) Business Days after
the Borrower's receipt of such Insurance and Condemnation Proceeds.
(v) Excess Cash Flow. No later than ninety (90) days after the end
of any Fiscal Year commencing with the Fiscal Year ending March 31, 2002,
during the term of this Agreement for which the Total Leverage Ratio
exceeds 2.00 to 1.00, the Borrower shall make a mandatory principal
repayment of the Term Loans in an amount equal to fifty percent (50%) of
Excess Cash Flow, if any, for such Fiscal Year.
(vi) Asset Coverage Ratio. In the event that payments made under
Section 2.4(b)(i) are insufficient to cause the pro forma Asset Coverage
Ratio to equal or exceed 1.00 to 1.00, then Borrower shall immediately
repay remaining principal installments of the Term Loans, in inverse order
of maturity, in an amount sufficient to cause the Asset Coverage Ratio
(determined on a pro forma basis after giving effect to such payment) to
equal or exceed 1.00 to 1.00. Any prepayment pursuant to this Section
4.4(b)(vi) shall be applied to reduce, in inverse order of maturity, the
remaining scheduled principal installments of the Term Loans pursuant to
Section 4.3.
(vii) Notice; Manner of Payment. Upon the occurrence of any event
triggering the prepayment requirement under Sections 4.4(b)(i) through and
including 4.4(b)(v), the Borrower shall promptly deliver a Notice of
Prepayment to the Administrative Agent and upon receipt of such notice,
the Administrative Agent shall promptly so notify each of the
35
Lenders by telecopier (or by telephone promptly confirmed by telecopier).
Each prepayment under this Section 4.4 shall be applied as follows: (A)
first to reduce, in inverse order of maturity, the remaining scheduled
principal installments of the Term Loans pursuant to Section 4.3, and (B)
second to the extent of any excess (the "Excess Proceeds"), to prepay the
aggregate outstanding amounts under the Revolving Credit Facility and, to
the extent of any prepayments made pursuant to Section 4.4(b)(iii), to
permanently reduce the Revolving Credit Commitment; provided, however,
that (a) to the extent that there are any amounts outstanding under the
Revolving Credit Facility, or (b) with respect to prepayments resulting
from any equity securities offering pursuant to Section 4.4(b)(ii)
consummated on or before December 31, 2001 (regardless of whether there
are amounts outstanding under the Revolving Credit Facility), any Term
Loan Lender shall have the right to refuse its pro rata share (based on
Term Loan Percentage) of any such mandatory prepayment at which time the
remaining amount shall be applied first, to reduce the Revolving Credit
Loans in accordance with the foregoing Section 4.4(b)(vii)(B), and then,
to the extent of any remaining funds, to the Borrower. No prepayment or
repayment pursuant to this Section 4.4 shall affect any of the Borrower's
obligations under any Hedging Agreement.
Amounts prepaid under the Term Loans pursuant to this Section 4.4 may not be
reborrowed and will constitute a permanent reduction in such Term Loan
Commitment. Each prepayment shall be accompanied by any amount required to be
paid pursuant to Section 5.9 hereof.
SECTION 4.5 Term Notes. Except as otherwise provided in Section 14.10 (a)
- (e), each Lender's Term Loan and the obligation of the Borrower to repay such
Term Loan shall be evidenced by a separate Term Note executed by the Borrower
payable to the order of such Lender.
SECTION 4.6 Optional Increase In Term Loan Commitment.
(a) Subject to the conditions set forth below, the Borrower shall have the
option, at any time after the Closing Date until the Term Loan Increase
Termination Date to incur additional indebtedness under this Agreement in the
form of an increase of the Term Loan Commitment of up to Fifty Million
($50,000,000) Dollars. The Borrower, by providing an Increase Notification, may
request that additional Term Loans be made on the Additional Term Loan Effective
Date pursuant to such increase in the Term Loan Commitment (each such additional
Term Loan, an "Additional Term Loan, and collectively, the "Additional Term
Loans").
(b) Each Additional Term Loan shall be obtained from existing Lenders,
entities that qualify as Eligible Assignees, or from other banks, financial
institutions or investment funds, in each case in accordance with this Section
4.6. Participation in any Additional Term Loan shall be offered first to each of
the existing Lenders; provided that each such Lender shall have no obligation to
provide any portion of such Additional Term Loans. If the amount of the
Additional Term Loans requested by the Borrower shall exceed the commitments
which the existing Lenders are willing to provide with respect to such
Additional Term Loans, then the Borrower may invite other banks, financial
institutions and investment funds which meet the
36
requirements of an Eligible Assignee to join this Agreement as Lenders for the
portion of such Additional Term Loans not committed to by existing Lenders (each
such other bank, financial institution or investment fund, a "New Lender" and
collectively with the existing Lenders providing increased Commitments, the
"Increase Lenders"). The Administrative Agent is authorized to enter into, on
behalf of the Lenders, any amendment to this Agreement or any other Loan
Document as may be necessary to incorporate the terms of any Additional Term
Loan herein or therein; provided that such amendment shall not modify the Credit
Agreement or any other Loan Document in any manner materially adverse to any
Lender and shall otherwise be in accordance with Section 14.11 hereof.
(c) The following terms and conditions shall apply to each Additional Term
Loan: (i) the Additional Term Loans made under this Section 4.6 shall constitute
Obligations of the Borrower and shall be secured and guaranteed with the other
Extensions of Credit on a pari passu basis; (ii) any New Lender making
Additional Term Loans shall be entitled to the same voting rights as the
existing Lenders under the Term Loan Facility and the Additional Term Loans
shall receive proceeds of prepayments on the same basis as the Term Loans; (iii)
the Borrower shall execute such Term Loan Notes as are necessary to reflect the
Additional Term Loans under this Section 4.6; (iv) the Administrative Agent and
the Lenders shall have received from the Borrower updated financial projections
and an Officer's Compliance Certificate, in each case in form and substance
satisfactory to the Administrative Agent, demonstrating that, after giving
effect to any such Additional Term Loan, the Borrower will be in pro forma
compliance with the financial covenants set forth in Article X; (v) no Default
or Event of Default shall have occurred and be continuing hereunder as of the
Additional Term Loan Effective Date or after giving effect to the making of any
such Additional Term Loans; (vi) the representations and warranties made by the
Borrower and contained in Article VII shall be true and correct on and as of the
Additional Term Loan Effective Date with the same effect as if made on and as of
such date (other than those representations and warranties that by their terms
speak as of a particular date, which representations and warranties shall be
true and correct as of such particular date); (vii) the Borrower shall
demonstrate, on a pro forma basis (as of the date of, and after giving effect
to, the making of any such Additional Term Loan), an Asset Coverage Ratio equal
to or exceeding 1.00 to 1.00; (viii) the amount of such increase in the Term
Loan Commitment and any Additional Term Loans obtained thereunder shall not (A)
be less than a minimum principal amount of $10,000,000, or any whole multiple of
$5,000,000 in excess thereof and (B) shall not cause the Term Loan Commitment to
exceed $190,000,000; (ix) the Borrower and each such Lender or lender not
theretofore a Lender shall execute and deliver to the Administrative Agent, for
its acceptance and recording in the Register, a Lender Addition and
Acknowledgment Agreement acknowledged by the Administrative Agent and each
Subsidiary Guarantor and substantially in the form of Exhibit J attached hereto,
and (x) the Administrative Agent shall have received any documents or
information, including any joinder agreements, in connection with such increase
in the Term Loan Commitment as it may request in its reasonable discretion.
(d) Upon the execution, delivery, acceptance and recording of the Lender
Addition and Acknowledgement Agreement, from and after the Additional Term Loan
Effective Date, each such Increase Lender shall have a Term Loan Commitment as
therein set forth and all the rights and obligations of a Lender with such a
Term Loan Commitment hereunder. The Increase Lenders shall make Additional Term
Loans to the Borrower on the Additional Term Loan
37
Effective Date in an amount equal to each such Lender's Term Loan Commitment.
(e) The Administrative Agent shall maintain a copy of each Lender Addition
and Acknowledgement Agreement delivered to it in accordance with Section
14.10(d).
(f) Within five (5) Business Days after receipt of notice, the Borrower
shall execute and deliver to the Administrative Agent, in exchange for any
surrendered Term Loan Note or Term Loan Notes of any existing Lender or with
respect to any Lender not theretofore a Lender, a new Term Loan Note or Term
Loan Notes to the order of the applicable Lenders in amounts equal to the Term
Loan Commitment of such Lenders pursuant to the Lender Addition and
Acknowledgement Agreement. Such new Term Loan Note or Term Loan Notes shall be
in an aggregate principal amount equal to the aggregate principal amount of such
Term Loan Commitments, shall be dated as of the Additional Term Loan Effective
Date and shall otherwise be in substantially the form of the existing Term Loan
Notes. Each surrendered Term Loan Note and/or Term Loan Notes shall be canceled
and returned to the Borrower.
(g) The Applicable Margin and pricing grid, if applicable, for the
Additional Term Loans shall be determined on the Additional Term Loan Effective
Date. If the Applicable Margin and pricing grid, if applicable, for such
Additional Term Loans at such time exceeds the Applicable Margin or existing
pricing grid, as applicable, for Term Loans set forth in Section 5.1(c), then
the Applicable Margin and pricing grid, if applicable, for all Term Loans shall
be increased to be equal to the Applicable Margin and pricing grid, if
applicable, for the Additional Term Loans as determined on the Additional Loan
Effective Date. In addition, the amortization schedule set forth in Section 4.3
shall be replaced with a new amortization schedule reflecting a pro rata
increase in the remaining installment payments and to provide for the repayment
of both the existing Term Loans and the Additional Term Loans.
ARTICLE V
GENERAL LOAN PROVISIONS
SECTION 5.1 Interest.
(a) Interest Rate Options. Subject to the provisions of this Section 5.1,
at the election of the Borrower, (i) Revolving Credit Loans and Term Loans shall
bear interest at (A) the Base Rate plus the Applicable Margin as set forth in
Section 5.1(c) or (B) the LIBOR Rate plus the Applicable Margin as set forth in
Section 5.1(c) (provided that the LIBOR Rate shall not be available until three
(3) Business Days after the Closing Date) and (ii) any Swingline Loan shall bear
interest at the Base Rate plus the Applicable Margin as set forth in Section
5.1(c). The Borrower shall select the rate of interest and Interest Period, if
any, applicable to any Loan at the time a Notice of Borrowing is given or at the
time a Notice of Conversion/Continuation is given pursuant to Section 5.2. Each
Loan or portion thereof bearing interest based on the Base Rate shall be a "Base
Rate Loan", each Loan or portion thereof bearing interest based on the LIBOR
Rate shall be a "LIBOR Rate Loan." Any Loan or any portion thereof as to which
the Borrower has not duly specified an interest rate as provided herein shall be
deemed a Base Rate Loan.
38
(b) Interest Periods. In connection with each LIBOR Rate Loan, the
Borrower, by giving notice at the times described in Section 5.1(a), shall elect
an interest period (each, an "Interest Period") to be applicable to such Loan,
which Interest Period shall be a period of one (1), two (2), three (3), or six
(6) months with respect to each LIBOR Rate Loan; provided that:
(i) the Interest Period shall commence on the date of advance of or
conversion to any LIBOR Rate Loan and, in the case of immediately
successive Interest Periods, each successive Interest Period shall
commence on the date on which the immediately preceding Interest Period
expires;
(ii) if any Interest Period would otherwise expire on a day that is
not a Business Day, such Interest Period shall expire on the next
succeeding Business Day; provided, that if any Interest Period with
respect to a LIBOR Rate Loan would otherwise expire on a day that is not a
Business Day but is a day of the month after which no further Business Day
occurs in such month, such Interest Period shall expire on the immediately
preceding Business Day;
(iii) any Interest Period with respect to a LIBOR Rate Loan that
begins on the last Business Day of a calendar month (or on a day for which
there is no numerically corresponding day in the calendar month at the end
of such Interest Period) shall end on the last Business Day of the
relevant calendar month at the end of such Interest Period;
(iv) no Interest Period shall extend beyond the Revolving Credit
Maturity Date or the Term Loan Maturity Date, as applicable, and Interest
Periods shall be selected by the Borrower so as to permit the Borrower to
make mandatory reductions of the Revolving Credit Commitment pursuant to
Section 2.6(b) and the quarterly principal installment payments pursuant
to Section 4.3 without payment of any amounts pursuant to Section 5.9; and
(v) there shall be no more than six (6) Interest Periods in effect
at any time.
(c) Applicable Margin.
(i) The Applicable Margin provided for in Section 5.1(a) with
respect to any Revolving Credit Loans and Swingline Loans (the "Applicable
Margin") shall be based upon the table set forth below and shall be
determined and adjusted quarterly on the date (each a "Calculation Date")
ten (10) Business Days after the date by which the Borrower is required to
provide an Officer's Compliance Certificate for the most recently ended
fiscal quarter of the Borrower; provided, however, that (A) the initial
Applicable Margin for the Revolving Credit Loans and Swingline Loans shall
be based on Pricing Level IV (as shown below) and shall remain at Pricing
Level IV until December 31, 2001, and, thereafter the Pricing Level shall
be determined by reference to the Total Leverage Ratio as of the last day
of the most recently ended fiscal quarter of the Borrower preceding the
applicable Calculation Date, and (B) if the Borrower fails to provide the
Officer's Compliance Certificate as required by Section 8.2 for the most
recently ended fiscal
39
quarter of the Borrower preceding the applicable Calculation Date, the
Applicable Margin for Revolving Credit Loans and Swingline Loans from such
Calculation Date shall be based on Pricing Level IV (as shown below) until
such time as an appropriate Officer's Compliance Certificate is provided,
at which time the Pricing Level shall be determined by reference to the
Total Leverage Ratio as of the last day of the most recently ended fiscal
quarter of the Borrower preceding such Calculation Date. The Applicable
Margin for Revolving Credit Loans and Swingline Loans shall be effective
from one Calculation Date until the next Calculation Date. Any adjustment
in the Applicable Margin shall be applicable to all Extensions of Credit
then existing or subsequently made or issued.
PRICING LEVEL TOTAL LEVERAGE RATIO LIBOR BASE RATE
------------- -------------------- ----- ---------
I <2.00x 2.25% 1.25%
II greater than or equal to 2.00x but <2.50x 2.50% 1.50%
III greater than or equal to 2.50x but <3.00x 2.75% 1.75%
IV greater than or equal to 3.00x 3.00% 2.00%
(ii) Subject to the provisions of Section 4.6(g), the Applicable
Margin for Term Loans shall be based on the table set forth below and
shall be determined and adjusted on each Calculation Date until such time
as any change in the Applicable Margin or pricing grid, as applicable for
Term Loans pursuant to Section 4.6; provided, however that (A) the initial
Applicable Margin for Term Loans shall be based on Pricing Level II until
the Calculation Date of March 31, 2002 and (B) if the Borrower fails to
provide the Officer's Compliance Certificate as required by Section 8.2
for the most recently ended fiscal quarter of the Borrower preceding the
applicable Calculation Date, the Applicable Margin for Term Loans from
such Calculation Date shall be based on Pricing Level II (as shown below)
until such time as an appropriate Officer's Compliance Certificate is
provided, at which time the Pricing Level shall be determined by reference
to the Total Leverage Ratio as of the last day of the most recently ended
fiscal quarter of the Borrower preceding such Calculation Date. The
Applicable Margin for Term Loans shall be effective from one Calculation
Date until the next Calculation Date. Any adjustment in the Applicable
Margin shall be applicable to all Term Loans then existing or subsequently
made or issued.
Applicable LIBOR Applicable Base Rate
Level Total Leverage Ratio Rate Margin (bps) Margin (bps)
----- -------------------- ----------------- --------------------
I < 2.50x 300.0 200.0
II greater than or equal to 2.50x 325.0 225.0
(d) Default Rate. Subject to Section 13.3, at the discretion of the
Administrative Agent or as directed by the Required Lenders, upon the occurrence
and during the continuance of an Event of Default, (i) the Borrower shall no
longer have the option to request LIBOR Rate Loans or Swingline Loans, (ii) all
outstanding LIBOR Rate Loans shall bear interest at a rate per annum of two
percent (2%) in excess of the rate then applicable to LIBOR Rate Loans until the
40
end of the applicable Interest Period and thereafter at a rate equal to two
percent (2%) in excess of the rate then applicable to Base Rate Loans, and (iii)
all outstanding Base Rate Loans and other Obligations arising hereunder or under
any other Loan Document shall bear interest at a rate per annum equal to two
percent (2%) in excess of the rate then applicable to Base Rate Loans or such
other Obligations arising hereunder or under any other Loan Document. Interest
shall continue to accrue on the Notes after the filing by or against the
Borrower of any petition seeking any relief in bankruptcy or under any act or
law pertaining to insolvency or debtor relief, whether state, federal or
foreign.
(e) Interest Payment and Computation. Interest on each Base Rate Loan
shall be payable in arrears on the last Business Day of each calendar quarter
commencing September 30, 2001; and interest on each LIBOR Rate Loan shall be
payable on the last day of each Interest Period applicable thereto, and if such
Interest Period extends over three (3) months, at the end of each three (3)
month interval during such Interest Period. Interest on LIBOR Rate Loans and all
fees payable hereunder shall be computed on the basis of a 360-day year and
assessed for the actual number of days elapsed and interest on Base Rate Loans
shall be computed on the basis of a 365/66-day year and assessed for the actual
number of days elapsed.
(f) Maximum Rate. In no contingency or event whatsoever shall the
aggregate of all amounts deemed interest hereunder or under any of the Notes
charged or collected pursuant to the terms of this Agreement or pursuant to any
of the Notes exceed the highest rate permissible under any Applicable Law which
a court of competent jurisdiction shall, in a final determination, deem
applicable hereto. In the event that such a court determines that the Lenders
have charged or received interest hereunder in excess of the highest applicable
rate, the rate in effect hereunder shall automatically be reduced to the maximum
rate permitted by Applicable Law and the Lenders shall at the Administrative
Agent's option (i) promptly refund to the Borrower any interest received by the
Lenders in excess of the maximum lawful rate or (ii) shall apply such excess to
the principal balance of the Obligations on a pro rata basis. It is the intent
hereof that the Borrower not pay or contract to pay, and that neither the
Administrative Agent nor any Lender receive or contract to receive, directly or
indirectly in any manner whatsoever, interest in excess of that which may be
paid by the Borrower under Applicable Law.
SECTION 5.2 Notice and Manner of Conversion or Continuation of Loans.
Provided that no Default or Event of Default has occurred and is then
continuing, the Borrower shall have the option to (a) convert at any time
following the third Business Day after the Closing Date all or any portion of
any outstanding Base Rate Loans (other than Swingline Loans) in a principal
amount equal to $2,500,000 or any whole multiple of $100,000 in excess thereof
into one or more LIBOR Rate Loans and (b) upon the expiration of any Interest
Period, (i) convert all or any part of its outstanding LIBOR Rate Loans in a
principal amount equal to $2,500,000 or a whole multiple of $100,000 in excess
thereof into Base Rate Loans (other than Swingline Loans) or (ii) continue such
LIBOR Rate Loans as LIBOR Rate Loans. Whenever the Borrower desires to convert
or continue Loans as provided above, the Borrower shall give the Administrative
Agent irrevocable prior written notice substantially in the form attached hereto
as Exhibit E (a "Notice of Conversion/Continuation") not later than 11:00 a.m.
(Charlotte time) three (3) Business Days before the day on which a proposed
conversion or continuation of such Loan is to be effective specifying (A) the
Loans to be converted or continued, and, in the case of
41
any LIBOR Rate Loan to be converted or continued, the last day of the Interest
Period therefor, (B) the effective date of such conversion or continuation
(which shall be a Business Day), (C) the principal amount of such Loans to be
converted or continued, and (D) the Interest Period to be applicable to such
converted or continued LIBOR Rate Loan. The Administrative Agent shall promptly
notify the Lenders of such Notice of Conversion/Continuation by telecopier (or
by telephone promptly confirmed by telecopier).
SECTION 5.3 Fees.
(a) Commitment Fee. Commencing on the Closing Date, the Borrower shall pay
to the Administrative Agent, for the account of the Lenders, a non-refundable
commitment fee at a rate per annum equal to 0.50% on the average daily unused
portion of the Revolving Credit Commitment; provided, that the amount of
outstanding Swingline Loans shall not be considered usage of the Revolving
Credit Commitment for the purpose of calculating such commitment fee. The
commitment fee shall be payable in arrears on the last Business Day of each
calendar quarter during the term of this Agreement with the first payment due on
September 30, 2001, and on the Revolving Credit Maturity Date. Such commitment
fee shall be promptly distributed by the Administrative Agent to the Lenders pro
rata in accordance with the Lenders' respective Revolving Credit Commitment
Percentages.
(b) Administrative Agent's and Other Fees. In order to compensate the
Administrative Agent for structuring and syndicating the Loans and for its
obligations hereunder, the Borrower agrees to pay to the Administrative Agent,
for its account, the fees set forth in the separate fee letter agreement
executed by the Borrower and the Administrative Agent dated June 22, 2001.
SECTION 5.4 Manner of Payment. Each payment by the Borrower on account of
the principal of or interest on the Loans or of any fee, commission or other
amounts (including the Reimbursement Obligation) payable to the Lenders under
this Agreement or any Note shall be made not later than 1:00 p.m. (Charlotte
time) on the date specified for payment under this Agreement to the
Administrative Agent at the Administrative Agent's Office for the account of the
Lenders (other than as set forth below) pro rata in accordance with their
respective Revolving Credit Commitment Percentages or Term Loan Percentages, as
applicable, (except as specified below), in Dollars, in immediately available
funds and shall be made without any set-off, counterclaim or deduction
whatsoever. Any payment received after such time but before 2:00 p.m. (Charlotte
time) on such day shall be deemed a payment on such date for the purposes of
Section 12.1, but for all other purposes shall be deemed to have been made on
the next succeeding Business Day. Any payment received after 2:00 p.m.
(Charlotte time) shall be deemed to have been made on the next succeeding
Business Day for all purposes. Upon receipt by the Administrative Agent of each
such payment, the Administrative Agent shall promptly distribute to each Lender
at its address for notices set forth herein its pro rata share of such payment
in accordance with such Lender's Revolving Credit Commitment Percentage or Term
Loan Percentage, as applicable, (except as specified below) and shall wire
advice of the amount of such credit to each Lender. Each payment to the
42
Administrative Agent of the Issuing Lender's fees or L/C Participants'
commissions shall be made in like manner, but for the account of the Issuing
Lender or the L/C Participants, as the case may be. Each payment to the
Administrative Agent of Administrative Agent's fees or expenses shall be made
for the account of the Administrative Agent and any amount payable to any Lender
under Sections 5.8, 5.9, 5.10, 5.11 or 14.2 shall be promptly paid to the
Administrative Agent for the account of the applicable Lender. Subject to
Section 5.1(b)(ii) if any payment under this Agreement or any Note shall be
specified to be made upon a day which is not a Business Day, it shall be made on
the next succeeding day which is a Business Day and such extension of time shall
in such case be included in computing any interest if payable along with such
payment.
SECTION 5.5 Crediting of Payments and Proceeds. In the event that the
Borrower shall fail to pay any of the Obligations when due and the Obligations
have been accelerated pursuant to Section 12.2, all payments received by the
Lenders upon the Notes and the other Obligations and all net proceeds from the
enforcement of the Obligations shall be applied: (a) first, to all expenses then
due and payable by the Borrower hereunder and under the other Loan Documents,
(b) then to all indemnity obligations then due and payable by the Borrower
hereunder and under the other Loan Documents, (c) then to all Administrative
Agent's and Issuing Lender's fees then due and payable, (d) then to all
commitment and other fees and commissions then due and payable, (e) then to
accrued and unpaid interest on the Swingline Note to the Swingline Lender, (f)
then to the principal amount outstanding under the Swingline Note to the
Swingline Lender, (g) then to accrued and unpaid interest on the other Notes,
accrued and unpaid interest on the Reimbursement Obligation and any payments
(including any termination payments and any accrued and unpaid interest thereon)
due in respect of a Hedging Agreement with any Lender or the Administrative
Agent (which such Hedging Agreement is permitted or required hereunder) (pro
rata in accordance with all such amounts due), (h) then to the principal amount
of the other Notes and Reimbursement Obligation (pro rata in accordance with all
such amounts due) and (i) then to the cash collateral account described in
Section 12.2(b) hereof to the extent of any L/C Obligations then outstanding, in
that order.
SECTION 5.6 Adjustments. If any Lender (a "Benefited Lender") shall at any
time receive any payment of all or part of the Obligations owing to it, or
interest thereon, or if any Lender shall at any time receive any collateral in
respect to the Obligations owing to it (whether voluntarily or involuntarily, by
set-off or otherwise) (other than as a result of the operation of the proviso to
Section 4.4(b)(vii) hereof or pursuant to Sections 5.8, 5.9, 5.10, 5.11 or 14.2
hereof) in a greater proportion than any such payment to and collateral received
by any other Lender, if any, in respect of the similar Obligations owing to such
other Lender, or interest thereon, such Benefited Lender shall purchase for cash
from the other Lenders such portion of each such other Lender's Extensions of
Credit, or shall provide such other Lenders with the benefits of any such
collateral, or the proceeds thereof, as shall be necessary to cause such
Benefited Lender to share the excess payment or benefits of such collateral or
proceeds ratably with each of the Lenders; provided, that if all or any portion
of such excess payment or benefits is thereafter recovered from such Benefited
Lender, such purchase shall be rescinded, and the purchase price and benefits
returned to the extent of such recovery, but without interest. The Borrower
agrees that each Lender so purchasing a portion of another Lender's Extensions
of Credit may exercise all rights of payment (including, without limitation,
rights of set-off) with respect to such portion as fully as if such Lender were
the direct holder of such portion.
SECTION 5.7 Nature of Obligations of Lenders Regarding Extensions of
Credit;
43
Assumption by the Administrative Agent. The obligations of the Lenders under
this Agreement to make the Loans and issue or participate in Letters of Credit
are several and are not joint or joint and several. Unless the Administrative
Agent shall have received written notice from a Lender prior to a proposed
borrowing date that such Lender will not make available to the Administrative
Agent such Lender's ratable portion of the amount to be borrowed on such date
(which notice shall not release such Lender of its obligations hereunder), the
Administrative Agent may assume that such Lender has made such portion available
to the Administrative Agent on the proposed borrowing date in accordance with
Sections 2.3(b) and 4.2, and the Administrative Agent may, in reliance upon such
assumption, make available to the Borrower on such date a corresponding amount.
If such amount is made available to the Administrative Agent on a date after
such borrowing date, such Lender shall pay to the Administrative Agent on demand
an amount, until paid, equal to the product of (a) the amount not made available
by such Lender in accordance with the terms hereof, times (b) the daily average
Federal Funds Rate during such period as determined by the Administrative Agent,
times (c) a fraction the numerator of which is the number of days that elapse
from and including such borrowing date to the date on which such amount not made
available by such Lender in accordance with the terms hereof shall have become
immediately available to the Administrative Agent and the denominator of which
is 360. A certificate of the Administrative Agent with respect to any amounts
owing under this Section 5.7 shall be conclusive, absent manifest error. If such
Lender's Revolving Credit Commitment Percentage or Term Loan Percentage, as
applicable, of such borrowing is not made available to the Administrative Agent
by such Lender within three (3) Business Days after such borrowing date, the
Administrative Agent shall be entitled to recover such amount made available by
the Administrative Agent with interest thereon at the rate per annum applicable
to such borrowing hereunder, on demand, from the Borrower. The failure of any
Lender to make available its Revolving Credit Commitment Percentage or Term Loan
Percentage, as applicable, of any Loan requested by the Borrower shall not
relieve it or any other Lender of its obligation, if any, hereunder to make its
Revolving Credit Commitment Percentage or Term Loan Percentage, as applicable,
of such Loan available on the borrowing date, but no Lender shall be responsible
for the failure of any other Lender to make its Revolving Credit Commitment
Percentage or Term Loan Percentage, as applicable, of such Loan available on the
borrowing date. Notwithstanding anything set forth herein to the contrary, any
Lender that fails to make available its Revolving Credit Commitment Percentage
or Term Loan Percentage, as applicable, shall not (a) have any voting or consent
rights under or with respect to any Loan Document or (b) constitute a "Lender"
for purposes of the calculation of Required Lenders hereunder for any voting or
consent rights under or with respect to any Loan Document; so long as such
Lender fails to make available such Revolving Credit Commitment Percentage or
Term Loan Percentage. Notwithstanding the foregoing, in no event shall any of
the amendments, changes or modifications specifically enumerated in Section
14.11(a) - (d) be effective with respect to any Lender that has not consented
thereto.
SECTION 5.8 Changed Circumstances.
(a) Circumstances Affecting LIBOR Rate Availability. If with respect to
any Interest Period the Administrative Agent or any Lender (after consultation
with the Administrative Agent) shall determine that, by reason of circumstances
affecting the foreign exchange and interbank markets generally, deposits in
eurodollars, in the applicable amounts are not being
44
quoted via the Dow Xxxxx Market Screen 3750 or offered to the Administrative
Agent or such Lender for such Interest Period, then the Administrative Agent
shall forthwith give notice thereof to the Borrower and the Lenders by
telecopier (or by telephone promptly confirmed by telecopier). Thereafter, until
the Administrative Agent notifies the Borrower and the Lenders by telecopier (or
by telephone promptly confirmed by telecopier) that such circumstances no longer
exist, the obligation of the Lenders to make LIBOR Rate Loans and the right of
the Borrower to convert any Loan to or continue any Loan as a LIBOR Rate Loan
shall be suspended, and the Borrower shall repay in full (or cause to be repaid
in full) the then outstanding principal amount of each such LIBOR Rate Loan
together with accrued interest thereon, on the last day of the then current
Interest Period applicable to such LIBOR Rate Loan or convert the then
outstanding principal amount of each such LIBOR Rate Loan to a Base Rate Loan as
of the last day of such Interest Period.
(b) Laws Affecting LIBOR Rate Availability. If, after the date hereof, the
introduction of, or any change in, any Applicable Law or any change in the
interpretation or administration thereof by any Governmental Authority, central
bank or comparable agency charged with the interpretation or administration
thereof, or compliance by any of the Lenders (or any of their respective Lending
Offices) with any request or directive (whether or not having the force of law)
of any such Governmental Authority, central bank or comparable agency, shall
make it unlawful or impossible for any of the Lenders (or any of their
respective Lending Offices) to honor their obligations hereunder to make or
maintain any LIBOR Rate Loan, such Lender shall promptly give notice thereof to
the Administrative Agent and the Administrative Agent shall promptly give notice
to the Borrower and the other Lenders by telecopier (or by telephone promptly
confirmed by telecopier). Thereafter, until the Administrative Agent notifies
the Borrower and the other Lenders by telecopier (or by telephone promptly
confirmed by telecopier) that such circumstances no longer exist, (i) the
obligations of the Lenders to make LIBOR Rate Loans and the right of the
Borrower to convert any Loan or continue any Loan as a LIBOR Rate Loan shall be
suspended and thereafter the Borrower may select only Base Rate Loans hereunder,
and (ii) if any of the Lenders may not lawfully continue to maintain a LIBOR
Rate Loan to the end of the then current Interest Period applicable thereto as a
LIBOR Rate Loan, the applicable LIBOR Rate Loan shall immediately be converted
to a Base Rate Loan for the remainder of such Interest Period and the Borrower
shall pay any amount required to be paid under Section 5.9 hereof.
(c) Increased Costs. If, after the date hereof, the introduction of, or
any change in, any Applicable Law, or in the interpretation or administration
thereof by any Governmental Authority, central bank or comparable agency charged
with the interpretation or administration thereof, or compliance by any of the
Lenders (or any of their respective Lending Offices) with any request or
directive (whether or not having the force of law) of such Governmental
Authority, central bank or comparable agency:
(i) shall (except as provided in Section 5.11(e)) subject any of the
Lenders (or any of their respective Lending Offices) to any tax, duty or
other charge with respect to any Note, Letter of Credit or Application or
shall change the basis of taxation of payments to any of the Lenders (or
any of their respective Lending Offices) of the principal of or interest
on any Note, Letter of Credit or Application or any other amounts
45
due under this Agreement in respect thereof (except for changes in the
rate of franchise tax or tax on the overall net income of any of the
Lenders or any of their respective Lending Offices imposed by the
jurisdiction in which such Lender is organized or is or should be
qualified to do business or such Lending Office is located); provided that
the Borrower shall not be obligated to pay any amounts pursuant to this
Section 5.8(c)(i) to the extent that such amounts are duplicative of any
amounts paid by the Borrower pursuant to Section 5.11; or
(ii) shall impose, modify or deem applicable any reserve (including,
without limitation, any reserve imposed by the Board of Governors of the
Federal Reserve System), special deposit, insurance or capital or similar
requirement against assets of, deposits with or for the account of, or
credit extended by any of the Lenders (or any of their respective Lending
Offices) or shall impose on any of the Lenders (or any of their respective
Lending Offices) or the foreign exchange and interbank markets any other
condition affecting any Note; and the result of any of the foregoing
events described in clause (i) or (ii) above is to increase the costs to
any of the Lenders of maintaining any LIBOR Rate Loan or issuing or
participating in Letters of Credit or to reduce the yield or amount of any
sum received or receivable by any of the Lenders under this Agreement or
under the Notes in respect of a LIBOR Rate Loan or Letter of Credit or
Application, then such Lender shall promptly notify the Administrative
Agent, and the Administrative Agent shall promptly notify the Borrower of
such fact and demand compensation therefor and, within fifteen (15) days
after such notice by the Administrative Agent, the Borrower shall pay to
such Lender such additional amount or amounts as will compensate such
Lender or Lenders for such increased cost or reduction.
The Administrative Agent will promptly notify the Borrower of any event of
which it has knowledge which will entitle such Lender to compensation
pursuant to this Section 5.8(c); provided, that the Administrative Agent
shall incur no liability whatsoever to the Lenders or the Borrower in the
event it fails to do so. The amount of such compensation shall be
determined, in the applicable Lender's sole discretion, based upon the
assumption that such Lender funded its Revolving Credit Commitment
Percentage or Term Loan Percentage, as applicable, of the LIBOR Rate Loans
in the London interbank market and using any reasonable attribution or
averaging methods which such Lender deems appropriate and practical. A
certificate of such Lender setting forth the basis for determining such
amount or amounts necessary to compensate such Lender shall be forwarded
to the Borrower through the Administrative Agent and shall be conclusively
presumed to be correct save for manifest error.
SECTION 5.9 Indemnity. The Borrower hereby indemnifies each of the Lenders
against any loss or expense which may arise or be attributable to each Lender's
obtaining, liquidating or employing deposits or other funds acquired to effect,
fund or maintain any Loan (a) as a consequence of any failure by the Borrower to
make any payment when due of any amount due hereunder in connection with a LIBOR
Rate Loan, (b) due to any failure of the Borrower to borrow, continue or convert
on a date specified therefor in a Notice of Borrowing or Notice of
Continuation/Conversion or (c) due to any payment, prepayment or conversion of
any LIBOR Rate Loan on a date other than the last day of the Interest Period
therefor. The amount
46
of such loss or expense shall be determined, in the applicable Lender's sole
discretion, based upon the assumption that such Lender funded its Revolving
Credit Commitment Percentage or Term Loan Percentage, as applicable, of the
LIBOR Rate Loans in the London interbank market and using any reasonable
attribution or averaging methods which such Lender deems appropriate and
practical. A certificate of such Lender setting forth the basis for determining
such amount or amounts necessary to compensate such Lender shall be forwarded to
the Borrower through the Administrative Agent and shall be conclusively presumed
to be correct save for manifest error.
SECTION 5.10 Capital Requirements. If either (a) the introduction of, or
any change in, or in the interpretation of, any Applicable Law or (b) compliance
with any guideline or request from any central bank or comparable agency or
other Governmental Authority (whether or not having the force of law), has or
would have the effect of reducing the rate of return on the capital of, or has
affected or would affect the amount of capital required to be maintained by, any
Lender or any corporation controlling such Lender as a consequence of, or with
reference to the Commitments and other commitments of this type, below the rate
which such Lender or such other corporation could have achieved but for such
introduction, change or compliance, then within five (5) Business Days after
written demand by any such Lender, the Borrower shall pay to such Lender from
time to time as specified by such Lender additional amounts sufficient to
compensate such Lender or other corporation for such reduction. A certificate as
to such amounts submitted to the Borrower and the Administrative Agent by such
Lender, shall, in the absence of manifest error, be presumed to be correct and
binding for all purposes.
SECTION 5.11 Taxes.
(a) Payments Free and Clear. Except as otherwise provided in Section
5.11(e), any and all payments by the Borrower hereunder or under the Notes or
the Letters of Credit shall be made free and clear of and without deduction for
any and all present or future taxes, levies, imposts, deductions, charges or
withholding, and all liabilities with respect thereto excluding, (i) in the case
of each Lender and the Administrative Agent, income and franchise taxes imposed
by the jurisdiction under the laws of which such Lender or the Administrative
Agent (as the case may be) is organized or is or should be qualified to do
business or any political subdivision thereof and (ii) in the case of each
Lender, income and franchise taxes imposed by the jurisdiction of such Lender's
Lending Office or any political subdivision thereof (all such non-excluded
taxes, levies, imposts, deductions, charges, withholdings and liabilities being
hereinafter referred to as "Taxes"). If the Borrower shall be required by law to
deduct or withhold any Taxes from or in respect of any sum payable hereunder or
under any Note or in respect of any Letter of Credit to any Lender or the
Administrative Agent, (A) except as otherwise provided in Section 5.11(e), the
sum payable shall be increased as may be necessary so that after making all
required deductions or withholdings (including deductions or withholdings
applicable to additional sums payable under this Section 5.11) such Lender or
the Administrative Agent (as the case may be) receives an amount equal to the
amount such party would have received had no such deductions or withholdings
been made, (B) the Borrower shall make such deductions or withholdings, (C) the
Borrower shall pay the full amount deducted to the relevant taxing authority or
other authority in accordance with Applicable Law, and (D) the Borrower shall
deliver to the Administrative Agent and such Lender evidence of such payment to
the
47
relevant taxing authority or other Governmental Authority in the manner provided
in Section 5.11(d).
(b) Stamp and Other Taxes. In addition, the Borrower shall pay any present
or future stamp, registration, recordation or documentary taxes or any other
similar fees or charges or excise or property taxes, levies of the United States
or any state or political subdivision thereof or any applicable foreign
jurisdiction which arise from any payment made hereunder or from the execution,
delivery or registration of, or otherwise with respect to, this Agreement, the
Loans, the Letters of Credit or the other Loan Documents, or the perfection of
any rights or security interest in respect thereof (hereinafter referred to as
"Other Taxes").
(c) Indemnity. Except as otherwise provided in Section 5.11(e), the
Borrower shall indemnify each Lender and the Administrative Agent for the full
amount of Taxes and Other Taxes (including, without limitation, any Taxes and
Other Taxes imposed by any jurisdiction on amounts payable under this Section
5.11) paid by such Lender or the Administrative Agent (as the case may be) and
any liability (including penalties, interest and expenses) arising therefrom or
with respect thereto, whether or not such Taxes or Other Taxes were correctly or
legally asserted. Such indemnification shall be made within thirty (30) days
from the date such Lender or the Administrative Agent (as the case may be) makes
written demand therefor.
(d) Evidence of Payment. Within thirty (30) days after the date of any
payment of Taxes or Other Taxes, the Borrower shall furnish to the
Administrative Agent and the applicable Lender, at its address referred to in
Section 14.1, the original or a certified copy of a receipt evidencing payment
thereof or other evidence of payment satisfactory to the Administrative Agent.
(e) Delivery of Tax Forms. To the extent required by Applicable Law to
reduce or eliminate withholding or payment of taxes, each Lender and the
Administrative Agent shall deliver to the Borrower, with a copy to the
Administrative Agent, on the Closing Date or concurrently with the delivery of
the relevant Assignment and Acceptance, as applicable, (i) two United States
Internal Revenue Service Forms W-9, Forms W-8ECI or Forms W-8BEN, as applicable
(or successor forms) properly completed and certifying in each case that such
Lender is entitled to a complete exemption from withholding or deduction for or
on account of any United States federal income taxes, and (ii) an Internal
Revenue Service Form W-8BEN or W-8ECI or successor applicable form, as the case
may be, to establish an exemption from United States backup withholding taxes.
Each such Lender further agrees to deliver to the Borrower, with a copy to the
Administrative Agent, as applicable, two Form W-9, Form W-8BEN or W-8ECI, or
successor applicable forms or manner of certification, as the case may be, on or
before the date that any such form expires or becomes obsolete or after the
occurrence of any event requiring a change in the most recent form previously
delivered by it to the Borrower, certifying in the case of a Form W-9, Form
W-8BEN or W-8ECI (or successor forms) that such Lender is entitled to receive
payments under this Agreement without deduction or withholding of any United
States federal income taxes (unless in any such case an event (including,
without limitation, any change in treaty, law or regulation) has occurred prior
to the date on which any such delivery would otherwise be required which renders
such forms inapplicable or the exemption to which such forms relate unavailable
and such Lender notifies the Borrower and the
48
Administrative Agent that it is not entitled to receive payments without
deduction or withholding of United States federal income taxes) and, in the case
of a Form W-9, Form W-8BEN or W-8ECI, establishing an exemption from United
States backup withholding tax. Notwithstanding anything in any Loan Document to
the contrary, the Borrower shall not be required to pay additional amounts to
any Lender or the Administrative Agent under Section 5.11 or Section 5.8(c), (i)
if such Lender or the Administrative Agent fails to comply with the requirements
of this Section 5.11(e), other than to the extent (i) that such failure is due
to a change in law occurring after the date on which such Lender or the
Administrative Agent became a party to this Agreement or (ii) that such
additional amounts are the result of such Lender's or the Administrative Agent's
gross negligence or willful misconduct, as applicable.
(f) Survival. Without prejudice to the survival of any other agreement of
the Borrower hereunder, the agreements and obligations of the Borrower contained
in this Section 5.11 shall survive the payment in full of the Obligations and
the termination of the Commitments until the expiration of the applicable
statute of limitations.
SECTION 5.12 Security. The Obligations of the Borrower and the Subsidiary
Guaranteed Obligations shall be secured as provided in the Security Documents.
SECTION 5.13 Mitigation Obligations/Replacement of Lenders. (a) If any
Lender requests compensation under Section 5.8(c), or if the Borrower is
required to pay any additional amount to any Lender or any Governmental
Authority for the account of any Lender pursuant to Section 5.11, then such
Lender shall use its reasonable efforts to designate a different lending office
for funding or booking its Loans hereunder or to assign its rights and
obligations hereunder to another of its offices, branches or affiliates, if, in
the reasonable judgment of such Lender, such designation or assignment (i) would
eliminate or reduce amounts payable pursuant to Section 5.8(c) or 5.11, as the
case may be, in the future and (ii) would not subject such Lender to any
unreimbursed cost or expense and would not otherwise be disadvantageous to such
Lender. The Borrower hereby agrees to pay all reasonable costs and expenses
incurred by any Lender in connection with any such designation or assignment.
(b) If any Lender requests compensation under Section 5.8(c), or if the
Borrower is required to pay any additional amount to any Lender or any
Governmental Authority for the account of any Lender pursuant to Section 5.11,
or if any Lender defaults in its obligations to fund Loans hereunder, then the
Borrower may, at its sole expense and effort, upon notice to such Lender and the
Administrative Agent, require such Lender to assign and delegate, without
recourse (in accordance with and subject to the restrictions contained in
Section 14.10), all its interests, rights and obligations under this Agreement
to an Eligible Assignee that shall assume such obligations (which Eligible
Assignee may be another Lender, if a Lender accepts such assignment); provided
that (i) the Borrower shall have received the prior written consent of the
Administrative Agent (and, if a Revolving Commitment is being assigned, the
Issuing Bank and Swingline Lender), which consent shall not unreasonably be
withheld, (ii) such Lender shall have received payment of an amount equal to the
outstanding principal of its Loans and participations in L/C Obligations and
Swingline Loans, accrued interest thereon, accrued fees and all other amounts
payable to it hereunder, from the assignee (to the extent of such outstanding
principal and accrued interest and fees) or the Borrower (in the case of all
other
49
amounts (including, without limitation, any amounts then payable to such Lender
under Section 5.8(c) or Section 5.11 hereof)) and (iii) in the case of any such
assignment resulting from a claim for compensation under Section 5.8(c) or
payments required to be made pursuant to Section 5.11, such assignment will
result in a material reduction in such compensation or payments. A Lender shall
not be required to make any such assignment and delegation if, prior thereto, as
a result of a waiver by such Lender or otherwise, the circumstances entitling
the Borrower to require such assignment and delegation cease to apply.
ARTICLE VI
CLOSING; CONDITIONS OF CLOSING AND BORROWING
SECTION 6.1 Closing. The closing shall take place at the offices of
Xxxxxxx Xxxxxxxxx Xxxxxxx & Xxxxxxx, L.L.P. at 10:00 a.m. on September 28, 2001,
or on such other place, date and time as the parties hereto shall mutually
agree.
SECTION 6.2 Conditions to Closing and Initial Extensions of Credit. The
obligation of the Lenders to close this Agreement and to make the initial Loan
or issue or participate in the initial Letter of Credit, if any, is subject to
the satisfaction of each of the following conditions:
(a) Executed Loan Documents. This Agreement, the Revolving Credit Notes,
the Term Notes, the Swingline Note, the Security Documents, together with any
other applicable Loan Documents, shall have been duly authorized, executed and
delivered to the Administrative Agent by the parties thereto, shall be in full
force and effect and no Default or Event of Default shall exist thereunder, and
the Borrower shall have delivered original counterparts thereof to the
Administrative Agent.
(b) Closing Certificates; etc.
(i) Officer's Certificate of the Borrower. The Administrative Agent
shall have received a certificate from a Responsible Officer, in form and
substance satisfactory to the Administrative Agent, to the effect that all
representations and warranties of the Borrower contained in this Agreement
and the other Loan Documents are true, correct and complete; that the
Borrower is not in violation of any of the covenants contained in this
Agreement and the other Loan Documents; that, after giving effect to the
transactions contemplated by this Agreement, no Default or Event of
Default has occurred and is continuing; and that the Borrower has
satisfied each of the closing conditions.
(ii) Certificate of Secretary of the Borrower and Subsidiary
Guarantors. The Administrative Agent shall have received a certificate of
the secretary or assistant secretary of each of the Borrower and the
Subsidiary Guarantors certifying as to the incumbency and genuineness of
the signature of each officer of the Borrower or such Subsidiary Guarantor
executing the Loan Documents to which it is a party and certifying that
attached thereto is a true, correct and complete copy of (A) the
certificate of limited partnership, articles of incorporation or other
organizational document of the Borrower or such Subsidiary Guarantor and
all amendments thereto, certified as of a recent date by the appropriate
Governmental Authority in its jurisdiction of incorporation, (B) the
bylaws, partnership agreement, operating agreement or other operative
document of the Borrower or
50
such Subsidiary Guarantor as in effect on the date of such certifications,
(C) resolutions duly adopted by the Board of Directors, partners or
members of the Borrower or such Subsidiary Guarantor authorizing the
borrowings contemplated hereunder and the execution, delivery and
performance of this Agreement and the other Loan Documents to which it is
a party, and (D) each certificate required to be delivered pursuant to
Section 6.2(b)(iii).
(iii) Certificates of Good Standing. The Administrative Agent shall
have received certificates as of a recent date of the good standing of the
Borrower and each Subsidiary Guarantor under the laws of its jurisdiction
of organization and, to the extent requested by the Administrative Agent
in its reasonable judgment, each other jurisdiction where the Borrower and
each Subsidiary Guarantor is qualified to do business and a certificate of
the relevant taxing authorities of such jurisdictions certifying that such
Person has filed required tax returns and owes no delinquent taxes.
(iv) Opinions of Counsel. The Administrative Agent shall have
received favorable opinions of counsel to the Borrower and Subsidiary
Guarantors addressed to the Administrative Agent and the Lenders with
respect to the Borrower and Subsidiary Guarantors, the Loan Documents and
such other matters as the Administrative Agent shall reasonably request.
(v) Tax Forms. The Administrative Agent shall have received copies
of the United States Internal Revenue Service forms required by Section
5.11(e) hereof.
(vi) Borrowing Base Certificate. The Administrative Agent shall have
received from the Borrower a Borrowing Base Certificate dated as of the
last day of the month preceding the Closing Date executed by a Responsible
Officer of the Borrower which shall be accurate and complete in all
material respects.
(c) Collateral.
(i) Filings and Recordings. All filings and recordations that are
necessary to perfect the security interests of the Lenders in the
collateral described in the Security Documents shall have been received by
the Administrative Agent and the Administrative Agent shall have received
evidence satisfactory to the Administrative Agent that upon such filings
and recordations such security interests constitute valid and perfected
first priority Liens therein.
(ii) Pledged Collateral. The Administrative Agent shall have
received (A) original stock certificates or other certificates evidencing
the capital stock or other ownership interests pledged pursuant to the
Collateral Agreement or the Pledge Agreements together with an undated
stock power for each such certificate duly executed in blank by the
registered owner thereof and (B) each original promissory note pledged
51
pursuant to the Collateral Agreement or any Pledge Agreement.
(iii) Lien Search. The Administrative Agent shall have received the
results of a Lien search (including a search as to judgments and tax
matters) made against the Borrower and its Restricted Subsidiaries under
the Uniform Commercial Code as in effect in any state in which any of its
assets are located, indicating among other things that its assets are free
and clear of any Lien except for Liens permitted hereunder.
(iv) Hazard and Liability Insurance. The Administrative Agent shall
have received certificates of insurance, evidence of payment of all
insurance premiums for the current policy year of each, and, if requested
by the Administrative Agent, copies (certified by a Responsible Officer)
of insurance policies in the form required under the Security Documents
and otherwise in form and substance reasonably satisfactory to the
Administrative Agent.
(v) Environmental Assessments. The Administrative Agent shall have
received the environmental assessments and the other environmental reports
set forth on Schedule 6.2(c)(v).
(d) Consents; Defaults.
(i) Governmental and Third Party Approvals. The Borrower shall have
obtained all necessary approvals, authorizations and consents of any
Person and of all Governmental Authorities and courts having jurisdiction
with respect to the transactions contemplated by this Agreement and the
other Loan Documents.
(ii) No Injunction, Etc. No action, proceeding, investigation,
regulation or legislation shall have been instituted, threatened or
proposed before any Governmental Authority to enjoin, restrain, or
prohibit, or to obtain substantial damages in respect of, or which is
related to or arises out of this Agreement or the other Loan Documents or
the consummation of the transactions contemplated hereby or thereby, or
which, in the Administrative Agent's sole discretion, would make it
inadvisable to consummate the transactions contemplated by this Agreement
and such other Loan Documents.
(iii) No Event of Default. No Default or Event of Default shall have
occurred and be continuing.
(e) Financial Matters.
(i) Financial Statements. The Administrative Agent shall have
received the March 31, 2001 audited Consolidated financial statements of
the Borrower and its Subsidiaries, and unaudited pro forma Consolidated
financial statements for the twelve month period ended June 30, 2001, of
the Borrower and its Subsidiaries and for Sensors, all in form and
substance satisfactory to the Administrative Agent and prepared in
accordance with GAAP, except that such financial statements of Sensors
shall not be prepared in accordance with GAAP.
52
(ii) Closing Balance Sheet. The Administrative Agent shall have
received a closing balance sheet of the Borrower dated as of the last day
of the month preceding the Closing Date that, after giving effect to the
Acquisition, shall not be materially different from the projections
previously delivered to the Administrative Agent and otherwise be in form
and substance satisfactory to the Administrative Agent.
(iii) Financial Condition Certificate. The Borrower shall have
delivered to the Administrative Agent a certificate, in form and substance
satisfactory to the Administrative Agent, and certified as accurate by a
Responsible Officer, that (A) the Borrower and its Restricted Subsidiaries
taken as a whole are Solvent, (B) the Borrower's and its Restricted
Subsidiaries' payables are not past due beyond customary trade terms, (C)
attached thereto are calculations evidencing compliance basis with the
covenants contained in Article X hereof and an Asset Coverage Ratio equal
to or exceeding 1.00 to 1.00, in each case, determined on a pro forma
basis, as of the Closing Date and after giving effect to the proposed
Extensions of Credit to be made on such date, (D) the financial
projections previously delivered to the Administrative Agent represent the
good faith estimates (utilizing assumptions believed by the Borrower's
management to be reasonable) of the financial condition and operations of
the Borrower and its Restricted Subsidiaries and (E) attached thereto is a
calculation of the Applicable Margin pursuant to Section 5.1(c).
(iv) Financial Projections. The Administrative Agent shall have
received management approved five (5) year projected financial statements
of the Borrower and its Subsidiaries.
(v) Debt Ratings. The Administrative Agent shall have received
senior secured debt ratings for the Borrower from both Standard & Poor's
Corporation and Xxxxx'x Investors Service.
(vi) Payment at Closing; Fee Letters. The Borrower shall have paid
to the Administrative Agent and the Lenders the fees set forth or
referenced in Section 5.3 and any other accrued and unpaid fees or
commissions due hereunder (including, without limitation, legal fees and
expenses) and to any other Person such amount as may be due thereto in
connection with the transactions contemplated hereby, including all taxes,
fees and other charges in connection with the execution, delivery,
recording, filing and registration of any of the Loan Documents.
(f) Acquisition Documents.
(i) The Administrative Agent shall have received all documentation
(including amendments, modifications, and waivers thereof) relating to the
Acquisition (and all closing conditions therein shall be satisfied to the
satisfaction of the Administrative Agent and the Acquisition shall be
consummated in accordance with the terms of such provided documentation on
or before the Closing Date).
53
(ii) The Administrative Agent shall be satisfied that the maximum
amount paid for the Acquisition (including the fees and expenses paid in
connection with such Acquisition) does not exceed $95,000,000.
(iii) The Administrative Agent shall have received evidence
satisfactory thereto that all governmental (including approvals required
under the Xxxx Xxxxx Xxxxxx Antitrust Improvements Act of 1976, as
amended), shareholder and third party consents and approvals necessary or
desirable in connection with the Acquisition shall have been obtained and
remain in effect.
(iv) The Administrative Agent shall have received copies (i) of each
employment agreement between the Borrower and its respective key employees
and (ii) each non-competition agreement entered into by any seller or any
member of management of the Borrower in favor of the Borrower, each of the
foregoing in form and substance satisfactory to the Administrative Agent.
(v) The Administrative Agent shall have received copies of all such
other Acquisition documents and information as it may reasonably request,
including, without limitation, copies of (A) the Estimated Closing Net
Assets as such term is defined in Section 2.4(b) of the Asset Purchase
Agreement, (B) the Closing Statement of Assets and Liabilities as such
term is defined in Section 2.5(a) of the Asset Purchase Agreement, (C)
copies of any Notice of Disagreement as such term is defined in the Asset
Purchase Agreement and (D) copies of the final Tax Allocation pursuant to
the terms of Section 2.7 of the Asset Purchase Agreement.
(vi) The Administrative Agent shall have received satisfactory
evidence that all Debt of the Borrower and its Restricted Subsidiaries
other than Debt permitted by Section 11.1, including any Debt incurred in
connection with the Acquisition, has been repaid in full and any Liens or
other security interests related thereto have been terminated.
(g) Miscellaneous.
(i) Notice of Borrowing. The Administrative Agent shall have
received a Notice of Borrowing, as applicable, from the Borrower in
accordance with Section 2.3(a) and Section 4.2, and a Notice of Account
Designation specifying the account or accounts to which the proceeds of
any Loans made after the Closing Date are to be disbursed.
(ii) Existing Facility. The Existing Facility (except for the
Existing Letters of Credit) shall be repaid in full and terminated and all
collateral security therefor shall be released, and the Administrative
Agent shall have received a pay-off letter in form and substance
satisfactory to it evidencing such repayment, termination, reconveyance
and release. On the Closing Date, the Existing Letters of Credit shall be
deemed to be Letters of Credit issued under this Agreement.
(iii) Other Documents. All opinions, certificates and other
instruments and all
54
proceedings in connection with the transactions contemplated by this
Agreement shall be satisfactory in form and substance to the
Administrative Agent. The Administrative Agent shall have received copies
of all other documents, certificates and instruments reasonably requested
thereby, with respect to the transactions contemplated by this Agreement.
SECTION 6.3 Conditions to All Extensions of Credit. The obligations of the
Lenders to make any Extensions of Credit (including the initial Extension of
Credit), convert or continue any Loan and/or the Issuing Lender to issue or
extend any Letter of Credit are subject to the satisfaction of the following
conditions precedent on the relevant borrowing continuation, conversion,
issuance or extension date:
(a) Continuation of Representations and Warranties. The
representations and warranties contained in Article VII shall be true and
correct on and as of such borrowing or issuance date or such date of
continuation or conversion with the same effect as if made on and as of such
date; except for any representation and warranty made as of an earlier date,
which representation and warranty shall remain true and correct as of such
earlier date.
(b) Asset Coverage Ratio. After giving effect to any requested
Extension of Credit on a pro forma basis, the Asset Coverage Ratio of the
Borrower and its Restricted Subsidiaries shall be greater than or equal to 1.00
to 1.00.
(c) No Existing Default. No Default or Event of Default shall have
occurred and be continuing (i) on the borrowing date with respect to such Loan
or after giving effect to the Loans to be made on such date or (ii) on the issue
date with respect to such Letter of Credit or after giving effect to the
issuance of such Letter of Credit on such date or on such continuation or
conversion date after giving effect to such continuation or conversion.
(d) Notices. The Administrative Agent shall have received a Notice
of Borrowing or Notice of Conversion/Continuation, as applicable, from the
Borrower in accordance with Section 2.3(a) and Section 4.2.
(e) Additional Documents. The Administrative Agent shall have
received each additional document, instrument, legal opinion or other item
reasonably requested by it.
ARTICLE VII
REPRESENTATIONS AND WARRANTIES OF THE BORROWER
SECTION 7.1 Representations and Warranties. To induce the Administrative
Agent and Lenders to enter into this Agreement and to induce the Lenders to make
Extensions of Credit, the Borrower hereby represents and warrants to the
Administrative Agent and Lenders both before and after giving effect to the
transactions contemplated hereunder that:
(a) Organization; Power; Qualification. Each of the Borrower and its
Restricted
55
Subsidiaries (i) is duly organized, validly existing and in good standing under
the laws of the jurisdiction of its incorporation or formation and (ii) except
to the extent as could not reasonably be expected to have a Material Adverse
Effect, has the power and authority to own its properties and to carry on its
business as now being and hereafter proposed to be conducted and is duly
qualified and authorized to do business in each jurisdiction in which the
character of its properties or the nature of its business requires such
qualification and authorization. The jurisdictions in which the Borrower and its
Restricted Subsidiaries are organized and qualified to do business as of the
Closing Date are described on Schedule 7.1(a).
(b) Ownership. Each Subsidiary of the Borrower as of the Closing Date is
listed on Schedule 7.1(b). As of the Closing Date, the capitalization of the
Borrower and its Subsidiaries consists of the number of shares, authorized,
issued and outstanding, of such classes and series, with or without par value,
described on Schedule 7.1(b). All outstanding shares have been duly authorized
and validly issued and are fully paid and nonassessable, with no personal
liability attaching to the ownership thereof, and not subject to any preemptive
or similar rights. The shareholders of the Subsidiaries of the Borrower and the
number of shares owned by each as of the Closing Date are described on Schedule
7.1(b). As of the Closing Date, there are no outstanding stock purchase
warrants, subscriptions, options, securities, instruments or other rights of any
type or nature whatsoever, which are convertible into, exchangeable for or
otherwise provide for or permit the issuance of capital stock of the Borrower or
its Restricted Subsidiaries, except as described on Schedule 7.1(b).
(c) Authorization of Agreement, Loan Documents and Borrowing. Each of the
Borrower and its Restricted Subsidiaries has the right, power and authority and
has taken all necessary corporate and other action to authorize the execution,
delivery and performance of this Agreement and each of the other Loan Documents
to which it is a party in accordance with their respective terms. This Agreement
and each of the other Loan Documents have been duly executed and delivered by
the duly authorized officers of the Borrower and each of its Restricted
Subsidiaries party thereto, and each such document constitutes the legal, valid
and binding obligation of the Borrower or its Restricted Subsidiary party
thereto, enforceable in accordance with its terms, except as such enforceability
may be limited by bankruptcy, insolvency, reorganization, moratorium or similar
state or federal debtor relief laws from time to time in effect which affect the
enforcement of creditors' rights in general and the availability of equitable
remedies.
(d) Compliance of Agreement, Loan Documents and Borrowing with Laws, Etc.
The execution, delivery and performance by the Borrower and its Restricted
Subsidiaries of the Loan Documents to which each such Person is a party, in
accordance with their respective terms, the Extensions of Credit hereunder and
the transactions contemplated hereby do not and will not, by the passage of
time, the giving of notice or otherwise, (i) require any Governmental Approval
or violate any Applicable Law relating to the Borrower or any of its Restricted
Subsidiaries, (ii) conflict with, result in a breach of or constitute a default
under the articles of incorporation, bylaws or other organizational documents of
the Borrower or any of its Restricted Subsidiaries or any indenture, agreement
or other instrument to which such Person is a party or by which any of its
properties may be bound or any Governmental Approval relating to such Person,
(iii) result in or require the creation or imposition of any Lien upon or with
respect to any property now
56
owned or hereafter acquired by such Person other than Liens arising under the
Loan Documents or (iv) require any consent or authorization of, filing with, or
other act in respect of, an arbitrator or Governmental Authority and no consent
of any other Person is required in connection with the execution, delivery,
performance, validity or enforceability of this Agreement.
(e) Compliance with Law; Governmental Approvals. Except where the failure
to do so could not reasonably be expected to create a Material Adverse Effect,
each of the Borrower and its Restricted Subsidiaries (i) has all Governmental
Approvals required by any Applicable Law for it to conduct its business, each of
which is in full force and effect, is final and not subject to review on appeal
and is not the subject of any pending or, to the best of its knowledge,
threatened attack by direct or collateral proceeding, (ii) is in compliance with
each Governmental Approval applicable to it and in compliance with all other
Applicable Laws relating to it or any of its respective properties and (iii) has
timely filed all material reports, documents and other materials required to be
filed by it under all Applicable Laws with any Governmental Authority and has
retained all material records and documents required to be retained by it under
Applicable Law.
(f) Tax Returns and Payments. Each of the Borrower and its Restricted
Subsidiaries has duly filed or caused to be filed all federal, state, local and
other tax returns required by Applicable Law to be filed, and has paid, or made
adequate provision for the payment of, all federal, state, local and other
taxes, assessments and governmental charges or levies upon it and its property,
income, profits and assets which are due and payable, except (a) any taxes that
are being contested in good faith by appropriate proceedings and for which the
Borrower or such Restricted Subsidiary, as applicable, has set aside on its
books adequate reserves or (b) to the extent that the failure to do so could not
reasonably be expected to result in a Material Adverse Effect. Such returns
accurately reflect in all material respects all liability for taxes of the
Borrower and its Subsidiaries for the periods covered thereby. There is no
ongoing audit or examination or, to the knowledge of the Borrower, other
investigation by any Governmental Authority of the tax liability of the Borrower
and its Restricted Subsidiaries. No Governmental Authority has asserted any Lien
or other claim against the Borrower or any Restricted Subsidiary thereof with
respect to unpaid taxes which has not been discharged or resolved other than
Liens for taxes not yet due and payable. The charges, accruals and reserves on
the books of the Borrower and any of its Subsidiaries in respect of federal,
state, local and other taxes for all Fiscal Years and portions thereof for all
open years of the Borrower and any of its Restricted Subsidiaries are in the
judgment of the Borrower adequate, and the Borrower does not anticipate any
additional material taxes or assessments for any of such years.
(g) Intellectual Property Matters. Except where the failure to do so could
not reasonably be expected to create a Material Adverse Effect, each of the
Borrower and its Restricted Subsidiaries owns or possesses rights to use all
franchises, licenses, copyright registrations, copyright applications, issued
patents, patent applications, trademarks, trademark applications, trademark
registrations, trademark rights, service marks, service xxxx rights, trade
names, trade name rights, copyrights and rights with respect to the foregoing
which are required to conduct its business. To the knowledge of the Borrower and
its Restricted Subsidiaries, no event has occurred which permits, or after
notice or lapse of time or both would permit, the revocation or termination of
any such rights (except for the expiration of patents in the ordinary
57
course), and neither the Borrower nor any Restricted Subsidiary thereof is
liable to any Person for infringement under Applicable Law with respect to any
such rights as a result of its business operations except to the extent any such
revocation, termination, or infringement could not reasonably be expected to
have a Material Adverse Effect.
(h) Environmental Matters. Except for any such matter that could not
reasonably be expected to create a Material Adverse Effect,
(i) The properties presently owned, leased or operated by the
Borrower and its Restricted Subsidiaries do not contain, and to their
knowledge have not previously contained, any Hazardous Materials in
amounts or concentrations which (A) constitute or constituted a violation
of applicable Environmental Laws or (B) could reasonably be expected to
give rise to liability under applicable Environmental Laws;
(ii) The Borrower, each Restricted Subsidiary and such properties
and all operations conducted in connection therewith are in compliance,
and have been in compliance, with all applicable Environmental Laws, and
there is no contamination at, under or about such properties or such
operations which could interfere with the continued operation of such
properties;
(iii) Neither the Borrower nor any Restricted Subsidiary thereof has
received any notice of violation, alleged violation, non-compliance,
liability or potential liability regarding environmental matters,
Hazardous Materials, or compliance with Environmental Laws, nor does the
Borrower or any Restricted Subsidiary thereof have knowledge or reason to
believe that any such notice will be received or is being threatened;
(iv) Hazardous Materials have not been transported or disposed of to
or from the properties owned, leased or operated by of the Borrower and
its Restricted Subsidiaries in violation of, or in a manner or to a
location which could reasonably be expected to give rise to liability
under, Environmental Laws, nor have any Hazardous Materials been
generated, treated, stored or disposed of at, on or under any of such
properties in violation of, or in a manner that could give rise to
liability under, any applicable Environmental Laws; and
(v) No judicial proceedings or governmental or administrative action
is pending under any Environmental Law to which the Borrower or any
Restricted Subsidiary thereof has been named as a potentially responsible
party with respect to such properties or operations conducted in
connection therewith, nor are there any consent decrees or other decrees,
consent orders, administrative orders or other orders, or other
administrative or judicial requirements outstanding under any
Environmental Law with respect to Borrower or any Restricted Subsidiary.
(i) ERISA.
(i) As of the Closing Date, neither the Borrower nor any ERISA
Affiliate
58
maintains or contributes to, or has any obligation under, any Employee
Benefit Plans other than those identified on Schedule 7.1(i);
(ii) The Borrower and each ERISA Affiliate is in material compliance
with all applicable provisions of ERISA and the regulations and published
interpretations thereunder with respect to all Employee Benefit Plans
except for any required amendments for which the remedial amendment period
as defined in Section 401(b) of the Code has not yet expired and except
where a failure to so comply could not reasonably be expected to have a
Material Adverse Effect. Each Employee Benefit Plan that is intended to be
qualified under Section 401(a) of the Code has been determined by the
Internal Revenue Service to be so qualified, and each trust related to
such plan has been determined to be exempt under Section 501(a) of the
Code except for such plans that have not yet received determination
letters but for which the remedial amendment period for submitting a
determination letter has not yet expired. No liability has been incurred
by the Borrower or any ERISA Affiliate which remains unsatisfied for any
taxes or penalties with respect to any Employee Benefit Plan or any
Multiemployer Plan except for a liability that could not reasonably be
expected to have a Material Adverse Effect;
(iii) Except for any such matter that could not reasonably be
expected to create a Material Adverse Effect, as of the Closing Date, no
Pension Plan has been terminated, nor has any accumulated funding
deficiency (as defined in Section 412 of the Code) been incurred (without
regard to any waiver granted under Section 412 of the Code), nor has any
funding waiver from the Internal Revenue Service been received or
requested with respect to any Pension Plan, nor has the Borrower or any
ERISA Affiliate failed to make any contributions or to pay any amounts due
and owing as required by Section 412 of the Code, Section 302 of ERISA or
the terms of any Pension Plan prior to the due dates of such contributions
under Section 412 of the Code or Section 302 of ERISA, nor has there been
any event requiring any disclosure under Section 4041(c)(3)(C) or 4063(a)
of ERISA with respect to any Pension Plan;
(iv) Except where the failure of any of the following
representations to be correct in all material respects could not
reasonably be expected to have a Material Adverse Effect, neither the
Borrower nor any ERISA Affiliate has: (A) engaged in a nonexempt
prohibited transaction described in Section 406 of ERISA or Section 4975
of the Code, (B) incurred any liability to the PBGC which remains
outstanding other than the payment of premiums and there are no premium
payments which are due and unpaid, (C) failed to make a required
contribution or payment to a Multiemployer Plan, or (D) failed to make a
required installment or other required payment under Section 412 of the
Code;
(v) No Termination Event has occurred or is reasonably expected to
occur; and
(vi) Except where the failure of any of the following
representations to be correct in all material respects could not
reasonably be expected to have a Material Adverse Effect, no proceeding,
claim (other than a benefits claim in the ordinary course
59
of business), lawsuit and/or investigation is existing or, to the best
knowledge of the Borrower after due inquiry, threatened concerning or
involving any (A) employee welfare benefit plan (as defined in Section
3(1) of ERISA) currently maintained or contributed to by the Borrower or
any ERISA Affiliate, (B) Pension Plan or (C) Multiemployer Plan.
(j) Margin Stock. Neither the Borrower nor any Restricted Subsidiary
thereof is engaged principally or as one of its activities in the business of
extending credit for the purpose of "purchasing" or "carrying" any "margin
stock" (as each such term is defined or used, directly or indirectly, in
Regulation U of the Board of Governors of the Federal Reserve System). No part
of the proceeds of any of the Loans or Letters of Credit will be used for
purchasing or carrying margin stock or for any purpose which violates, or which
would be inconsistent with, the provisions of Regulation T, U or X of such Board
of Governors.
(k) Government Regulation. Neither the Borrower nor any Restricted
Subsidiary thereof is an "investment company" or a company "controlled" by an
"investment company" (as each such term is defined or used in the Investment
Company Act of 1940, as amended) and neither the Borrower nor any Restricted
Subsidiary thereof is, or after giving effect to any Extension of Credit will
be, subject to regulation under the Public Utility Holding Company Act of 1935
or the Interstate Commerce Act, each as amended, or any other Applicable Law
which limits its ability to incur or consummate the transactions contemplated
hereby.
(l) Material Contracts. Schedule 7.1(l) sets forth a complete and accurate
list of all Material Contracts of the Borrower and its Restricted Subsidiaries
in effect as of the Closing Date not listed on any other Schedule hereto; other
than as set forth in Schedule 7.1(l), each such Material Contract is, and after
giving effect to the consummation of the transactions contemplated by the Loan
Documents will be, in full force and effect in accordance with the terms
thereof. The Borrower and its Subsidiaries have made available to the
Administrative Agent a true and complete copy of each Material Contract required
to be listed on Schedule 7.1(l) or any other Schedule hereto. Neither the
Borrower nor any Restricted Subsidiary (nor, to the knowledge of the Borrower,
any other party thereto) is in breach of or in default under any Material
Contract which could reasonably be expected to have a Material Adverse Effect.
(m) Employee Relations. Each of the Borrower and its Restricted
Subsidiaries is not, as of the Closing Date, party to any collective bargaining
agreement nor has any labor union been recognized as the representative of its
employees except as set forth on Schedule 7.1(m). The Borrower knows of no
pending, threatened or contemplated strikes, work stoppage or other collective
labor disputes involving its employees or those of its Restricted Subsidiaries.
(n) Burdensome Provisions. Neither the Borrower nor any Restricted
Subsidiary thereof is a party to any indenture, agreement, lease or other
instrument, or subject to any corporate or partnership restriction, Governmental
Approval or Applicable Law which is so unusual or burdensome as in the
foreseeable future could be reasonably expected to have a Material Adverse
Effect. The Borrower and its Restricted Subsidiaries do not presently anticipate
that future expenditures needed to meet the provisions of any statutes, orders,
rules or regulations of a Governmental Authority will be so burdensome as could
reasonably be expected to have a Material Adverse Effect. No Restricted
Subsidiary is party to any agreement or
60
instrument or otherwise subject to any restriction or encumbrance that restricts
or limits its ability to make dividend payments or other distributions in
respect of its capital stock to the Borrower or any Restricted Subsidiary or to
transfer any of its assets or properties to the Borrower or any other Restricted
Subsidiary in each case other than existing under or by reason of the Loan
Documents or Applicable Law.
(o) Financial Statements. The financial statements required pursuant to
Section 6.2(e) and related unaudited interim statements of income and retained
earnings, copies of which have been furnished to the Administrative Agent and
each Lender, are complete and correct and fairly present on a Consolidated basis
the assets, liabilities and financial position of the Borrower and its
Restricted Subsidiaries as at such dates, and the results of the operations and
changes of financial position for the periods then ended (other than customary
year-end adjustments for unaudited financial statements). All such financial
statements, including the related schedules and notes thereto, have been
prepared in accordance with GAAP.
(p) No Material Adverse Change. Since March 31, 2001, there has been no
material adverse change in the properties, business, operations, prospects, or
condition (financial or otherwise) of the Borrower, its Restricted Subsidiaries
or Sensors and no event has occurred or condition arisen that could reasonably
be expected to have a Material Adverse Effect.
(q) Solvency. As of the Closing Date and after giving effect to each
Extension of Credit made hereunder, the Borrower and its Restricted Subsidiaries
taken as a whole will be Solvent.
(r) Titles to Properties. Each of the Borrower and its Restricted
Subsidiaries has such title to the real property owned or leased by it as is
necessary or desirable to the conduct of its business and valid and legal title
to all of its personal property and assets, including, but not limited to, those
reflected on the balance sheets of the Borrower and its Restricted Subsidiaries
delivered pursuant to Section 7.1(o), except those which have been disposed of
by the Borrower or its Restricted Subsidiaries subsequent to such date which
dispositions have been in the ordinary course of business or as otherwise
expressly permitted hereunder. As of the Closing Date, all real property owned
or leased by the Borrower or any Restricted Subsidiary is set forth on Schedule
7.1(r).
(s) Liens. None of the properties and assets of the Borrower or any
Restricted Subsidiary thereof is subject to any Lien, except Permitted Liens. No
financing statement under the Uniform Commercial Code of any state which names
the Borrower or any Restricted Subsidiary thereof or any of their respective
trade names or divisions as debtor and which has not been terminated, has been
filed in any state or other jurisdiction and neither the Borrower nor any
Restricted Subsidiary thereof has signed any such financing statement or any
security agreement authorizing any secured party thereunder to file any such
financing statement, except to perfect those Liens permitted by Section 11.2
hereof.
(t) Debt and Guaranty Obligations. Schedule 7.1(t) is a complete and
correct listing of all Debt, Guaranty Obligations and Bonding Obligations of the
Borrower and its Restricted Subsidiaries as of the date set forth on such
Schedule 7.1(t) in excess of $1,000,000. The
61
Borrower and its Restricted Subsidiaries have performed and are in compliance
with all of the terms of such Debt and Guaranty Obligations and all instruments
and agreements relating thereto, and no default or event of default, or event or
condition which with notice or lapse of time or both would constitute such a
default or event of default on the part of the Borrower or any of its Restricted
Subsidiaries exists with respect to any such Debt or Guaranty Obligation.
(u) Litigation. Except for any such matter that could not reasonably be
expected to create a Material Adverse Effect, and except for matters existing on
the Closing Date and set forth on Schedule 7.1(u), there are no actions, suits
or proceedings pending nor, to the knowledge of the Borrower, threatened against
or in any other way relating adversely to or affecting the Borrower, any
Restricted Subsidiary thereof or Sensors or any of their respective properties
in any court or before any arbitrator of any kind or before or by any
Governmental Authority.
(v) Absence of Defaults. No event has occurred or is continuing which
constitutes a Default or an Event of Default, or which constitutes, or which
with the passage of time or giving of notice or both would constitute, a default
or event of default by the Borrower or any Restricted Subsidiary thereof under
any Material Contract (which such default under such Material Contract, either
individually, or in the aggregate with all other outstanding defaults under
other Material Contracts (including, for purposes hereof, the effect of
termination of any other Material Contracts that could reasonably be expected to
be terminated as a result of such existing default or defaults), could
reasonably be expected to have a Material Adverse Effect) or judgment, decree or
order to which the Borrower or any of its Restricted Subsidiaries is a party or
by which the Borrower or any of its Subsidiaries or any of their respective
properties may be bound or which would require the Borrower or any of its
Restricted Subsidiaries to make any payment thereunder prior to the scheduled
maturity date therefor.
(w) Senior Debt Status. The Obligations of the Borrower and each of its
Restricted Subsidiaries under this Agreement, the Subsidiary Guaranteed
Obligations and each of the other Loan Documents ranks and shall continue to
rank at least senior in priority of payment to all Subordinated Debt and the
Obligations of the Borrower and each Restricted Subsidiary under this Agreement
are hereby designated as "Senior Indebtedness" under all instruments and
documents, now or in the future, relating to all Subordinated Debt.
(x) Accuracy and Completeness of Information. All written information,
reports and other papers and data, when taken as a whole, produced by or on
behalf of the Borrower or any Restricted Subsidiary thereof (other than
financial projections, which shall be subject to the standard set forth in
Section 8.1(c)) and furnished to the Lenders were, at the time the same were so
furnished, complete and correct in all material respects to the extent necessary
to give the recipient a true and accurate knowledge of the subject matter. No
document furnished or written statement made to the Administrative Agent or the
Lenders by the Borrower or any Restricted Subsidiary thereof in connection with
the negotiation, preparation or execution of this Agreement or any of the Loan
Documents contains or will contain any untrue statement of a fact material to
the creditworthiness of the Borrower or its Restricted Subsidiaries or omits or
will omit to state a fact necessary in order to make the statements contained
therein not misleading. The Borrower is not aware of any facts which it has not
disclosed in writing to the
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Administrative Agent having a Material Adverse Effect, or insofar as the
Borrower can now foresee, which could reasonably be expected to have a Material
Adverse Effect.
SECTION 7.2 Survival of Representations and Warranties, Etc. All
representations and warranties set forth in this Article VII and all
representations and warranties contained in any certificate, or any of the Loan
Documents (including, but not limited to, any such representation or warranty
made in or in connection with any amendment thereto) shall constitute
representations and warranties made under this Agreement. All representations
and warranties made under this Agreement shall be made or deemed to be made at
and as of the Closing Date (except those that are expressly made as of a
specific date), shall survive the Closing Date and shall not be waived by the
execution and delivery of this Agreement, any investigation made by or on behalf
of the Lenders or any borrowing hereunder.
ARTICLE VIII
FINANCIAL INFORMATION AND NOTICES
Until all the Obligations have been paid and satisfied in full and the
Commitments terminated, unless consent has been obtained in the manner set forth
in Section 14.11, the Borrower will furnish or cause to be furnished to (a)
Standard & Poor's Corporation, (b) Xxxxx'x Investors Service and (c) the
Administrative Agent at the Administrative Agent's Office at the address set
forth in Section 14.1 and to the Lenders at their respective addresses as set
forth on Schedule 1, or such other office as may be designated by the
Administrative Agent and Lenders from time to time:
SECTION 8.1 Financial Statements and Projections.
(a) Quarterly Financial Statements. As soon as practicable and in any
event within forty-five (45) days after the end of each fiscal quarter of each
Fiscal Year, an unaudited Consolidated and consolidating balance sheet of the
Borrower and its Restricted Subsidiaries as of the close of such fiscal quarter
and unaudited Consolidated and consolidating statements of income, retained
earnings and cash flows for the fiscal quarter then ended and that portion of
the Fiscal Year then ended, including the notes thereto, all in reasonable
detail setting forth in comparative form the corresponding figures as of the end
of and for the corresponding period in the preceding Fiscal Year and prepared by
the Borrower in accordance with GAAP and, if applicable, containing disclosure
of the effect on the financial position or results of operations of any change
in the application of accounting principles and practices during the period, and
certified by the chief financial officer of the Borrower to present fairly in
all material respects the financial condition of the Borrower and its Restricted
Subsidiaries on a Consolidated and consolidating basis as of their respective
dates and the results of operations of the Borrower and its Restricted
Subsidiaries for the respective periods then ended, subject to normal year end
adjustments.
(b) Annual Financial Statements. As soon as practicable and in any event
within ninety (90) days after the end of each Fiscal Year, an audited
Consolidated balance sheet of the
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Borrower and its Restricted Subsidiaries as of the close of such Fiscal Year and
audited Consolidated statements of income, retained earnings and cash flows for
the Fiscal Year then ended, including the notes thereto, all in reasonable
detail setting forth in comparative form the corresponding figures as of the end
of and for the preceding Fiscal Year and prepared by an independent certified
public accounting firm acceptable to the Administrative Agent in accordance with
GAAP and, if applicable, containing disclosure of the effect on the financial
position or results of operations of any change in the application of accounting
principles and practices during the year, and accompanied by a report thereon by
such certified public accountants that is not qualified with respect to scope
limitations imposed by the Borrower or any of its Restricted Subsidiaries or
with respect to accounting principles followed by the Borrower or any of its
Restricted Subsidiaries not in accordance with GAAP.
(c) Annual Business Plan and Financial Projections. As soon as practicable
and in any event within thirty (30) days prior to the beginning of each Fiscal
Year, a business plan of the Borrower and its Restricted Subsidiaries for the
ensuing four (4) fiscal quarters, such plan to be prepared in accordance with
GAAP and to include, on a quarterly basis, the following: a quarterly operating
and capital budget, a projected income statement, statement of cash flows and
balance sheet and a report containing management's discussion and analysis of
such projections, accompanied by a certificate from the chief financial officer
of the Borrower to the effect that, to the best of such officer's knowledge,
such projections are good faith estimates (utilizing assumptions believed by
Borrower's management to be reasonable) of the financial condition and
operations of the Borrower and its Restricted Subsidiaries for such four (4)
quarter period.
SECTION 8.2 Officer's Compliance Certificate. At each time financial
statements are delivered pursuant to Sections 8.1 (a) or (b) and at such other
times as the Administrative Agent shall reasonably request (including, without
limitation, in connection with any Permitted Acquisition), a certificate of the
chief financial officer or the treasurer of the Borrower in the form of Exhibit
F attached hereto (an "Officer's Compliance Certificate").
SECTION 8.3 Accountants' Certificate. At each time financial statements
are delivered pursuant to Section 8.1(b), a certificate of the independent
public accountants certifying such financial statements addressed to the
Administrative Agent for the benefit of the Lenders:
(a) stating that in making the examination necessary for the certification
of such financial statements, they obtained no knowledge of any Default or Event
of Default or, if such is not the case, specifying such Default or Event of
Default and its nature and period of existence; and
(b) including the calculations prepared by such accountants required to
establish whether or not the Borrower and its Restricted Subsidiaries are in
compliance with the financial covenants set forth in Article X hereof as at the
end of each respective period.
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SECTION 8.4 Other Reports.
(a) Auditor's Management Letters. Promptly upon receipt thereof, copies of
all reports, if any, submitted to the Borrower or its Board of Directors by its
independent public accountants in connection with their auditing function,
including, without limitation, any management report and any management
responses thereto; and
(b) Borrowing Base Certificate. As soon as available, but in any event
within twenty-five (25) days after the end of each calendar month (and, upon the
occurrence and during the continuation of an Event of Default, on a more
frequent basis if requested by the Administrative Agent or at such other times
as required pursuant to the terms of this Agreement), a Borrowing Base
Certificate which shall include a calculation of the Asset Coverage Ratio as of
such date.
(c) Accounts Receivable Aging Report. As soon as available, but in any
event within twenty-five (25) days after the end of each calendar month (and,
upon the occurrence and during the continuation of an Event of Default, on a
more frequent basis if requested by the Administrative Agent), a summary
accounts receivable aging report as of the last Business Day of such month which
report shall include such information as the Administrative Agent may require,
all in form and substance satisfactory to the Administrative Agent. Upon the
Administrative Agent's reasonable request, the Borrowers shall deliver annually
on the first day of the second quarter of each Fiscal Year and upon the
occurrence and during the continuation of a Default or Event of Default, within
thirty (30) days upon the request of the Administrative Agent, the name and
mailing address of each Account Debtor.
(d) Accounts Payable Aging Report. As soon as available, but in any event
within twenty-five (25) days after the end of each calendar month (and, upon the
occurrence and during the continuation of an Event of Default, on a more
frequent basis if requested by the Administrative Agent), a summary accounts
payable aging report which report shall include such information as the
Administrative Agent may require, all in form and substance satisfactory to the
Administrative Agent.
(e) Government Contract Report. Upon the request of the Administrative
Agent, which such requests shall be limited to one per fiscal quarter (and, upon
the occurrence and during the continuance of an Event of Default, as often as
requested by the Administrative Agent), a status report with respect to all
Governmental Contracts in excess of $1,000,000 of the Borrowers and their
Restricted Subsidiaries, in form and substance satisfactory to the
Administrative Agent.
(f) Acquisition Related Reports. As soon as available, a copy of any
report issued by an Accounting Arbitrator pursuant to the terms of the Asset
Purchase Agreement, including, without limitation, reports issued pursuant to
Section 2.5(d) of the Asset Purchase Agreement.
(g) Contract Backlog Report. As soon as available, but in any event within
forty-five (45) days after the close of each fiscal quarter of each Fiscal Year
of the Borrower, a contract backlog report for the Borrower, its Restricted
Subsidiaries and Affiliates signed by a Responsible Officer of the Borrower.
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(h) Other Information. Such other information regarding the operations,
business affairs and financial condition of the Borrower or any of its
Restricted Subsidiaries, including any reports delivered to the Securities and
Exchange Commission as the Administrative Agent or any Lender may reasonably
request.
SECTION 8.5 Notice of Litigation and Other Matters. Prompt (but in no
event later than ten (10) days after an officer of the Borrower obtains
knowledge thereof) telephonic and written notice of:
(a) Except for any such matter that could not reasonably be expected to
create a Material Adverse Effect, the commencement of all proceedings and
investigations by or before any Governmental Authority and all actions and
proceedings in any court or before any arbitrator against or involving the
Borrower or any Restricted Subsidiary thereof or any of their respective
properties, assets or businesses;
(b) Except for any such matter that could not reasonably be expected to
create a Material Adverse Effect, any notice of any violation received by the
Borrower or any Restricted Subsidiary thereof from any Governmental Authority
including, without limitation, any notice of violation of Environmental Laws;
(c) Except for any such matter that could not reasonably be expected to
create a Material Adverse Effect, any labor controversy that has resulted in, or
threatens to result in, a strike or other work action against the Borrower or
any Restricted Subsidiary thereof;
(d) any attachment, judgment, lien, levy or order exceeding $2,500,000
that may be assessed against or threatened in writing against the Borrower or
any Restricted Subsidiary thereof;
(e) (i) any Default or Event of Default, (ii) the occurrence or existence
of any event or circumstance that foreseeably will become a Default or Event of
Default or (iii) any event which constitutes or which with the passage of time
or giving of notice or both would constitute a default or event of default under
any Material Contract to which the Borrower or any of its Restricted
Subsidiaries is a party or by which the Borrower or any Restricted Subsidiary
thereof or any of their respective properties may be bound;
(f) (i) any unfavorable determination letter from the Internal Revenue
Service regarding the qualification of an Employee Benefit Plan under Section
401(a) of the Code (along with a copy thereof), (ii) all notices received by the
Borrower or any ERISA Affiliate of the PBGC's intent to terminate any Pension
Plan or to have a trustee appointed to administer any Pension Plan, (iii) all
notices received by the Borrower or any ERISA Affiliate from a Multiemployer
Plan sponsor concerning the imposition or amount of withdrawal liability
pursuant to Section 4202 of ERISA and (iv) the Borrower obtaining knowledge or
reason to know that the Borrower or any ERISA Affiliate has filed or intends to
file a notice of intent to terminate any Pension Plan under a distress
termination within the meaning of Section 4041(c) of ERISA;
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(g) any event which makes any of the representations set forth in Section
7.1 inaccurate in any respect; and
(h) any change in the government contracting status of the Borrower or its
Restricted Subsidiaries with respect to the government of the United States or
any department or agency thereof that could reasonably be expected to have a
Material Adverse Effect.
SECTION 8.6 Accuracy of Information. All written information, reports,
statements and other papers and data furnished by or on behalf of the Borrower
to the Administrative Agent or any Lender whether pursuant to this Article VIII
or any other provision of this Agreement, or any of the Security Documents,
shall, at the time the same is so furnished, comply with the representations and
warranties set forth in Section 7.1.
ARTICLE IX
AFFIRMATIVE COVENANTS
Until all of the Obligations have been paid and satisfied in full and the
Commitments terminated, unless consent has been obtained in the manner provided
for in Section 14.11, the Borrower will, and will cause each of its Restricted
Subsidiaries to:
SECTION 9.1 Preservation of Corporate Existence and Related Matters.
Except as permitted by Section 11.4, preserve and maintain (a) its separate
corporate existence and (b) all rights, franchises, licenses and privileges
necessary to the conduct of its business, and qualify and remain qualified as a
foreign corporation and authorized to do business in each jurisdiction where the
nature and scope of its activities require it to so qualify under Applicable Law
except (with respect to this clause (b) only) to the extent such failure to
preserve or maintain could not reasonably be expected to have a Materially
Adverse Effect.
SECTION 9.2 Maintenance of Property. In addition to the requirements of
any of the Security Documents, protect and preserve all properties useful in and
material to its business, including copyrights, patents, trade names, service
marks and trademarks; maintain in good working order and condition all
buildings, equipment and other tangible real and personal property; and from
time to time make or cause to be made all renewals, replacements and additions
to such property necessary for the conduct of its business, so that the business
carried on in connection therewith may be conducted in a commercially reasonable
manner.
SECTION 9.3 Insurance. Maintain insurance with financially sound and
reputable insurance companies against such risks and in such amounts as are
customarily maintained by similar businesses and as may be required by
Applicable Law and as are required by any Security Documents, and on the Closing
Date and from time to time thereafter deliver to the Administrative Agent upon
its request a reasonably detailed list of the insurance then in effect, stating
the names of the insurance companies, the amounts and rates of the insurance,
the dates of the expiration thereof and the properties and risks covered
thereby.
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SECTION 9.4 Accounting Methods and Financial Records. Maintain a system of
accounting, and keep such books, records and accounts (which shall be true and
complete in all material respects) as may be required or as may be necessary to
permit the preparation of financial statements in accordance with GAAP and in
compliance with the regulations of any Governmental Authority having
jurisdiction over it or any of its properties.
SECTION 9.5 Payment and Performance of Obligations. Pay and perform all
Obligations under this Agreement and the other Loan Documents, and pay or
perform (a) except where the failure to do so could not reasonably be expected
to create a Material Adverse Effect, all taxes, assessments and other
governmental charges that may be levied or assessed upon it or any of its
property, and (b) except where the failure to do so could not reasonably be
expected to create a Material Adverse Effect, all other indebtedness,
obligations and liabilities in accordance with customary trade practices;
provided, that the Borrower or such Restricted Subsidiary may contest any item
described in clauses (a) or (b) of this Section 9.5 in good faith so long as
adequate reserves are maintained with respect thereto in accordance with GAAP.
SECTION 9.6 Compliance With Laws and Approvals. Except where the failure
to do so could not reasonably be expected to create a Material Adverse Effect,
observe and remain in compliance in all respects with all Applicable Laws and
maintain in full force and effect all Governmental Approvals, in each case
applicable to the conduct of its business.
SECTION 9.7 Environmental Laws. Except where the failure to do so could
not reasonably be expected to create a Material Adverse Effect, in addition to
and without limiting the generality of Section 9.6, (a) comply with, and make
commercially reasonable efforts to ensure such compliance by all tenants and
subtenants with all applicable Environmental Laws and obtain and comply with and
maintain, and make commercially reasonable efforts to ensure that all tenants
and subtenants, if any, obtain and comply with and maintain, any and all
licenses, approvals, notifications, registrations or permits required by
applicable Environmental Laws, (b) conduct and complete all investigations,
studies, sampling and testing, and all remedial, removal and other actions
required under Environmental Laws, and promptly comply with all lawful orders
and directives of any Governmental Authority regarding Environmental Laws, and
(c) defend, indemnify and hold harmless the Administrative Agent and the
Lenders, and their respective parents, Subsidiaries, Affiliates, employees,
agents, officers and directors, from and against any claims, demands, penalties,
fines, liabilities, settlements, damages, costs and expenses of whatever kind or
nature known or unknown, contingent or otherwise, arising out of, or in any way
relating to the presence of Hazardous Materials, or the violation of,
noncompliance with or liability under any Environmental Laws applicable to the
operations of the Borrower or any such Restricted Subsidiary, or any orders,
requirements or demands of Governmental Authorities related thereto, including,
without limitation, reasonable attorney's and consultant's fees, investigation
and laboratory fees, response costs, court costs and litigation expenses, except
to the extent that any of the foregoing directly result from the gross
negligence or willful misconduct of the party seeking indemnification therefor.
SECTION 9.8 Compliance with ERISA. In addition to and without limiting the
generality of Section 9.6, (a) except where the failure to so comply could not,
individually or in
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the aggregate, reasonably be expected to have a Material Adverse Effect, (i)
comply with all material applicable provisions of ERISA and the regulations and
published interpretations thereunder with respect to all Employee Benefit Plans,
(ii) not take any action or fail to take action the result of which could be a
liability to the PBGC or to a Multiemployer Plan, (iii) not participate in any
prohibited transaction that could result in any civil penalty under ERISA or tax
under the Code and (iv) operate each Employee Benefit Plan in such a manner that
will not incur any tax liability under Section 4980B of the Code or any
liability to any qualified beneficiary as defined in Section 4980B of the Code
and (b) furnish to the Administrative Agent upon the Administrative Agent's
request such additional information about any Employee Benefit Plan as may be
reasonably requested by the Administrative Agent.
SECTION 9.9 Compliance With Agreements. Except where the failure to do so
could not reasonably be expected to create a Material Adverse Effect, comply in
all respects with each term, condition and provision of all leases, agreements
and other instruments entered into in the conduct of its business including,
without limitation, any Material Contract; provided, that the Borrower or any
such Restricted Subsidiary may contest any such lease, agreement or other
instrument in good faith through applicable proceedings so long as adequate
reserves are maintained in accordance with GAAP.
SECTION 9.10 Inspection of Property; Books and Records; Discussions.
Except for information and records which the Borrower may not under Applicable
Law disseminate or disclose to the Administrative Agent and/or the Lenders, the
Borrower, its Restricted Subsidiaries and Affiliates shall permit any authorized
representative(s) designated by the Administrative Agent and/or the Lenders to
visit, to conduct a field audit or to otherwise inspect any of the Borrower's,
its Restricted Subsidiaries' and/or Affiliates' respective properties, including
their financial and accounting records, and to make copies and take extracts
therefrom, and to discuss the Borrower's, its Restricted Subsidiaries' and/or
Affiliates' respective affairs, finances and accounts with the Administrative
Agent's and the Lenders' officers, employees, representatives or independent
certified public accountants, upon reasonable notice and during normal business
hours. All information furnished to the Administrative Agent and/or the Lenders
shall be received and maintained by the Administrative Agent and the Lenders in
strict confidence and in accordance with Applicable Law, and they shall not
disseminate said information to any Person for so long as said information has
or retains a confidential or proprietary nature, except where required by and in
accordance with Applicable Law, or pursuant to subpoena or other legal process
or where contemplated by the Loan Documents (including, without limitation, in
connection with the enforcement of any rights or remedies thereunder). The
Administrative Agent and the Lenders agree that it shall not take any action or
omit to take any action which would cause or result in the violation of
Applicable Law (including without limitation, any export control law) by the
Borrower, its Restricted Subsidiaries and Affiliates. Each such visitation and
inspection by or on behalf of the Administrative Agent and/or the Lenders after
the occurrence and during the continuance of an Event of Default shall be at the
Borrower's own reasonable cost and expense. The Borrower shall, and shall cause
its Restricted Subsidiaries and Affiliates, to keep proper books and records and
account in accordance with GAAP and Applicable Law.
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SECTION 9.11 Additional Subsidiaries.
(a) Within forty-five (45) days after (i) the redesignation of an
Unrestricted Subsidiary as a Restricted Subsidiary in accordance with Section
9.11(c) below or (ii) the creation or acquisition of any Domestic Subsidiary
(any such Subsidiary, a "New Subsidiary") of the Borrower or any Restricted
Subsidiary (including in connection with any Permitted Acquisition), cause to be
executed and delivered to the Administrative Agent (A) a duly executed joinder
agreement in form and substance reasonably satisfactory to the Administrative
Agent joining such New Subsidiary (to the extent such New Subsidiary is a
Restricted Subsidiary) to the Subsidiary Guaranty Agreement, the Collateral
Agreement and any other applicable Security Documents, (B) updated Schedules
7.1(a) and 7.1(b) reflecting the creation or acquisition of such Subsidiary, (C)
favorable legal opinions covering such matters consistent with opinions for this
Agreement and addressed to the Administrative Agent and Lenders in form and
substance reasonably satisfactory thereto with respect to such joinder
agreement, (D) original stock or other certificates and stock or other transfer
powers evidencing the ownership interests of the Borrower or Restricted
Subsidiary, as applicable, in such New Subsidiary, and (E) any other documents
and certificates as may be reasonably requested by the Administrative Agent or
the Required Lenders (through the Administrative Agent).
(b) Within forty-five (45) days after the creation of any first tier
Foreign Subsidiary of the Borrower or any Restricted Subsidiary (including in
connection with a Permitted Acquisition), cause to be executed and delivered to
the Administrative Agent, (A) a supplement to the applicable Security Documents
previously executed and delivery by the Borrower or such Restricted Subsidiary,
as applicable, to provide for the pledge of sixty-five percent (65%) of the
capital stock or other ownership interests of such Foreign Subsidiary, (B)
updated Schedules 7.1(a) and 7.1(b) reflecting the creation or acquisition of
such Subsidiary, (C) favorable legal opinions addressed to the Administrative
Agent and Lenders in form and substance reasonably satisfactory thereto with
respect to such supplement, (D) original stock or other certificates and stock
or other transfer powers evidencing the ownership interests of the Borrower or
such Restricted Subsidiary in such Foreign Subsidiary, and (E) any other
documents and certificates as may be reasonably requested by the Administrative
Agent or the Required Lenders (through the Administrative Agent).
(c) The Borrower may, at any time and upon written notice to the
Administrative Agent, redesignate an Unrestricted Subsidiary as a Restricted
Subsidiary. Further, promptly after the date on which the Borrower or the
Administrative Agent determines that:
(i) any individual Unrestricted Subsidiary and its respective
Subsidiaries (A) represent five percent (5%) or more of (I) the
Consolidated assets of the Borrower and its Subsidiaries as of the most
recently ended fiscal quarter prior to such date or (II) Consolidated
EBITDA (notwithstanding the definition thereof, calculated to include
all Unrestricted Subsidiaries) of the Borrower and its Subsidiaries for
the four (4) consecutive fiscal quarters most recently ended prior to
such date or (B) is or becomes the obligor on any Debt (notwithstanding
the definition thereof, determined by reference to such Unrestricted
Subsidiary) which is guaranteed by, credit supported by, or recourse to
the Borrower or any Restricted Subsidiary, or
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(ii) all Unrestricted Subsidiaries and their respective
Subsidiaries represent ten percent (10%) or more of (A) the
Consolidated assets of the Borrower and its Subsidiaries as of the most
recently ended fiscal quarter prior to such date or (B) Consolidated
EBITDA (notwithstanding the definition thereof, calculated to include
all Unrestricted Subsidiaries) for the four consecutive fiscal quarters
most recently ended prior to such date,
then, in the case of clause (i), such Unrestricted Subsidiary shall be
redesignated as a Restricted Subsidiary and in the case of clause (ii), the
Borrower shall promptly identify in writing to the Administrative Agent such
Unrestricted Subsidiaries to be redesignated as Restricted Subsidiaries to cause
such remaining Unrestricted Subsidiaries and their Subsidiaries (after giving
effect to such redesignation) to represent less than ten percent (10%) of (A)
the Consolidated assets of the Borrower and its Subsidiaries as of the most
recently ended fiscal quarter prior to such date and (B) Consolidated EBITDA
(notwithstanding the definition thereof, calculated to include all Unrestricted
Subsidiaries) for the four consecutive fiscal quarters most recently ended prior
to such date.
(d) So long as no Default or Event of Default has occurred and is
continuing, the Borrower shall be permitted, on prior written notice to the
Administrative Agent, to redesignate any Restricted Subsidiary as an
Unrestricted Subsidiary (or designate any newly formed or acquired Subsidiary as
an Unrestricted Subsidiary; provided that such formation or acquisition is
otherwise permitted hereunder), so long as the following conditions have been
satisfied as reasonably determined by the Administrative Agent:
(i) any such individual Subsidiary and its respective Subsidiaries
to be designated (or redesignated, as applicable) as an Unrestricted
Subsidiary (A) represent less than five percent (5%) of (I) the
Consolidated assets of the Borrower and its Subsidiaries as of the most
recently ended fiscal quarter prior to such date and (II) Consolidated
EBITDA (notwithstanding the definition thereof, calculated to include all
Unrestricted Subsidiaries) of the Borrower and its Subsidiaries for the
four (4) consecutive fiscal quarters most recently ended prior to such
date and (B) is not the obligor on any Debt (notwithstanding the
definition thereof, determined by reference to such Unrestricted
Subsidiary) which is guaranteed by, credit supported by, or recourse to
the Borrower or any Restricted Subsidiary; and
(ii) at the time of such proposed designation (or redesignation, as
applicable), and after giving effect thereto, all Unrestricted
Subsidiaries and their respective Subsidiaries (including the Subsidiary
and its respective Subsidiaries to be designated (or redesignated, as
applicable) as an Unrestricted Subsidiary) represent less than ten percent
(10%) of (A) the Consolidated assets of the Borrower and its Subsidiaries
as of the most recently ended fiscal quarter prior to such date and (B)
Consolidated EBITDA (notwithstanding the definition thereof, calculated to
include all Unrestricted Subsidiaries) for the four consecutive fiscal
quarters most recently ended prior to such date.
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Such designation (or redesignation, as applicable) shall have an effective
date mutually acceptable to the Administrative Agent and Borrower, but in no
event earlier than five (5) Business Days following receipt by the
Administrative Agent of such written notice.
SECTION 9.12 Reserved.
SECTION 9.13 Use of Proceeds. The Borrower shall use the proceeds of the
Extensions of Credit (a) to finance the Acquisition (b) to finance Permitted
Acquisitions, (c) to refinance existing indebtedness of the Borrower, (d) to
finance Capital Expenditures of the Borrower, and (e) for working capital and
general corporate requirements of the Borrower and its Restricted Subsidiaries,
including the payment of certain fees and expenses incurred in connection with
the Acquisition and the other transactions contemplated hereby and Letters of
Credit.
SECTION 9.14 Conduct of Business. Engage only in businesses in
substantially the same fields as the business conducted on the Closing Date and
in lines of business reasonably related thereto.
SECTION 9.15 Account Designation. Designate only accounts with the
Administrative Agent as the location for all deposits and payments required to
be made to the Borrower as Buyer pursuant to the terms of the Asset Purchase
Agreement.
SECTION 9.16 Debt Rating. Maintain an up to date debt rating with both
Standard & Poor's Corporation and Xxxxx'x Investors Service or, in the event one
or both such entities cease to provide any such rating, such other rating agency
or agencies that are reasonably acceptable to the Administrative Agent.
SECTION 9.17 Existing Letters of Credit. Cause each Existing Letter of
Credit to be replaced (if required by the beneficiary thereof) on or before the
current expiration date of such Existing Letter of Credit.
SECTION 9.18 Further Assurances. Make, execute and deliver all such
additional and further acts, things, deeds and instruments as the Administrative
Agent or the Required Lenders (through the Administrative Agent) may reasonably
require to document and consummate the transactions contemplated hereby and to
vest completely in and insure the Administrative Agent and the Lenders their
respective rights under this Agreement, the Notes, the Letters of Credit and the
other Loan Documents.
ARTICLE X
FINANCIAL COVENANTS
Until all of the Obligations have been paid and satisfied in full and the
Commitments terminated, unless consent has been obtained in the manner set forth
in Section 14.11, the Borrower and its Restricted Subsidiaries on a Consolidated
basis will not:
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SECTION 10.1 Maximum Total Leverage Ratio: As of any fiscal quarter end,
permit the ratio (the "Total Leverage Ratio") of (a) the sum of (i) Debt less
(ii) the outstanding amount of all Performance Based Letters of Credit, in each
case as of such date to (b) EBITDA for the period of four (4) consecutive fiscal
quarters ending on or immediately prior to such date to be greater than the
corresponding ratio set forth in Table A below; provided, however, that if the
Borrower consummates an equity issuance in a minimum amount of $40,000,000 (a
"Qualifying Equity Issuance"), the ratios set forth in Table B shall apply. For
purposes of calculating the Total Leverage Ratio, any prepayment of Debt with
the proceeds of a Qualifying Equity Issuance occurring within five (5) Business
Days following any fiscal quarter end shall be deemed to have been made as of
the last day of such fiscal quarter.
TABLE A
Period Ratio
------ -----
Fiscal quarter ending 3.50 to 1.00
12/31/01
Fiscal quarters ending 3.25 to 1.00
3/31/02 and 6/30/02
Fiscal quarters ending 3.00 to 1.00
9/30/02 and 12/31/02
Fiscal quarters ending 2.75 to 1.00
3/31/03, 6/30/03, 9/30/03
and 12/31/03
Fiscal quarters ending 2.50 to 1.00
3/31/04 and thereafter
TABLE B
Period Ratio
------ -----
Fiscal quarter end 12/31/01 3.00 to 1.00
Fiscal quarters ending 2.75 to 1.00
3/31/02 and 6/30/02
Fiscal quarters ending 2.50 to 1.00
9/30/02 and thereafter
SECTION 10.2 Minimum Fixed Charge Coverage Ratio: As of any fiscal
quarter end, permit the ratio of (a) the sum of (i) EBITDA for the period of
four (4) consecutive fiscal quarters ending on or immediately prior to such date
minus (ii) Capital Expenditures for such period to (b) Fixed Charges for the
period of four (4) consecutive fiscal quarters ending on
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or immediately prior to such date to be less than the corresponding ratio set
forth below; provided that (i) for the fiscal quarter ending 12/31/01, Fixed
Charges (other than cash taxes) shall be calculated by multiplying the actual
amount of Fixed Charges (other than cash taxes) for such fiscal quarter by four
(4), (ii) for the fiscal quarter ending 3/31/02, Fixed Charges (other than cash
taxes) shall be calculated by multiplying the actual amount of Fixed Charges
(other than cash taxes) for such two fiscal quarters by two (2), and (iii) for
the fiscal quarter ending 6/30/02, Fixed Charges (other than cash taxes) shall
be calculated by multiplying the actual amount of Fixed Charges (other than cash
taxes) for such three fiscal quarters by four-thirds (4/3), and for each of the
foregoing fiscal quarters, cash taxes shall be calculated on the basis of actual
cash taxes during the four (4) consecutive fiscal quarter period ending on such
date.
Period Ratio
------ -----
Fiscal quarters ending 1.20 to 1.00
12/31/01 through 3/31/02
Fiscal quarters ending 1.25 to 1.00
6/30/02 through 12/31/03
Fiscal quarters ending 1.50 to 1.00
3/31/04 and thereafter
SECTION 10.3 Maximum Capital Expenditures. Permit Capital Expenditures
during any Fiscal Year to be greater than the maximum aggregate amount
corresponding to such Fiscal Year set forth below:
Fiscal Year Maximum Capital Expenditures
----------- ----------------------------
2002 $22,000,000
2003 $25,000,000
2004 and thereafter $20,000,000
Notwithstanding the foregoing, the maximum amount of Capital Expenditures
permitted by this Section 10.3 in any Fiscal Year shall be increased by an
amount equal to the lesser of (a) $5,000,000 and (b) the excess of (i) the
amount of Capital Expenditures that were permitted to be made under this Section
10.3 in the immediately preceding Fiscal Year (without giving effect to any
carryover amount from prior Fiscal Years) over (ii) the amount of Capital
Expenditures actually made during such preceding Fiscal Year.
ARTICLE XI
NEGATIVE COVENANTS
Until all of the Obligations have been paid and satisfied in full and the
Commitments terminated, unless consent has been obtained in the manner set forth
in Section 14.11, the Borrower has not and will not and will not permit any of
its Restricted Subsidiaries to:
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SECTION 11.1 Limitations on Debt. Create, incur, assume or suffer to exist
any Debt except:
(a) the Obligations (excluding Hedging Obligations permitted pursuant to
Section 11.1(b));
(b) Debt incurred in connection with a Hedging Agreement with a
counterparty and upon terms and conditions (including interest rate) reasonably
satisfactory to the Administrative Agent; provided, that any counterparty that
is a Lender shall be deemed satisfactory to the Administrative Agent.
(c) Debt existing on the Closing Date and not otherwise permitted under
this Section 11.1, as set forth on Schedule 7.1(t) and the renewal, refinancing,
extensions and replacements (but not the increase in the aggregate principal
amount) thereof;
(d) Debt of the Borrower and its Restricted Subsidiaries incurred in
connection with Capitalized Leases in an aggregate amount not to exceed
$5,000,000 on any date of determination;
(e) purchase money Debt of the Borrower and its Restricted Subsidiaries in
an aggregate amount not to exceed $5,000,000 on any date of determination;
(f) Guaranty Obligations in favor of the Administrative Agent for the
benefit of the Administrative Agent and the Lenders;
(g) other unsecured Debt in an aggregate principal amount not exceeding
$2,000,000 at any time outstanding;
(h) Debt of the Borrower to any Restricted Subsidiary and of any
Restricted Subsidiary to the Borrower or any other Restricted Subsidiary;
provided that if requested by the Administrative Agent any such loans and
advances made by a Borrower or any other Restricted Subsidiary that are
evidenced by a promissory note or other instrument shall be pledged pursuant to
the Collateral Agreement;
(i) Guaranty Obligations with respect to Debt permitted pursuant to
subsections (a) through (f) of this Section 11.1; and
(j) Unsecured Debt of DRS Technologies Canada Company in an aggregate
amount not to exceed $15,000,000 (US Dollars) on any date of determination;
provided, that no agreement or instrument with respect to Debt permitted to be
incurred by this Section shall restrict, limit or otherwise encumber (by
covenant or otherwise) the ability of any Restricted Subsidiary of the Borrower
to make any payment to the Borrower or any of its Restricted Subsidiaries (in
the form of dividends, intercompany advances or otherwise) for the purpose of
enabling the Borrower to pay the Obligations.
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SECTION 11.2 Limitations on Liens. Create, incur, assume or suffer to
exist, any Lien on or with respect to any of its assets or properties
(including, without limitation, shares of capital stock or other ownership
interests), real or personal, whether now owned or hereafter acquired, except:
(a) Liens for taxes, assessments and other governmental charges or levies
(excluding any Lien imposed pursuant to any of the provisions of ERISA or
Environmental Laws) not yet due or as to which the period of grace (not to
exceed thirty (30) days), if any, related thereto has not expired or which are
being contested in good faith and by appropriate proceedings if adequate
reserves are maintained to the extent required by GAAP;
(b) the claims of materialmen, mechanics, carriers, warehousemen,
processors or landlords for labor, materials, supplies or rentals incurred in
the ordinary course of business, (i) which are not overdue for a period of more
than thirty (30) days or (ii) which are being contested in good faith and by
appropriate proceedings;
(c) Liens consisting of deposits or pledges made in the ordinary course of
business in connection with, or to secure payment of, obligations under workers'
compensation, unemployment insurance or similar legislation;
(d) Liens constituting encumbrances in the nature of zoning restrictions,
easements and rights or restrictions of record on the use of real property,
which in the aggregate are not substantial in amount and which do not, in any
case, detract from the value of such property or impair the use thereof in the
ordinary conduct of business;
(e) Liens of the Administrative Agent for the benefit of the
Administrative Agent and the Lenders;
(f) Liens not otherwise permitted by this Section 11.2 and in existence on
the Closing Date and described on Schedule 11.2;
(g) Liens securing Debt permitted under Sections 11.1(d) and (e); provided
that (i) such Liens shall be created substantially simultaneously with the
acquisition or lease of the related asset, (ii) such Liens do not at any time
encumber any property other than the property financed by such Debt, (iii) the
amount of Debt secured thereby is not increased and (iv) the principal amount of
Debt secured by any such Lien shall at no time exceed one hundred percent (100%)
of the original purchase price or lease payment amount of such property at the
time it was acquired; and
(h) any Lien existing on any property or asset (other than properties or
assets acquired pursuant to the Acquisition) prior to the acquisition thereof by
the Borrower or any Restricted Subsidiary or existing on any property or asset
of any Person that becomes a Restricted Subsidiary after the date of
consummation of the Acquisition prior to the time such Person becomes a
Restricted Subsidiary; provided that (i) such Lien is not created in
contemplation of or in connection with such acquisition or such Person becoming
a Restricted
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Subsidiary, as the case may be, (ii) such Lien shall not apply to any other
property or assets of the Borrower or any Restricted Subsidiary and (iii) such
Lien shall secure only those obligations that it secures on the date of such
acquisition or the date such Person becomes a Restricted Subsidiary, as the case
may be, and extensions, renewals and replacements thereof that do not increase
the outstanding principal amount thereof; and
(i) deposits to secure the performance of bids, trade contracts,
obligations for utilities, leases, Bonding Obligations permitted pursuant to
Section 11.14 and other obligations of a like nature (other than obligations for
borrowed money of other Debt), in each case in the ordinary course of business.
SECTION 11.3 Limitations on Loans, Advances, Investments and Acquisitions.
Purchase, own, invest in or otherwise acquire, directly or indirectly, any
capital stock, interests in any partnership or joint venture (including, without
limitation, the creation or capitalization of any Restricted Subsidiary),
evidence of Debt or other obligation or security, substantially all or a portion
of the business or assets of any other Person or any other investment or
interest whatsoever in any other Person, or make or permit to exist, directly or
indirectly, any loans, advances or extensions of credit to, or any investment in
cash or by delivery of property in, any Person except:
(a) investments (i) in Restricted Subsidiaries existing on the Closing
Date, (ii) in Restricted Subsidiaries formed or acquired after the Closing Date
so long as the Borrower and its Restricted Subsidiaries comply with the
applicable provisions of Section 9.11 and Section 11.3(d) and (iii) the other
loans, advances and investments described on Schedule 11.3 existing on the
Closing Date;
(b) investments in (i) marketable direct obligations issued or
unconditionally guaranteed by the United States of America or any agency thereof
maturing within one hundred twenty (120) days from the date of acquisition
thereof, (ii) commercial paper maturing no more than one hundred twenty (120)
days from the date of creation thereof and currently having the highest rating
obtainable from either Standard & Poor's Ratings Services, a division of The
XxXxxx-Xxxx Companies, Inc. or Xxxxx'x Investors Service, Inc., (iii)
certificates of deposit maturing no more than one hundred twenty (120) days from
the date of creation thereof issued by commercial banks incorporated under the
laws of the United States of America, each having combined capital, surplus and
undivided profits of not less than $500,000,000 and having a rating of "A" or
better by a nationally recognized rating agency; provided, that the aggregate
amount invested in such certificates of deposit shall not at any time exceed
$5,000,000 for any one such certificate of deposit and $10,000,000 for any one
such bank, (iv) time deposits maturing no more than thirty (30) days from the
date of creation thereof with commercial banks or savings banks or savings and
loan associations each having membership either in the FDIC or the deposits of
which are insured by the FDIC and in amounts not exceeding the maximum amounts
of insurance thereunder; or (v) repurchase agreements with a Lender or a bank or
trust company or a recognized securities dealer having capital and surplus in
excess of $500,000,000 for direct obligations issued by or fully guaranteed by
the United States of America (such investments described in items (i) through
(v) above, "Cash Equivalents"); and
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(c) the Acquisition;
(d) investments by the Borrower or any Restricted Subsidiary thereof in
the form of acquisitions of all or substantially all of the business or a line
of business (whether by the acquisition of capital stock, assets or any
combination thereof) of any other Person if each such acquisition meets all of
the following requirements (such acquisitions being, "Permitted Acquisitions"):
(i) the Person to be acquired shall be in a substantially similar
line of business as the Borrower,
(ii) evidence of approval of the acquisition by the acquiree's board
of directors or equivalent governing body or a copy of the opinion of
counsel delivered by legal counsel to the acquiree in connection with the
acquisition which evidences such approval shall be delivered to the
Administrative Agent at the time the documents referred to in clause (vi)
of this Section 11.3(d) are required to be delivered;
(iii) a description of the acquisition in the form customarily
prepared by the Borrower shall have been delivered to the Administrative
Agent and the Lenders prior to the consummation of the acquisition;
(iv) the Borrower or any Restricted Subsidiary shall be the
surviving Person and no Change of Control shall have been effected
thereby;
(v) the Borrower shall have demonstrated to the Administrative Agent
(A) pro forma compliance (as of the date of the proposed acquisition and
after giving effect thereto and any Extensions of Credit made or to be
made in connection therewith) with each covenant contained in and in the
manner set forth in, Article X, (B) pro forma Asset Coverage Ratio (as of
the date of the proposed acquisition and after giving effect thereto and
any Extensions of Credit made or to be made in connection therewith) equal
to or exceeding 1.00 to 1.00, (C) maintenance of at least $25,000,000 of
availability under the Revolving Credit Facility both before and after
giving effect to the proposed acquisition; and (D) a Maximum Total
Leverage Ratio at least .25 below the applicable ratio set forth in
Section 10.1 prior to consummating the acquisition, and no Default or
Event of Default shall have occurred and be continuing both before and
after giving effect to the acquisition;
(vi) the Borrower shall have delivered to the Administrative Agent
such documents reasonably requested by the Administrative Agent or the
Required Lenders (through the Administrative Agent) pursuant to Section
8.11 to be delivered at the time required pursuant to Section 8.11
confirming that such Person is or will be a Subsidiary Guarantor
hereunder, and its Subsidiary Guaranteed Obligations incurred in such
capacity are secured by the Security Documents, said documents to include
a favorable opinion of counsel to the Borrower acceptable to the
Administrative Agent addressed to the Administrative Agent and the Lenders
with respect to the Borrower, the Person to be acquired and the
acquisition in form and substance reasonably acceptable to the
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Administrative Agent;
(vii) the aggregate amount of Permitted Acquisition Consideration
for such acquisition shall not exceed (A) $15,000,000 in the aggregate per
Fiscal Year for all such Permitted Acquisitions; provided, however, that
any time Maximum Total Leverage Ratio is less than 2.50 to 1.00, the
aggregate amount of Permitted Acquisition Consideration for such
acquisitions shall not exceed $25,000,000 for any one such Permitted
Acquisition;
(viii) the Person to be acquired shall demonstrate positive EBITDA
for the most recent twelve (12) month period then ended, both prior to the
acquisition and after giving effect thereto, by providing the
Administrative Agent and Lenders copies of the most recent financial
statements and projections, all in form and substance reasonably
satisfactory to the Administrative Agent and Lenders;
(ix) the Borrower shall provide such other documents and other
information as may be reasonably requested by the Administrative Agent or
the Required Lenders (through the Administrative Agent) in connection with
the proposed acquisition;
(e) Hedging Agreements permitted pursuant to Section 11.1;
(f) loans or advances made by the Borrower to any Restricted Subsidiary
and made by any Subsidiary to the Borrower or any other Subsidiary; provided
that any such loans and advances made by a Borrower or any other Restricted
Subsidiary that are evidenced by a promissory note or other instrument shall be
pledged pursuant to the Collateral Agreement;
(g) investments received in connection with the bankruptcy or
reorganization of, or settlement of delinquent accounts and disputes with,
customers and suppliers, in each case in the ordinary course of business;
(h) investments made after the Closing Date in joint ventures and other
business entities (in each case that are not Subsidiaries of the Borrower) that
are engaged in the same line or lines of business as the Borrower and its
Restricted Subsidiaries in an aggregate amount not to exceed $5,000,000;
(i) loans to employees of the Borrower and the Restricted Subsidiaries in
their capacity as such, in an aggregate principal amount not to exceed
$1,000,000 at any time outstanding;
(j) any investment received as consideration, in whole or in part, for any
asset sale otherwise permitted hereunder in an aggregate principal amount not to
exceed $5,000,000; and
(k) purchases of assets in the ordinary course of business.
SECTION 11.4 Limitations on Mergers and Liquidation. Merge, consolidate or
enter into any similar combination with any other Person or liquidate, wind-up
or dissolve itself
79
(or suffer any liquidation or dissolution) except:
(a) any Wholly-Owned Subsidiary of the Borrower may merge with the
Borrower or any other Wholly-Owned Restricted Subsidiary of the Borrower;
provided that (i) in any merger involving the Borrower, the Borrower shall be
the surviving entity and (ii) in any merger involving a Restricted Subsidiary,
the Restricted Subsidiary shall be the surviving entity;
(b) any Wholly-Owned Subsidiary of the Borrower may merge into the Person
such Wholly-Owned Subsidiary was formed to acquire in connection with a
Permitted Acquisition (and, in the case of any merger involving a Restricted
Subsidiary, such Person is or becomes a Restricted Subsidiary); and
(c) any Wholly-Owned Subsidiary of the Borrower may wind-up into the
Borrower or any other Wholly-Owned Restricted Subsidiary of the Borrower.
SECTION 11.5 Limitations on Sale of Assets. Convey, sell, lease, assign,
transfer or otherwise dispose of any of its property, business or assets
(including, without limitation, the sale of any receivables and leasehold
interests and any sale-leaseback or similar transaction), whether now owned or
hereafter acquired except:
(a) the sale of inventory in the ordinary course of business;
(b) the sale of obsolete assets no longer used or usable in the business
of the Borrower or any of its Subsidiaries;
(c) the transfer of assets to the Borrower or any Restricted Subsidiary of
the Borrower pursuant to Section 11.4 (c);
(d) the sale or discount without recourse of accounts receivable arising
in the ordinary course of business in connection with the compromise or
collection thereof;
(e) the sale of DRS Data Systems, Inc.;
(f) the sale, transfer and other disposition of assets of the Borrower or
its Restricted Subsidiaries (other than less than 100% of the equity ownership
interest in a Subsidiary) that are not permitted by any other clause of this
Section 11,5; provided that (i) the aggregate fair market value of all assets
sold, transferred or otherwise disposed of in reliance upon this clause (f) in
the aggregate shall not exceed $2,000,000 in a Fiscal Year and (ii) the Borrower
or applicable Restricted Subsidiary complies with the provisions of Section
4.4(b); and
(g) assets acquired in connection with any Permitted Acquisition that the
Borrower intended to sell at the time of such Permitted Acquisition; provided
(i) such assets were identified in writing to the Administrative Agent at the
time of such Permitted Acquisition and (ii) the aggregate amount of such assets
does not exceed $2,000,000 per each such Permitted Acquisition and (iii) the
Borrower or applicable Restricted Subsidiary complies with the provisions of
Section 4.4(b).
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SECTION 11.6 Limitations on Dividends and Distributions. Declare or pay
any dividends upon any of its capital stock; purchase, redeem, retire or
otherwise acquire, directly or indirectly, any shares of its capital stock, or
make any distribution of cash, property or assets among the holders of shares of
its capital stock, or make any change in its capital structure which such change
in its capital structure could reasonably be expected to have a Material Adverse
Effect; provided that:
(a) the Borrower or any Restricted Subsidiary may pay dividends in shares
of its own capital stock;
(b) any Restricted Subsidiary may pay cash dividends to the Borrower; and
(c) the Borrower or any Restricted Subsidiary may make any distribution
(whether direct or indirect and whether in the form of cash, property,
securities or otherwise) to shareholders, employees or other permitted
distributees under Borrower's 1996 Omnibus Plan and other benefit or retirement
plans maintained and created by the Borrower, its Restricted Subsidiaries and
Affiliates.
SECTION 11.7 Limitations on Exchange and Issuance of Capital Stock. Issue,
sell or otherwise dispose of any class or series of capital stock that, by its
terms or by the terms of any security into which it is convertible or
exchangeable, is, or upon the happening of an event or passage of time would be,
(a) convertible or exchangeable into Debt or (b) required to be redeemed or
repurchased, including at the option of the holder, in whole or in part, or has,
or upon the happening of an event or passage of time would have, a redemption or
similar payment due, except for any class or series of capital stock that is not
required to be redeemed or repurchased prior to the date which is one (1) year
and one (1) day following the Term Loan Maturity Date.
SECTION 11.8 Transactions with Affiliates. Except for transactions
permitted by 11.6, 11.7, 11.3 and those listed on Schedule 11.8, directly or
indirectly (a) make any loan or advance to, or purchase or assume any note or
other obligation to or from, any of its officers, directors, shareholders or
other Affiliates, or to or from any member of the immediate family of any of its
officers, directors, shareholders or other Affiliates, or subcontract any
operations to any of its Affiliates or (b) enter into, or be a party to, any
other transaction not described in clause (a) above with any of its Affiliates,
except pursuant to the reasonable requirements of its business and upon fair and
reasonable terms that are fully disclosed to and approved in writing by the
Required Lenders prior to the consummation thereof and are no less favorable to
it than it would obtain in a comparable arm's length transaction with a Person
not its Affiliate.
SECTION 11.9 Certain Accounting Changes; Organizational Documents. (a)
Change its Fiscal Year end, or make any change in its accounting treatment and
reporting practices except as required by GAAP or (b) amend, modify or change
its articles of incorporation (or corporate charter or other similar
organizational documents) or amend, modify or change its bylaws (or other
similar documents) in any manner materially adverse in any respect to the rights
or interests of the Lenders.
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SECTION 11.10 Amendments; Payments and Prepayments of Subordinated Debt.
Amend or modify (or permit the modification or amendment of) any of the terms or
provisions of any Subordinated Debt, or cancel or forgive, make any voluntary or
optional payment or prepayment on, or redeem or acquire for value (including,
without limitation, by way of depositing with any trustee with respect thereto
money or securities before due for the purpose of paying when due) any
Subordinated Debt.
SECTION 11.11 Amendments, Consents and Waivers under Asset Purchase
Agreement. Materially amend, modify, waive (or permit the material amendment,
modification of or waiver of) any of the terms or provisions of the Asset
Purchase Agreement without the prior written approval of the Administrative
Agent and Required Lenders, which shall not be unreasonably withheld.
SECTION 11.12 Restrictive Agreements.
(a) Enter into any Debt which contains any negative pledge on assets or
any covenants more restrictive than the provisions of Articles IX, X, XI hereof,
or which restricts, limits or otherwise encumbers its ability to incur Liens on
or with respect to any of its assets or properties other than the assets or
properties securing such Debt.
(b) Enter into or permit to exist any agreement which impairs or limits
the ability of any Restricted Subsidiary of the Borrower to pay dividends to the
Borrower.
SECTION 11.13 Nature of Business. Alter in any material respect the
character or conduct of the business conducted by the Borrower and its
Restricted Subsidiaries as of the Closing Date.
SECTION 11.14 Limitation on Bonding Obligations. Create, incur, assume or
suffer to exist Bonding Obligations in an aggregate amount in excess of
$5,000,000 outstanding at any time during the term hereof.
SECTION 11.15 Impairment of Security Interests. Take or omit to take any
action, which might or would have the result of materially impairing the
security interests in favor of the Administrative Agent with respect to the
Collateral or grant to any Person (other than the Administrative Agent for the
benefit of itself and the Lenders pursuant to the Security Documents) any
interest whatsoever in the Collateral, except for Liens permitted under Section
11.2 and asset sales permitted under Section 11.5.
ARTICLE XII
DEFAULT AND REMEDIES
SECTION 12.1 Events of Default. Each of the following shall constitute an
Event of Default, whatever the reason for such event and whether it shall be
voluntary or involuntary or
82
be effected by operation of law or pursuant to any judgment or order of any
court or any order, rule or regulation of any Governmental Authority or
otherwise:
(a) Default in Payment of Principal of Loans and Reimbursement
Obligations. The Borrower shall default in any payment of principal of any Loan,
Note or Reimbursement Obligation when and as due (whether at maturity, by reason
of acceleration or otherwise).
(b) Other Payment Default. The Borrower shall default in the payment when
and as due (whether at maturity, by reason of acceleration or otherwise) of
interest on any Loan, Note or Reimbursement Obligation or the payment of any
other Obligation and such default shall continue for a period of three (3)
Business Days.
(c) Misrepresentation. Any representation or warranty made or deemed to be
made by the Borrower or any of its Restricted Subsidiaries under this Agreement,
any other Loan Document or any amendment hereto or thereto, shall at any time
prove to have been incorrect or misleading in any material respect when made or
deemed made.
(d) Default in Performance of Certain Covenants. The Borrower shall
default in the performance or observance of any covenant or agreement contained
in Sections 8.1, 8.2, 8.4(b), (c) or (d) or 8.5(e)(i) or Articles X or XI of
this Agreement.
(e) Default in Performance of Other Covenants and Conditions. The Borrower
or any Restricted Subsidiary thereof shall default in the performance or
observance of any term, covenant, condition or agreement contained in this
Agreement (other than as specifically provided for otherwise in this Section
12.1) or any other Loan Document and such default shall continue for a period of
thirty (30) days after written notice thereof has been given to the Borrower by
the Administrative Agent.
(f) Hedging Agreement. The Borrower shall default in the performance or
observance of any terms, covenant, condition or agreement (after giving effect
to any applicable grace or cure period) under any Hedging Agreement and such
default causes the termination of such Hedging Agreement or permits any counter
party to such Hedging Agreement to terminate any such Hedging Agreement.
(g) Debt Cross-Default. The Borrower or any of its Restricted Subsidiaries
shall (i) default in the payment of any Debt (other than the Notes or any
Reimbursement Obligation) the aggregate outstanding amount of which Debt is in
excess of $5,000,000 beyond the period of grace if any, provided in the
instrument or agreement under which such Debt was created, or (ii) default in
the observance or performance of any other agreement or condition relating to
any Debt (other than the Notes or any Reimbursement Obligation) the aggregate
outstanding amount of which Debt is in excess of $5,000,000 or contained in any
instrument or agreement evidencing, securing or relating thereto or any other
event shall occur or condition exist, the effect of which default or other event
or condition is to cause, or to permit the holder or holders of such Debt (or a
trustee or agent on behalf of such holder or holders) to cause, with the giving
of notice if required, any such Debt to become due prior to its stated maturity
(any applicable grace period having expired).
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(h) Other Cross-Defaults. The Borrower or any of its Restricted
Subsidiaries shall default in the payment when due, or in the performance or
observance, of any obligation or condition of any Material Contract, which such
default, either individually, or in the aggregate with all other outstanding
defaults under other Material Contracts (including, for purposes hereof, the
effect of termination of any other Material Contracts that could reasonably be
expected to be terminated as a result of such existing default or defaults),
could reasonably be expected to have a Material Adverse Effect.
(i) Change in Control. Any person or group of persons (within the meaning
of Section 13(d) of the Securities Exchange Act of 1934, as amended) shall
obtain ownership or control in one or more series of transactions of more than
thirty percent (30%) of the common stock or thirty percent (30%) of the voting
power of the Borrower entitled to vote in the election of members of the board
of directors of the Borrower or there shall have occurred under any indenture or
other instrument evidencing any Debt in excess of $5,000,000 any "change in
control" (as defined in such indenture or other evidence of Debt) obligating the
Borrower to repurchase, redeem or repay all or any part of the Debt or capital
stock provided for therein (any such event, a "Change in Control").
(j) Voluntary Bankruptcy Proceeding. The Borrower or any Restricted
Subsidiary thereof shall (i) commence a voluntary case under the federal
bankruptcy laws (as now or hereafter in effect), (ii) file a petition seeking to
take advantage of any other laws, domestic or foreign, relating to bankruptcy,
insolvency, reorganization, winding up or composition for adjustment of debts,
(iii) consent to or fail to contest in a timely and appropriate manner any
petition filed against it in an involuntary case under such bankruptcy laws or
other laws, (iv) apply for or consent to, or fail to contest in a timely and
appropriate manner, the appointment of, or the taking of possession by, a
receiver, custodian, trustee, or liquidator of itself or of a substantial part
of its property, domestic or foreign, (v) admit in writing its inability to pay
its debts as they become due, (vi) make a general assignment for the benefit of
creditors, or (vii) take any corporate action for the purpose of authorizing any
of the foregoing.
(k) Involuntary Bankruptcy Proceeding. A case or other proceeding shall be
commenced against the Borrower or any Restricted Subsidiary thereof in any court
of competent jurisdiction seeking (i) relief under the federal bankruptcy laws
(as now or hereafter in effect) or under any other laws, domestic or foreign,
relating to bankruptcy, insolvency, reorganization, winding up or adjustment of
debts, or (ii) the appointment of a trustee, receiver, custodian, liquidator or
the like for the Borrower or any Restricted Subsidiary thereof or for all or any
substantial part of their respective assets, domestic or foreign, and such case
or proceeding shall continue without dismissal or stay for a period of sixty
(60) consecutive days, or an order granting the relief requested in such case or
proceeding (including, but not limited to, an order for relief under such
federal bankruptcy laws) shall be entered.
(l) Failure of Agreements. Any provision of this Agreement or any
provision of any other Loan Document shall for any reason cease to be valid and
binding on the Borrower or any Restricted Subsidiary party thereto or any such
Person shall so state in writing, or any Loan Document shall for any reason
cease to create a valid and perfected first priority Lien on, or
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security interest in, any of the collateral purported to be covered thereby, in
each case other than in accordance with the express terms hereof or thereof.
(m) Termination Event. Except where the failure to do so could not
reasonably be expected to create a Material Adverse Effect, the occurrence of
any of the following events: (i) the Borrower or any ERISA Affiliate fails to
make full payment when due of all amounts which, under the provisions of any
Pension Plan or Section 412 of the Code, the Borrower or any ERISA Affiliate is
required to pay as contributions thereto, (ii) an accumulated funding deficiency
occurs or exists, whether or not waived, with respect to any Pension Plan, (iii)
a Termination Event or (iv) the Borrower or any ERISA Affiliate as employers
under one or more Multiemployer Plans makes a complete or partial withdrawal
from any such Multiemployer Plan and the plan sponsor of such Multiemployer
Plans notifies such withdrawing employer that such employer has incurred a
withdrawal liability.
(n) Judgment. A judgment or order for the payment of money which causes
the aggregate amount of all such judgments to exceed $5,000,000 in any Fiscal
Year shall be entered against the Borrower or any of its Restricted Subsidiaries
by any court and such judgment or order shall continue without discharge or stay
for a period of thirty (30) days.
(o) Environmental. Any one or more Environmental Claims shall have been
asserted against the Borrower or any of its Restricted Subsidiaries; the
Borrower and its Restricted Subsidiaries would be reasonably likely to incur
liability as a result thereof; and such liability would be reasonably likely,
individually or in the aggregate, to have a Material Adverse Effect.
(p) Government Contracts. Any of the Borrower, its Restricted Subsidiaries
or Affiliates, (i) is debarred or suspended by any Governmental Authority, or
has been issued a notice of proposed debarment or notice of proposed suspension
by any Governmental Authority; (ii) is the subject of an investigation by any
Governmental Authority (other than a normal and customary review) involving or
possibly involving fraud or willful misconduct which could reasonably be
expected to result in criminal liability, civil liability or expense in excess
of $250,000, suspension, debarment or any other adverse administrative action;
and (iii) is a party to any Material Contract with any Governmental Authority
which has been actually terminated due to the Borrower's, such Restricted
Subsidiary's or Affiliate's alleged fraud or willful misconduct.
SECTION 12.2 Remedies. Upon the occurrence of an Event of Default (which
such Event of Default has not previously been cured or waived in accordance with
Section 14.11), with the consent of the Required Lenders, the Administrative
Agent may, or upon the request of the Required Lenders, the Administrative Agent
shall, by notice to the Borrower:
(a) Acceleration; Termination of Facilities. Declare the principal of and
interest on the Loans, the Notes and the Reimbursement Obligations at the time
outstanding, and all other amounts owed to the Lenders and to the Administrative
Agent under this Agreement or any of the other Loan Documents (including,
without limitation, all L/C Obligations, whether or not the beneficiaries of the
then outstanding Letters of Credit shall have presented or shall be entitled to
present the documents required thereunder) and all other Obligations (other than
Hedging
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Obligations), to be forthwith due and payable, whereupon the same shall
immediately become due and payable without presentment, demand, protest or other
notice of any kind, all of which are expressly waived, anything in this
Agreement or the other Loan Documents to the contrary notwithstanding, and
terminate the Credit Facility and any right of the Borrower to request
borrowings or Letters of Credit thereunder; provided, that upon the occurrence
of an Event of Default specified in Section 12.1(j) or (k), the Credit Facility
shall be automatically terminated and all Obligations (other than Hedging
Obligations) shall automatically become due and payable without presentment,
demand, protest or other notice of any kind, all of which are expressly waived,
anything in this Agreement or in any other Loan Document to the contrary
notwithstanding.
(b) Letters of Credit. With respect to all Letters of Credit with respect
to which presentment for honor shall not have occurred at the time of an
acceleration pursuant to the preceding paragraph, the Borrower shall at such
time deposit in a cash collateral account opened by the Administrative Agent an
amount equal to the aggregate then undrawn and unexpired Dollar Equivalent
amount of such Letters of Credit. Amounts held in such cash collateral account
shall be applied by the Administrative Agent to the payment of drafts drawn
under such Letters of Credit, and the unused portion thereof after all such
Letters of Credit shall have expired or been fully drawn upon, if any, shall be
applied to repay the other Obligations on a pro rata basis. After all such
Letters of Credit shall have expired or been fully drawn upon, the Reimbursement
Obligation shall have been satisfied and all other Obligations shall have been
paid in full, the balance, if any, in such cash collateral account shall be
returned to the Borrower.
(c) Rights of Collection. Exercise on behalf of the Lenders all of its
other rights and remedies under this Agreement, the other Loan Documents and
Applicable Law, in order to satisfy all of the Borrower's Obligations.
SECTION 12.3 Rights and Remedies Cumulative; Non-Waiver; etc. The
enumeration of the rights and remedies of the Administrative Agent and the
Lenders set forth in this Agreement is not intended to be exhaustive and the
exercise by the Administrative Agent and the Lenders of any right or remedy
shall not preclude the exercise of any other rights or remedies, all of which
shall be cumulative, and shall be in addition to any other right or remedy given
hereunder or under the other Loan Documents or that may now or hereafter exist
at law or in equity or by suit or otherwise. No delay or failure to take action
on the part of the Administrative Agent or any Lender in exercising any right,
power or privilege shall operate as a waiver thereof, nor shall any single or
partial exercise of any such right, power or privilege preclude any other or
further exercise thereof or the exercise of any other right, power or privilege
or shall be construed to be a waiver of any Event of Default. No course of
dealing between the Borrower, the Administrative Agent and the Lenders or their
respective agents or employees shall be effective to change, modify or discharge
any provision of this Agreement or any of the other Loan Documents or to
constitute a waiver of any Event of Default.
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ARTICLE XIII
THE ADMINISTRATIVE AGENT
SECTION 13.1 Appointment. Each of the Lenders hereby irrevocably
designates and appoints First Union as Administrative Agent of such Lender under
this Agreement and the other Loan Documents for the term hereof and each such
Lender irrevocably authorizes First Union, as Administrative Agent for such
Lender, to take such action on its behalf under the provisions of this Agreement
and the other Loan Documents and to exercise such powers and perform such duties
as are expressly delegated to the Administrative Agent by the terms of this
Agreement and such other Loan Documents, together with such other powers as are
reasonably incidental thereto. Notwithstanding any provision to the contrary
elsewhere in this Agreement or such other Loan Documents, the Administrative
Agent shall not have any duties or responsibilities, except those expressly set
forth herein and therein, or any fiduciary relationship with any Lender, and no
implied covenants, functions, responsibilities, duties, obligations or
liabilities shall be read into this Agreement or the other Loan Documents or
otherwise exist against the Administrative Agent. Any reference to the
Administrative Agent in this Article XIII shall be deemed to refer to the
Administrative Agent solely in its capacity as Administrative Agent and not in
its capacity as a Lender. In performing its functions and duties under this
Agreement and each of the other Loan Documents or in connection with them and in
respect of anything relating to them, the Administrative Agent shall act solely
as the administrative agent of (but not as trustee for (except to the extent
specifically required pursuant to the Security Documents)) the Lenders, and the
Administrative Agent shall not have any fiduciary duty towards any Person
(except as expressly referred to above) or be under any obligation other than
those expressly provided for in this Agreement and any of the other Loan
Documents.
The Administrative Agent shall not in any way whatsoever assume, nor shall
it be deemed to have assumed, any obligation as agent of or trustee for, or any
relationship of agency or trust with or for, the Borrower or any Subsidiary
thereof.
SECTION 13.2 Delegation of Duties. The Administrative Agent may execute
any of its respective duties under this Agreement and the other Loan Documents
by or through agents or attorneys-in-fact and shall be entitled to advice of
counsel concerning all matters pertaining to such duties. The Administrative
Agent shall not be responsible for the negligence or misconduct of any agents or
attorneys-in-fact selected by the Administrative Agent with reasonable care.
SECTION 13.3 Exculpatory Provisions. Neither the Administrative Agent nor
any of its officers, directors, employees, agents, attorneys-in-fact,
Subsidiaries or Affiliates shall be (a) liable for any action lawfully taken or
omitted to be taken by it or such Person under or in connection with this
Agreement or the other Loan Documents (except for actions occasioned solely by
its or such Person's own gross negligence or willful misconduct), or (b)
responsible in any manner to any of the Lenders for any recitals, statements,
representations or warranties made by the Borrower or any of its Subsidiaries or
any officer thereof contained in this Agreement or the other Loan Documents or
in any certificate, report, statement or other document referred to or provided
for in, or received by the Administrative Agent under or in connection with,
this Agreement or the other Loan Documents or for the value, validity,
effectiveness, genuineness,
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enforceability or sufficiency of this Agreement or the other Loan Documents or
for any failure of the Borrower or any of its Subsidiaries to perform its
obligations hereunder or thereunder. The Administrative Agent shall not be under
any obligation to any Lender to ascertain or to inquire as to the observance or
performance of any of the agreements contained in, or conditions of, this
Agreement, or to inspect the properties, books or records of the Borrower or any
of its Subsidiaries.
SECTION 13.4 Reliance by the Administrative Agent. The Administrative
Agent shall be entitled to rely, and shall be fully protected in relying, upon
any note, writing, resolution, notice, consent, certificate, affidavit, letter,
cablegram, telegram, telecopy, telex or teletype message, statement, order or
other document or conversation believed by 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
Borrower), independent accountants and other experts selected by the
Administrative Agent. The Administrative Agent may deem and treat the payee of
any Note as the owner thereof for all purposes unless such Note shall have been
transferred in accordance with Section 14.10. The Administrative Agent shall be
fully justified in failing or refusing to take any action under this Agreement
and the other Loan Documents unless it shall first receive such advice or
concurrence of the Required Lenders (or, when expressly required hereby or by
the relevant other Loan Documents, all the Lenders) as it deems appropriate or
it shall first be indemnified to its satisfaction by the Lenders against any and
all liability and expense which may be incurred by it by reason of taking or
continuing to take any such action except for its own gross negligence or
willful misconduct. The Administrative Agent shall in all cases be fully
protected in acting, or in refraining from acting, under this Agreement and the
Notes in accordance with a request of the Required Lenders (or, when expressly
required hereby, all the Lenders), and such request and any action taken or
failure to act pursuant thereto shall be binding upon all the Lenders and all
future holders of the Notes.
SECTION 13.5 Notice of Default. The Administrative Agent shall not be
deemed to have knowledge or notice of the occurrence of any Default or Event of
Default unless it has received notice from a Lender or the Borrower referring to
this Agreement, describing such Default or Event of Default and stating that
such notice is a "notice of default". In the event that the Administrative Agent
receives such a notice, it shall promptly give notice thereof to the Lenders.
The Administrative Agent shall take such action with respect to such Default or
Event of Default as shall be reasonably directed by the Required Lenders (or,
when expressly required hereby, all the Lenders); provided that unless and until
the Administrative Agent shall have received such directions, the Administrative
Agent may (but shall not be obligated to) take such action, or refrain from
taking such action, with respect to such Default or Event of Default as it shall
deem advisable in the best interests of the Lenders, except to the extent that
other provisions of this Agreement expressly require that any such action be
taken or not be taken only with the consent and authorization or the request of
the Lenders or Required Lenders, as applicable.
SECTION 13.6 Non-Reliance on the Administrative Agent and Other Lenders.
Each Lender expressly acknowledges that neither the Administrative Agent nor any
of its respective officers, directors, employees, agents, attorneys-in-fact,
Subsidiaries or Affiliates has
88
made any representations or warranties to it and that no act by the
Administrative Agent hereafter taken, including any review of the affairs of the
Borrower or any of its Subsidiaries, shall be deemed to constitute any
representation or warranty by the Administrative Agent to any Lender. Each
Lender represents to the Administrative Agent that it has, independently and
without reliance upon the Administrative Agent or any other Lender, and based on
such documents and information as it has deemed appropriate, made its own
appraisal of and investigation into the business, operations, property,
financial and other condition and creditworthiness of the Borrower and its
Subsidiaries and made its own decision to make its Loans and issue or
participate in Letters of Credit hereunder and enter into this Agreement. Each
Lender also represents that it will, independently and without reliance upon the
Administrative Agent or any other Lender, and based on such documents and
information as it shall deem appropriate at the time, continue to make its own
credit analysis, appraisals and decisions in taking or not taking action under
this Agreement and the other Loan Documents, and to make such investigation as
it deems necessary to inform itself as to the business, operations, property,
financial and other condition and creditworthiness of the Borrower and its
Subsidiaries. Except for notices, reports and other documents expressly required
to be furnished to the Lenders by the Administrative Agent hereunder or by the
other Loan Documents, the Administrative Agent shall not have any duty or
responsibility to provide any Lender with any credit or other information
concerning the business, operations, property, financial and other condition or
creditworthiness of the Borrower or any of its Subsidiaries which may come into
the possession of the Administrative Agent or any of its respective officers,
directors, employees, agents, attorneys-in-fact, Subsidiaries or Affiliates.
SECTION 13.7 Indemnification. The Lenders severally agree to indemnify the
Administrative Agent in its capacity as such and (to the extent that the
Administrative Agent shall be entitled to be, and shall not have been reimbursed
by the Borrower and without limiting the obligation of the Borrower to do so),
ratably according to the respective amounts of their Revolving Credit Commitment
Percentages and/or Term Loan Percentages, as applicable, from and against any
and all liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, costs, expenses or disbursements of any kind whatsoever which
may at any time (including, without limitation, at any time following the
payment of the Notes or any Reimbursement Obligation) be imposed on, incurred by
or asserted against the Administrative Agent in any way relating to or arising
out of this Agreement or the other Loan Documents, or any documents, reports or
other information provided to the Administrative Agent or any Lender or
contemplated by or referred to herein or therein or the transactions
contemplated hereby or thereby or any action taken or omitted by the
Administrative Agent under or in connection with any of the foregoing; provided
that no Lender shall be liable for the payment of any portion of such
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
costs, expenses or disbursements resulting solely from the Administrative
Agent's bad faith, gross negligence or willful misconduct. The agreements in
this Section 13.7 shall survive the payment of the Notes, any Reimbursement
Obligation and all other amounts payable hereunder and the termination of this
Agreement.
SECTION 13.8 The Administrative Agent in Its Individual Capacity. The
Administrative Agent and its respective Subsidiaries and Affiliates may make
loans to, accept deposits from and generally engage in any kind of business with
the Borrower as though the
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Administrative Agent were not the Administrative Agent hereunder. With respect
to any Loans made or renewed by it and any Note issued to it and with respect to
any Letter of Credit issued by it or participated in by it, the Administrative
Agent shall have the same rights and powers under this Agreement and the other
Loan Documents as any Lender and may exercise the same as though it were not the
Administrative Agent, and the terms "Lender" and "Lenders" shall include the
Administrative Agent in its individual capacity.
SECTION 13.9 Resignation of the Administrative Agent; Successor
Administrative Agent. Subject to the appointment and acceptance of a successor
as provided below, the Administrative Agent may resign at any time by giving
thirty (30) days notice thereof to the Lenders and the Borrower. Upon any such
resignation, the Required Lenders shall have the right to appoint a successor
Administrative Agent, which successor shall have minimum capital and surplus of
at least $500,000,000 (so long as no Default or Event of Default has occurred
and is continuing) and be reasonably acceptable to the Borrower. If no successor
Administrative Agent shall have been so appointed by the Required Lenders and
shall have accepted such appointment within thirty (30) days after the
Administrative Agent's giving of notice of resignation, then the Administrative
Agent may, on behalf of the Lenders, appoint a successor Administrative Agent,
which successor shall have minimum capital and surplus of at least $500,000,000
and be reasonably acceptable to the Borrower (so long as no Default or Event of
Default has occurred and is continuing). Upon the acceptance of any appointment
as Administrative Agent hereunder by a successor Administrative Agent, such
successor Administrative Agent shall thereupon succeed to and become vested with
all rights, powers, privileges and duties of the retiring Administrative Agent,
and the retiring Administrative Agent shall be discharged from its duties and
obligations hereunder. After any retiring Administrative Agent's resignation
hereunder as Administrative Agent, the provisions of this Section 13.9 shall
continue in effect for its benefit in respect of any actions taken or omitted to
be taken by it while it was acting as Administrative Agent.
SECTION 13.10 Trustee Powers. Except as otherwise expressly provided in
this Agreement and any of the other Loan Documents, in its capacity as trustee
under certain of the Security Documents the Administrative Agent shall have:
(a) the benefit of all the provisions in this Article XIII and all other
agency, indemnification and exculpatory provisions set forth in any
other Loan Documents;
(b) all the powers of an absolute owner of the Lien constituted by such
Security Documents;
(c) the power of appointing new and/or additional trustees; and
(d) all the powers and discretions conferred on trustees by the Trustee
Xxx 0000 of the laws of England (to the extent not inconsistent with
this Agreement and the other Loan Documents) and on the
Administrative Agent by this Agreement and the other Loan Documents
(including without limitation the power to invest all monies which
are received by the Administrative Agent under the trusts contained
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in such Security Documents in its name or under its control in any
investment for the time being authorized by United States, English
or other applicable law for the investment by trustees of trust
money or in any other investments which may be selected by the
Administrative Agent). Additionally, the Administrative Agent shall
have the power to place such monies on deposit in its name or under
its control at such bank or institution (including at the
Administrative Agent) and on such terms as the Administrative Agent
may determine.
SECTION 13.11 Documentation and Syndication Agent. The Documentation and
Syndication Agents, in their respective capacities as documentation and
syndication agents, shall have no duties or responsibilities under this
Agreement or any other Loan Document.
ARTICLE XIV
MISCELLANEOUS
SECTION 14.1 Notices.
(a) Method of Communication. Except as otherwise provided in this
Agreement, all notices and communications hereunder shall be in writing, or by
telephone subsequently confirmed in writing. Any notice shall be effective if
delivered by hand delivery or sent via telecopy, recognized overnight courier
service or certified mail, return receipt requested, and shall be presumed to be
received by a party hereto (i) on the date of delivery if delivered by hand or
sent by telecopy, (ii) on the next Business Day if sent by recognized overnight
courier service and (iii) on the third Business Day following the date sent by
certified mail, return receipt requested. A telephonic notice to the
Administrative Agent as understood by the Administrative Agent will be deemed to
be the controlling and proper notice in the event of a discrepancy with or
failure to receive a confirming written notice.
(b) Addresses for Notices. Notices to any party shall be sent to it at the
following addresses, or any other address as to which all the other parties are
notified in writing.
If to the Borrower: DRS Technologies, Inc.
Corporate Headquarters
0 Xxxxxx Xxx
Xxxxxxxxxx, Xxx Xxxxxx 00000
Attention: Xxxxxxx Xxxxxxxxx,
Executive Vice-President
Telephone No.: (000) 000-0000
Telecopy No.: (000) 000-0000
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If to First Union as First Union National Bank
Administrative Agent: Charlotte Plaza, CP-23
000 Xxxxx Xxxxxxx Xxxxxx
Xxxxxxxxx, Xxxxx Xxxxxxxx 00000-0000
Attention: Syndication Agency Services
Telephone No.: (000) 000-0000
Telecopy No.: (000) 000-0000
If to any Lender: To the address set forth on Schedule 1 hereto
(c) Administrative Agent's Office. The Administrative Agent hereby
designates its office located at the address set forth above, or any subsequent
office which shall have been specified for such purpose by written notice to the
Borrower and Lenders, as the Administrative Agent's Office referred to herein,
to which payments due are to be made and at which Loans will be disbursed and
Letters of Credit issued.
SECTION 14.2 Expenses; Indemnity. The Borrower will (a) pay all reasonable
out-of-pocket expenses of the Administrative Agent in connection with (i) the
preparation, execution and delivery of this Agreement and each other Loan
Document, whenever the same shall be executed and delivered, including, without
limitation, all out-of-pocket syndication and due diligence expenses and
reasonable fees and disbursements of counsel for the Administrative Agent and
(ii) the preparation, execution and delivery of any waiver, amendment or consent
by the Administrative Agent or the Lenders relating to this Agreement or any
other Loan Document, including, without limitation, reasonable fees and
disbursements of counsel for the Administrative Agent, (b) after the occurrence
and during the continuance of an Event of Default, pay all reasonable
out-of-pocket expenses of the Administrative Agent and each Lender actually
incurred in connection with the administration and enforcement of any rights and
remedies of the Administrative Agent and Lenders under the Credit Facility
including, without limitation, in connection with any workout, restructuring,
bankruptcy or other similar proceeding, creating and perfecting Liens in favor
of Administrative Agent on behalf of Lenders pursuant to any Security Document,
enforcing any Obligations of or collecting any payments due from the Borrower or
any Subsidiary Guarantor by reason of an Event of Default (including in
connection with the sale of, collection from, or other realization upon any of
the Collateral or the enforcement of the Subsidiary Guaranty Agreement,
consulting with appraisers, accountants, engineers, attorneys and other Persons
concerning the nature, scope or value of any right or remedy of the
Administrative Agent or any Lender hereunder or under any other Loan Document or
any factual matters in connection therewith, which expenses shall include
without limitation the reasonable fees and disbursements of such Persons, and
(c) defend, indemnify and hold harmless the Administrative Agent and the
Lenders, and their respective parents, Subsidiaries, Affiliates, employees,
agents, officers and directors, from and against any losses, penalties, fines,
liabilities, settlements, damages, costs and expenses, suffered by any such
Person in connection with any claim (including, without limitation, any
Environmental Claims), investigation, litigation or other proceeding (whether or
not the Administrative Agent or any Lender is a party thereto) and the
prosecution and defense thereof, arising out of or in any way connected with the
Loans, this Agreement, any other Loan Document, or any documents, reports or
other information provided to the Administrative Agent or any Lender or
contemplated by or referred
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to herein or therein or the transactions contemplated hereby or thereby,
including, without limitation, reasonable attorney's and consultant's fees,
except to the extent that any of the foregoing directly result from the gross
negligence or willful misconduct of the party seeking indemnification therefor.
SECTION 14.3 Set-off. In addition to any rights now or hereafter granted
under Applicable Law and not by way of limitation of any such rights, upon and
after the occurrence of any Event of Default and during the continuance thereof,
the Lenders and any assignee or participant of a Lender in accordance with
Section 14.10 are hereby authorized by the Borrower at any time or from time to
time, without notice to the Borrower or to any other Person, any such notice
being hereby expressly waived, to set off and to appropriate and to apply any
and all deposits (general or special, time or demand, including, but not limited
to, indebtedness evidenced by certificates of deposit, whether matured or
unmatured) and any other indebtedness at any time held or owing by the Lenders,
or any such assignee or participant to or for the credit or the account of the
Borrower against and on account of the Obligations irrespective of whether or
not (a) the Lenders shall have made any demand under this Agreement or any of
the other Loan Documents or (b) the Administrative Agent shall have declared any
or all of the Obligations to be due and payable as permitted by Section 12.2 and
although such Obligations shall be contingent or unmatured. Notwithstanding the
preceding sentence, each Lender agrees to notify within three (3) Business Days
the Borrower and the Administrative Agent after any such set-off and
application, provided that the failure to give such notice shall not affect the
validity of such set-off and application.
SECTION 14.4 Governing Law. This Agreement, the Notes and the other Loan
Documents, unless otherwise expressly set forth therein, shall be governed by,
construed and enforced in accordance with the laws of the State of New York
(including Section 5-1401 and Section 5-1402 of the General Obligations Law of
the State of New York), without regard to the conflicts of law provisions of
such state.
SECTION 14.5 Jurisdiction and Venue.
(a) Jurisdiction. The Borrower hereby irrevocably consents to the personal
jurisdiction of the state and federal courts located in New York, New York (and
any courts from which an appeal from any of such courts must or may be taken),
in any action, claim or other proceeding arising out of any dispute in
connection with this Agreement, the Notes and the other Loan Documents, any
rights or obligations hereunder or thereunder, or the performance of such rights
and obligations. The Borrower hereby irrevocably consents to the service of a
summons and complaint and other process in any action, claim or proceeding
brought by the Administrative Agent or any Lender in connection with this
Agreement, the Notes or the other Loan Documents, any rights or obligations
hereunder or thereunder, or the performance of such rights and obligations, on
behalf of itself or its property, in the manner specified in Section 14.1.
Nothing in this Section 14.5 shall affect the right of the Administrative Agent
or any Lender to serve legal process in any other manner permitted by Applicable
Law or affect the right of the Administrative Agent or any Lender to bring any
action or proceeding against the Borrower or its properties in the courts of any
other jurisdictions.
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(b) Venue. The Borrower hereby irrevocably waives any objection it may
have now or in the future to the laying of venue in the aforesaid jurisdiction
in any action, claim or other proceeding arising out of or in connection with
this Agreement, any other Loan Document or the rights and obligations of the
parties hereunder or thereunder. The Borrower irrevocably waives, in connection
with such action, claim or proceeding, any plea or claim that the action, claim
or other proceeding has been brought in an inconvenient forum.
SECTION 14.6 Binding Arbitration; Waiver of Jury Trial.
(a) Binding Arbitration. Upon demand of any party, whether made before or
after institution of any judicial proceeding, any dispute, claim or controversy
arising out of, connected with or relating to this Agreement or any other Loan
Document ("Disputes"), between or among parties hereto and to the other Loan
Documents shall be resolved by binding arbitration as provided herein.
Institution of a judicial proceeding by a party does not waive the right of that
party to demand arbitration hereunder. Disputes may include, without limitation,
tort claims, counterclaims, claims brought as class actions, claims arising from
Loan Documents executed in the future, disputes as to whether a matter is
subject to arbitration, or claims concerning any aspect of the past, present or
future relationships arising out of or connected with the Loan Documents.
Arbitration shall be conducted under and governed by the Commercial Financial
Disputes Arbitration Rules (the "Arbitration Rules") of the American Arbitration
Association (the "AAA") and the Federal Arbitration Act. All arbitration
hearings shall be conducted in New York, New York or Charlotte, North Carolina.
The expedited procedures set forth in Rule 51, et seq. of the Arbitration Rules
shall be applicable to claims of less than $1,000,000. All applicable statutes
of limitations shall apply to any Dispute. A judgment upon the award may be
entered in any court having jurisdiction. Notwithstanding anything foregoing to
the contrary, any arbitration proceeding demanded hereunder shall begin within
ninety (90) days after such demand thereof and shall be concluded within one
hundred twenty (120) days after such demand. These time limitations may not be
extended unless a party hereto shows cause for extension and then such extension
shall not exceed a total of sixty (60) days. The panel from which all
arbitrators are selected shall be comprised of licensed attorneys selected from
the Commercial Financial Dispute Arbitration Panel of the AAA. The single
arbitrator selected for expedited procedure shall be a retired judge from the
highest court of general jurisdiction, state or federal, of the state where the
hearing will be conducted. The parties hereto do not waive any applicable
Federal or state substantive law except as provided herein. Notwithstanding the
foregoing, this paragraph shall not apply to any Hedging Agreement.
(b) Jury Trial. THE ADMINISTRATIVE AGENT, EACH LENDER AND THE BORROWER
HEREBY ACKNOWLEDGE THAT BY AGREEING TO BINDING ARBITRATION THEY HAVE IRREVOCABLY
WAIVED THEIR RESPECTIVE RIGHTS TO A JURY TRIAL WITH RESPECT TO ANY ACTION, CLAIM
OR OTHER PROCEEDING ARISING OUT OF ANY DISPUTE IN CONNECTION WITH THIS
AGREEMENT, THE NOTES OR THE OTHER LOAN DOCUMENTS, ANY RIGHTS OR OBLIGATIONS
HEREUNDER OR THEREUNDER, OR THE PERFORMANCE OF SUCH RIGHTS AND OBLIGATIONS.
(c) Preservation of Certain Remedies. Notwithstanding the preceding
binding
94
arbitration provisions, the parties hereto and the other Loan Documents
preserve, without diminution, certain remedies that such Persons may employ or
exercise freely, either alone, in conjunction with or during a Dispute. Each
such Person shall have and hereby reserves the right to proceed in any court of
proper jurisdiction or by self help to exercise or prosecute the following
remedies, as applicable: (i) all rights to foreclose against any real or
personal property or other security by exercising a power of sale granted in the
Loan Documents or under Applicable Law or by judicial foreclosure and sale,
including a proceeding to confirm the sale, (ii) all rights of self help
including peaceful occupation of property and collection of rents, set off, and
peaceful possession of property, (iii) obtaining provisional or ancillary
remedies including injunctive relief, sequestration, garnishment, attachment,
appointment of receiver and in filing an involuntary bankruptcy proceeding, and
(iv) when applicable, a judgment by confession of judgment. Preservation of
these remedies does not limit the power of an arbitrator to grant similar
remedies that may be requested by a party in a Dispute.
SECTION 14.7 Reversal of Payments. To the extent the Borrower makes a
payment or payments to the Administrative Agent for the ratable benefit of the
Lenders or the Administrative Agent receives any payment or proceeds of the
collateral which payments or proceeds or any part thereof are subsequently
invalidated, declared to be fraudulent or preferential, set aside and/or
otherwise required to be repaid to a trustee, receiver or any other party under
any bankruptcy law, state or federal law, common law or equitable cause (whether
by demand, settlement, litigation or otherwise), then, to the extent of such
payment or proceeds repaid, the Obligations or part thereof intended to be
satisfied shall be revived and continued in full force and effect as if such
payment or proceeds had not been received by the Administrative Agent.
SECTION 14.8 Injunctive Relief; Punitive Damages.
(a) The Borrower recognizes that, in the event the Borrower fails to
perform, observe or discharge any of its obligations or liabilities under this
Agreement, any remedy of law may prove to be inadequate relief to the Lenders.
Therefore, the Borrower agrees that the Lenders, at the Lenders' option, shall
be entitled to seek temporary and permanent injunctive relief in any such case
without the necessity of proving actual damages.
(b) The Administrative Agent, the Lenders and the Borrower (on behalf of
itself and its Subsidiaries) hereby agree that no such Person shall have a
remedy of punitive or exemplary damages against any other party to a Loan
Document and each such Person hereby waives any right or claim to punitive or
exemplary damages that they may now have or may arise in the future in
connection with any Dispute, whether such Dispute is resolved through
arbitration or judicially.
SECTION 14.9 Accounting Matters. Except as otherwise expressly provided
herein, all terms of an accounting or financial nature shall be construed in
accordance with GAAP, as in effect from time to time, provided that, if the
Borrower notifies the Administrative Agent that the Borrower requests an
amendment to any provision hereof to eliminate the effect of any change
occurring after the date hereof in GAAP or in the application thereof on the
operation of such provision (or if the Administrative Agent notifies the
Borrower that the
95
Required Lenders request an amendment to any provision hereof for such purpose),
regardless of whether any such notice is given before or after such change in
GAAP or in the application thereof, then such provision shall be interpreted on
the basis of GAAP as in effect and applied immediately before such change shall
have become effective until such notice shall have been withdrawn or such
provision amended in accordance therewith.
SECTION 14.10 Successors and Assigns; Participations.
(a) Benefit of Agreement. This Agreement shall be binding upon and inure
to the benefit of the Borrower, the Administrative Agent and the Lenders, all
future holders of the Notes, and their respective successors and assigns, except
that the Borrower shall not assign or transfer any of its rights or obligations
under this Agreement without the prior written consent of each Lender.
(b) Assignment by Lenders. Each Lender may, in the ordinary course of its
business and in accordance with Applicable Law, sell or assign to any Lender,
any Affiliate of a Lender or in the case of the Term Loans any Approved Fund and
with the consent of the Borrower (so long as no Default or Event of Default has
occurred and is continuing) and the consent of the Administrative Agent, which
consents shall not be unreasonably withheld or delayed, assign to one or more
other Eligible Assignees (any of the forgoing assignees or purchasers, a
"Purchasing Lender") all or a portion of its interests, rights and obligations
under this Agreement and the other Loan Documents (including, without
limitation, all or a portion of the Extensions of Credit at the time owing to it
and the Notes held by it); provided that:
(i) each such assignment shall be of a constant, and not a varying,
percentage of the Revolving Credit Commitment and/or the Term Loan
Commitment, as applicable, of the assigning Lender's rights and
obligations under this Agreement;
(ii) if less than all of the assigning Lender's Revolving Credit
Commitment or Term Loan Commitment, as applicable, is to be assigned, the
Commitment so assigned shall not be less than $5,000,000 with respect to
the Revolving Credit Facility and $1,000,000 (or otherwise agreed by the
Administrative Agent and Borrower) with respect to the Term Loan Facility,
unless such sale or assignment is made to an existing Lender, to an
Affiliate thereof, or (with respect to any Term Loan) to an Approved Fund,
in which case no minimum amount shall apply;
(iii) the Purchasing Lender shall have delivered to the
Administrative Agent all United States Internal Revenue Service Forms
required pursuant to Section 5.11(e) and all of the parties to each such
assignment shall execute and deliver to the Administrative Agent, for its
acceptance and recording in the Register, an Assignment and Acceptance
substantially in the form of Exhibit G attached hereto (an "Assignment and
Acceptance"), together with (to the extent requested by any Purchasing
Lender) any Note or Notes subject to such assignment;
(iv) no assignment of a Revolving Credit Commitment, or
participation in L/C Obligations or Swingline Loans shall be made without
the prior written consent of the
96
Administrative Agent, the Swingline Lender, the Issuing Lender and (so
long as no Default or Event of Default has occurred and is continuing) the
Borrower (which consents shall not be unreasonably withheld);
(v) where consent of the Borrower to an assignment to a Purchasing
Lender is required hereunder (including consent to an assignment to an
Approved Fund), the Borrower shall be deemed to have given its consent
five (5) Business Days after the date written notice thereof has been
delivered by the assigning Lender (through the Administrative Agent)
unless such consent is expressly refused by the Borrower prior to such
fifth (5th) Business Day;
(vi) such assignment shall not, without the consent of the Borrower,
require the Borrower to file a registration statement with the Securities
and Exchange Commission or apply to or qualify the Loans or the Notes
under the blue sky laws of any state; and
(vii) the assigning Lender shall pay to the Administrative Agent an
assignment fee of $2,500 upon the execution by such Lender of the
Assignment and Acceptance; provided that no such fee shall be payable upon
any assignment by a Lender to an Affiliate thereof.
Upon such execution, delivery, acceptance and recording, from and after the
effective date specified in each Assignment and Acceptance, which effective date
shall be at least five (5) Business Days after the execution thereof (unless
otherwise agreed to by the Administrative Agent), (A) the Purchasing Lender
thereunder shall be a party hereto and, to the extent provided in such
Assignment and Acceptance, have the rights and obligations of a Lender hereby
and (B) the Lender thereunder shall, to the extent provided in such assignment,
be released from its obligations under this Agreement.
(c) Rights and Duties Upon Assignment. By executing and delivering an
Assignment and Acceptance, the assigning Lender thereunder and the Purchasing
Lender thereunder confirm to and agree with each other and the other parties
hereto as set forth in such Assignment and Acceptance.
(d) Register. The Administrative Agent shall maintain a copy of each
Assignment and Acceptance and each Lender Addition and Acknowledgment delivered
to it and a register for the recordation of the names and addresses of the
Lenders and the amount of the Extensions of Credit with respect to each Lender
from time to time (the "Register"). The entries in the Register shall be
conclusive, in the absence of manifest error, and the Borrower, the
Administrative Agent and the Lenders may treat each person whose name is
recorded in the Register as a Lender hereunder for all purposes of this
Agreement. The Register shall be available for inspection by the Borrower or any
Lender at any reasonable time and from time to time upon reasonable prior
notice.
(e) Issuance of New Notes. Upon its receipt of an Assignment and
Acceptance executed by an assigning Lender and a Purchasing Lender together with
any Note or Notes (if
97
applicable) subject to such assignment and (if applicable) the written consent
to such assignment, the Administrative Agent shall, if such Assignment and
Acceptance has been completed and is substantially in the form of Exhibit G:
(i) accept such Assignment and Acceptance;
(ii) record the information contained therein in the Register;
(iii) give prompt notice thereof to the Lenders and the Borrower;
and
(iv) promptly deliver a copy of such Assignment and Acceptance to
the Borrower.
Within five (5) Business Days after receipt of notice, the Borrower shall
execute and deliver to the Administrative Agent, in exchange for the surrendered
Note or Notes, a new Note or Notes to the order of such Purchasing Lender (to
the extent requested thereby) in amounts equal to the Revolving Credit
Commitment and/or Term Loan Commitment assumed by it pursuant to such Assignment
and Acceptance and a new Note or Notes to the order of the assigning Lender (to
the extent requested thereby) in an amount equal to the Revolving Credit
Commitment and/or Term Loan Commitment retained by it hereunder. Such new Note
or Notes shall be in an aggregate principal amount equal to the aggregate
principal amount of such surrendered Note or Notes, shall be dated the effective
date of such Assignment and Acceptance and shall otherwise be in substantially
the form of the assigned Notes delivered to the assigning Lender. Each
surrendered Note or Notes shall be canceled and returned to the Borrower.
Notwithstanding anything in this Agreement to the contrary, any Lender which has
not been issued a Note or Notes hereunder may at any time deliver a written
request for a Note or Notes to the Administrative Agent and Borrower. Within
five (5) Business Days after receipt of notice, the Borrower shall execute and
deliver to the Administrative Agent, a Note or Notes (as applicable) to the
order of such Lender in amounts equal to the Revolving Credit Commitment and/or
Term Loan Commitment of such Lender. Upon receipt thereby, the Administrative
Agent shall promptly deliver such Note or Notes to such Lender.
(f) Participations. Each Lender may, without notice to or the consent of
the Borrower or the Administrative Agent, in the ordinary course of its
commercial banking business and in accordance with Applicable Law, sell
participations to one or more banks or other entities (any such bank or other
entity, a "Participant") in all or a portion of its rights and obligations under
this Agreement (including, without limitation, all or a portion of its
Extensions of Credit and the Notes held by it); provided that:
(i) such Lender's obligations under this Agreement (including,
without limitation, its Revolving Credit Commitment and/or Term Loan
Commitment, as applicable) shall remain unchanged;
(ii) such Lender shall remain solely responsible to the other
parties hereto for the performance of such obligations;
98
(iii) such Lender shall remain the holder of the Notes held by it
for all purposes of this Agreement;
(iv) the Borrower, the Administrative Agent and the other Lenders
shall continue to deal solely and directly with such Lender in connection
with such Lender's rights and obligations under this Agreement;
(v) such Lender shall not permit such Participant the right to
approve any waivers, amendments or other modifications to this Agreement
or any other Loan Document other than waivers, amendments or modifications
which would reduce the principal of or the interest rate on any Loan or
Reimbursement Obligation, extend the term or increase the amount of the
Revolving Credit Commitment and/or Term Loan Commitment of such Lender,
reduce the amount of any fees to which such Participant is entitled,
extend any scheduled payment date for principal of any Loan or, except as
expressly contemplated hereby or thereby, release substantially all of the
Collateral; and
(vi) any such disposition shall not, without the consent of the
Borrower, require the Borrower to file a registration statement with the
Securities and Exchange Commission or apply to qualify the Loans or the
Notes under the blue sky law of any state.
The Borrower agrees that each Participant shall be entitled to the
benefits of Section 5.7, Section 5.8, Section 5.9, Section 5.10, Section 5.11
and Section 14.3 to the same extent as if it were a Lender and had acquired its
interest by assignment pursuant to paragraph (b) of this Section 14.10; provided
that a Participant shall not be entitled to receive any greater payment under
Section 5.7, Section 5.8, Section 5.9, Section 5.10, and Section 5.11 than the
applicable Lender would have been entitled to receive with respect to the
participation sold to such Participant, unless the sale of the participation to
such Participant is made with the Borrower's prior written consent and such
Participant shall have delivered to the Administrative Agent all United States
Internal Revenue Service Forms required pursuant to Section 5.11(e).
(g) Disclosure of Information; Confidentiality. The Administrative Agent
and the Lenders shall hold all non-public information with respect to the
Borrower obtained pursuant to the Loan Documents (or any Hedging Agreement with
a Lender or the Administrative Agent) in accordance with their customary
procedures for handling confidential information; provided, that the
Administrative Agent may disclose information relating to this Agreement to Gold
Sheets and other similar bank trade publications, such information to consist of
deal terms and other information customarily found in such publications and
provided further, that the Administrative Agent or any Lender may disclose any
such information to the extent such disclosure is (i) required by law or
requested or required pursuant to any legal process, (ii) requested by, or
required to be disclosed to, any rating agency, or regulatory or similar
authority (including, without limitation, the National Association of Insurance
Commissioners) or (iii) used in any suit, action or proceeding for the purpose
of defending itself, reducing its liability or protecting any of its claims,
rights, remedies or interests under or in connection with the Loan Documents (or
any Hedging Agreement with a Lender or the Administrative Agent). Any Lender
may, in connection with any assignment, proposed assignment, participation or
proposed participation
99
pursuant to this Section 14.10, disclose to the Purchasing Lender, proposed
Purchasing Lender, Participant, proposed Participant, or to any direct or
indirect contractual counterparty in swap agreements or such contractual
counterparty's professional advisor any information relating to the Borrower
furnished to such Lender by or on behalf of the Borrower; provided, that prior
to any such disclosure, each such Purchasing Lender, proposed Purchasing Lender,
Participant, proposed Participant, contractual counterparty or professional
advisor shall agree to be bound by the provisions of this Section 14.10(g).
(h) Certain Pledges or Assignments. Any Lender may at any time pledge or
assign a security interest in all or any portion of its rights under this
Agreement or any other Loan Document to secure obligations of such Lender,
including without limitation any pledge or assignment to secure obligations to a
Federal Reserve Bank; provided that no such pledge or assignment of a security
interest shall release a Lender from any of its obligations hereunder or
substitute any such pledgee or assignee for such Lender as a party hereto.
SECTION 14.11 Amendments, Waivers and Consents. Except as set forth below
or as specifically provided in any Loan Document, any term, covenant, agreement
or condition of this Agreement or any of the other Loan Documents may be amended
or waived by the Lenders, and any consent given by the Lenders, if, but only if,
such amendment, waiver or consent is in writing signed by the Required Lenders
(or by the Administrative Agent with the consent of the Required Lenders) and
delivered to the Administrative Agent and, in the case of an amendment, signed
by the Borrower; provided, that no amendment, waiver or consent shall:
(a) (i) increase the Revolving Credit Commitment of any Lender, (ii)
reduce the rate of, or forgive any, interest or fees payable on any
Revolving Credit Loan or Reimbursement Obligation, (iii) reduce or forgive
the principal amount of any Revolving Credit Loan or Reimbursement
Obligation, (iv) extend the originally scheduled time or times of payment
of the principal of any Revolving Credit Loan or Reimbursement Obligation
or the time or times of payment of interest on any Revolving Credit Loan
or Reimbursement Obligation or any fee or commission with respect hereto,
(v) permit any subordination of the principal or interest on any Revolving
Credit Loan or Reimbursement Obligation or (vi) extend the time of the
obligation of the Revolving Credit Commitment Lenders to make or issue or
participate in Letters or Credit or Swingline Loans, in any case, without
the written consent of each Lender holding Revolving Credit Loans or a
Revolving Credit Commitment;
(b) (i) except as otherwise provided in Section 4.6, increase the
Term Loan Commitment of any Lender, (ii) reduce the rate of, or forgive
any, interest or fees payable on any Term Loan, (iii) reduce or forgive
the principal amount of any Term Loan, (iv) permit any subordination of
the principal or interest on, or any Lien securing, any Term Loan or (v)
extend the originally scheduled time or times of payment of the principal
of any Term Loan or the time or times of payment of interest on any Term
Loan or any fee or commission with respect thereto, in any case, without
the written consent of each Lender holding a Term Loan or a Term Loan
Commitment;
(c) release any material portion of the Collateral or release any
Security
100
Document or release any Subsidiary Guarantor (other than in connection
with the redesignation of a Restricted Subsidiary as an Unrestricted
Subsidiary in accordance with Section 9.11, with a sale of assets
permitted pursuant to Section 11.5, or as otherwise specifically permitted
in this Agreement or the applicable Security Document), amend the
provisions of this Section 14.11, or amend the definition or percentage of
Required Lenders without the written consent of each Lender or amend the
definition, or any percentage therein, of Borrowing Base; or
(d) release any Borrower from all or any material portion of the
Obligations (other than Hedging Obligations) hereunder or under any other
Loan Document or permit any assignment (other than as specifically
permitted or contemplated in this Agreement or any other Loan Document) of
any Borrower's rights and obligations hereunder or under any other Loan
Document without the written consent of each Lender.
In addition, no amendment, waiver or consent to the provisions of (a) Article
XIII shall be made without the written consent of the Administrative Agent and
(b) Article III without the written consent of the Issuing Lender.
SECTION 14.12 Performance of Duties. The Borrower's obligations under this
Agreement and each of the other Loan Documents shall be performed by the
Borrower at its sole cost and expense.
SECTION 14.13 Syndication of Credit Facility. The Administrative Agent
shall be entitled, after consultation with the Borrower, to change the pricing,
terms or structure of the Credit Facility, either before or after the Closing
Date, if the Administrative Agent determines in its sole discretion that such
changes are advisable in order to ensure a successful syndication or an optimal
capital structure; provided, that the aggregate amount of the Credit Facility
shall remain unchanged.
SECTION 14.14 All Powers Coupled with Interest. All powers of attorney and
other authorizations granted to the Lenders, the Administrative Agent and any
Persons designated by the Administrative Agent or any Lender pursuant to any
provisions of this Agreement or any of the other Loan Documents shall be deemed
coupled with an interest and shall be irrevocable so long as any of the
Obligations remain unpaid or unsatisfied, any of the Commitments remain in
effect or the Credit Facility has not been terminated.
SECTION 14.15 Survival of Indemnities. Notwithstanding any termination of
this Agreement, the indemnities to which the Administrative Agent and the
Lenders are entitled under the provisions of this Article XV and any other
provision of this Agreement and the other Loan Documents shall continue in full
force and effect and shall protect the Administrative Agent and the Lenders
against events arising after such termination as well as before.
SECTION 14.16 Titles and Captions. Titles and captions of Articles,
Sections and subsections in, and the table of contents of, this Agreement are
for convenience only, and neither limit nor amplify the provisions of this
Agreement.
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SECTION 14.17 Severability of Provisions. Any provision of this Agreement
or any other Loan Document which is prohibited or unenforceable in any
jurisdiction shall, as to such jurisdiction, be ineffective only to the extent
of such prohibition or unenforceability without invalidating the remainder of
such provision or the remaining provisions hereof or thereof or affecting the
validity or enforceability of such provision in any other jurisdiction.
SECTION 14.18 Counterparts. This Agreement may be executed in any number
of counterparts and by different parties hereto in separate counterparts, each
of which when so executed shall be deemed to be an original and shall be binding
upon all parties, their successors and assigns, and all of which taken together
shall constitute one and the same agreement.
SECTION 14.19 Term of Agreement. This Agreement shall remain in effect
from the Closing Date through and including the date upon which all Obligations
arising hereunder or under any other Loan Document shall have been indefeasibly
and irrevocably paid and satisfied in full and all Commitments have been
terminated. The Administrative Agent is hereby permitted to release all Liens on
the Collateral in favor of the Administrative Agent, for the ratable benefit of
itself and the Lenders, upon repayment of the outstanding principal of and all
accrued interest on the Loans, payment of all outstanding fees and expenses
hereunder and the termination of the Lender's Commitments. No termination of
this Agreement shall affect the rights and obligations of the parties hereto
arising prior to such termination or in respect of any provision of this
Agreement which survives such termination.
SECTION 14.20 Advice of Counsel. Each of the parties represents to each
other party hereto that it has discussed this Agreement with its counsel.
SECTION 14.21 No Strict Construction. The parties hereto have participated
jointly in the negotiation and drafting of this Agreement. In the event an
ambiguity or question of intent or interpretation arises, this Agreement shall
be construed as if drafted jointly by the parties hereto and no presumption or
burden of proof shall arise favoring or disfavoring any party by virtue of the
authorship of any provisions of this Agreement.
SECTION 14.22 Inconsistencies with Other Documents; Independent Effect of
Covenants.
(a) In the event there is a conflict or inconsistency between this
Agreement and any other Loan Document, the terms of this Agreement shall
control; provided, that any provision of the Security Documents which imposes
additional burdens on the Borrower or its Subsidiaries or further restricts the
rights of the Borrower or its Subsidiaries or gives the Administrative Agent or
Lenders additional rights shall not be deemed to be in conflict or inconsistent
with this Agreement and shall be given full force and effect.
(b) The Borrower expressly acknowledges and agrees that each covenant
contained in Articles IX, X, or XI hereof shall be given independent effect.
Accordingly, the Borrower shall not engage in any transaction or other act
otherwise permitted under any covenant contained in Articles IX, X, or XI if,
before or after giving effect to such transaction or act, the Borrower shall or
would be in breach of any other covenant contained in Articles IX, X, or XI.
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[Signature pages to follow]
103
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed under seal by their duly authorized officers, all as of the day and
year first written above.
[CORPORATE SEAL] DRS TECHNOLOGIES, INC., as Borrower
By: /s/ Xxxx X. Xxxxxx
-------------------------------
Name: Xxxx X. Xxxxxx
Title: Chairman of the Board
CEO & President
FIRST UNION NATIONAL BANK,
as Administrative Agent and Lender
By: /s/ Xxxxx Xxxxxxxx
------------------------------
Name: Xxxxx Xxxxxxxx
Title: Director
[ADDITIONAL LENDERS], as Lender
By: __________________________________
Name: ___________________________
Title: ___________________________
ACKNOWLEDGED AND AGREED: [SUBSIDIARY GUARANTORS],
as Subsidiary Guarantor
By: __________________________________
Name: ___________________________
Title: ___________________________
================================================================================
CREDIT AGREEMENT
dated as of September 28, 2001,
by and among
DRS TECHNOLOGIES, INC.,
as Borrower,
the Lenders referred to herein,
FIRST UNION NATIONAL BANK,
as Administrative Agent,
TD SECURITIES (USA) INC.,
as Syndication Agent
and
MELLON BANK, N.A.,
as Documentation Agent
================================================================================
FIRST UNION SECURITIES, INC.,
as Co-Lead Arranger and Book Manager,
and
MELLON BANK, N.A.,
as Co-Lead Arranger
TABLE OF CONTENTS
ARTICLE I DEFINITIONS............................................................................. 1
SECTION 1.1 Definitions................................................................... 1
SECTION 1.2 General....................................................................... 22
SECTION 1.3 Other Definitions and Provisions.............................................. 22
ARTICLE II REVOLVING CREDIT FACILITY.............................................................. 22
SECTION 2.1 Revolving Credit Loans........................................................ 22
SECTION 2.2 Swingline Loans............................................................... 23
SECTION 2.3 Procedure for Advances of Revolving Credit and Swingline Loans................ 24
SECTION 2.4 Repayment of Loans............................................................ 25
SECTION 2.5 Notes......................................................................... 27
SECTION 2.6 Permanent Reduction of the Revolving Credit Commitment........................ 27
SECTION 2.7 Termination of Revolving Credit Facility...................................... 28
ARTICLE III LETTER OF CREDIT FACILITY............................................................. 28
SECTION 3.1 L/C Commitment................................................................ 28
SECTION 3.2 Procedure for Issuance of Letters of Credit................................... 28
SECTION 3.3 Commissions and Other Charges................................................. 29
SECTION 3.4 L/C Participations............................................................ 29
SECTION 3.5 Reimbursement Obligation of the Borrower...................................... 30
SECTION 3.6 Obligations Absolute.......................................................... 31
SECTION 3.7 Effect of Application......................................................... 31
SECTION 3.8 Existing Foreign Currency Letters of Credit................................... 32
ARTICLE IV TERM LOAN FACILITY..................................................................... 32
SECTION 4.1 Term Loans.................................................................... 32
SECTION 4.2 Procedure for Advance of Term Loan............................................ 32
SECTION 4.3 Repayment of Term Loan........................................................ 32
SECTION 4.4 Prepayments of Term Loan...................................................... 33
SECTION 4.5 Term Notes.................................................................... 36
SECTION 4.6 Optional Increase In Term Loan Commitment..................................... 36
ARTICLE V GENERAL LOAN PROVISIONS................................................................. 38
SECTION 5.1 Interest...................................................................... 38
SECTION 5.2 Notice and Manner of Conversion or Continuation of Loans...................... 41
SECTION 5.3 Fees.......................................................................... 42
SECTION 5.4 Manner of Payment............................................................. 42
SECTION 5.5 Crediting of Payments and Proceeds............................................ 43
SECTION 5.6 Adjustments................................................................... 43
SECTION 5.7 Nature of Obligations of Lenders Regarding Extensions of Credit; Assumption
i
by the Administrative Agent .................................................. 43
SECTION 5.8 Changed Circumstances......................................................... 44
SECTION 5.9 Indemnity..................................................................... 46
SECTION 5.10 Capital Requirements.......................................................... 47
SECTION 5.11 Taxes......................................................................... 47
SECTION 5.12 Security...................................................................... 49
ARTICLE VI CLOSING; CONDITIONS OF CLOSING AND BORROWING........................................... 50
SECTION 6.1 Closing....................................................................... 50
SECTION 6.2 Conditions to Closing and Initial Extensions of Credit........................ 50
SECTION 6.3 Conditions to All Extensions of Credit........................................ 55
ARTICLE VII REPRESENTATIONS AND WARRANTIES OF THE BORROWER........................................ 55
SECTION 7.1 Representations and Warranties................................................ 55
SECTION 7.2 Survival of Representations and Warranties, Etc............................... 63
ARTICLE VIII FINANCIAL INFORMATION AND NOTICES.................................................... 63
SECTION 8.1 Financial Statements and Projections.......................................... 63
SECTION 8.2 Officer's Compliance Certificate.............................................. 64
SECTION 8.3 Accountants' Certificate...................................................... 64
SECTION 8.4 Other Reports................................................................. 65
SECTION 8.5 Notice of Litigation and Other Matters........................................ 66
SECTION 8.6 Accuracy of Information....................................................... 67
ARTICLE IX AFFIRMATIVE COVENANTS.................................................................. 67
SECTION 9.1 Preservation of Corporate Existence and Related Matters....................... 67
SECTION 9.2 Maintenance of Property....................................................... 67
SECTION 9.3 Insurance..................................................................... 67
SECTION 9.4 Accounting Methods and Financial Records...................................... 68
SECTION 9.5 Payment and Performance of Obligations........................................ 68
SECTION 9.6 Compliance With Laws and Approvals............................................ 68
SECTION 9.7 Environmental Laws............................................................ 68
SECTION 9.8 Compliance with ERISA......................................................... 68
SECTION 9.9 Compliance With Agreements.................................................... 69
SECTION 9.10 Inspection of Property; Books and Records; Discussions........................ 69
SECTION 9.11 Additional Subsidiaries....................................................... 70
SECTION 9.12 Reserved...................................................................... 72
SECTION 9.13 Use of Proceeds............................................................... 72
SECTION 9.14 Conduct of Business........................................................... 72
SECTION 9.15 Account Designation........................................................... 72
SECTION 9.16 Debt Rating................................................................... 72
SECTION 9.17 Existing Letters of Credit.................................................... 72
SECTION 9.18 Further Assurances............................................................ 72
ii
ARTICLE X FINANCIAL COVENANTS..................................................................... 72
SECTION 10.1 Maximum Total Leverage Ratio.................................................. 73
SECTION 10.2 Minimum Fixed Charge Coverage Ratio........................................... 73
SECTION 10.3 Maximum Capital Expenditures.................................................. 74
ARTICLE XI NEGATIVE COVENANTS..................................................................... 74
SECTION 11.1 Limitations on Debt........................................................... 75
SECTION 11.2 Limitations on Liens.......................................................... 76
SECTION 11.3 Limitations on Loans, Advances, Investments and Acquisitions.................. 77
SECTION 11.4 Limitations on Mergers and Liquidation........................................ 79
SECTION 11.5 Limitations on Sale of Assets................................................. 80
SECTION 11.6 Limitations on Dividends and Distributions.................................... 81
SECTION 11.7 Limitations on Exchange and Issuance of Capital Stock......................... 81
SECTION 11.8 Transactions with Affiliates.................................................. 81
SECTION 11.9 Certain Accounting Changes; Organizational Documents.......................... 81
SECTION 11.10 Amendments; Payments and Prepayments of Subordinated Debt..................... 81
SECTION 11.11 Amendments, Consents and Waivers under Asset Purchase Agreement............... 82
SECTION 11.12 Restrictive Agreements........................................................ 82
SECTION 11.13 Nature of Business............................................................ 82
SECTION 11.14 Limitation on Bonding Obligations............................................. 82
SECTION 11.15 Impairment of Security Interests.............................................. 82
ARTICLE XII DEFAULT AND REMEDIES.................................................................. 82
SECTION 12.1 Events of Default............................................................. 82
SECTION 12.2 Remedies...................................................................... 85
SECTION 12.3 Rights and Remedies Cumulative; Non-Waiver; etc............................... 86
ARTICLE XIII THE ADMINISTRATIVE AGENT............................................................. 87
SECTION 13.1 Appointment................................................................... 87
SECTION 13.2 Delegation of Duties.......................................................... 87
SECTION 13.3 Exculpatory Provisions........................................................ 87
SECTION 13.4 Reliance by the Administrative Agent.......................................... 88
SECTION 13.5 Notice of Default............................................................. 88
SECTION 13.6 Non-Reliance on the Administrative Agent and Other Lenders.................... 88
SECTION 13.7 Indemnification............................................................... 89
SECTION 13.8 The Administrative Agent in Its Individual Capacity........................... 89
SECTION 13.9 Resignation of the Administrative Agent; Successor Administrative Agent....... 90
SECTION 13.10 Trustee Powers................................................................ 90
SECTION 13.11 Documentation and Syndication Agent........................................... 91
ARTICLE XIV MISCELLANEOUS......................................................................... 91
SECTION 14.1 Notices....................................................................... 91
SECTION 14.2 Expenses; Indemnity........................................................... 92
SECTION 14.3 Set-off....................................................................... 93
iii
SECTION 14.4 Governing Law................................................................. 93
SECTION 14.5 Jurisdiction and Venue........................................................ 93
SECTION 14.6 Binding Arbitration; Waiver of Jury Trial..................................... 94
SECTION 14.7 Reversal of Payments.......................................................... 95
SECTION 14.8 Injunctive Relief; Punitive Damages........................................... 95
SECTION 14.9 Accounting Matters............................................................ 95
SECTION 14.10 Successors and Assigns; Participations........................................ 96
SECTION 14.11 Amendments, Waivers and Consents.............................................. 100
SECTION 14.12 Performance of Duties......................................................... 101
SECTION 14.13 Syndication of Credit Facility................................................ 101
SECTION 14.14 All Powers Coupled with Interest.............................................. 101
SECTION 14.15 Survival of Indemnities....................................................... 101
SECTION 14.16 Titles and Captions........................................................... 101
SECTION 14.17 Severability of Provisions.................................................... 102
SECTION 14.18 Counterparts.................................................................. 102
SECTION 14.19 Term of Agreement............................................................. 102
SECTION 14.20 Advice of Counsel............................................................. 102
SECTION 14.21 No Strict Construction........................................................ 102
SECTION 14.22 Inconsistencies with Other Documents; Independent Effect of Covenants......... 102
iv
EXHIBITS
Exhibit A-1 - Form of Revolving Credit Note
Exhibit A-2 - Form of Swingline Note
Exhibit A-3 - Form of Term Note
Exhibit B - Form of Notice of Borrowing
Exhibit C - Form of Notice of Account Designation
Exhibit D - Form of Notice of Prepayment
Exhibit E - Form of Notice of Conversion/Continuation
Exhibit F - Form of Officer's Compliance Certificate
Exhibit G - Form of Assignment and Acceptance
Exhibit H - Form of Subsidiary Guaranty Agreement
Exhibit I - Form of Collateral Agreement
Exhibit J - Form of Lender Addition and Acknowledgment
Exhibit K - Form of Borrowing Base Certificate
Exhibit L - Form of Pledge Agreement
SCHEDULES
Schedule 1 - Lenders and Commitments
Schedule 2 - Unrestricted Subsidiaries
Schedule 6.2(c)(v) - Environmental Reports
Schedule 7.1(a) - Jurisdictions of Organization and Qualification
Schedule 7.1(b) - Subsidiaries and Capitalization
Schedule 7.1(i) - ERISA Plans
Schedule 7.1(l) - Material Contracts
Schedule 7.1(m) - Labor and Collective Bargaining Agreements
Schedule 7.1(r) - Owned and Leased Real Property
Schedule 7.1(t) - Debt, Guaranty and Bonding Obligations
Schedule 7.1(u) - Litigation
Schedule 11.2 - Existing Liens
Schedule 11.3 - Existing Loans, Advances and Investments
v
FIRST AMENDMENT
March 26, 2002
First Union National Bank, as Administrative Agent
Attn: Xxxxxxx Xxx Xxxxxxx
NC-0760
000 Xxxxx Xxxxxxx Xxxxxx
Xxxxxxxxx, XX 00000-0000
Re: Credit Agreement dated as of September 28, 2001 among DRS
Technologies, Inc. (the "Company"), the Lenders party thereto, and First
Union National Bank, as Administrative Agent (as amended hereby and as
further amended, restated, supplemented or otherwise modified from time to
time, the "Credit Agreement").
In your capacity as Administrative Agent under the Credit Agreement, you
have informed us that the Company has requested to amend Section 8.1(c) of the
Credit Agreement by deleting the phrase "thirty (30) days prior to" in the first
sentence of such Section and inserting the phrase "forty-five (45) days
following" in lieu thereof.
By executing this First Amendment in the space below, the undersigned
hereby consents to amend the Credit Agreement as provided herein. Upon consent
by the Required Lenders, this First Amendment shall have an effective date of
January 1, 2002. Please deliver an executed copy of this First Amendment via fax
to Xxxxx Xxxxx at Kennedy, Covington, Xxxxxxx & Xxxxxxx, L.L.P. (704-331-7598)
no later than Tuesday, April 2, 2002.
______________________________________
[Insert name of financial institution]
By:___________________________________
Name: ________________________________
Title:________________________________
SECOND AMENDMENT, WAIVER AND CONSENT TO THE
CREDIT AGREEMENT
THIS SECOND AMENDMENT, WAIVER AND CONSENT TO THE CREDIT AGREEMENT (this
"Agreement") is made and entered into as of this 23rd day of May, 2002,
effective in accordance with Section 5 below, by and among DRS TECHNOLOGIES,
INC., a Delaware corporation (the "Borrower"), the financial institutions from
time to time party to the Credit Agreement referred to below (the "Lenders") and
WACHOVIA BANK, NATIONAL ASSOCIATION (formerly known as First Union National
Bank), a national banking association, as Administrative Agent for the Lenders
(the "Administrative Agent").
Statement of Purpose
The Borrower, the Lenders and the Administrative Agent are parties to a
Credit Agreement dated as of September 28, 2001 (as amended by the First
Amendment, dated as of March 26, 2002, as amended hereby, and as may be further
amended, restated, supplemented or otherwise modified from time to time, the
"Credit Agreement"), by and among the Borrower, the Lenders, the Administrative
Agent, TD Securities (USA) Inc., as Syndication Agent and Mellon Bank, N.A., as
Documentation Agent pursuant to which the Lenders have extended certain credit
facilities to the Borrowers;
DRS Air, Inc. (now known as DRS Unmanned Technologies, Inc.), an
Unrestricted Subsidiary of the Borrower, acquired assets of Meggitt Defense
Systems, Inc., a Texas corporation (the "Acquisition") for a purchase price of
$750,000 pursuant to the Asset Sale Purchase Agreement dated as April 4, 2002 by
and among DRS Air, Inc., as Buyer, Meggitt Defense Systems, Inc., as Seller and
Meggitt-USA Inc., as Parent. The funding for the Acquisition (the "Acquisition
Funding") was provided to DRS Air, Inc. by the Borrower or one of its Restricted
Subsidiaries.
DRS Data Systems, Inc., a Restricted Subsidiary of the Borrower desires to
sell its remaining assets (the "Data Asset Sale") to members of its management
in exchange for a promissory note (the "Seller Note") in the amount of
$2,813,000 as such amount may be adjusted in accordance with the terms contained
in the definitive asset sale agreement. Although the Data Asset Sale is
contemplated by Section 11.5(e) of the Credit Agreement, Section 11.8 of the
Credit Agreement prohibits transactions with Affiliates unless prior written
approval is given by the Required Lenders and Section 11.3 of the Credit
Agreement prohibits the Borrower and its Restricted Subsidiaries from making the
loan contemplated by the Seller Note without the consent of the Required
Lenders.
The Borrower has requested that the Lenders (a) waive the Default and
Event of Default resulting from the breach of Section 11.3 of the Credit
Agreement on account of the Acquisition Funding, (b) consent to the Borrower's
sale of certain assets of DRS Data Systems, Inc. to an Affiliate of the Borrower
and to the financing of the Data Asset Sale with the Seller Note, and (c) amend
the Credit Agreement in certain respects as more fully described below;
Subject to the terms and conditions of this Agreement, the Administrative
Agent and the Lenders are willing to agree to the requested waivers, consents
and amendments;
NOW THEREFORE, for good and valuable consideration, the receipt and
adequacy of which is hereby acknowledged, the parties hereto agree as follows:
SECTION 1. Definitions. All capitalized, undefined terms used in this
Agreement shall have the meanings assigned thereto in the Credit Agreement.
SECTION 2. Waiver. Pursuant to Section 14.11 of the Credit Agreement and
effective as of the date upon which the conditions specified in Section 5 below
are satisfied, the Administrative Agent and the Lenders hereby waive any breach
that may have occurred under Section 11.3 of the Credit Agreement on account of
the Acquisition Funding.
SECTION 3. Consent. Pursuant to Section 14.11 of the Credit Agreement and
effective as of the date upon which the conditions specified in Section 5 below
are satisfied, the Administrative Agent and the Lenders hereby consent to the
Data Asset Sale and the loan contemplated by the Seller Note notwithstanding the
applicable provisions of Section 11.3 of the Credit Agreement or applicable
provisions of Section 11.8 of the Credit Agreement. Furthermore, the Lenders
hereby agree that the Seller Note shall not be applied against the $5,000,000
basket set forth in Section 11.3(j) of the Credit Agreement.
SECTION 4. Amendments. Pursuant to Section 14.11 of the Credit Agreement
and effective as of the date upon which the conditions specified in Section 5
below are satisfied, the Administrative Agent and the Lenders hereby:
(a) Amendment of Section 3.1. Amend Section 3.1 "L/C Commitment", by
adding the phrase "or in an amount less than $100,000 if approved in writing by
the Administrative Agent in its sole discretion" between the phrase "in a
minimum amount of $100,000" and the parenthetical in clause (i) of the second
sentence of Section 3.1.
(b) Amendment of Section 11.8. Amend Section 11.8 "Transactions with
Affiliates", by replacing the words "the Required Lenders" contained therein
with the following: "(i) the Administrative Agent; provided that the aggregate
of all such transactions approved by the Administrative Agent does not exceed
$5,000,000, (ii) the Required Lenders, if the aggregate of all such transactions
exceeds $5,000,000,".
SECTION 5. Effectiveness.
(a) Consents. Each consent set forth in Section 3 shall become
effective on the date hereof.
(b) Waiver and Amendments. The waiver set forth in Section 2 and
each amendment set forth in Section 4 of this Agreement shall become effective
upon (i) the receipt by the Administrative Agent of a duly authorized and
executed original of this Agreement by the parties hereto, (ii) the Borrower's
payment of all outstanding fees and expenses of the
2
Administrative Agent (including without limitation, legal fees and expenses)
incurred in connection with the preparation and negotiation of this Agreement
and all documents, certificates and other instruments delivered in connection
therewith, (iii) the receipt by the Administrative Agent, in form and substance
satisfactory to the Administrative Agent, of the final definitive asset sale
agreement (including all schedules and exhibits thereto) and all related
transaction documents with respect to the Data Asset Sale, (iv) the receipt by
the Administrative Agent, in form and substance satisfactory to the
Administrative Agent, of the final definitive acquisition agreement (including
all schedules and exhibits thereto) and all related transaction documents with
respect to the Acquisition, (v) the receipt by the Administrative Agent of the
original Seller Note along with all necessary endorsements, and (vi) the receipt
by the Administrative Agent of written notice by the Borrower of its intention
to designate DRS Unmanned Technologies, Inc. as a Restricted Subsidiary pursuant
to Section 9.11.
SECTION 6. Post-Closing Conditions.
(a) The Administrative Agent shall have received any other agreement
or document required to be delivered in accordance with Section 9.11 of the
Credit Agreement (including, without limitation, any other agreement or document
required to be delivered in connection with any Loan Document). Notwithstanding
any timing requirement set forth in Section 9.11(a) to the contrary, the
Borrower shall cause DRS Unmanned Technologies, Inc. to be redesignated as a
Restricted Subsidiary within forty-five (45) days of the effectiveness of this
Agreement or within such time as may be reasonably determined by the
Administrative Agent, provided that such time shall not exceed sixty (60) days
after the effectiveness of this Agreement without the approval of the Required
Lenders.
(b) The Administrative Agent shall have received, within forty-five
(45) days of the effectiveness of this Agreement or within such time as may be
reasonably determined by the Administrative Agent, provided that such time shall
not exceed sixty (60) days after the effectiveness of this Agreement without the
approval of the Required Lenders, duly authorized, executed and delivered copies
of such additional certificates, instruments and other documents in connection
with the Data Asset Sale (including, without limitation, collateral assignments
of representations, warranties, payment rights and security interests) (each in
form and substance satisfactory thereto) as are reasonably requested by the
Administrative Agent to create and perfect a security interest, for the ratable
benefit of the Administrative Agent and the Lenders, in all of the Borrower's
rights to receive payments under the Data Asset Sale to secure its Obligations
under the Credit Agreement.
(c) The Administrative Agent shall have received, within forty-five
(45) days of the effectiveness of this Agreement or within such time as may be
reasonably determined by the Administrative Agent, provided that such time shall
not exceed sixty (60) days after the effectiveness of this Agreement without the
approval of the Required Lenders, duly authorized, executed and delivered copies
of such additional certificates, instruments and other documents in connection
with the Acquisition (including, without limitation, a collateral assignment of
representations, warranties, payment rights and security interests) (each in
form and substance satisfactory thereto) as are reasonably requested by the
Administrative Agent to create and perfect a security interest, for the ratable
benefit of the Administrative Agent and the Lenders, in all of the
3
Borrower's rights to receive payments under the Acquisition to secure its
Obligations under the Credit Agreement.
SECTION 7. Limited Waiver, Consent and Amendment. Except as expressly
provided in this Agreement, the Credit Agreement and each other Loan Document
shall continue to be, and shall remain, in full force and effect. This Agreement
shall not be deemed or otherwise construed (a) to be a waiver of, or consent to
or a modification or amendment of, any other term or condition of the Credit
Agreement or any other Loan Document, (b) to prejudice any other right or
remedies that the Administrative Agent or the Lenders, or any of them, may now
have or may have in the future under or in connection with the Credit Agreement
or the Loan Documents, as such documents may be amended, restated or otherwise
modified from time to time, (c) to be a commitment or any other undertaking or
expression of any willingness to engage in any further discussion with the
Borrower or any other person, firm or corporation with respect to any waiver,
amendment, modification or any other change to the Credit Agreement or the Loan
Documents or any rights or remedies arising in favor of the Lenders or the
Administrative Agent, or any of them, under or with respect to any such
documents or (d) to be a waiver of, or consent to or a modification or amendment
of, any other term or condition of any other agreement by and among the
Borrower, on the one hand, and the Administrative Agent or any other Lender, on
the other hand.
SECTION 8. Representations and Warranties/No Default. By its execution
hereof, and after giving effect to this Agreement, the Borrower hereby certifies
that (a) each of the representations and warranties set forth in the Credit
Agreement and the other Loan Documents is true and correct as of the date hereof
as if fully set forth herein (other than representations and warranties which
speak as of a specific date pursuant to the Credit Agreement, which
representations and warranties shall have been true and correct as of such
specific dates) and that as of the date hereof (after giving effect to the
provisions of this Agreement) no Default or Event of Default, other than as
specifically waived hereby, has occurred and is continuing, (b) each of the
representations and warranties set forth in the Credit Agreement and the other
Loan Documents will be true and correct as of the date hereof as if fully set
forth herein (other than representations and warranties which speak as of a
specific date pursuant to the Credit Agreement, which representations and
warranties shall have been true and correct as of such specific dates) and that
as of the date hereof (after giving effect to the provisions of this Agreement)
no Default or Event of Default, other than as specifically waived hereby, will
have occurred and be continuing and (c) the execution, delivery and performance
of this Agreement have been authorized by all requisite corporate action on the
part of the Borrower.
SECTION 9. Confirmation of all Loan Documents. The Borrower hereby
expressly consents to the consents, releases, modifications and amendments set
forth in this Agreement. The Borrower hereby (a) reaffirms all of its respective
covenants, representations, warranties and other obligations set forth in the
Credit Agreement, the Collateral Agreement and the other Loan Documents to which
it is a party and (b) acknowledges, represents and agrees that its respective
covenants, representations, warranties and other obligations set forth in the
Credit Agreement, the Collateral Agreement and the other Loan Documents to which
it is a party remain in full force and effect
4
SECTION 10. Expenses. The Borrower shall pay all reasonable out-of-pocket
expenses of the Administrative Agent in connection with the preparation,
execution and delivery of this Agreement, including, without limitation, the
reasonable fees and disbursements of counsel for the Administrative Agent.
SECTION 11. Governing Law. This Agreement, the Notes and the other Loan
Documents, unless otherwise expressly set forth therein, shall be governed by,
construed and enforced in accordance with the laws of the State of New York
(including Section 5-1401 and Section 5-1402 of the General Obligations Law of
the State of New York), without regard to the conflicts of law provisions of
such state.
SECTION 12. Counterparts. This Agreement may be executed in separate
counterparts, each of which when executed and delivered is an original but all
of which taken together constitute one and the same instrument.
[Signature Pages Follow]
5
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed under seal by their duly authorized representatives, all as of the
day and year first above written.
[CORPORATE SEAL] DRS TECHNOLOGIES, INC., as Borrower
By: __________________________________
Name: ___________________________
Title: ___________________________
WACHOVIA BANK, NATIONAL ASSOCIATION
(formerly known as First Union
National Bank), as Administrative
Agent and Lender, on behalf of itself
and the Required Lenders at the
direction of the Required Lenders
By: __________________________________
Name: ___________________________
Title: ___________________________
THIRD AMENDMENT AND CONSENT TO THE
CREDIT AGREEMENT
THIS THIRD AMENDMENT AND CONSENT TO THE CREDIT AGREEMENT (this
"Agreement") is made and entered into as of this 15th day of July, 2002, with an
effective date determined (the "Effective Date") in accordance with Section 4
below, by and among DRS TECHNOLOGIES, INC., a Delaware corporation (the
"Borrower"), the financial institutions from time to time party to the Credit
Agreement referred to below (the "Lenders") and WACHOVIA BANK, NATIONAL
ASSOCIATION (formerly known as First Union National Bank), a national banking
association, as Administrative Agent for the Lenders (the "Administrative
Agent").
Statement of Purpose
The Borrower, the Lenders and the Administrative Agent are parties to a
Credit Agreement dated as of September 28, 2001 (as amended by the First
Amendment, dated as of March 26, 2002, as amended by the Second Amendment,
Waiver and Consent dated as of May 23, 2002, and as may be further amended,
restated, supplemented or otherwise modified from time to time, the "Credit
Agreement"), by and among the Borrower, the Lenders, the Administrative Agent,
TD Securities (USA) Inc., as Syndication Agent and Mellon Bank, N.A., as
Documentation Agent pursuant to which the Lenders have extended certain credit
facilities to the Borrowers.
The Borrower has signed an agreement to acquire the Navy Controls Division
of Xxxxx Corp. for an approximate purchase price of $92,200,000 pursuant to the
Purchase Agreement dated as of May 24, 2002 by and between the Borrower and
Xxxxx Corporation and as more fully described in Annex A attached hereto (the
"NCD Acquisition"). In addition to the foregoing, during the fourth quarter of
the Fiscal Year ended March 31, 2002, Borrower reached a settlement agreement
with the federal government in connection with United States x. Xxxxx. The
settlement involved, among other things, a payment to the federal government of
$2,500,000 by DRS Photronics, Inc. (the "Settlement").
The Borrower has requested that the Lenders (a) consent to the NCD
Acquisition, (b) consent to Borrower adding $2,500,000 to its EBITDA
calculations for each quarter of the current Fiscal Year to account for the
Settlement and (c) amend the Credit Agreement in certain respects as more fully
described below;
Subject to the terms and conditions of this Agreement, the Administrative
Agent and the Lenders are willing to agree to the requested consent and
amendments;
NOW THEREFORE, for good and valuable consideration, the receipt and
adequacy of which is hereby acknowledged, the parties hereto agree as follows:
SECTION 1. Definitions. All capitalized, undefined terms used in this
Agreement shall have the meanings assigned thereto in the Credit Agreement.
SECTION 2. Consent.
(a) Pursuant to Section 14.11 of the Credit Agreement and effective
as of the Effective Date, the Administrative Agent and the Lenders hereby
consent to the NCD Acquisition.
(b) The Lenders hereby consent to the addition of $2,500,000 to the
EBITDA calculations of the Borrower for each fiscal quarter of the current
Fiscal Year.
SECTION 3. Amendments. Pursuant to Section 14.11 of the Credit Agreement,
the Credit Agreement is hereby amended as follows (which amendments shall become
effective from and after the Effective Date):
(a) Amendment to Exhibits. The Exhibits to the Credit Agreement are
hereby amended by inserting Exhibit K-2 titled "Form of Asset Coverage Ratio
Certificate", a copy of which is attached hereto.
(b) Amendment to Exhibit K. Exhibit K to the Credit Agreement, "Form
of Borrowing Base Certificate", is hereby redesignated as "Exhibit K-1" and all
references in any Loan Document to "Exhibit K" is deemed to refer to "Exhibit
K-1".
(c) Amendments to Definitions. Section 1.1 of the Credit Agreement
is hereby amended by adding or amending, as applicable, the following defined
terms (in alphabetical order):
"Asset Coverage Ratio Certificate" means the certificate
delivered by the Borrower substantially in the form of Exhibit
K-2.
"L/C Commitment" means Seventy-Five Million Dollars
($75,000,000)."
"Third Amendment and Consent" means the Third Amendment and
Consent to the Credit Agreement dated as of June 28, 2002.
"Third Amendment Effective Date" means June 28, 2002.
(d) Amendment to Section 2.4(b)(i). Section 2.4(b)(i) of the Credit
Agreement is hereby amended by replacing the term "Borrowing Base Certificate"
located in the second line of such subsection with the term "Asset Coverage
Ratio Certificate".
(e) Amendment to Section 8.4(b). Section 8.4(b) of the Credit
Agreement is hereby deleted in its entirety and the following is substituted in
lieu thereof:
"(b) Borrowing Base Certificate; Asset Coverage Ratio
Certificate.
(i) Borrowing Base Certificate. As soon as available,
but in any event within twenty-five (25) days after the end of
each calendar
2
month (and, upon the occurrence and during the continuation of
an Event of Default, on a more frequent basis if requested by
the Administrative Agent or at such other times as required
pursuant to the terms of this Agreement) a Borrowing Base
Certificate; provided, that so long as the rating on the debt
of the Borrower under this Agreement is "BB-" or better by
Standard & Poor's Corporation and "Ba3" or better by Xxxxx'x
Investors Service, the Borrower's obligation to deliver the
Borrowing Base Certificate shall be suspended. Such suspension
shall be immediately terminated upon a downgrade of the rating
on debt issued pursuant to this Agreement and a Borrowing Base
Certificate shall be promptly delivered on the earlier to
occur of (i) five (5) days after such downgrade or (ii)
twenty-five (25) days after the end of the most recent
calendar month.
(ii) Asset Coverage Ratio Certificate. As soon as
available, but in any event within twenty-five (25) days after
the end of each calendar month (and, upon the occurrence and
during the continuation of an Event of Default, on a more
frequent basis if requested by the Administrative Agent or at
such other times as required pursuant to the terms of this
Agreement), an Asset Coverage Ratio Certificate which shall
include a calculation of the Asset Coverage Ratio as of such
date."
(f) Amendment to Section 8.4(c) and (d). Subsections (c) and (d) of
Section 8.4 are hereby amended by replacing each occurrence of the phrase "each
calendar month" with the phrase "each fiscal quarter of each Fiscal Year".
(g) Amendment to Section 10.3. Section 10.3 of the Credit Agreement
is hereby deleted in its entirety and the following is substituted in lieu
thereof:
"Maximum Capital Expenditures. Permit Capital Expenditures during
any Fiscal Year to exceed an aggregate amount of Thirty-Five Million
Dollars ($35,000,000). Notwithstanding the foregoing, the maximum
amount of Capital Expenditures permitted by this Section 10.3 in any
Fiscal Year shall be increased by an amount equal to the lesser of
(a) $5,000,000 and (b) the excess of (i) the amount of Capital
Expenditures that were permitted to be made under this Section 10.3
in the immediately preceding Fiscal Year (without giving effect to
any carryover amount from prior Fiscal Years) over (ii) the amount
of Capital Expenditures actually made during such preceding Fiscal
Year."
(h) Amendment to Section 11.1(d). Section 11.1(d) of the Credit
Agreement is hereby amended by replacing the dollar amount of "$5,000,000"
located in the second line of such subsection with the dollar amount of
"$15,000,000".
(i) Amendment to Section 11.3(d).
3
(i) Section 11.3(d)(v) is hereby amended by deleting
subsection "(D)" within such section and substituting in lieu thereof the
following:
"(D) a pro forma Maximum Total Leverage Ratio (as of the date of the
proposed acquisition and after giving effect thereto and any
Extensions of Credit made or to be made in connection therewith) at
least 0.25 below the applicable ratio set forth in Section 10.1, and
no Default or Event of Default shall have occurred and be continuing
both before and after giving effect to the acquisition;"
(ii) Section 11.3(d)(vi) of the Credit Agreement is hereby amended
by replacing "Section 8.11" with "Section 9.11" located in the third and
fourth lines of such subsection.
(j) Amendments to Section 11.5(f). Section 11.5(f) of the Credit
Agreement is hereby amended by: (i) replacing the dollar amount of "$2,000,000"
in the fifth line thereof with the dollar amount of "$25,000,000", (ii)
replacing "Section 11,5" with "Section 11.5" located in the third line of such
subsection and (iii) replacing the "; and" located at the end of such subsection
with ".".
(k) Amendment to Section 11.5(g). Section 11.5(g) of the Credit
Agreement is hereby deleted in its entirety.
SECTION 4. Effectiveness. This Agreement shall become effective upon (i)
the receipt by the Administrative Agent of a duly authorized and executed
original of this Agreement by the parties hereto, (ii) the receipt by the
Administrative Agent of a Borrowing Base Certificate dated as of the Effective
Date and after giving effect to the NCD Acquisition, (iii) the Borrower's
payment of all outstanding fees and expenses of the Administrative Agent
(including without limitation, legal fees and expenses) incurred in connection
with the preparation and negotiation of this Agreement and all documents,
certificates and other instruments delivered in connection therewith, (iv) the
Borrower's payment of all applicable amendment fees due and payable to the
Lenders executing this agreement on or before 5:00 P.M. (Eastern Time) on June
28, 2002 and (v) the receipt by the Administrative Agent of an executed
acquisition certificate with all attachments, in form and substance satisfactory
to the Administrative Agent, together with the final definitive acquisition
agreement (including all schedules and exhibits thereto) and all related
transaction documents with respect to the NCD Acquisition.
SECTION 5. Post-Closing Conditions. The Administrative Agent shall have
received, within forty-five (45) days of the effectiveness of this Agreement or
within such time as may be reasonably determined by the Administrative Agent;
provided that such time shall not exceed sixty (60) days after the effectiveness
of this Agreement without the approval of the Required Lenders, duly authorized,
executed and delivered copies of such additional certificates, instruments and
other documents in connection with the NCD Acquisition (including, without
limitation, each agreement or document required to be delivered in accordance
with Section 9.11 of the Credit Agreement and a collateral assignment of
representations, warranties, payment rights and security interests) (each in
form and substance satisfactory thereto) as are reasonably requested by the
Administrative Agent to create and perfect a security interest, for the ratable
benefit of the Administrative Agent and the Lenders, in all of the Borrower's
acquired assets and rights to receive payments under the NCD Acquisition to
secure its Obligations under the Credit Agreement.
4
SECTION 6. Limited Consent and Amendment. Except as expressly provided in
this Agreement, the Credit Agreement and each other Loan Document shall continue
to be, and shall remain, in full force and effect. This Agreement shall not be
deemed or otherwise construed (a) to be a waiver of, or consent to or a
modification or amendment of, any other term or condition of the Credit
Agreement or any other Loan Document, (b) to prejudice any other right or
remedies that the Administrative Agent or the Lenders, or any of them, may now
have or may have in the future under or in connection with the Credit Agreement
or the Loan Documents, as such documents may be amended, restated or otherwise
modified from time to time, (c) to be a commitment or any other undertaking or
expression of any willingness to engage in any further discussion with the
Borrower or any other person, firm or corporation with respect to any waiver,
amendment, modification or any other change to the Credit Agreement or the Loan
Documents or any rights or remedies arising in favor of the Lenders or the
Administrative Agent, or any of them, under or with respect to any such
documents or (d) to be a waiver of, or consent to or a modification or amendment
of, any other term or condition of any other agreement by and among the
Borrower, on the one hand, and the Administrative Agent or any other Lender, on
the other hand.
SECTION 7. Representations and Warranties/No Default. By its execution
hereof, and after giving effect to this Agreement, the Borrower hereby certifies
that (a) each of the representations and warranties set forth in the Credit
Agreement and the other Loan Documents is true and correct as of the date hereof
as if fully set forth herein (other than representations and warranties which
speak as of a specific date pursuant to the Credit Agreement, which
representations and warranties shall have been true and correct as of such
specific dates) and that as of the date hereof (after giving effect to the
provisions of this Agreement) no Default or Event of Default, other than as
specifically waived hereby, has occurred and is continuing, (b) each of the
representations and warranties set forth in the Credit Agreement and the other
Loan Documents will be true and correct as of the date hereof as if fully set
forth herein (other than representations and warranties which speak as of a
specific date pursuant to the Credit Agreement, which representations and
warranties shall have been true and correct as of such specific dates) and that
as of the date hereof (after giving effect to the provisions of this Agreement)
no Default or Event of Default, other than as specifically waived hereby, will
have occurred and be continuing and (c) the execution, delivery and performance
of this Agreement have been authorized by all requisite corporate action on the
part of the Borrower.
SECTION 8. Confirmation of all Loan Documents. The Borrower hereby
expressly consents to the consents, releases, modifications and amendments set
forth in this Agreement. The Borrower hereby (a) reaffirms all of its respective
covenants, representations, warranties and other obligations set forth in the
Credit Agreement, the Collateral Agreement and the other Loan Documents to which
it is a party and (b) acknowledges, represents and agrees that its respective
covenants, representations, warranties and other obligations set forth in the
Credit Agreement, the Collateral Agreement and the other Loan Documents to which
it is a party remain in full force and effect.
SECTION 9. Expenses. The Borrower shall pay all reasonable out-of-pocket
expenses of the Administrative Agent in connection with the preparation,
execution and delivery of
5
this Agreement, including, without limitation, the reasonable fees and
disbursements of counsel for the Administrative Agent.
SECTION 10. Governing Law. This Agreement, the Notes and the other Loan
Documents, unless otherwise expressly set forth therein, shall be governed by,
construed and enforced in accordance with the laws of the State of New York
(including Section 5-1401 and Section 5-1402 of the General Obligations Law of
the State of New York), without regard to the conflicts of law provisions of
such state.
SECTION 11. Counterparts. This Agreement may be executed in separate
counterparts, each of which when executed and delivered is an original but all
of which taken together constitute one and the same instrument.
6
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed under seal by their duly authorized representatives, all as of the
day and year first above written.
[CORPORATE SEAL] DRS TECHNOLOGIES, INC., as Borrower
By: __________________________________
Name: ___________________________
Title: ___________________________
WACHOVIA BANK, NATIONAL ASSOCIATION
(formerly known as First Union
National Bank), as Administrative
Agent and Lender, on behalf of itself
and the Required Lenders at the
direction of the Required Lenders
By: __________________________________
Name: ___________________________
Title: ___________________________
ACKNOWLEDGEMENT AND CONSENT
Dated as of June , 2002
The undersigned, as Guarantors under the Subsidiary Guaranty Agreement
dated September 28, 2001 (as amended or supplemented, the "Guaranty Agreement")
in favor of the Administrative Agent for the Lenders parties to the Credit
Agreement referred to in the foregoing Third Amendment and Consent to Credit
Agreement, hereby (a) consent to the said Third Amendment and Consent to Credit
Agreement, (b) acknowledge and hereby confirm and agree that the Guaranty
Agreement is, and shall continue to be, in full force and effect and are hereby
ratified and confirmed in all respects.
[CORPORATE SEAL] DRS TECHNOLOGIES CANADA, INC.
DRS INTERNATIONAL, INC.
DRS COMMUNICATIONS COMPANY, LLC
By: DRS Technologies, Inc., its
Sole Member and Manager
DRS INFRARED TECHNOLOGIES, LP
By: DRS FPA, Inc., its General
Partner
DRS FPA, INC.
as Guarantors
By: __________________________________
Name: ___________________________
Title: ___________________________
[CORPORATE SEAL] DRS ELECTRONIC SYSTEMS, INC.
DRS TECHNICAL SERVICES, INC.
LAUREL TECHNOLOGIES PARTNERSHIP
By: DRS Systems Management
Corporation, a General
Partner
RS SURVEILLANCE SUPPORT SYSTEMS, INC.
DRS SYSTEMS MANAGEMENT CORPORATION
NAI TECHNOLOGIES, INC.
as Guarantors
By: __________________________________
Name: ___________________________
Title: ___________________________
[CORPORATE SEAL] LAUREL TECHNOLOGIES PARTNERSHIP,
as Guarantor
By: Sunburst Management
Corporation, a General Partner
By: __________________________________
Name: ___________________________
Title: ___________________________
[CORPORATE SEAL] DRS PHOTRONICS, INC.
DRS PRECISION ECHO, INC.
as Guarantors
By: __________________________________
Name: ___________________________
Title: ___________________________
[CORPORATE SEAL] DRS OPTRONICS, INC.
DRS SENSOR SYSTEMS, INC.
DRS SENSORS & TARGETING SYSTEMS, INC.
as Guarantors
By: __________________________________
Name: ___________________________
Title: ___________________________
[CORPORATE SEAL] DRS DATA SYSTEMS, INC., as Guarantor
By: __________________________________
Name: ___________________________
Title: ___________________________
[CORPORATE SEAL] DRS ADVANCED PROGRAMS, INC.,
as Guarantor
By: __________________________________
Name: ___________________________
Title: ___________________________
[CORPORATE SEAL] DRS SYSTEMS, INC., as Guarantor
By: __________________________________
Name: ___________________________
Title: ___________________________
[CORPORATE SEAL] DRS UNMANNED TECHNOLOGIES, INC.,
as Guarantor
By: __________________________________
Name: ___________________________
Title: ___________________________
