[EXECUTION COPY]
AMENDED AND RESTATED CREDIT AGREEMENT,
dated as of June 9, 1999,
among
THE TITAN CORPORATION,
as the Borrower,
VARIOUS FINANCIAL INSTITUTIONS FROM TIME TO TIME
PARTIES HERETO,
as the Lenders,
THE BANK OF NOVA SCOTIA,
as Lead Arranger and as Administrative Agent for the Lenders,
and
IMPERIAL BANK,
as the Documentation Agent.
AMENDED AND RESTATED CREDIT AGREEMENT
THIS AMENDED AND RESTATED CREDIT AGREEMENT, dated as of June 9, 1999,
is among THE TITAN CORPORATION, a Delaware corporation (the "Borrower"), the
various financial institutions from time to time parties hereto (the "Lenders"),
THE BANK OF NOVA SCOTIA ("Scotiabank"), as Lead Arranger and as administrative
agent (in such capacity, the "Administrative Agent") for the Lenders, and
IMPERIAL BANK ("Imperial"), as documentation agent (in such capacity, the
"Documentation Agent").
W I T N E S S E T H:
WHEREAS, the Borrower, the Lenders, the Administrative Agent and the
Documentation Agent are parties to a Credit Agreement, dated as of July 29, 1998
(the "Existing Credit Agreement");
WHEREAS, the Borrower has requested that the Lenders amend and restate
the Existing Credit Agreement (the Existing Credit Agreement, as amended and
restated by this Agreement (such capitalized term, and other capitalized terms
used in these recitals, to have the meanings set forth in Section 1.1), being
referred to as the "Credit Agreement");
WHEREAS, under the Existing Credit Agreement, the Borrower obtained (a)
Revolving Loan Commitments, Letter of Credit Commitments and a Swing Line Loan
Commitment and (b) a Term Loan Commitment (as defined in the Existing Credit
Agreement) which Term Loan Commitment will be fully utilized as of the Effective
Date hereof for the purposes set forth therein which Commitments and Loans are
to be continued hereunder, subject to the terms of this Agreement;
WHEREAS, in connection with so amending and restating the Existing
Credit Agreement and at the time of the effectiveness of such amendment and
restatement, the Borrower desires to obtain from the Lenders subject to the
terms of this Agreement, (a) New Acquisition Loan Commitments to (i) finance the
Permitted Acquisitions, and (ii) pay related transaction fees and expenses and
(b) Term B Loan Commitments to (i) pay the consideration for the SRC
Acquisition, (ii) refinance certain Indebtedness of SRC, (iii) repay a portion
of the outstanding Existing Revolving Loans of the Borrower, and (iv) pay
related fees and expenses;
WHEREAS, the Lenders are willing, on the terms and subject to the
conditions hereinafter set forth, to (a) continue Revolving Loan Commitments,
Letter of Credit Commitments and Swing Line Loan Commitments and all Loans
outstanding under the Existing
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Credit Agreement and (b) extend the Term B Loan Commitment and the New
Acquisition Loan Commitment and make the Term B Loans and the New Acquisition
Loans to the Borrower;
NOW, THEREFORE, the parties hereby agree as follows:
ARTICLE I
DEFINITIONS AND ACCOUNTING TERMS
SECTION 1.1. Defined Terms. The following terms (whether or not
underscored) when used in this Agreement, including its preamble and recitals,
shall, except where the context otherwise requires, have the following meanings
(such meanings to be equally applicable to the singular and plural forms
thereof):
"Administrative Agent" is defined in the preamble and includes each
other Person appointed as the successor Administrative Agent pursuant to Section
9.4.
"Affected Lender" is defined in Section 4.10.
"Affiliate" of any Person means any other Person which, directly or
indirectly, controls, is controlled by or is under common control with such
Person. "Control" of a Person means the power, directly or indirectly,
(a) to vote 10% or more of the securities (on a fully diluted
basis) having ordinary voting power for the election of directors,
managing members or general partners (as applicable); or
(b) to direct or cause the direction of the management and
policies of such Person (whether by contract or otherwise).
"Agreement" means, on any date, this Credit Agreement as originally in
effect on the Effective Date and as thereafter from time to time amended,
supplemented, amended and restated or otherwise modified and in effect on such
date.
"Alternate Base Rate" means, on any date and with respect to all Base
Rate Loans, a fluctuating rate of interest per annum (rounded upward, if
necessary, to the next highest 1/16 of 1%) equal to the higher of
(a) the Base Rate in effect on such day; and
(b) the Federal Funds Rate in effect on such day plus 1/2 of
1%.
Changes in the rate of interest on that portion of any Loans maintained as Base
Rate Loans will take effect simultaneously with each change in the Alternate
Base Rate. The Administrative
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Agent will give notice promptly to the Borrower and the Lenders of changes in
the Alternate Base Rate; provided, that the failure to give such notice shall
not affect the Alternate Base Rate in effect after such change.
"Applicable Commitment Fee Margin" means at all times during the
applicable periods set forth below with respect to the fee payable to the
Lenders pursuant to Section 3.3.1:
(a) with respect to the Revolving Loan Commitment, the applicable
percentage set forth below under the column entitled "Applicable Commitment Fee
Margin":
Total Debt to Applicable Commitment
EBITDA Ratio Fee Margin
Greater than or equal to 2.75 : 1.00 0.500%
Less than 2.75 : 1.00 0.375%
The Total Debt to EBITDA Ratio used to compute the Applicable
Commitment Fee Margin shall be that set forth in the Compliance Certificate most
recently delivered by the Borrower to the Administrative Agent; changes in the
Applicable Commitment Fee Margin resulting from a change in the Total Debt to
EBITDA Ratio shall become effective upon delivery by the Borrower to the
Administrative Agent of a new Compliance Certificate pursuant to clause (c) of
Section 7.1.1. If the Borrower shall fail to deliver a Compliance Certificate
within 60 days after the end of any Fiscal Quarter (or within 105 days, in the
case of the last Fiscal Quarter of the Fiscal Year), the Applicable Commitment
Fee Margin from and including the 61st (or 106th, as the case may be) day after
the end of such Fiscal Quarter to but not including the date the Borrower
delivers to the Administrative Agent a Compliance Certificate shall conclusively
equal the highest Applicable Commitment Fee Margin set forth above; and
(b) with respect to the New Acquisition Loan Commitment, 1%.
Notwithstanding anything to the contrary herein, the Applicable
Commitment Fee Margin in respect of the New Acquisition Loan Commitment
(i) shall be reduced to 0.67% (on a per annum basis) upon reduction of
the New Acquisition Loan Commitment to $23,333,000 or less, and (ii)
shall equal the applicable percentage set forth in clause (a) under the
column entitled "Applicable Commitment Fee Margin" upon reduction of
the New Acquisition Loan Commitment to $11,667,000 or less.
"Applicable Margin" means at all times during the applicable periods
set forth below
(a) with respect to the unpaid principal amount of each Term B
Loan (i) maintained as a Base Rate Loan, 2.00% at all times, and (ii)
maintained as a LIBO Rate Loan, 3.00% at all times.
(b) with respect to the unpaid principal amount of each
Original Acquisition Loan, New Acquisition Loan and Revolving Loan
maintained as a Base Rate Loan, the
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applicable percentage set forth below in clause (c) under the column
entitled "Applicable Margin for Base Rate Loans"; and
(c) with respect to the unpaid principal amount of each
Original Acquisition Loan, New Acquisition Loan and Revolving Loan
maintained as a LIBO Rate Loan, the applicable percentage set forth
below under the column entitled "Applicable Margin for LIBO Rate
Loans":
Total Debt to Applicable Margin For Applicable Margin For
EBITDA Ratio Base Rate Loans LIBO Rate Loans
Greater than or equal to 1.75 2.75
3.75:1.00
Greater than or equal to
3.25:1.00 but less than 1.50% 2.50%
3.75:1.00
Greater than or equal to
2.75 : 1.00 but less
than 3.25 : 1.00 1.25% 2.25%
Greater than or equal to
2.25 : 1.00 but less than
2.75 :1.00 1.00% 2.00%
Less than 2.25:1.00 0.75% 1.75%
The Total Debt to EBITDA Ratio used to compute the Applicable Margin
following the Effective Date shall be the Total Debt to EBITDA Ratio set forth
in the Compliance Certificate most recently delivered by the Borrower to the
Administrative Agent; changes in the Applicable Margin resulting from a change
in the Total Debt to EBITDA Ratio shall become effective upon delivery by the
Borrower to the Administrative Agent of a new Compliance Certificate pursuant to
clause (c) of Section 7.1.1. If the Borrower shall fail to deliver a Compliance
Certificate within 60 days after the end of any Fiscal Quarter (or within 105
days, in the case of the last Fiscal Quarter of the Fiscal Year), the Applicable
Margin from and including the 61st (or 106th, as the case may be) day after the
end of such Fiscal Quarter to but not including the date the Borrower delivers
to the Administrative Agent a Compliance Certificate shall conclusively equal
the highest Applicable Margin set forth above.
"Approved Fund" means, with respect to any Lender which is a fund that
invests in bank loans, any other fund or trust or entity that invests in bank
loans and is advised or managed by the same investment advisor as such Lender or
by an Affiliate of such investment advisor.
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"Asset Sale" means any sale or other disposition by the Borrower or any
of its Restricted Subsidiaries of any of its property or assets, including the
Capital Stock of any Restricted Subsidiary, except sales and dispositions
permitted by Section 7.2.11.
"Assignee Lender" is defined in Section 10.11.1.
"Assignment of Claims Act" means Xxxxx 00, Xxxxxx Xxxxxx Code ss. 3727
and Title 41. United States Code ss. 15, as revised or amended, and any rules or
regulations issued pursuant thereto, and also shall be deemed to include any
other laws, rules or regulations governing the assignment of government
contracts or claims against a Governmental Authority.
"Authorized Officer" means, relative to any Obligor, those of its
officers, general partners or managing members (as applicable) whose signatures
and incumbency shall have been certified to the Administrative Agent, the
Lenders and the Issuers in the certificate of incumbency most recently delivered
by such Obligor.
"Base Rate" means, at any time, the rate of interest then most recently
established by the Administrative Agent in New York as its base rate for U.S.
dollars loaned in the United States. The Base Rate is not necessarily intended
to be the lowest rate of interest determined by the Administrative Agent in
connection with extensions of credit.
"Base Rate Loan" means a Loan bearing interest at a fluctuating rate
determined by reference to the Alternate Base Rate.
"Borrower" is defined in the preamble.
"Borrower Pledge Agreement" means the Pledge Agreement executed and
delivered by the Borrower pursuant to Article V substantially in the form of
Exhibit G-1 hereto, as amended, supplemented, amended and restated or otherwise
modified.
"Borrower Security Agreement" means the Security Agreement executed and
delivered by the Borrower pursuant to Article V substantially in the form of
Exhibit H-1 hereto, as amended, supplemented, amended and restated or otherwise
modified.
"Borrowing" means the Loans of the same type and, in the case of LIBO
Rate Loans, having the same Interest Period made by all Lenders required to make
such Loans on the same Business Day and pursuant to the same Borrowing Request
in accordance with Section 2.1.
"Borrowing Request" means a Loan request and certificate duly executed
by an Authorized Officer of the Borrower, substantially in the form of Exhibit
B-1 hereto.
"Business Day" means
(a) any day which is neither a Saturday or Sunday nor a legal
holiday on which banks are authorized or required to be closed in New
York, New York; and
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(b) relative to the making, continuing, prepaying or repaying
of any LIBO Rate Loans, any day which is a Business Day described in
clause (a) above and which is also a day on which dealings in Dollars
are carried on in the interbank eurodollar market of the Administrative
Agent's LIBOR Office.
"Capital Expenditures" means, for any period, the aggregate amount of
all expenditures of the Borrower and its Restricted Subsidiaries for fixed or
capital assets made during such period which, in accordance with GAAP, would be
classified as capital expenditures; provided, however, that such expenditures
shall not include up to $12,000,000, in the aggregate, of amounts expended by
the Borrower for up to two pasteurization units to be constructed during Fiscal
Year 1999 and Fiscal Year 2000.
"Capital Stock" means, with respect to any Person, any and all shares,
interests, participations or other equivalents (however designated, whether
voting or non-voting) of such Person's capital, whether now outstanding or
issued after the Effective Date.
"Capitalized Lease Liabilities" means all monetary obligations of the
Borrower or any of its Restricted Subsidiaries under any leasing or similar
arrangement which have been (or, in accordance with GAAP, should be) classified
as capitalized leases, and for purposes of each Loan Document the amount of such
obligations shall be the capitalized amount thereof, determined in accordance
with GAAP, and the stated maturity thereof shall be the date of the last payment
of rent or any other amount due under such lease prior to the first date upon
which such lease may be terminated by the lessee without payment of a premium or
a penalty.
"Cash Equivalents" means (a) marketable direct obligations issued or
unconditionally guaranteed by the United States government and backed by the
full faith and credit of the United States government; (b) domestic and
Eurodollar certificates of deposit and time deposits, bankers' acceptances and
floating rate certificates of deposit issued by any commercial bank organized
under the laws of the United States, any state thereof, the District of
Columbia, any foreign bank, or its branches or agencies (fully protected against
currency fluctuations), which, at the time of acquisition, are rated A-1 (or
better) by S&P or P-1 (or better) by Xxxxx'x; (c) commercial paper of United
States and foreign banks and bank holding companies and their Subsidiaries and
United States and foreign finance, commercial industrial or utility companies
which, at the time of acquisition, are rated A-1 (or better) by S&P or P-1 (or
better) by Xxxxx'x; (d) marketable direct obligations of any State of the United
States of America or any political subdivision of any such State given on the
date of such investment the highest credit rating by Xxxxx'x and S&P; provided,
that the maturities of all obligations of the type specified in clauses (a)
through (d) above shall not exceed one hundred eighty (180) days; and (e)
reverse purchase agreements covering obligations of the type specified in clause
(a) above.
"Cash Equivalent Investment" means, at any time:
(a) any direct obligation of (or unconditionally guaranteed
by) the United States of America or a State thereof (or any agency or
political subdivision thereof, to the extent
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such obligations are supported by the full faith and credit of the
United States of America or a State thereof) maturing not more than one
year after such time;
(b) commercial paper maturing not more than 365 days from the
date of issue, which is issued by
(i) a corporation (other than an Affiliate of any
Obligor) organized under the laws of any State of the United
States or of the District of Columbia and rated A-1 or higher
by S&P or P-1 or higher by Xxxxx'x, or
(ii) any Lender (or its holding company);
(c) any certificate of deposit, time deposit or bankers
acceptance, maturing not more than one year after its date of issuance,
which is issued by either
(i) any bank organized under the laws of the United
States (or any State thereof) and which has (x) a credit
rating of A2 or higher from Xxxxx'x or A or higher from S&P
and (y) a combined capital and surplus greater than
$500,000,000, or
(ii) any Lender; or
(d) any repurchase agreement having a term of 30 days or less
entered into with any Lender or any commercial banking institution
satisfying the criteria set forth in clause (c)(i) which
(i) is secured by a fully perfected security interest
in any obligation of the type described in clause (a), and
(ii) has a market value at the time such repurchase
agreement is entered into of not less than 100% of the
repurchase obligation of such commercial banking institution
thereunder.
"CERCLA" means the Comprehensive Environmental Response, Compensation
and Liability Act of 1980, as amended.
"CERCLIS" means the Comprehensive Environmental Response Compensation
Liability Information System List.
"Change in Control" means (i) the acquisition by any person, entity or
"group", within the meaning of Section 13(d)(3) or 14(d)(2) of the Exchange Act,
(excluding, for this purpose, the Borrower or its Restricted Subsidiaries, or
any employee benefit plan of the Borrower or its Restricted Subsidiaries which
acquires beneficial ownership of voting securities of the Borrower) of
beneficial ownership (within the meaning of Rule 13d-3 promulgated under the
Exchange Act) of 25% or more of either the then outstanding shares of common
stock of the
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Borrower or the combined voting power of the Borrower's then outstanding voting
securities entitled to vote generally in the election of directors; or (ii)
individuals who, as of the date of the Prospectus, constitute the Board of
Directors (as of the date hereof the "Incumbent Board") cease for any reason to
constitute at least a majority of the Board of Directors, provided that any
person becoming a director subsequent to the date hereof whose election, or
nomination for election by the Borrower's stockholders, was approved by a vote
of at least a majority of the directors then comprising the Incumbent Board
shall be considered as though such person were a member of the Incumbent Board;
or (iii) approval by the stockholders of the Borrower of a reorganization,
merger or consolidation, in each case with respect to which persons who were the
stockholders of the Borrower immediately prior to such reorganization, merger or
consolidation do not, immediately thereafter, own more than 10% of the combined
voting power entitled to vote generally in the election of directors of the
reorganized, merged or consolidated company's then outstanding voting securities
or (iv) any "Change of Control" (or substantially similar provision) under (and
as defined in) any Sub Debt Document.
"Closing Date" means the first date on which all of the conditions
precedent set forth in Section 5.1 have been satisfied, but in no event shall
such date be later than June 30, 1999.
"Code" means the Internal Revenue Code of 1986, and the regulations
thereunder, in each case as amended, reformed or otherwise modified from time to
time.
"Collateral Documents" means the Borrower Pledge Agreement, the
Borrower Security Agreement, the Subsidiary Pledge Agreements and the Subsidiary
Security Agreements.
"Commitment" means, as the context may require, a Lender's respective
Term Loan Commitment, Revolving Loan Commitment or Letter of Credit Commitment,
or Scotiabank's Swing Line Loan Commitment.
"Commitment Amount" means, as the context may require, a Term Loan
Commitment Amount, the Revolving Loan Commitment Amount, the Letter of Credit
Commitment Amount or the Swing Line Loan Commitment Amount.
"Commitment Termination Date" means, as the context may require, a Term
Loan Commitment Termination Date or the Revolving Loan Commitment Termination
Date.
"Commitment Termination Event" means
(a) the occurrence of any Event of Default described in
clauses (a) through (d) of Section 8.1.9; or
(b) the occurrence and continuance of any other Event of
Default and either
(i) the declaration of all or any portion of the Loans
to be due and payable pursuant to Section 8.3, or
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(ii) the giving of notice by the Administrative
Agent, acting at the direction of the Required Lenders, to the
Borrower that the Commitments have been terminated.
"Compliance Certificate" means a certificate duly completed and
executed by an Authorized Officer of the Borrower, substantially in the form of
Exhibit E hereto, together with such changes thereto as the Administrative Agent
may from time to time request for the purpose of monitoring the Borrower's
compliance with the financial covenants contained herein.
"Contingent Liability" means any agreement, undertaking or arrangement
by which any Person guarantees, endorses or otherwise becomes or is contingently
liable upon (by direct or indirect agreement, contingent or otherwise, to
provide funds for payment, to supply funds to, or otherwise to invest in, a
debtor, or otherwise to assure a creditor against loss) the Indebtedness of any
other Person (other than by endorsements of instruments in the course of
collection), or guarantees the payment of dividends or other distributions upon
the shares of any other Person. The amount of any Person's obligation under any
Contingent Liability shall (subject to any limitation set forth therein) be
deemed to be the outstanding principal amount of the debt, obligation or other
liability guaranteed thereby.
"Continuation/Conversion Notice" means a notice of continuation or
conversion and certificate duly executed by an Authorized Officer of the
Borrower, substantially in the form of Exhibit C hereto.
"Controlled Group" means all members of a controlled group of
corporations and all members of a controlled group of trades or businesses
(whether or not incorporated) under common control which, together with the
Borrower, are treated as a single employer under Section 414(b) or 414(c) of the
Code or Section 4001 of ERISA.
"Copyright Security Agreement" means any Copyright Security Agreement
executed and delivered by any Obligor in substantially the form of Exhibit C to
any Security Agreement, as amended, supplemented, amended and restated or
otherwise modified.
"Credit Agents" means, collectively, the Administrative Agent, the
Documentation Agent, and Scotiabank in its capacity as Agent (as defined in each
of the Collateral Documents) for each of the Secured Parties under the
Collateral Documents.
"Credit Extension" means, as the context may require,
(a) the making of a Loan by a Lender; or
(b) the issuance of any Letter of Credit, or the extension of
any Stated Expiry Date of any existing Letter of Credit, by an Issuer.
"Credit Extension Request" means, as the context may require, any
Borrowing Request or Issuance Request.
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"Default" means any Event of Default or any condition, occurrence or
event which, after notice or lapse of time or both, would constitute an Event of
Default.
"Disbursement" is defined in Section 2.6.2.
"Disbursement Date" is defined in Section 2.6.2.
"Disclosure Schedule" means the Disclosure Schedule I attached hereto
as Schedule I, as it may be amended, supplemented, amended and restated or
otherwise modified from time to time by the Borrower with the written consent of
the Required Lenders.
"Documentation Agent" is defined in the preamble.
"Dollar" and the sign "$" mean lawful money of the United States.
"Domestic Office" means, relative to any Lender, the office of such
Lender designated as such Lender's "Domestic Office" set forth opposite its name
on Schedule II hereto or in a Lender Assignment Agreement, or such other office
of a Lender (or any successor or assign of such Lender) within the United States
as may be designated from time to time by notice from such Lender, as the case
may be, to each other Person party hereto.
"EBITDA" means, for the Borrower and its Restricted Subsidiaries, for
any applicable period, the sum (without duplication) of
(a) Net Income,
plus
(b) the amount deducted by the Borrower and its Restricted
Subsidiaries, in determining Net Income, representing amortization,
plus
(c) the amount deducted, in determining Net Income, of all
federal, state and local income taxes (whether paid in cash or
deferred) of the Borrower and its Restricted Subsidiaries,
plus
(d) Interest Expense of the Borrower and its Restricted
Subsidiaries,
plus
(e) the amount deducted, in determining Net Income,
representing depreciation of assets of the Borrower and its Restricted
Subsidiaries.
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"Effective Date" means the date this Agreement becomes effective
pursuant to Section 5.1.
"Environmental Laws" means all applicable federal, state or local
statutes, laws, ordinances, codes, rules, regulations and guidelines (including
consent decrees and administrative orders) relating to public health and safety
and protection of the environment.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended, and any successor statute thereto of similar import, together with the
regulations thereunder, in each case as in effect from time to time. References
to sections of ERISA also refer to any successor sections thereto.
"Event of Default" is defined in Section 8.1.
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"Exemption Certificate" is defined in clause (e) of Section 4.6.
"Existing Letters of Credit" means the Letters of Credit as defined in
the Existing Credit Agreement.
"Existing Revolving Loans" means the Revolving Loans as defined in the
Existing Credit Agreement.
"Existing Subordinated Debt" means the 8 1/4% Convertible Subordinated
Debentures described more specifically in the Prospectus.
"Federal Funds Rate" means, for any period, a fluctuating interest rate
per annum equal for each day during such period to
(a) the weighted average of the rates on overnight federal
funds transactions with members of the Federal Reserve System arranged
by federal funds brokers, as published for such day (or, if such day is
not a Business Day, for the next preceding Business Day) by the Federal
Reserve Bank of New York; or
(b) if such rate is not so published for any day which is a
Business Day, the average of the quotations for such day on such
transactions received by Scotiabank from three federal funds brokers of
recognized standing selected by it.
"Fee Letter" means the confidential letter, dated April 13, 1999, from
Scotiabank to the Borrower.
"Fiscal Quarter" means a quarter ending on the last day of each March,
June, September or December.
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"Fiscal Year" means any period of twelve consecutive calendar months
ending on December 31 of each year; references to a Fiscal Year with a number
corresponding to any calendar year (e.g., the "1999 Fiscal Year") refer to the
Fiscal Year ending on December 31 of such calendar year.
"Fixed Charge Coverage Ratio" means, as of the close of any Fiscal
Quarter, the ratio computed for the period consisting of such Fiscal Quarter and
each of the three immediately preceding Fiscal Quarters with respect to the
Borrower and its Restricted Subsidiaries on a consolidated basis of:
(a) EBITDA (for all such Fiscal Quarters) minus Capital
Expenditures made during such Fiscal Quarters (as permitted in Section
7.2.7);
to
(b) the sum (for all such Fiscal Quarters) of
(i) Interest Expense paid in cash;
plus
(ii) scheduled principal payments of the Term Loans
pursuant to the provisions of clause (d) of Section 3.1.1
after giving effect to any reductions in such scheduled
principal repayments attributable to any optional or mandatory
prepayments of the Term Loans;
plus
(iii) Restricted Payments;
plus
(iv) all federal, state and foreign income taxes
actually paid in cash by the Borrower and its Restricted
Subsidiaries.
"Foreign Subsidiary" means any Subsidiary that is not a U.S.
Subsidiary.
"F.R.S. Board" means the Board of Governors of the Federal Reserve
System or any successor thereto.
"GAAP" is defined in Section 1.4.
"Governmental Authority" means the government of the United States of
America, any other nation or any political subdivision thereof, whether state or
local, and any agency, authority, instrumentality, regulatory body, court,
central bank or other entity exercising
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executive, legislative, judicial, taxing, regulatory or administrative powers or
functions of or pertaining to government.
"Guarantor" means each wholly owned Restricted Subsidiary which has
executed and delivered to the Administrative Agent a Subsidiary Guaranty.
"Hazardous Material" means
(a) any "hazardous substance", as defined by CERCLA;
(b) any "hazardous waste", as defined by the Resource
Conservation and Recovery Act, as amended; or
(c) any pollutant or contaminant or hazardous, dangerous or
toxic chemical, material or substance (including any petroleum product)
within the meaning of any other applicable federal, state or local law,
regulation, ordinance or requirement (including consent decrees and
administrative orders) relating to or imposing liability or standards
of conduct concerning any hazardous, toxic or dangerous waste,
substance or material, all as amended.
"Hedging Obligations" means, with respect to any Person, all
liabilities of such Person under currency exchange agreements, interest rate
swap agreements, interest rate cap agreements and interest rate collar
agreements, and all other agreements or arrangements designed to protect such
Person against fluctuations in interest rates or currency exchange rates.
"herein", "hereof", "hereto", "hereunder" and similar terms contained
in this Agreement or any other Loan Document refer to this Agreement or such
other Loan Document, as the case may be, as a whole and not to any particular
Section, paragraph or provision of this Agreement or such other Loan Document.
"Impermissible Qualification" means, relative to the opinion or
certification of any independent public accountant as to any financial statement
of the Borrower, any qualification or exception to such opinion or certification
(a) which is of a "going concern" or similar nature;
(b) which relates to the limited scope of examination of
matters relevant to such financial statement; or
(c) which relates to the treatment or classification of any
item in such financial statement and which, as a condition to its
removal, would require an adjustment to such item the effect of which
would be to cause the Borrower to be in default of any of its
obligations under Section 7.2.4.
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"including" and "include" means including without limiting the
generality of any description preceding such term, and, for purposes of this
Agreement and each other Loan Document, the parties hereto agree that the rule
of ejusdem generis shall not be applicable to limit a general statement, which
is followed by or referable to an enumeration of specific matters, to matters
similar to the matters specifically mentioned.
"Incumbent Board" is defined in the definition of "Change in Control."
"Indebtedness" of any Person means, without duplication:
(a) all obligations of such Person for borrowed money or
advances and all obligations of such Person evidenced by bonds,
debentures, notes or similar instruments;
(b) all obligations, contingent or otherwise, relative to the
face amount of all letters of credit, whether or not drawn, and
banker's acceptances issued for the account of such Person;
(c) all Capitalized Lease Liabilities of such Person;
(d) for purposes of Section 8.1.5 only, all other items which,
in accordance with GAAP, would be included as liabilities on the
liability side of the balance sheet of such Person as of the date at
which Indebtedness is to be determined;
(e) net liabilities of such Person under all Hedging
Obligations;
(f) whether or not so included as liabilities in accordance
with GAAP, all obligations of such Person to pay the deferred purchase
price of property or services excluding trade accounts payable in the
ordinary course of business which are not overdue for a period of more
than 90 days or, if overdue for more than 90 days, as to which a
dispute exists and adequate reserves in conformity with GAAP have been
established on the books of such Person, and indebtedness secured by
(or for which the holder of such indebtedness has an existing right,
contingent or otherwise, to be secured by) a Lien on property owned or
being acquired by such Person (including indebtedness arising under
conditional sales or other title retention agreements), whether or not
such indebtedness shall have been assumed by such Person or is limited
in recourse; and
(g) all Contingent Liabilities of such Person in respect of
any of the foregoing.
For all purposes of this Agreement, the Indebtedness of any Person shall include
the Indebtedness of any other entity (including any partnership in which such
Person is a general partner) to the extent such Person is liable therefor as a
result of such Person's ownership interest in or other relationship with such
entity, except to the extent the terms of such Indebtedness provide that such
Person is not liable therefor.
"Indemnified Liabilities" is defined in Section 10.4.
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"Indemnified Parties" is defined in Section 10.4.
"Interco Subordination Agreement" means the Subordination Agreement,
substantially in the form of Exhibit K hereto.
"Interest Expense" means, for any Fiscal Quarter, the aggregate
interest expense of the Borrower and its Restricted Subsidiaries for such Fiscal
Quarter, as determined in accordance with GAAP, including the portion of any
payments made in respect of Capitalized Lease Liabilities allocable to interest
expense.
"Interest Period" means, relative to any LIBO Rate Loan, the period
beginning on (and including) the date on which such LIBO Rate Loan is made or
continued as, or converted into, a LIBO Rate Loan pursuant to Section 2.3 or 2.4
and shall end on (but exclude) the day which numerically corresponds to such
date one, two, three or six months thereafter (or, if such month has no
numerically corresponding day, on the last Business Day of such month), as the
Borrower may select in its relevant notice pursuant to Section 2.3 or 2.4;
provided, however, that
(a) the Borrower shall not be permitted to select Interest
Periods to be in effect at any one time which have expiration dates
occurring on more than five different dates;
(b) if such Interest Period would otherwise end on a day which
is not a Business Day, such Interest Period shall end on the next
following Business Day (unless such next following Business Day is the
first Business Day of a calendar month, in which case such Interest
Period shall end on the Business Day next preceding such numerically
corresponding day); and
(c) no Interest Period for any Loan may end later than the
Stated Maturity Date for such Loan.
"Investment" means, relative to any Person,
(a) any loan or advance made by such Person to any other
Person (excluding commission, travel, xxxxx cash and similar advances
to officers and employees made in the ordinary course of business);
(b) any Contingent Liability of such Person incurred in
connection with loans or advances described in clause (a); and
(c) any ownership or similar interest held by such Person in
any other Person.
The amount of any Investment shall be the original principal or capital amount
thereof less all returns of principal or equity thereon and shall, if made by
the transfer or exchange of property other than cash, be deemed to have been
made in an original principal or capital amount equal to the fair market value
of such property at the time of such Investment.
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"Issuance Request" means a Letter of Credit request and certificate
duly executed by an Authorized Officer of the Borrower, substantially in the
form of Exhibit B-2 hereto.
"Issuer" means Scotiabank or Imperial in its capacity as Issuer of the
Letters of Credit. At the request of Scotiabank and with the Borrower's consent
(not to be unreasonably withheld), another Lender or an Affiliate of Scotiabank
may issue one or more Letters of Credit hereunder.
"Lender Assignment Agreement" means an assignment agreement
substantially in the form of Exhibit L hereto.
"Lenders" is defined in the preamble and, in addition, shall include
any commercial bank or other financial institution that becomes a Lender
pursuant to Section 10.11.1.
"Lender's Environmental Liability" means any and all losses,
liabilities, obligations, penalties, claims, litigation, demands, defenses,
costs, judgments, suits, proceedings, damages (including consequential damages),
disbursements or expenses of any kind or nature whatsoever (including reasonable
attorneys' fees at trial and appellate levels and experts' fees and
disbursements and expenses incurred in investigating, defending against or
prosecuting any litigation, claim or proceeding) which may at any time be
imposed upon, incurred by or asserted or awarded against the Administrative
Agent, any Lender or any Issuer or any of such Person's Affiliates,
shareholders, directors, officers, employees, and agents in connection with or
arising from:
(a) any Hazardous Material on, in, under or affecting all or
any portion of any property of the Borrower or any of its Subsidiaries,
the groundwater thereunder, or any surrounding areas thereof to the
extent caused by Releases from the Borrower's or any of its
Subsidiaries' or any of their respective predecessors' properties;
(b) any misrepresentation, inaccuracy or breach of any
warranty, contained or referred to in Section 6.12;
(c) any violation or claim of violation by the Borrower or any
of its Subsidiaries of any Environmental Laws; or
(d) the imposition of any lien for damages caused by or the
recovery of any costs for the cleanup, release or threatened release of
Hazardous Material by the Borrower or any of its Subsidiaries, or in
connection with any property owned or formerly owned by the Borrower or
any of its Subsidiaries.
"Letter of Credit" is defined in Section 2.1.2 and shall include the
Existing Letters of Credit under the Existing Credit Agreement which have been
designated as Letters of Credit hereunder pursuant to Section 2.1.2.
"Letter of Credit Commitment" means, with respect to an Issuer, such
Issuer's obligation to issue Letters of Credit pursuant to Section 2.1.2 and,
with respect to each Revolving Loan
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Lender, the obligations of each such Lender to participate in such Letters of
Credit pursuant to Section 2.6.1.
"Letter of Credit Commitment Amount" means, on any date, a maximum
amount of $10,000,000, as such amount may be permanently reduced from time to
time pursuant to Section 2.2.
"Letter of Credit Outstandings" means, on any date, an amount equal to
the sum of
(a) the then aggregate amount which is undrawn and available
under all issued and outstanding Letters of Credit,
plus
(b) the then aggregate amount of all unpaid and outstanding
Reimbursement Obligations.
"LIBO Rate" means, relative to any Interest Period for LIBO Rate Loans,
the rate of interest equal to the average (rounded upwards, if necessary, to the
nearest 1/16 of 1%) of the rates per annum at which Dollar deposits in
immediately available funds are offered to the Administrative Agent's LIBOR
Office in the London interbank market as at or about 11:00 a.m. London, England
time two Business Days prior to the beginning of such Interest Period for
delivery on the first day of such Interest Period, and in an amount
approximately equal to the amount of the Administrative Agent's LIBO Rate Loan
and for a period approximately equal to such Interest Period.
"LIBO Rate Loan" means a Loan bearing interest, at all times during an
Interest Period applicable to such Loan, at a rate of interest determined by
reference to the LIBO Rate (Reserve Adjusted).
"LIBO Rate (Reserve Adjusted)" means, relative to any Loan to be made,
continued or maintained as, or converted into, a LIBO Rate Loan for any Interest
Period, a rate per annum (rounded upwards, if necessary, to the nearest 1/16 of
1%) determined pursuant to the following formula:
LIBO Rate = LIBO Rate
(Reserve Adjusted) 1.00 - LIBOR Reserve Percentage
The LIBO Rate (Reserve Adjusted) for any Interest Period for LIBO Rate Loans
will be determined by the Administrative Agent on the basis of the LIBOR Reserve
Percentage in effect two Business Days before the first day of such Interest
Period.
"LIBOR Office" means, relative to any Lender, the office of such Lender
designated as such Lender's "LIBOR Office" set forth opposite its name on
Schedule II hereto or in a Lender Assignment Agreement, or such other office of
a Lender as designated from time to time by
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notice from such Lender to the Borrower and the Administrative Agent, whether or
not outside the United States, which shall be making or maintaining LIBO Rate
Loans of such Lender hereunder.
"LIBOR Reserve Percentage" means, relative to any Interest Period for
LIBO Rate Loans, the reserve percentage (expressed as a decimal) equal to the
maximum aggregate reserve requirements (including all basic, emergency,
supplemental, marginal and other reserves and taking into account any
transitional adjustments or other scheduled changes in reserve requirements)
specified under regulations issued from time to time by the F.R.S. Board and
then applicable to assets or liabilities consisting of or including
"Eurocurrency Liabilities", as currently defined in Regulation D of the F.R.S.
Board, having a term approximately equal or comparable to such Interest Period.
"Lien" means any security interest, mortgage, pledge, hypothecation,
assignment, deposit arrangement, encumbrance, lien (statutory or otherwise),
charge against or interest in property, or other priority or preferential
arrangement of any kind or nature whatsoever, to secure payment of a debt or
performance of an obligation.
"Loan Documents" collectively means this Agreement, the Letters of
Credit, the Fee Letter, the Collateral Documents, each Subsidiary Guaranty, each
agreement pursuant to which the Administrative Agent is granted a Lien to secure
the Obligations and each other agreement, certificate, document or instrument
delivered in connection with this Agreement or such other Loan Documents,
whether or not specifically mentioned herein or therein.
"Loans" means, as the context may require, a Revolving Loan, each Term
Loan, or a Swing Line Loan, of any type.
"Material Adverse Effect" means a material adverse effect on (i) the
business, condition (financial or otherwise), operations, assets, properties or
prospects of the Borrower or the Borrower and its Subsidiaries taken as a whole,
(ii) the rights and remedies of the Administrative Agent, any Lender or any
Issuer under any Loan Document or (iii) the ability of any Obligor to perform
its Obligations under any Loan Document.
"Moody's" means Xxxxx'x Investors Service, Inc.
"Net Income" means (exclusive of all amounts, in accordance with GAAP,
in respect of any non-cash and non-recurring gains or non-cash and non-recurring
losses, including fees, costs, charges and other expenses incurred by the
Borrower and its Restricted Subsidiaries in connection with any discontinued
operation, reorganization, consolidation or restructuring) for any period, the
aggregate of all amounts which would be included as net income on the
consolidated financial statements of the Borrower and its Restricted
Subsidiaries for such period.
"Net Proceeds" means (a) with respect to the issuance of any equity
securities (other than the issuance or exercise of stock options in connection
with employee incentive programs or employee benefit programs) of the Borrower
the excess of (i) the proceeds received by the
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Borrower from the sale or issuance to any Person of any stock, warrants or
options or the exercise of any such warrants or options, over (ii) all
reasonable and customary underwriting commissions and legal, investment banking,
brokerage and accounting and other professional fees, sales commissions and
disbursements actually incurred in connection with such sale or issuance; (b)
with respect to any Asset Sale the excess of (i) the proceeds received from any
Asset Sale over (ii) the reasonable cash costs of such Asset Sale, taxes paid or
payable as a result thereof, and all reasonable and customary legal, investment
banking, accounting, and other professional fees, sales commissions or
disbursements actually incurred in connection with such Asset Sale which have
not been paid to Affiliates of the Borrower in connection therewith; (c) with
respect to the incurrence or issuance of Indebtedness the excess of (i) the
proceeds received from the incurrence or issuance of any Indebtedness (except
for Indebtedness permitted by Section 7.2.2), of the Borrower or any of its
Restricted Subsidiaries over (ii) the reasonable costs incurred in such
transaction, and all reasonable and customary legal, investment banking,
accounting, and other professional fees, sales commissions or disbursements
actually incurred in connection with such transaction; and (d) the proceeds
received from repayment of intercompany Indebtedness upon completion of the
initial public offering with respect to Titan Wireless.
The amount of the proceeds described in clauses (a), (b), and (d)
which, at the option of the Borrower and so long as no Default shall have
occurred and be continuing, the Borrower uses or causes any Subsidiary to use
such proceeds to purchase (x) substantially similar assets useful in the
business of the Borrower or such Subsidiary, or (y) Capital Stock of Persons
which, immediately after giving effect to such purchase, become a Restricted
Subsidiary (with such assets or interests described in clauses (x) and (y),
collectively, referred to as "Qualified Assets") within 180 days (with respect
to the proceeds described in clauses (a) and (d)), and 270 days (with respect to
the proceeds described in clause (b)), after the consummation (and with the
proceeds) of such sale, conveyance or disposition, and in the event the Borrower
or such Subsidiary elects to exercise its right to purchase Qualified Assets
with the Net Proceeds pursuant to this provision, the Borrower shall deliver a
certificate of an Authorized Officer to the Administrative Agent within 90 days
following the receipt of Net Proceeds setting forth the amount of the Net
Proceeds which the Borrower or such Subsidiary expects to use to purchase
Qualified Assets during such 180-day or 270-day period, as applicable.
If and to the extent that the Borrower or such Subsidiary has elected
to reinvest Net Proceeds as permitted above, then on the date which is 180 days
or 270 days, as appropriate, after the relevant sale, conveyance or disposition,
the Borrower shall deliver a certificate of an Authorized Officer to the
Administrative Agent certifying as to the amount and use of such Net Proceeds
actually used to purchase Qualified Assets. To the extent such Net Proceeds are
not so used to purchase Qualified Assets then the New Acquisition Loan
Commitment Amount or the Revolving Loan Commitment Amount, as appropriate
pursuant to Section 2.2.2, shall be automatically reduced and/or Loans may be
repaid as set forth in Section 3.1.1(c) by an amount equal to the aggregate
amount of such proceeds not so used to purchase Qualified Assets.
Notwithstanding the foregoing, Net Proceeds shall not include proceeds described
in clause (b) of the first paragraph of this definition to the extent such
proceeds are utilized to acquire Capital Stock pursuant to Section 7.2.6 (c).
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"Net Worth" means, with respect to any Person at any date, on a
consolidated basis for such Person and its Subsidiaries, the excess of:
(a) the sum of Capital Stock taken at par value, capital
surplus and retained earnings (or accumulated deficit) of such Person
at such date;
minus
(b) treasury stock of such Person and, to the extent included
in the preceding clause (a), minority interests in Subsidiaries of such
Person at such date.
"New Acquisition Conversion Amount" means the aggregate outstanding
principal amount of all New Acquisition Loans advanced pursuant to Section
2.1.3, prior to the New Acquisition Conversion Date.
"New Acquisition Conversion Date" means the date which is one year from
the Closing Date.
"New Acquisition Loan" is defined in Section 2.1.3.
"New Acquisition Loan Commitment" means, relative to any Lender, such
Lender's obligation (if any) to make New Acquisition Loans pursuant to Section
2.1.3.
"New Acquisition Loan Commitment Amount" means, on any date,
$35,000,000, as such amount may be reduced from time to time pursuant to Section
2.2.
"New Acquisition Loan Commitment Termination Date" means the earliest
of:
(a) June 30, 1999 (if the initial Credit Extension with
respect to the Term B Loan has not occurred on or prior to such date);
(b) the New Acquisition Conversion Date;
(c) the date on which the New Acquisition Loan Commitment
Amount is terminated in full or reduced to zero pursuant to Section 2.2; and
(d) the date on which any Commitment Termination Event occurs.
Upon the occurrence of any event described in clauses (b), (c) or (d), the New
Acquisition Loan Commitments shall terminate automatically and without any
further action.
"New Acquisition Loan Lender" is defined in Section 2.1.3(c).
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"New Acquisition Note" means a promissory note of the Borrower payable
to any Lender, in the form of Exhibit A-5 hereto (as such promissory note may be
amended, endorsed or otherwise modified from time to time), evidencing the
aggregate Indebtedness of the Borrower to such Lender resulting from outstanding
New Acquisition Loans, and also means all other promissory notes accepted from
time to time in substitution therefor or renewal thereof.
"Non-Excluded Taxes" means any Taxes other than net income and
franchise taxes imposed with respect to the Administrative Agent or any Lender
by the Governmental Authority under the laws of which the Administrative Agent
or such Lender, as applicable, is organized or in which it maintains its
applicable lending office.
"Non-U.S. Lender" means any Lender that is not a "United States
person", as defined under section 7701(a)(30) of the Code.
"Note" means, as the context may require, a Revolving Note, a Term
Note, or a Swing Line Note.
"Obligations" means all obligations (monetary or otherwise, whether
absolute or contingent, matured or unmatured) of the Borrower and each other
Obligor arising under or in connection with this Agreement and each other Loan
Document.
"Obligor" means, as the context may require, the Borrower and each
other Person (other than a Secured Party) obligated under any Loan Document.
"Organic Document" means, relative to any Obligor, as applicable, its
certificate of incorporation, by-laws, certificate of partnership, partnership
agreement, certificate of formation, limited liability agreement and all
shareholder agreements, voting trusts and similar arrangements applicable to any
of such Obligor's partnership interests, limited liability company interests or
authorized shares of capital stock.
"Original Acquisition Loan" means the Term Loan as defined in the
Existing Credit Agreement.
"Original Acquisition Conversion Date" means July 29, 1999.
"Original Acquisition Loan Lender"means the Term Loan Lender as defined
in the Existing Credit Agreement.
"Original Acquisition Note" means a promissory note of the Borrower
payable to any Lender, in the form of Exhibit A-2 hereto (as such promissory
note may be amended, endorsed or otherwise modified from time to time),
evidencing the aggregate Indebtedness of the Borrower to such Lender resulting
from outstanding Original Acquisition Loans, and also means all other promissory
notes accepted from time to time in substitution therefor or renewal thereof.
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"Other Taxes" means any and all stamp, documentary or similar taxes, or
any other excise or property taxes or similar levies that arise on account of
any payment being or being required to be made hereunder or under any Note or
from the execution, delivery, registration, recording or enforcement of this
Agreement or any other Loan Document.
"Participant" is defined in Section 10.11.2.
"Patent Security Agreement" means any Patent Security Agreement
executed and delivered by any Obligor in substantially the form of Exhibit A to
any Security Agreement, as amended, supplemented, amended and restated or
otherwise modified.
"PBGC" means the Pension Benefit Guaranty Corporation and any entity
succeeding to any or all of its functions under ERISA.
"Pension Plan" means a "pension plan", as such term is defined in
Section 3(2) of ERISA, which is subject to Title IV of ERISA (other than a
multiemployer plan as defined in Section 4001(a)(3) of ERISA), and to which the
Borrower or any corporation, trade or business that is, along with the Borrower,
a member of a Controlled Group, may have liability, including any liability by
reason of having been a substantial employer within the meaning of Section 4063
of ERISA at any time during the preceding five years, or by reason of being
deemed to be a contributing sponsor under Section 4069 of ERISA.
"Percentage" means, relative to any Lender, the applicable percentage
relating to Revolving Loans or Term Loans, set forth opposite its name on
Schedule II hereto under the applicable column heading or set forth in a Lender
Assignment Agreement under the applicable column heading, as such percentage may
be adjusted from time to time pursuant to Lender Assignment Agreement(s)
executed by such Lender and its Assignee Lender(s) and delivered pursuant to
Section 10.11.1. A Lender shall not have any Commitment to make Revolving Loans
or Term Loans if its percentage under the respective column heading is zero
(0%).
"Permitted Acquisitions" means (a) an acquisition (whether pursuant to
an acquisition of stock, assets or otherwise) by the Borrower or any Restricted
Subsidiary of any Person or the assets of any Person which meets all of the
following conditions (i) such Person is primarily engaged in a similar line of
business as the Borrower or such Restricted Subsidiary as of the Closing Date;
(ii) with respect to any single acquisition, or a series of related acquisitions
with a single or aggregate net purchase price of greater than $10,000,000 (with
any non-cash consideration being valued in good faith by senior management of
the Borrower as set forth in an Officer's Certificate delivered to the
Administrative Agent), the Borrower has obtained the prior consent of the
Required Lenders, (iii) immediately before and after giving effect to such
acquisition, no Default shall have occurred and be continuing or would result
therefrom (including under Section 7.2.1), (iv) the Borrower shall have
delivered to the Administrative Agent a Compliance Certificate for the period of
four full Fiscal Quarters immediately preceding such acquisition (prepared in
good faith and in a manner and using such methodology which is consistent with
the most recent financial statements delivered pursuant to Section 7.1.1) giving
pro forma effect in accordance with this Agreement to the consummation of such
acquisition and
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evidencing compliance with the covenants set forth in Section 7.2.4; (v) if such
Person becomes a Restricted Subsidiary as a result of such acquisition, such
Person and the Borrower shall have complied with Section 7.1.7; or (vi) the
Administrative Agent shall have received a certificate, dated a date reasonably
acceptable to the Administrative Agent, of an Authorized Officer of the Borrower
certifying as to a true and complete copy of each purchase agreement, and all
other documents and instruments delivered in connection with the consummation of
any Permitted Acquisitions which occur on the Effective Date and that are
required to be delivered pursuant to the terms of the relevant purchase
agreement. The Administrative Agent shall be satisfied with all amendments,
waivers or other modifications of, or other forbearance to exercise any rights
with respect to, any of the terms or provisions of such purchase agreements and
the exhibits and schedules thereto, and (b) the SRC Acquisition so long as the
aggregate consideration paid by the Borrower or any of its Subsidiaries does not
exceed $45,000,000 on the aggregate..
"Person" means any natural person, corporation, limited liability
company, partnership, joint venture, association, trust or unincorporated
organization, Governmental Authority or any other legal entity, whether acting
in an individual, fiduciary or other capacity.
"Plan" means any Pension Plan or Welfare Plan.
"Pledge Agreement" means, as the context may require, the Borrower
Pledge Agreement or the Subsidiary Pledge Agreement.
"Pledged Subsidiary" means, at any time, each Subsidiary in respect of
which the Administrative Agent has been granted, at such time, a security
interest in and to, or a pledge of, (i) any of the issued and outstanding shares
of capital stock of such Subsidiary, or (ii) any intercompany notes of such
Subsidiary owing to the Borrower or another Subsidiary of the Borrower.
"Pro Forma Balance Sheet" is defined in Section 5.1.8.
"Prospectus" means the prospectus of the Borrower, dated October 29,
1996, in connection with the issuance of 8 1/4% convertible subordinated
debentures.
"Qualified Assets" is defined in the definition of "Net Proceeds".
"Quarterly Payment Date" means the last day of March, June, September
and December, or, if any such day is not a Business Day, the next succeeding
Business Day.
"Quick Ratio" means, as of the date of determination, on a consolidated
basis for the Borrower and the Restricted Subsidiaries, the ratio of (a) the sum
of (i) cash and Cash Equivalents plus (ii) the net amount of accounts receivable
at such time to (b) current liabilities (other than non-cash current
liabilities) of the Borrower and the Restricted Subsidiaries (including the
aggregate principal amount of outstanding Revolving Loans and the current
portion of the Term Loans then outstanding and the current portion of any other
long term debt ).
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"Refunded Swing Line Loans" is defined in clause (b) of Section 2.3.2.
"Reimbursement Obligation" is defined in Section 2.6.3.
"Release" means a "release", as such term is defined in CERCLA.
"Replacement Lender" is defined in of Section 4.10.
"Required Lenders" means, at any time, Lenders holding at least 51% of
the Total Exposure Amount.
"Resource Conservation and Recovery Act" means the Resource
Conservation and Recovery Act, 42 U.S.C. Section 6901, et seq., as amended.
"Restricted Payment" means the declaration or payment of any dividend
(other than dividends payable solely in common stock of the Borrower) on, or the
making of any payment or distribution on account of, or setting apart assets for
a sinking or other analogous fund for, the purchase, redemption, defeasance,
retirement or other acquisition of any class of Capital Stock of the Borrower or
any Subsidiary or any warrants or options to purchase any such Capital Stock,
whether now or hereafter outstanding, or the making of any other distribution in
respect thereof, either directly or indirectly, whether in cash or property,
obligations of the Borrower or any Subsidiary or otherwise.
"Restricted Subsidiaries" means all direct and indirect, wholly owned
U.S. Subsidiaries of the Borrower, including SRC; provided, however, that Titan
Wireless shall, at the Borrower's option, cease to be a Restricted Subsidiary
upon satisfaction of the following conditions precedent: (a) from and after the
date of completion of its initial public offering on terms and conditions
reasonably satisfactory to the Administrative Agent, (b) from and after the date
the Borrower receives payment of no less than $12,000,000 from Titan Wireless as
repayment of intercompany notes owed to the Borrower (which proceeds are to be
used to repay the Loans pursuant to the terms of Section 3.1.1(c) hereunder),
and (c) upon satisfaction by the Administrative Agent that no Default shall have
occurred, then be continuing or would result from the initial public offering.
"Revolving Loan" is defined in Section 2.1.1 and shall include the
Existing Revolving Loans held by the Revolving Loan Lenders under the Existing
Credit Agreement which have been designated as Revolving Loans hereunder
pursuant to Section 2.1.1.
"Revolving Loan Commitment" means, relative to any Lender, such
Lender's obligation (if any) to make Revolving Loans pursuant to clause (a) of
Section 2.1.1.
"Revolving Loan Commitment Amount" means, on any date, $55,000,000, as
such amount may be reduced from time to time pursuant to Section 2.2.
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"Revolving Loan Commitment Termination Date" means the earliest of:
(a) July 29, 2003;
(b) the date on which the Revolving Loan Commitment Amount is
terminated in full or reduced to zero pursuant to Section 2.2; and
(c) the date on which any Commitment Termination Event occurs.
Upon the occurrence of any event described in the preceding clauses (b) or (c),
the Revolving Loan Commitments shall terminate automatically and without any
further action.
"Revolving Loan Lender" is defined in clause (a) of Section 2.1.1.
"Revolving Note" means a promissory note of the Borrower payable to any
Revolving Loan Lender, in the form of Exhibit A-1 hereto (as such promissory
note may be amended, endorsed or otherwise modified from time to time),
evidencing the aggregate Indebtedness of the Borrower to such Revolving Loan
Lender resulting from outstanding Revolving Loans, and also means all other
promissory notes accepted from time to time in substitution therefor or renewal
thereof.
"S&P" means Standard & Poor's Rating Services.
"Scotiabank" is defined in the preamble.
"SEC" means the Securities and Exchange Commission.
"Secured Parties" means the Lenders, the Issuers, the Administrative
Agent, and (in each case), each of their respective successors, transferees and
assigns.
"Security Agreement" means, as the context may require, the Borrower
Security Agreement and the Subsidiary Security Agreement, in each case as
amended, supplemented, amended and restated or otherwise modified.
"SRC" means System Resources Corporation, a Delaware corporation.
"SRC Acquisition" means the acquisition of all of the issued and
outstanding Capital Stock of SRC by Titan Technologies pursuant to the SRC
Purchase Agreement.
"SRC Purchase Agreement" means the Stock Purchase Agreement, dated as
of June 9, 1999, among Titan Technologies, SRC, and the shareholders of SRC, as
amended, supplemented, amended and restated or otherwise modified in accordance
with Section 7.2.12.
"SRC Seller Notes" means the promissory note(s), executed on or about
June 9, 1999, made by Titan Technologies in favor of the stockholders of SRC, in
the initial principal amount
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of $2,000,000 (subject to adjustment as provided for in the SRC Purchase
Agreement) as amended or otherwise modified in accordance with Section 7.2.12.
"Stated Amount", means on any date and with respect to a particular
Letter of Credit, the total amount then available to be drawn under such Letter
of Credit.
"Stated Expiry Date" is defined in Section 2.6.
"Stated Maturity Date" means with respect to
(a) the Original Acquisition Loans and the Revolving Loans,
July 29, 2003;
(b) the New Acquisition Loans, the fifth anniversary of the
Closing Date; and
(c) the Term B Loans, the sixth anniversary of the Closing
Date.
"Sub Debt Documents" means, collectively, the loan agreements,
indentures, note purchase agreements, promissory notes, guarantees, and other
instruments and agreements evidencing the terms of Subordinated Debt, as
amended, supplemented, amended and restated in accordance with Section 7.2.12.
"Subordinated Debt" means (i) the Existing Subordinated Debt, and (ii)
unsecured Indebtedness of the Borrower subordinated in right of payment to the
Obligations pursuant to documentation containing maturities, amortization
schedules, covenants, defaults, remedies, subordination provisions and other
terms reasonably satisfactory to the Required Lenders.
"Subordinated Notes" means, collectively, any promissory notes
evidencing Subordinated Debt, as such notes or instruments may be amended,
supplemented or otherwise modified from time to time in accordance with Section
7.2.12.
"Subsidiary" means, with respect to any Person, any corporation,
limited liability company, partnership or other entity of which more than 50% of
the outstanding securities (or other ownership interest) having ordinary voting
power to elect the board of directors, managers or other voting members of the
governing body of such corporation, limited liability company, partnership or
other entity (irrespective of whether at the time securities (or other ownership
interest) of any other class or classes of such corporation, limited liability
company, partnership or other entity shall or might have voting power upon the
occurrence of any contingency) is at the time directly or indirectly owned or
controlled by such Person, by such Person and one or more other Subsidiaries of
such Person, or by one or more other Subsidiaries of such Person. Unless the
context otherwise specifically requires, the term "Subsidiary" shall be a
reference to a Subsidiary of the Borrower.
"Subsidiary Guaranty" means the subsidiary guaranty executed and
delivered by each Restricted Subsidiary pursuant to the terms of this Agreement,
substantially in the form of Exhibit J hereto, as amended, supplemented, amended
and restated or otherwise modified.
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"Subsidiary Pledge Agreement" means the Pledge Agreement executed and
delivered by each Restricted Subsidiary that in turn has any Subsidiaries,
substantially in the form of Exhibit G-2 hereto, in each case as amended,
supplemented, amended and restated or otherwise modified.
"Subsidiary Security Agreement" means, collectively, each Security
Agreement executed and delivered by any Restricted Subsidiary in favor of the
Administrative Agent for the benefit of the Secured Parties pursuant to the
terms of this Agreement, in substantially the form of Exhibit H-2, in each case,
as amended, supplemented, amended and restated or otherwise modified.
"Swing Line Lender" means, subject to the terms of this Agreement,
Scotiabank.
"Swing Line Loan" is defined in clause (b) of Section 2.1.1.
"Swing Line Loan Commitment" is defined in clause (b) of Section 2.1.1.
"Swing Line Loan Commitment Amount" means, on any date, $5,000,000, as
such amount may be reduced from time to time pursuant to Section 2.2.
"Swing Line Note" means a promissory note of the Borrower payable to
Scotiabank, in the form of Exhibit A-3 hereto (as such promissory note may be
amended, endorsed or otherwise modified from time to time), evidencing the
aggregate Indebtedness of the Borrower to Scotiabank resulting from outstanding
Swing Line Loans, and also means all other promissory notes accepted from time
to time in substitution therefor or renewal thereof.
"Taxes" means any and all income, stamp or other taxes, duties, levies,
imposts, charges, fees, deductions or withholdings, now or hereafter imposed,
levied, collected, withheld or assessed by any Governmental Authority, and all
interest, penalties or similar liabilities with respect thereto.
"Term B Loan" is defined in Section 2.1.3.
"Term B Loan Commitment" means, relative to any Lender, such Lender's
obligation (if any) to make Term B Loans pursuant to Section 2.1.3.
"Term B Loan Commitment Amount" means, on any date, $75,000,000.
"Term B Loan Commitment Termination Date" means the earliest of:
(a) June 30, 1999 (if the initial Credit Extension with
respect to the Term B Loan has not occurred on or prior to such date);
(b) the date the initial Credit Extensions (with respect to
the Term B Loan) are made (immediately after the making of the Term B
Loans on such date); and
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(c) the date on which any Commitment Termination Event occurs.
Upon the occurrence of any event described in clauses (b), or (c), the Term B
Loan Commitments shall terminate automatically and without any further action.
"Term B Loan Lender" is defined in Section 2.1.3.
"Term B Note" means a promissory note of the Borrower payable to any
Lender, in the form of Exhibit A-4 hereto (as such promissory note may be
amended, endorsed or otherwise modified from time to time), evidencing the
aggregate Indebtedness of the Borrower to such Lender resulting from outstanding
Term B Loans, and also means all other promissory notes accepted from time to
time in substitution therefor or renewal thereof.
"Term Loan" means, as the context may require, an Original Acquisition
Loan and/or, a Term B Loan, and/or a New Acquisition Loan.
"Term Loan Commitment" means, as the context may require, a Term B Loan
Commitment, and/or a New Acquisition Loan Commitment.
"Term Loan Commitment Amount" means, as the context may require, the
Term B Loan Commitment Amount, and/or the New Acquisition Loan Commitment
Amount.
"Term Loan Commitment Termination Date" means, as the context may
require, the Term B Loan Commitment Termination Date, and/or the New Acquisition
Loan Commitment Termination Date.
"Term Loan Lender" is defined in Section 2.1.3.
"Term Note" means, as the context may require, an Original Acquisition
Note, and/or a Term B Note, and/or a New Acquisition Note.
"Titan Technologies" means Titan Technologies and Information Systems
Corporation, a Delaware corporation.
"Titan Wireless" means Titan Wireless, Inc., a Delaware corporation.
"Total Debt" means, on any date of determination, the outstanding
principal amount of all Indebtedness of the Borrower and its Restricted
Subsidiaries of the type referred to in clause (a) (which, in the case of the
Loans, shall be deemed to equal the aggregate amount of Loans outstanding on
such date), clause (b) (which, in the case of Letter of Credit Outstandings
shall be deemed to equal the aggregate amount of Letter of Credit Outstandings
on such date), and clause (c), in each case of the definition of "Indebtedness"
(exclusive of intercompany Indebtedness between the Borrower and any of its
Subsidiaries) and (without duplication) any Contingent Liability in respect of
any of the foregoing.
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"Total Debt to EBITDA Ratio" means, as of the last day of any Fiscal
Quarter, the ratio of:
(a) Total Debt outstanding on the last day of such Fiscal
Quarter
to
(b) EBITDA computed for the period consisting of such Fiscal
Quarter and each of the three immediately preceding Fiscal Quarters.
"Total Exposure Amount" means, on any date of determination (and
without duplication), the outstanding principal amount of all Loans, the
aggregate amount of all Letter of Credit Outstandings and the unfunded amount of
the Commitments.
"Total Percentage" means, relative to any Lender, the applicable
percentage relating to the sum of (a) the total outstanding amount of Loans made
by such Lender, (b) without duplication of clause (a) the total amount owed to
such Lender with respect to Letters of Credit, if any, and (c) the total
unfunded amount of the Commitments of such Lender, all in relation to the Total
Exposure Amount, as such percentage may be adjusted from time to time pursuant
to Lender Assignment Agreement(s) executed by such Lender and its Assignee
Lender(s) and delivered pursuant to Section 10.11.1.
"Trademark Security Agreement" means any Trademark Security Agreement
executed and delivered by any Obligor substantially in the form of Exhibit B to
any Security Agreement, as amended, supplemented, amended and restated or
otherwise modified.
.
"Transaction Documents" means, collectively, each purchase agreement
and each other document required in connection with any Permitted Acquisition.
"type" means, relative to any Loan, the portion thereof, if any, being
maintained as a Base Rate Loan or a LIBO Rate Loan.
"U.C.C." means the Uniform Commercial Code as from time to time in
effect in the State of New York.
"United States" or "U.S." means the United States of America, its fifty
states and the District of Columbia.
"U.S. Subsidiary" means any Subsidiary that is incorporated or
organized under the laws of the United States or a state thereof or the District
of Columbia.
"VisiCom" means VisiCom Laboratories, Inc., a California corporation.
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"Voting Stock" means, with respect to any Person, Capital Stock of any
class or kind ordinarily having the power to vote for the election of directors,
managers or other voting members of the governing body of such Person.
"Welfare Plan" means a "welfare plan", as such term is defined in
section 3(1) of ERISA.
"wholly owned" means any Subsidiary all of the outstanding common stock
(or similar equity interest) of which (other than any director's qualifying
shares or investments by foreign nationals mandated by applicable laws) is owned
directly or indirectly by the Borrower.
SECTION 1.2. Use of Defined Terms. Unless otherwise defined or the
context otherwise requires, terms for which meanings are provided in this
Agreement shall have such meanings when used in each other Loan Document and the
Disclosure Schedule.
SECTION 1.3. Cross-References. Unless otherwise specified, references
in this Agreement and in each other Loan Document to any Article or Section are
references to such Article or Section of this Agreement or such other Loan
Document, as the case may be, and, unless otherwise specified, references in any
Article, Section or definition to any clause are references to such clause of
such Article, Section or definition.
SECTION 1.4. Accounting and Financial Determinations. (a) Unless
otherwise specified, all accounting terms used herein or in any other Loan
Document shall be interpreted, and all accounting determinations and
computations hereunder or thereunder (including under Section 7.2.4) shall be
made, in accordance with, those generally accepted accounting principles
("GAAP") applied in the preparation of the financial statements referred to in
Section 5.1. Unless otherwise expressly provided, all financial covenants and
defined financial terms shall be computed on a consolidated basis for the
Borrower and its Subsidiaries, in each case without duplication.
ARTICLE II
COMMITMENTS, BORROWING AND ISSUANCE
PROCEDURES, NOTES AND LETTERS OF CREDIT
SECTION 2.1. Commitments. On the terms and subject to the conditions of
this Agreement,
(a) each Lender severally agrees to make Loans (other than
Swing Line Loans) pursuant to the Commitments and Scotiabank agrees to
make Swing Line Loans pursuant to the Swing Line Loan Commitment, in
each case as described in this Section 2.1; and
(b) each Issuer severally agrees that it will issue Letters of
Credit pursuant to Section 2.1.2, and each Revolving Loan Lender
severally agrees that it will purchase participation interests in such
Letters of Credit pursuant to Section 2.6.1.
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SECTION 2.1.2. Revolving Loan Commitment and Swing Line Loan
Commitment. (a) From time to time on any Business Day occurring from and after
July 29, 1998 but prior to the Revolving Loan Commitment Termination Date, each
Lender that has a Revolving Loan Commitment (referred to as a "Revolving Loan
Lender") will make loans (relative to such Lender, its "Revolving Loans") to the
Borrower equal to such Lender's Percentage of the aggregate amount of each
Borrowing of the Revolving Loans requested by the Borrower to be made on such
day. On the terms and subject to the conditions hereof, the Borrower may from
time to time borrow, prepay and reborrow the Revolving Loans.
(b) From time to time on any Business Day occurring from and after the
Closing Date but prior to the Revolving Loan Commitment Termination Date,
Scotiabank will make loans (relative to Scotiabank, its "Swing Line Loan") to
the Borrower equal to the principal amount of the Swing Line Loan requested by
the Borrower to be made on such day. The Commitment of Scotiabank described in
this clause (b) is herein referred to as its "Swing Line Loan Commitment". On
the terms and subject to the conditions hereof, the Borrower may from time to
time borrow, prepay and reborrow Swing Line Loans.
SECTION 2.1.3. Letter of Credit Commitment. From time to time on any
Business Day occurring from and after July 29, 1998 but prior to the Revolving
Loan Commitment Termination Date, the Issuer will:
(a) issue one or more standby letters of credit (relative to
such Issuer, its "Letter of Credit") for the account of the Borrower or
any Guarantor in the Stated Amount requested by the Borrower on such
day; or
(b) extend the Stated Expiry Date of an existing standby
Letter of Credit previously issued hereunder to a date not later than
the earlier of (x) the Revolving Loan Commitment Termination Date and
(y) two years from the date of such extension.
SECTION 2.1.4. Term Loan Commitments.
(a) As of the Effective Date the Original Acquisition Loan was
outstanding in the aggregate principal amount equal to $25,000,000.
(b) In a single borrowing (which shall be a Business Day)
occurring on or prior to the Term B Loan Commitment Termination Date,
each Lender that has a Term B Loan Commitment (referred to as a "Term B
Loan Lender") will make loans (relative to such Lender, its "Term B
Loans") to the Borrower equal to such Lender's Percentage of the
aggregate amount of each Borrowing of the Term B Loans requested by the
Borrower to be made on such day. No amounts paid or prepaid with
respect to Term B Loans may be reborrowed.
(c) From time to time on any Business Day occurring from and
after the Effective Date but prior to the New Acquisition Conversion
Date, each Lender that has a New Acquisition Loan Commitment (referred
to as a "New Acquisition Loan Lender", and together with each Original
Acquisition Loan Lender and each Term B Loan Lender, a "Term Loan
Lender") will make loans (relative to such Lender, its "New Acquisition
Loans") to the Borrower equal to such Lender's Percentage of the
aggregate amount of each Borrowing of the New Acquisition Loans
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requested by the Borrower to be made on such day. No amounts paid or prepaid
with respect to New Acquisition Loans may be reborrowed.
SECTION 2.1.5. Lenders Not Permitted or Required to Make Loans. No
Lender shall be permitted or required to make any Loan if, after giving effect
thereto, the aggregate outstanding principal amount of:
(a) all Revolving Loans
(i) of all Revolving Loan Lenders and the outstanding
principal amount of all Swing Line Loans, together with the
aggregate amount of all Letter of Credit Outstandings, would
exceed the then existing Revolving Loan Commitment Amount; or
(ii) of such Revolving Loan Lender, together with
such Lender's Percentage of the aggregate amount of all Swing
Line Loans and Letter of Credit Outstandings, would exceed
such Lender's Percentage of the then existing Revolving Loan
Commitment Amount;
(b) all Term B Loans
(i) of all Lenders made on the Effective Date would
exceed the Term B Loan Commitment Amount; or
(ii) of such Lender with a Term B Loan Commitment
made on the Effective Date would exceed such Lender's
Percentage of the Term B Loan Commitment Amount; or
(c) all New Acquisition Loans
(i) of all Lenders made prior to the New Acquisition
Conversion Date would exceed the New Acquisition Loan
Commitment Amount; or
(ii) of such Lender with a New Acquisition Loan
Commitment made prior to the New Acquisition Conversion Date
would exceed such Lender's Percentage of the New Acquisition
Loan Commitment Amount; or
(d) (i) all Swing Line Loans would exceed the then existing
Swing Line Loan Commitment Amount or (ii) unless otherwise agreed to by
the Swing Line Lender, in its sole discretion, the sum of all Swing
Line Loans and Revolving Loans made by Scotiabank plus Scotiabank's
Percentage multiplied by the aggregate amount of Letter of Credit
Outstandings would exceed the amount determined by multiplying
Scotiabank's Percentage by the then existing Revolving Loan Commitment
Amount.
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SECTION 2.1.6. Issuer Not Permitted or Required to Issue Letters of
Credit. No Issuer shall be permitted or required to issue any Letter of Credit
if, after giving effect thereto, (a) the aggregate amount of all Letter of
Credit Outstandings would exceed the Letter of Credit Commitment Amount or (b)
the sum of the aggregate amount of all Letter of Credit Outstandings plus the
aggregate principal amount of all Revolving Loans and Swing Line Loans then
outstanding would exceed the Revolving Loan Commitment Amount.
SECTION 2.2. Reduction of the Commitment Amounts. The Commitment
Amounts are subject to reduction from time to time pursuant to this Section 2.2.
SECTION 2.2.1. Optional. The Borrower may, from time to time on any
Business Day occurring after the Effective Date, voluntarily reduce the amount
of the Revolving Loan Commitment Amount, the New Acquisition Loan Commitment
Amount (on any date before the New Acquisition Conversion Date), the Swing Line
Loan Commitment Amount or the Letter of Credit Commitment Amount on the Business
Day so specified by the Borrower; provided, however, that all such reductions
shall require at least one Business Day's prior notice to the Administrative
Agent and be permanent, and any partial reduction of any Commitment Amount shall
be in a minimum amount of $1,000,000 and in an integral multiple of $500,000.
Any reduction of the Revolving Loan Commitment Amount which reduces the
Revolving Loan Commitment Amount below the then current amount of the Swing Line
Loan Commitment Amount shall result in an automatic and corresponding reduction
of the Swing Line Loan Commitment Amount to the amount of the Revolving Loan
Commitment Amount, as so reduced, without any further action on the part of
Scotiabank or otherwise. Any reduction of the Revolving Loan Commitment Amount
which reduces the Revolving Loan Commitment Amount below the then current amount
of the Letter of Credit Commitment Amount shall result in an automatic and
corresponding reduction of the Letter of Credit Commitment Amount to the amount
of the Revolving Loan Commitment Amount, as so reduced, without any further
action on the part of Scotiabank or otherwise.
SECTION 2.2.2. Mandatory. (a) On the New Acquisition Conversion Date,
the New Acquisition Loan Commitment Amount shall automatically and without the
requirement of any action on the part of any Person be permanently reduced to
zero, and (b) on the date the Borrower or any of its Restricted Subsidiaries
receives any Net Proceeds and after the expiration of any period designated for
the purchase of Qualified Assets, if appropriate, the amounts outstanding under
the Term Loans, the New Acquisition Conversion Amount (on and after the New
Acquisition Conversion Date) and the Revolving Loan Commitment Amount (on the
date all Term Loans have been paid in full), shall be reduced by an amount equal
to 100% of Net Proceeds with respect to Net Proceeds described in clauses (b),
(c), and (d) of the definition thereof and 50% of such Net Proceeds with respect
to the Net Proceeds described in clause (a) of the definition thereof; provided,
however, that the Revolving Loan Commitment Amount shall only be reduced by the
Net Proceeds described in clause (b) of the definition thereof.
SECTION 2.3. Borrowing Procedures. Loans (other than Swing Line Loans)
shall be made by the Lenders in accordance with Section 2.3.1, and Swing Line
Loans shall be made by Scotiabank in accordance with Section 2.3.2.
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SECTION 2.3.1. Borrowing Procedure. In the case of other than Swing
Line Loans, by delivering a Borrowing Request to the Administrative Agent on or
before 12:00 noon, New York time, on a Business Day, the Borrower may from time
to time irrevocably request, on not less than one Business Day's notice in the
case of Base Rate Loans, or three Business Days' notice in the case of LIBO Rate
Loans, and in either case not more than five Business Days' notice, that a
Borrowing be made, in the case of LIBO Rate Loans, in a minimum amount of
$500,000 and an integral multiple of $500,000, in the case of Base Rate Loans,
in a minimum amount of $500,000 and an integral multiple of $100,000 or, in
either case, in the unused amount of the applicable Commitment. On the terms and
subject to the conditions of this Agreement, each Borrowing shall be comprised
of the type of Loans, and shall be made on the Business Day, specified in such
Borrowing Request. In the case of other than Swing Line Loans, on or before 1:00
p.m. (New York City time) on such Business Day each Lender that has a Commitment
to make the Loans being requested shall deposit with the Administrative Agent
same day funds in an amount equal to such Lender's Percentage of the requested
Borrowing. Such deposit will be made to an account which the Administrative
Agent shall specify from time to time by notice to the Lenders. To the extent
funds are received from the Lenders, the Administrative Agent shall make such
funds available to the Borrower by wire transfer to the accounts the Borrower
shall have specified in its Borrowing Request. No Lender's obligation to make
any Loan shall be affected by any other Lender's failure to make any Loan.
SECTION 2.3.2. Swing Line Loans. (a) By telephonic notice, promptly
followed (within one Business Day) by the delivery of a confirming Borrowing
Request, to Scotiabank on or before 12:00 noon, New York time, on the Business
Day the proposed Swing Line Loan is to be made, the Borrower may from time to
time irrevocably request that Swing Line Loans be made by Scotiabank in an
aggregate minimum principal amount of $500,000 and an integral multiple of
$100,000. All Swing Line Loans shall be made as Base Rate Loans and shall not be
entitled to be converted into LIBO Rate Loans. The proceeds of each Swing Line
Loan shall be made available by Scotiabank, by its close of business on the
Business Day telephonic notice is received by it as provided in this clause to
the Borrower by wire transfer to the account the Borrower shall have specified
in its notice therefor.
(b) If
(i) any Swing Line Loan shall be outstanding for more
than four Business Days;
(ii) any Swing Line Loan is or will be outstanding on
a date when the Borrower requests that a Revolving Loan be
made; or
(iii) any Default shall occur and be continuing,
each Revolving Loan Lender (other than Scotiabank) irrevocably agrees that it
will, at the request of Scotiabank, make a Revolving Loan (which shall initially
be funded as a Base Rate Loan) in an amount equal to such Lender's Percentage of
the aggregate principal amount of all such Swing Line Loans then outstanding
(such outstanding Swing Line Loans hereinafter referred to as the "Refunded
Swing Line Loans"). On or before 1:00 p.m. (New York time) on
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the first Business Day following receipt by each Lender of a request to make
Revolving Loans as provided in the preceding sentence, each Revolving Loan
Lender shall deposit in an account specified by Scotiabank the amount so
requested in same day funds and such funds shall be applied by Scotiabank to
repay the Refunded Swing Line Loans. At the time the aforementioned Lenders make
the above referenced Revolving Loans, Scotiabank shall be deemed to have made,
(in consideration of the making of the Refunded Swing Line Loans), Revolving
Loans in an amount equal to Scotiabank's Percentage of the aggregate principal
amount of the Refunded Swing Line Loans. Upon the making (or deemed making, in
the case of Scotiabank) of any Revolving Loans pursuant to this clause, the
amount so funded shall become outstanding under such Revolving Loan Lender's
Revolving Note and shall no longer be owed under the Swing Line Note. All
interest payable with respect to any Revolving Loans made (or deemed made, in
the case of Scotiabank) pursuant to this clause shall be appropriately adjusted
to reflect the period of time during which Scotiabank had outstanding Swing Line
Loans in respect of which such Revolving Loans were made. Each Revolving Loan
Lender's obligation to make the Revolving Loans referred to in this clause shall
be absolute and unconditional and shall not be affected by any circumstance,
including (i) any set-off, counterclaim, recoupment, defense or other right
which such Lender may have against Scotiabank, any Obligor or any Person for any
reason whatsoever; (ii) the occurrence or continuance of any Default; (iii) any
adverse change in the condition (financial or otherwise) of any Obligor; (iv)
the acceleration or maturity of any Obligations or the termination of any
Commitment after the making of any Swing Line Loan; (v) any breach of this
Agreement or any other Loan Document by any Person; or (vi) any other
circumstance, happening or event whatsoever, whether or not similar to any of
the foregoing.
SECTION 2.4. Continuation and Conversion Elections. By delivering a
Continuation/ Conversion Notice to the Administrative Agent on or before 12:00
noon, New York time, on a Business Day, the Borrower may from time to time
irrevocably elect, on not less than one Business Days' notice in the case of
Base Rate Loans, or three Business Days' notice in the case of LIBO Rate Loans,
and in either case not more than five Business Days' notice, that all, or any
portion in an aggregate minimum amount of $1,000,000 and an integral multiple of
$1,000,000 be, in the case of Base Rate Loans, converted into LIBO Rate Loans or
be, in the case of LIBO Rate Loans, converted into Base Rate Loans or continued
as LIBO Rate Loans (in the absence of delivery of a Continuation/Conversion
Notice with respect to any LIBO Rate Loan at least three Business Days (but not
more than five Business Days) before the last day of the then current Interest
Period with respect thereto, such LIBO Rate Loan shall, on such last day,
automatically convert to a Base Rate Loan); provided, however, that (x) each
such conversion or continuation shall be pro rated among the applicable
outstanding Loans of all Lenders that have made such Loans, and (y) no portion
of the outstanding principal amount of any Loans may be continued as, or be
converted into, LIBO Rate Loans when any Default has occurred and is continuing.
SECTION 2.5. Funding. Each Lender may, if it so elects, fulfill its
obligation to make, continue or convert LIBO Rate Loans hereunder by causing one
of its foreign branches or Affiliates (or an international banking facility
created by such Lender) to make or maintain such LIBO Rate Loan; provided,
however, that such LIBO Rate Loan shall nonetheless be deemed to have been made
and to be held by such Lender, and the obligation of the Borrower to repay such
LIBO Rate Loan shall nevertheless be to such Lender for the account of such
foreign branch,
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Affiliate or international banking facility. In addition, the Borrower hereby
consents and agrees that, for purposes of any determination to be made for
purposes of Section 4.1, 4.2, 4.3 or 4.4, it shall be conclusively assumed that
each Lender elected to fund all LIBO Rate Loans by purchasing Dollar deposits in
its LIBOR Office's interbank eurodollar market.
SECTION 2.6. Issuance Procedures. By delivering to the Administrative
Agent an Issuance Request on or before 12:00 noon, New York time, on a Business
Day, the Borrower may from time to time irrevocably request on not less than
three nor more than ten Business Days' notice, in the case of an initial
issuance of a Letter of Credit and not less than three Business Days' prior
notice, in the case of a request for the extension of the Stated Expiry Date of
a standby Letter of Credit, that an Issuer issue, or extend the Stated Expiry
Date of, as the case may be, an irrevocable Letter of Credit in such form as may
be requested by the Borrower and approved by such Issuer, solely for the
purposes described in Section 7.1.8. Each Letter of Credit shall by its terms be
stated to expire on a date (its "Stated Expiry Date") no later than the earlier
to occur of (i) the Revolving Loan Commitment Termination Date and (ii) (unless
otherwise agreed to by an Issuer, in its sole discretion) two years from the
date of its issuance. Each Issuer will make available to the beneficiary thereof
the original of the Letter of Credit which it issues hereunder.
SECTION 2.6.1. Other Lenders' Participation. Upon the issuance of each
Letter of Credit issued by an Issuer pursuant hereto, and without further
action, each Revolving Loan Lender (other than such Issuer) shall be deemed to
have irrevocably purchased, to the extent of its Percentage to make Revolving
Loans, a participation interest in such Letter of Credit (including the
Contingent Liability and any Reimbursement Obligation with respect thereto), and
such Revolving Loan Lender shall, to the extent of its Percentage to make
Revolving Loans, be responsible for reimbursing promptly (and in any event
within one Business Day) the Issuer for Reimbursement Obligations which have not
been reimbursed by the Borrower in accordance with Section 2.6.3. In addition,
such Revolving Loan Lender shall, to the extent of its Percentage to make
Revolving Loans, be entitled to receive a ratable portion of the Letter of
Credit fees payable pursuant to Section 3.3.3 with respect to each Letter of
Credit (other than the issuance fees payable to an Issuer of such Letter of
Credit pursuant to the last sentence of Section 3.3.3) and of interest payable
pursuant to Section 3.2 with respect to any Reimbursement Obligation. To the
extent that any Revolving Loan Lender has reimbursed any Issuer for a
Disbursement, such Lender shall be entitled to receive its ratable portion of
any amounts subsequently received (from the Borrower or otherwise) in respect of
such Disbursement.
SECTION 2.6.2. Disbursements. An Issuer will notify the Borrower and
the Administrative Agent promptly of the presentment for payment of any Letter
of Credit issued by such Issuer, together with notice of the date (the
"Disbursement Date") such payment shall be made (each such payment, a
"Disbursement"). Subject to the terms and provisions of such Letter of Credit
and this Agreement, the applicable Issuer shall make such payment to the
beneficiary (or its designee) of such Letter of Credit. Prior to 1:00 p.m., New
York time, on the first Business Day following the Disbursement Date, the
Borrower will reimburse the Administrative Agent, for the account of the
applicable Issuer, for all amounts which such Issuer has disbursed under such
Letter of Credit, together with interest thereon at a rate per annum equal to
the rate
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per annum then in effect for Base Rate Loans (with the then Applicable Margin
for Revolving Loans accruing on such amount) pursuant to Section 3.2 for the
period from the Disbursement Date through the date of such reimbursement.
Without limiting in any way the foregoing and notwithstanding anything to the
contrary contained herein or in any separate application for any Letter of
Credit, the Borrower hereby acknowledges and agrees that it shall be obligated
to reimburse the applicable Issuer upon each Disbursement of a Letter of Credit,
and it shall be deemed to be the obligor for purposes of each such Letter of
Credit issued hereunder (whether the account party on such Letter of Credit is
the Borrower or a Subsidiary).
SECTION 2.6.3. Reimbursement. The obligation (a "Reimbursement
Obligation") of the Borrower under Section 2.6.2 to reimburse an Issuer with
respect to each Disbursement (including interest thereon), and, upon the failure
of the Borrower to reimburse an Issuer, each Revolving Loan Lender's obligation
under Section 2.6.1 to reimburse an Issuer, shall be absolute and unconditional
under any and all circumstances and irrespective of any setoff, counterclaim or
defense to payment which the Borrower or such Revolving Loan Lender, as the case
may be, may have or have had against such Issuer or any Lender, including any
defense based upon the failure of any Disbursement to conform to the terms of
the applicable Letter of Credit (if, in such Issuer's good faith opinion, such
Disbursement is determined to be appropriate) or any non- application or
misapplication by the beneficiary of the proceeds of such Letter of Credit;
provided, however, that after paying in full its Reimbursement Obligation
hereunder, nothing herein shall adversely affect the right of the Borrower or
such Lender, as the case may be, to commence any proceeding against an Issuer
for any wrongful Disbursement made by such Issuer under a Letter of Credit as a
result of acts or omissions constituting gross negligence or wilful misconduct
on the part of such Issuer.
SECTION 2.6.4. Deemed Disbursements. Upon the occurrence and during the
continuation of any Default under Section 8.1.9 or upon notification by the
Administrative Agent (acting at the direction of the Required Lenders) to the
Borrower of its obligations under this Section, following the occurrence and
during the continuation of any other Event of Default,
(a) the aggregate Stated Amount of all Letters of Credit
shall, without demand upon or notice to the Borrower or any other
Person, be deemed to have been paid or disbursed by the Issuers of such
Letters of Credit (notwithstanding that such amount may not in fact
have been paid or disbursed); and
(b) the Borrower shall be immediately obligated to reimburse
the Issuers for the amount deemed to have been so paid or disbursed by
such Issuers.
Amounts payable by the Borrower pursuant to this Section shall be deposited in
immediately available funds with the Administrative Agent and held as collateral
security for the Reimbursement Obligations. When all Defaults giving rise to the
deemed disbursements under this Section have been cured or waived the
Administrative Agent shall return to the Borrower all amounts then on deposit
with the Administrative Agent pursuant to this Section which have not been
applied to the satisfaction of the Reimbursement Obligations.
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SECTION 2.6.5. Nature of Reimbursement Obligations. The Borrower, each
other Obligor and, to the extent set forth in Section 2.6.1, each Revolving Loan
Lender shall assume all risks of the acts, omissions or misuse of any Letter of
Credit by the beneficiary thereof. No Issuer (except to the extent of its own
gross negligence or wilful misconduct) shall be responsible for:
(a) the form, validity, sufficiency, accuracy, genuineness or
legal effect of any Letter of Credit or any document submitted by any
party in connection with the application for and issuance of a Letter
of Credit, even if it should in fact prove to be in any or all respects
invalid, insufficient, inaccurate, fraudulent or forged;
(b) the form, validity, sufficiency, accuracy, genuineness or
legal effect of any instrument transferring or assigning or purporting
to transfer or assign a Letter of Credit or the rights or benefits
thereunder or the proceeds thereof in whole or in part, which may prove
to be invalid or ineffective for any reason;
(c) failure of the beneficiary to comply fully with conditions
required in order to demand payment under a Letter of Credit;
(d) errors, omissions, interruptions or delays in transmission
or delivery of any messages, by mail, cable, telegraph, telex or
otherwise; or
(e) any loss or delay in the transmission or otherwise of any
document or draft required in order to make a Disbursement under a
Letter of Credit.
None of the foregoing shall affect, impair or prevent the vesting of any of the
rights or powers granted to any Issuer or any Revolving Loan Lender hereunder.
In furtherance and not in limitation or derogation of any of the foregoing, any
action taken or omitted to be taken by an Issuer in good faith (and not
constituting gross negligence or willful misconduct) shall be binding upon each
Obligor and each such Secured Party, and shall not put such Issuer under any
resulting liability to any Obligor or any Secured Party, as the case may be.
SECTION 2.7. Notes. Each Lender's Loans under a Commitment shall be
evidenced by a Note payable to the order of such Lender in a maximum principal
amount equal to such Lender's Percentage of the original applicable Commitment
Amount. The Borrower hereby irrevocably authorizes each Lender to make (or cause
to be made) appropriate notations on the grid attached to such Lender's Note (or
on any continuation of such grid), which notations, if made, shall evidence,
inter alia, the date of, the outstanding principal of, and the interest rate and
Interest Period applicable to the Loans evidenced thereby. Such notations shall
be rebuttably presumptive evidence of the accuracy of the information so set
forth; provided, however, that the failure of any Lender to make any such
notations shall not limit or otherwise affect any Obligations of any Obligor.
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ARTICLE III
REPAYMENTS, PREPAYMENTS, INTEREST AND FEES
SECTION 3.1. Repayments and Prepayments; Application.
SECTION 3.1.1. Repayments and Prepayments. The Borrower shall repay in
full the unpaid principal amount of each Loan upon the applicable Stated
Maturity Date therefor. Prior thereto, payments and prepayments of Loans shall
or may be made as set forth below.
(a) From time to time on any Business Day, the Borrower may
make a voluntary prepayment, in whole or in part, of the outstanding
principal amount of any:
(i) Loans (other than Swing Line Loans), provided,
however, that
(A) any such prepayment of the Term Loans
shall be made pro rata among all the Term Loans and,
if applicable, having the same Interest Period of all
Lenders that have made such Term Loans, and shall be
applied to the remaining amortization payments, for
the relevant Term Loans as provided for in Section
3.1.1(d) and any such prepayment of Revolving Loans
shall be made pro rata among the Revolving Loans of
the same type and, if applicable, having the same
Interest Period of all Lenders that have made such
Revolving Loans;
(B) all such voluntary prepayments shall
require at least one but no more than five Business
Days' prior written notice to the Administrative
Agent; and
(C) all such voluntary partial prepayments
shall be, in the case of LIBO Rate Loans, in an
aggregate minimum amount of $1,000,000 and an
integral multiple of $1,000,000 and, in the case of
Base Rate Loans, in an aggregate minimum amount of
$500,000 and an integral multiple of $100,000; and
(ii) Swing Line Loans, provided that
(A) all such voluntary prepayments shall
require prior telephonic notice to Scotiabank on or
before 1:00 p.m., New York time, on the day of such
prepayment (such notice to be confirmed in writing
within 24 hours thereafter); and
(B) all such voluntary partial prepayments
shall be in an aggregate minimum amount of $200,000
and an integral multiple of $100,000.
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(b) On each date when the sum of (i) the aggregate outstanding
principal amount of all Revolving Loans and Swing Line Loans and (ii)
the aggregate amount of all Letter of Credit Outstandings exceeds the
Revolving Loan Commitment Amount (as it may be reduced from time to
time, including pursuant to Section 2.2), the Borrower shall make a
mandatory prepayment of all the Revolving Loans or all Swing Line Loans
(or both) and, if necessary, give cash collateral to the Administrative
Agent pursuant to an agreement satisfactory to the Administrative Agent
to collateralize Letter of Credit Outstandings, in an aggregate amount
equal to such excess. On the first Business Day following the Effective
Date, the Borrower shall make a mandatory prepayment of Revolving Loans
(which prepayment shall not result in a reduction of the Revolving Loan
Commitment Amount) in an aggregate principal amount of at least
$35,200,000.
(c) Concurrently with the receipt (or deemed receipt) of any
Net Proceeds by the Borrower or any of its Restricted Subsidiaries, the
Borrower shall make a mandatory prepayment of the Loans (i) in an
amount equal to 100% of the Net Proceeds with respect to Net Proceeds
described in clauses (b), (c) and (d) of the definition thereof and
(ii) 50% of such Net Proceeds with respect to the Net Proceeds
described in clause (a) of the definition thereof, in each case, to be
applied as set forth in Section 3.1.2. The Borrower will, prior to
prepaying the Loans, give the Administrative Agent telephone notice
(promptly confirmed in writing) requesting that the Administrative
Agent provide notice of such prepayment to each Lender entitled to
receive any portion of such prepayment.
(d) On the Stated Maturity Date and on each Quarterly Payment
Date occurring during any period set forth below, the Borrower shall
make a scheduled repayment of the aggregate outstanding principal
amount of:
(i) the Original Acquisition Loans, if any, in an
amount equal to the amount set forth below:
Required Repayment Amount
Expressed as a Percentage of
Period the Original Principal Amount
------ -----------------------------
September 29, 1999 (and including) September
29, 2000 3.75%
September 30, 2000 through (and including)
September 29, 2001 5.00%
September 30, 2001 (and including) September
29, 2002 7.50%
September 30, 2002 through (and including) June
30, 2003 8.75%
July 29, 2003 100% of remaining principal
balance, if any
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(ii) the Term B Loans, if any, in an amount equal to the
amount set forth below:
Required Repayment Amount
Expressed as a Percentage
of the original principal
Period Amount of Term B Loans
------ ------------------------------
September 30, 1999 through (and including)
September 29, 2004 .25%
September 30, 2004 through (but excluding)
March 31, 2005 23.75%
June 9, 2005 100% of remaining principal
balance, if any
(iii) the New Acquisition Loans, if any, in an amount equal to
the amount set forth below:
Required Repayment Amount
Expressed as a Percentage
of the New Acquisition
Period Conversion Amount
------ ---------------------------
New Acquisition Conversion Date through (and
including) the date of the first anniversary of the
New Acquisition Conversion Date 3.75%
the first day following the first anniversary of the
New Acquisition Conversion Date through (and
including) the date of the second anniversary of
the New Acquisition Conversion Date 5.00%
the first day following the second anniversary of
the New Acquisition Conversion Date through
(and including) the date of the third anniversary of
the New Acquisition Conversion Date 7.50%
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the first day following the third anniversary of the
New Acquisition Conversion Date through (but
excluding) the date of the fourth anniversary of
the New Acquisition Conversion Date 8.75%
Stated Maturity Date for New Acquisition Loans 100% of remaining principal
balance, if any
(e) Immediately upon any acceleration of the Stated Maturity
Date of any Loans pursuant to Section 8.2 or Section 8.3, the Borrower
shall repay all the Loans, unless, pursuant to Section 8.3, only a
portion of all the Loans is so accelerated (in which case the portion
so accelerated shall be so repaid).
Each prepayment of any Loans made pursuant to this Section shall be without
premium or penalty, except as may be required by Section 4.4. No prepayment of
principal of any Revolving Loans or Swing Line Loans pursuant to clause (a) or
(b) shall cause a reduction in the Revolving Loan Commitment Amount or the Swing
Line Loan Commitment Amount, as the case may be.
SECTION 3.1.2. Application. Amounts prepaid shall be applied as set
forth in this Section.
(a) Subject to clause (b), each prepayment or repayment of the
principal of the Loans shall be applied, to the extent of such
prepayment or repayment, first, to the principal amount thereof being
maintained as Base Rate Loans, and second, to the principal amount
thereof being maintained as LIBO Rate Loans; provided, that mandatory
prepayments of LIBO Rate Loans made pursuant to clause (c) of Section
3.1.1, if not made on the last day of the Interest Period with respect
thereto, shall be (i) prepaid subject to the provisions of Section 4.4
(together with a payment of all accrued interest) or (ii) upon the
written request of the Borrower, so long as no Default or Event of
Default has occurred and is continuing, the last day of the relevant
Interest Period so long as the funds representing such prepayment are
deposited with the Administrative Agent pursuant to arrangements and
documentation in form and substance reasonably satisfactory to the
Administrative Agent.
(b) Each prepayment of Loans made pursuant to clause (c) of
Section 3.1.1 shall be applied (i) first, (A) prior to the New
Acquisition Conversion Date, as applicable, pro rata to the mandatory
prepayment of the outstanding principal amount of all Original
Acquisition Loans, Term B Loans or New Acquisition Loans, and (B) on
and after the New Acquisition Conversion Date, to the mandatory
prepayment of the outstanding principal amount of all Term Loans (with
the amount of such prepayment of the Term Loans being applied to all
remaining amortization payments of each Term Loan,
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pro rata among all such outstanding Term Loans), until all Term Loans
have been paid in full, and except that with respect to the amount of
any such prepayment that is allocated to the then outstanding Term B
Loans, each such Term B Loan Lender shall have the right to refuse any
such prepayment by giving written notice of such refusal to the
Borrower within five Business Days after such Term B Loan Lender's
receipt of notice from the Administrative Agent of such prepayment (and
the Borrower shall not prepay any such Term B Loans until such tenth
Business Day or such time as the Borrower receives written notice from
such Term B Loan Lender that it consents to such prepayment, whichever
is earlier). 50% of any prepayment so refused shall be applied pro rata
to the remaining Original Acquisition Loans, Term B Loans (of Term B
Loan Lenders that did not refuse such prepayment pursuant hereto) and
New Acquisition Loans, and the Borrower shall retain the remaining 50%
of any prepayment so refused; (ii) second, once all Term Loans have
been repaid in full and all Term Loan Commitment Amounts have been
reduced to $0, all prepayments of Loans made pursuant to clause (c) of
Section 3.1.1 shall be applied to the repayment of any outstanding
Revolving Loans and, in the case of Asset Sales only, a reduction of
the Revolving Loan Commitment Amount in accordance with Section 2.2.2.
SECTION 3.2. Interest Provisions. Interest on the outstanding principal
amount of Loans shall accrue and be payable in accordance with this Section 3.2.
SECTION 3.2.1. Rates. Subject to Section 2.3.2, pursuant to an
appropriately delivered Borrowing Request or Continuation/Conversion Notice, the
Borrower may elect that Loans comprising a Borrowing accrue interest at a rate
per annum:
(a) on that portion maintained from time to time as a Base
Rate Loan, equal to the sum of the Alternate Base Rate from time to
time in effect plus the Applicable Margin; provided that all Swing Line
Loans shall always accrue interest at the then effective Applicable
Margin for Revolving Loans maintained as Base Rate Loans; and
(b) on that portion maintained as a LIBO Rate Loan, during
each Interest Period applicable thereto, equal to the sum of the LIBO
Rate (Reserve Adjusted) for such Interest Period plus the Applicable
Margin.
All LIBO Rate Loans shall bear interest from and including the first
day of the applicable Interest Period to (but not including) the last day of
such Interest Period at the interest rate determined as applicable to such LIBO
Rate Loan.
SECTION 3.2.2. Post-Maturity Rates. After the date any principal amount
of any Loan or Reimbursement Obligation is due and payable (whether on the
Stated Maturity Date, upon acceleration or otherwise), or after any other
monetary Obligation of the Borrower shall have become due and payable, the
Borrower shall pay, but only to the extent permitted by law, interest (after as
well as before judgment) on such amounts at a rate per annum equal to the
Alternate Base Rate from time to time in effect plus the Applicable Margin then
in effect plus a margin of 2%.
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SECTION 3.2.3. Payment Dates. Interest accrued on each Loan shall be
payable, without duplication:
(a) on the Stated Maturity Date therefor;
(b) on the date of any payment or prepayment, in whole or in
part, of principal outstanding on such Loan on the principal amount so
paid or prepaid;
(c) with respect to Base Rate Loans, on each Quarterly Payment
Date occurring after the Effective Date;
(d) with respect to LIBO Rate Loans, on the last day of each
applicable Interest Period (and, if such Interest Period shall exceed
three months, on the date occurring on each three-month interval
occurring after the first day of such Interest Period); and
(e) on that portion of any Loans the Stated Maturity Date of
which is accelerated pursuant to Section 8.2 or Section 8.3,
immediately upon such acceleration.
Interest accrued on Loans or other monetary Obligations arising under this
Agreement or any other Loan Document after the date such amount is due and
payable (whether on the Stated Maturity Date, upon acceleration or otherwise)
shall be payable upon demand.
SECTION 3.3. Fees. The Borrower agrees to pay the fees set forth in
this Section 3.3. All such fees shall be non-refundable.
SECTION 3.3.1. Commitment Fee. The Borrower agrees to pay to the
Administrative Agent for the account of each Lender, for the period (including
any portion thereof when any of its Commitments are suspended by reason of the
Borrower's inability to satisfy any condition of Article V) commencing on the
Effective Date and continuing through the applicable Commitment Termination
Date, a commitment fee in an amount equal to the Applicable Commitment Fee
Margin, in each case on such Lender's Percentage of the sum of the average daily
unused portion of the applicable Commitment Amount (net of Letter of Credit
Outstandings, in the case of the Revolving Loan Commitment Amount.) All
commitment fees payable pursuant to this Section shall be calculated on a year
comprised of 360 days and payable by the Borrower in arrears on each Quarterly
Payment Date, commencing with the first Quarterly Payment Date following the
Effective Date, on the New Acquisition Conversion Date and on the Revolving Loan
Commitment Termination Date. The making of Swing Line Loans shall not constitute
usage of the Revolving Loan Commitment with respect to the calculation of
commitment fees to be paid by the Borrower to the Lenders.
SECTION 3.3.2. Agent's Fee. The Borrower agrees to pay to the
Administrative Agent, for its own account, the fees in the amounts and on the
dates set forth in the Fee Letter.
SECTION 3.3.3. Letter of Credit Fee. The Borrower agrees to pay to the
Administrative Agent, for the pro rata account of the applicable Issuer and each
Revolving Loan Lender, a
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Letter of Credit fee in an amount per annum equal to the then Applicable Margin
for Revolving Loans maintained as LIBO Rate Loans, multiplied by the Stated
Amount of each such Letter of Credit, such fees being payable, upon issuance of
each Letter of Credit (for the period from the date of issuance to the earlier
of the expiration date of the applicable Letter of Credit and the immediately
succeeding Quarterly Payment Date), quarterly in arrears on each Quarterly
Payment Date. The Borrower further agrees to pay to the applicable Issuer in
advance on the date of issuance or extension of each Letter of Credit (for the
period from the date of issuance to the earlier of the expiration date of the
applicable Letter of Credit and the immediately succeeding Quarterly Payment
Date, and thereafter quarterly in arrears on each Quarterly Payment Date) a
fronting fee as specified in the Fee Letter or as otherwise agreed to by the
Borrower and such Issuer.
ARTICLE IV
CERTAIN LIBO RATE AND OTHER PROVISIONS
SECTION 4.1. LIBO Rate Lending Unlawful. If any Lender shall determine
(which determination shall, upon notice thereof to the Borrower and the Lenders,
be conclusive and binding on the Borrower) that the introduction of or any
change in or in the interpretation of any law makes it unlawful, or any central
bank or other governmental authority asserts that it is unlawful, for such
Lender to make, continue or maintain any Loan as, or to convert any Loan into, a
LIBO Rate Loan, the obligations of such Lender to make, continue, maintain or
convert any such LIBO Rate Loan shall, upon such determination, forthwith be
suspended until such Lender shall notify the Administrative Agent that the
circumstances causing such suspension no longer exist, and all outstanding LIBO
Rate Loans of such Lender shall automatically convert into Base Rate Loans at
the end of the then current Interest Periods with respect thereto or sooner, if
required by such law or assertion.
SECTION 4.2. Deposits Unavailable. If the Administrative Agent shall
have determined that:
(a) Dollar deposits in the relevant amount and for the
relevant Interest Period are not available to it in its relevant
market; or
(b) by reason of circumstances affecting it's relevant market,
adequate means do not exist for ascertaining the interest rate
applicable hereunder to LIBO Rate Loans,
then, upon notice from the Administrative Agent to the Borrower and the Lenders,
the obligations of all Lenders under Section 2.3 and Section 2.4 to make or
continue any Loans as, or to convert any Loans into, LIBO Rate Loans shall
forthwith be suspended until the Administrative Agent shall notify the Borrower
and the Lenders that the circumstances causing such suspension no longer exist.
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SECTION 4.3. Increased LIBO Rate Loan Costs, etc. The Borrower agrees
to reimburse each Lender for any increase in the cost to such Lender of, or any
reduction in the amount of any sum receivable by such Lender in respect of,
making, continuing or maintaining (or of its obligation to make, continue or
maintain) any Loans as, or of converting (or of its obligation to convert) any
Loans into, LIBO Rate Loans that arise in connection with any change in, or the
introduction, adoption, effectiveness, interpretation, reinterpretation or
phase-in after the date hereof of, any law or regulation, directive, guideline,
decision or request (whether or not having the force of law) of any court,
central bank, regulator or other governmental authority, except for such changes
with respect to increased capital costs and taxes which are governed by Sections
4.5 and 4.6, respectively. Such Lender shall promptly notify the Administrative
Agent and the Borrower in writing of the occurrence of any such event, such
notice to state, in reasonable detail, the reasons therefor and the additional
amount required fully to compensate such Lender for such increased cost or
reduced amount. Such additional amounts shall be payable by the Borrower
directly to such Lender within five days (with at least one day being a Business
Day) of its receipt of such notice, and such notice shall, in the absence of
manifest error, be conclusive and binding on the Borrower.
Without limiting the foregoing, in the event that, as a result of any
such change, introduction, adoption or the like described above, the LIBOR
Reserve Percentage decreases for any Lender's LIBO Rate Loans, such Lender shall
give prompt notice thereof in writing to the Administrative Agent and the
Borrower. On the first Business Day following delivery of such notice, the LIBO
Rate (Reserve Adjusted) attributable to such Lender's LIBO Rate Loans shall be
adjusted to give the Borrower the benefit of such decrease (for so long as such
decrease shall remain in effect).
SECTION 4.4. Funding Losses. In the event any Lender shall incur any
loss or expense (including any loss or expense incurred by reason of the
liquidation or reemployment of deposits or other funds acquired by such Lender
to make, continue or maintain any portion of the principal amount of any Loan
as, or to convert any portion of the principal amount of any Loan into, a LIBO
Rate Loan) as a result of:
(a) any conversion or repayment or prepayment of the principal
amount of any LIBO Rate Loans on a date other than the scheduled last
day of the Interest Period applicable thereto, whether pursuant to
Section 3.1 or otherwise;
(b) any Loans not being made as LIBO Rate Loans in accordance
with the Borrowing Request therefor; or
(c) any Loans not being continued as, or converted into, LIBO
Rate Loans in accordance with the Continuation/Conversion Notice
therefor,
then, upon the written notice of such Lender to the Borrower (with a copy to the
Administrative Agent), the Borrower shall, within five days of its receipt
thereof, pay directly to such Lender such amount as will (in the reasonable
determination of such Lender) reimburse such Lender for
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such loss or expense. Such written notice (which shall include calculations in
reasonable detail) shall, be rebuttably presumptive evidence of the amount of
such loss or expense.
SECTION 4.5. Increased Capital Costs. If any change in, or the
introduction, adoption, effectiveness, interpretation, reinterpretation or
phase-in of, any law or regulation, directive, guideline, decision or request
(whether or not having the force of law) of any court, central bank, regulator
or other governmental authority affects or would affect the amount of capital
required or expected to be maintained by any Lender (including any Issuer) or
any Person controlling such Lender, and such Lender determines (in good faith
but in its sole and absolute discretion) that the rate of return on its or such
controlling Person's capital as a consequence of the Commitments or the Loans
made, or the Letters of Credit issued by or participated in, by such Lender is
reduced to a level below that which such Lender or such controlling Person could
have achieved but for the occurrence of any such circumstance, then, in any such
case upon notice from time to time by such Lender to the Borrower, the Borrower
shall immediately pay directly to such Lender additional amounts sufficient to
compensate such Lender or such controlling Person for such reduction in rate of
return. A statement of such Lender as to any such additional amount or amounts
(including calculations thereof in reasonable detail) shall, be rebuttably
presumptive evidence of the amount of such loss or expense. In determining such
amount, such Lender may use any method of averaging and attribution that it (in
its sole and absolute discretion) shall deem applicable.
SECTION 4.6. Taxes. (a) Any and all payments by the Borrower and each
other Obligor under this Agreement and each other Loan Document shall be made
without setoff, counterclaim or other defense, and free and clear of, and
without deduction or withholding for or on account of, any Taxes, except to the
extent such Taxes are imposed by law. In the event that any Taxes are required
by law to be deducted or withheld from any payment required to be made by the
Borrower or any other Obligor to or on behalf of the Administrative Agent or any
Lender hereunder or under any other Loan Document, then:
(i) subject to clause (f), if such Taxes are
Non-Excluded Taxes, the amount of such payment shall be
increased as may be necessary such that such payment is made,
after withholding or deduction for or on account of such
Taxes, in an amount that is not less than the amount provided
for herein or in such other Loan Document; and
(ii) the Borrower shall withhold the full amount of
such Taxes from such payment (as increased pursuant to clause
(a) (i)) and shall pay such amount to the Governmental
Authority imposing such Taxes in accordance with applicable
law.
(b) In addition, the Borrower and each other Obligor shall pay
any and all Other Taxes imposed to the relevant Governmental Authority
imposing such Other Taxes in accordance with applicable law.
(c) As promptly as practicable after the payment of any Taxes
or Other Taxes, and in any event within 45 days of any such payment
being due, the Borrower shall
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furnish to the Administrative Agent a copy of an official receipt (or a
certified copy thereof) evidencing the payment of such Taxes or Other
Taxes. The Administrative Agent shall make copies thereof available to
any Lender upon request therefor.
(d) Subject to clause (f), the Borrower shall indemnify the
Administrative Agent and each Lender for any Non-Excluded Taxes and
Other Taxes levied, imposed or assessed on (and whether or not paid
directly by) the Administrative Agent or such Lender (and whether or
not such Non-Excluded Taxes or Other Taxes are correctly or legally
asserted by the relevant Governmental Authority). Promptly upon having
knowledge that any such Non-Excluded Taxes or Other Taxes have been
levied, imposed or assessed, and promptly upon notice thereof by the
Administrative Agent or any Lender, the Borrower shall pay such
Non-Excluded Taxes or Other Taxes directly to the relevant Governmental
Authority (provided, however, that neither the Administrative Agent nor
any Lender shall be under any obligation to provide any such notice to
the Borrower). In addition, the Borrower shall indemnify the
Administrative Agent and each Lender for any incremental Taxes that may
become payable by the Administrative Agent or any Lender as a result of
any failure of the Borrower to pay any Taxes when due to the
appropriate Governmental Authority or to deliver to the Administrative
Agent, pursuant to clause (c), documentation evidencing the payment of
Taxes or Other Taxes. With respect to indemnification for Non-Excluded
Taxes and Other Taxes actually paid by the Administrative Agent or any
Lender or the indemnification provided in the immediately preceding
sentence, such indemnification shall be made within 30 days after the
date the Administrative Agent or such Lender, as the case may be, makes
written demand therefor. The Borrower acknowledges that any payment
made to the Administrative Agent or any Borrower or to any Governmental
Authority in respect of the indemnification obligations of the Borrower
provided in this clause shall constitute a payment in respect of which
the provisions of clause (a) and this clause shall apply.
(e) Each Non-U.S. Lender, on or prior to the date on which
such non-U.S. Lender becomes a Lender hereunder (and from time to time
thereafter upon the request of the Borrower or the Administrative
Agent, but only for so long as such non-U.S. Lender is legally entitled
to do so), shall deliver to the Borrower and the Administrative Agent
either
(i) (x) two duly completed copies of either (A)
Internal Revenue Service Form 1001 or (B) Internal Revenue
Service Form 4224, or in either case an applicable successor
form, and (y) a duly completed copy of Internal Revenue
Service Form W-8 or W-9 or applicable successor form; or
(ii) in the case of a Non-U.S. Lender that is not
legally entitled to deliver either form listed in clause
(e)(i)(x), (x) a certificate of a duly authorized officer of
such Non-U.S. Lender to the effect that such Non-U.S. Lender
is not (A) a "bank" within the meaning of Section 881(c)(3)(A)
of the Code, (B) a "10 percent shareholder" of the Borrower
within the meaning of Section 881(c)(3)(B) of the Code, or (C)
a controlled foreign corporation receiving interest from a
related
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person within the meaning of Section 881(c)(3)(C) of the Code
(such certificate, an "Exemption Certificate") and (y) two
duly completed copies of Internal Revenue Service Form W-8 or
applicable successor form.
(f) The Borrower shall not be obligated to gross up any
payments to any Lender pursuant to clause (a)(i), or to indemnify any
Lender pursuant to clause (d), in respect of United States federal
withholding taxes to the extent imposed as a result of (i) the failure
of such Lender to deliver to the Borrower the form or forms and/or an
Exemption Certificate, as applicable to such Lender, pursuant to clause
(e), (ii) such form or forms and/or Exemption Certificate not
establishing a complete exemption from U.S. federal withholding tax or
the information or certifications made therein by the Lender being
untrue or inaccurate on the date delivered in any material respect, or
(iii) the Lender designating a successor lending office at which it
maintains its Loans which has the effect of causing such Lender to
become obligated for tax payments in excess of those in effect
immediately prior to such designation; provided, however, that the
Borrower shall be obligated to gross up any payments to any such Lender
pursuant to clause (a)(i), and to indemnify any such Lender pursuant to
clause (d), in respect to United States federal withholding taxes if
(i) any such failure to deliver a form or forms or an Exemption
Certificate or the failure of such form or forms or Exemption
Certificate to establish a complete exemption from U.S. federal
withholding tax or inaccuracy or untruth contained therein resulted
from a change in any applicable statute, treaty, regulation or other
applicable law or any interpretation of any of the foregoing occurring
after the date hereof, which change rendered such Lender no longer
legally entitled to deliver such form or forms or Exemption Certificate
or otherwise ineligible for a complete exemption from U.S. federal
withholding tax, or rendered the information or certifications made in
such form or forms or Exemption Certificate untrue or inaccurate in a
material respect, (ii) the redesignation of the Lender's lending office
was made at the request of the Borrower or (iii) the obligation to
gross up payments to any such Lender pursuant to clause (a)(i) or to
indemnify any such Lender pursuant to clause (d) is with respect to an
Assignee Lender that becomes an Assignee Lender as a result of an
assignment made at the request of the Borrower.
SECTION 4.7. Payments, Computations, etc. Unless otherwise expressly
provided, all payments by the Borrower pursuant to this Agreement, the Notes,
each Letter of Credit or any other Loan Document shall be made by the Borrower
to the Administrative Agent for the pro rata account of the Lenders entitled to
receive such payment. All such payments required to be made to the
Administrative Agent shall be made, without setoff, deduction or counterclaim,
not later than 1:00 p.m., New York time, on the date due, in same day or
immediately available funds, to such account as the Administrative Agent shall
specify from time to time by notice to the Borrower. Funds received after that
time shall be deemed to have been received by the Administrative Agent on the
next succeeding Business Day. The Administrative Agent shall promptly remit in
same day funds to each Lender its share, if any, of such payments received by
the Administrative Agent for the account of such Lender. All interest (including
interest on LIBO Rate Loans) and fees shall be computed on the basis of the
actual number of days (including the first day but excluding the last day)
occurring during the period for which such
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interest or fee is payable over a year comprised of 360 days (or, in the case of
interest on a Base Rate Loan (calculated at other than the Federal Funds Rate),
365 days or, if appropriate, 366 days). Whenever any payment to be made shall
otherwise be due on a day which is not a Business Day, such payment shall
(except as otherwise required by clause (c) of the definition of the term
"Interest Period") be made on the next succeeding Business Day and such
extension of time shall be included in computing interest and fees, if any, in
connection with such payment.
SECTION 4.8. Sharing of Payments. If any Lender shall obtain any
payment or other recovery (whether voluntary, involuntary, by application of
setoff or otherwise) on account of any Loan or Reimbursement Obligation (other
than pursuant to the terms of Section 4.3, 4.4, 4.5 or 4.6) in excess of its pro
rata share of payments then or therewith obtained by all Lenders, such Lender
shall purchase from the other Lenders such participations in Credit Extensions
made by them as shall be necessary to cause such purchasing Lender to share the
excess payment or other recovery ratably with each of them; provided, however,
that if all or any portion of the excess payment or other recovery is thereafter
recovered from such purchasing Lender, the purchase shall be rescinded and each
Lender which has sold a participation to the purchasing Lender shall repay to
the purchasing Lender the purchase price to the ratable extent of such recovery
together with an amount equal to such selling Lender's ratable share (according
to the proportion of:
(a) the amount of such selling Lender's required repayment to
the purchasing Lender
to
(b) total amount so recovered from the purchasing Lender) of
any interest or other amount paid or payable by the purchasing Lender
in respect of the total amount so recovered. The Borrower agrees that
any Lender so purchasing a participation from another Lender pursuant
to this Section may, to the fullest extent permitted by law, exercise
all its rights of payment (including pursuant to Section 4.9) with
respect to such participation as fully as if such Lender were the
direct creditor of the Borrower in the amount of such participation. If
under any applicable bankruptcy, insolvency or other similar law, any
Lender receives a secured claim in lieu of a setoff to which this
Section applies, such Lender shall, to the extent practicable, exercise
its rights in respect of such secured claim in a manner consistent with
the rights of the Lenders entitled under this Section to share in the
benefits of any recovery on such secured claim.
SECTION 4.9. Setoff. Each Lender shall, upon the occurrence and during
the continuance of any Default described in clauses (a) through (d) of Section
8.1.9 or, with the consent of the Required Lenders, upon the occurrence and
during the continuance of any other Event of Default, have the right to
appropriate and apply to the payment of the Obligations owing to it (whether or
not then due), and (as security for such Obligations) the Borrower hereby grants
to each Lender a continuing security interest in, any and all balances, credits,
deposits, accounts or moneys of the Borrower then or thereafter maintained with
such Lender; provided, however, that any such appropriation and application
shall be subject to the provisions of
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Section 4.8. Each Lender agrees promptly to notify the Borrower and the
Administrative Agent after any such setoff and application made by such Lender;
provided, however, that the failure to give such notice shall not affect the
validity of such setoff and application. The rights of each Lender under this
Section are in addition to other rights and remedies (including other rights of
setoff under applicable law or otherwise) which such Lender may have.
SECTION 4.10. Replacement of Lender. Each Lender agrees that, upon the
occurrence of any event set forth in Sections 4.1, 4.3, 4.5, or 4.6, such Lender
will use reasonable efforts to book and maintain its Loans through a different
lending office or to transfer its Loans to an Affiliate with the objective of
avoiding or minimizing the consequences of such event; provided that such
booking or transfer is not otherwise disadvantageous to such Lender as
determined by such Lender in its sole and absolute discretion. If any Lender has
demanded to be paid additional amounts pursuant to Sections 4.1, 4.3, 4.5 or
4.6, and the payment of such additional amounts are, and are likely to continue
to be, more onerous in the reasonable judgment of the Borrower than with respect
to the other Lenders, then the Borrower shall have the right at any time when no
Default or Event of Default shall have occurred and be continuing to seek one or
more financial institutions which are not Affiliates of the Borrower (each, a
"Replacement Lender") to purchase with the written consent of the Administrative
Agent (which consent shall not be (x) required if such proposed Replacement
Lender is already a Lender, or an Affiliate of a Lender, or (y) unreasonably
delayed or withheld) the outstanding Loans and Commitments of such Lender (the
"Affected Lender"), and if the Borrower locates a Replacement Lender, the
Affected Lender shall, upon
(i) prior written notice to the Administrative Agent,
(ii) (A) payment to the Affected Lender of the
purchase price agreed between it and the Replacement Lender
(or, failing such agreement, a purchase price in the amount of
the outstanding principal amount of the Affected Lender's
Loans and accrued interest thereon to the date of payment) by
the Replacement Lender plus (B) payment by the Borrower of all
amounts (other than principal and interest) then due to the
Affected Lender or accrued for its account hereunder or under
any other Loan Document,
(iii) satisfaction of the provisions set forth in
Section 10.11.1, and
(iv) payment by the Borrower to the Affected Lender
and the Administrative Agent of all reasonable out-of-pocket
expenses in connection with such assignment and assumption
(including the processing fees described in Section 10.11.1),
assign and delegate all its rights and obligations under this Agreement and any
other Loan Document to which it is a party (including its outstanding Loans) to
the Replacement Lender (such assignment to be made without recourse,
representation or warranty), and the Replacement Lender shall assume such rights
and obligations, whereupon the Replacement Lender shall in accordance with
Section 10.11.1 become a party to each Loan Document to which the Affected
Lender is a party and shall have the rights and obligations of a Lender
thereunder and the
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Affected Lender shall be released from its obligations hereunder and each other
Loan Document to the extent of such assignment and delegation.
ARTICLE V
CONDITIONS TO CREDIT EXTENSIONS
SECTION 5.1. Conditions Precedent to the Effectiveness of this
Agreement. This Credit Agreement shall become effective on the date (the
"Effective Date") when each of the conditions precedent set forth in this
Section 5.1 have been satisfied (unless waived by the Lenders or unless the
deadline for delivery has been extended by the Administrative Agent). All such
conditions may occur contemporaneously but shall be deemed to have occurred
simultaneously.
SECTION 5.1.1. Execution of Counterparts. The Administrative Agent
shall have received counterparts of this Agreement, duly executed and delivered
on behalf of each of the Borrower and the Lenders.
SECTION 5.1.2. Resolutions, etc. The Administrative Agent shall have
received from (a) the Borrower, a certificate, dated the Effective Date and with
counterparts for each Lender, duly executed and delivered by the Borrower's
Secretary or Assistant Secretary, as to resolutions of its Board of Directors
then in full force and effect authorizing the execution, delivery and
performance of this Agreement to be executed by the Borrower, the SRC
Acquisition and the transactions contemplated by this Agreement, and
(b) SRC and Titan Technologies (i) a copy of a good standing
certificate, dated a date reasonably near the Effective Date, and (ii)
a certificate, dated the Effective Date and with counterparts for each
Lender, duly executed and delivered by such Person's Secretary or
Assistant Secretary, as to:
(A) resolutions of such Person's Board of
Directors then in full force and effect authorizing
the execution, delivery and performance of each Loan
Document to be executed by such Person, the SRC
Acquisition and the transactions contemplated by this
Agreement to be performed by such Person;
(B) the incumbency and signatures of those of
its officers, authorized to act with respect to each
Loan Document to be executed by such Person; and
(C) the full force and validity of each Organic
Document of such Person and copies thereof;
upon which certificates the Administrative Agent, each Lender and each Issuer
may conclusively rely until it shall have received a further certificate of the
Secretary or Assistant Secretary, of such Person, canceling or amending its
prior certificate.
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SECTION 5.1.3. Closing Date Certificate. The Administrative Agent shall
have received, with counterparts for each Lender, a certificate (the "Effective
Date Certificate"), dated the Effective Date and duly executed and delivered by
an Authorized Officer of the Borrower, in which certificate the Borrower shall
agree and acknowledge that the statements made therein shall be deemed to be
true and correct representations and warranties of the Borrower as of such date,
and, at the time each such certificate is delivered, such statements shall in
fact be true and correct. All documents and agreements required to be appended
to the Effective Date Certificate shall be in form and substance reasonably
satisfactory to the Administrative Agent.
SECTION 5.1.4. Notes. The Administrative Agent shall have received, for
the account of each Lender, such Lender's New Acquisition Term Note and Term B
Note, as applicable.
SECTION 5.1.5. Pledge Agreements. The Administrative Agent shall have
received, with counterparts for each Lender,
(a) a supplement to the Borrower Pledge Agreement, dated as of
the Effective Date, duly executed and delivered by an Authorized
Officer of the Borrower, together with:
(i) certificates evidencing all of the issued and
outstanding shares of Capital Stock owned by the Borrower with
respect to SRC which certificates shall be accompanied by
undated stock powers duly executed in blank; and
(ii) all Pledged Notes (as defined in the Borrower
Pledge Agreement), if any, evidencing Indebtedness of SRC
payable to the Borrower duly endorsed to the order of the
Administrative Agent;
(b) a supplement to the Subsidiary Pledge Agreement, dated as
of the Effective Date, duly executed and delivered by an Authorized
Officer of SRC (and any other Subsidiary of the Borrower that is
required to execute and deliver a supplement pursuant to this Agreement
and that has not done so prior to the Effective Date), together with:
(i) certificates evidencing all of the issued and
outstanding shares of Capital Stock owned by such Guarantor
which certificates shall be accompanied by undated stock
powers duly executed in blank; and
(ii) all Pledged Notes (as defined in the Subsidiary
Pledge Agreement), if any, evidencing Indebtedness payable to
a Guarantor duly endorsed to the order of the Administrative
Agent, together with Uniform Commercial Code Financing
Statements (or similar instruments) in respect of such Pledged
Notes executed by such Guarantor to be filed in such
jurisdictions as the Administrative Agent may reasonably
request; and
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(c) the Administrative Agent and its counsel shall be
satisfied that (i) the Lien granted to the Administrative Agent, for
the benefit of the Secured Parties in the collateral described above is
a first priority (or local equivalent thereof) security interest; and
(ii) no Lien exists on any of the collateral described above other than
the Lien created in favor of the Administrative Agent, for the benefit
of the Secured Parties, pursuant to a Loan Document.
SECTION 5.1.6. Security Agreements. The Administrative Agent shall have
received, with counterparts for each Lender, executed counterparts of a
supplement to the Subsidiary Security Agreement dated as of the Effective Date,
duly executed by SRC (and any other Subsidiary of the Borrower that is required
to execute and deliver a supplement pursuant to the Credit Agreement and that
has not done so prior to the Effective Date), together with
(a) executed copies of Uniform Commercial Code financing
statements (Form UCC-1), naming the applicable Obligor as a debtor and
the Administrative Agent as the secured party, or other similar
instruments or documents, to be filed under the Uniform Commercial Code
of all jurisdictions as may be necessary or, in the opinion of the
Administrative Agent, desirable to perfect the security interests of
the Administrative Agent pursuant to the applicable Security Agreement;
(b) an executed undertaking from the Borrower and Titan
Technologies that they shall cause to be delivered to the
Administrative Agent within 10 Business Days of the Effective Date
executed copies of proper Uniform Commercial Code Form UCC-3
termination statements, if any, necessary to release all Liens and
other rights of any Person in any collateral described in such Security
Agreement previously granted by any Person together with such other
Uniform Commercial Code Form UCC-3 termination statements as the
Administrative Agent may reasonably request from such Obligors (such
undertaking shall constitute a Loan Document); and
(c) certified copies of Uniform Commercial Code Requests for
Information or Copies (Form UCC-11), or a similar search report
certified by a party acceptable to the Administrative Agent, dated a
date reasonably near to the Effective Date, listing all effective
financing statements which name any Obligor (under its present name and
any previous names) as the debtor and which are filed in the
jurisdictions in which filings were made pursuant to clause (a) above,
together with copies of such financing statements.
(d) the Administrative Agent and its counsel shall be
satisfied that the Lien granted to the Administrative Agent, for the
benefit of the Secured Parties in the collateral described above is a
first priority (or local equivalent) security interest (subject to the
filing of the documents described in clause b above); and no other
effective Lien (other than Liens permitted under Section 7.2.3. exists
on any of the collateral described above other than the Lien created in
favor of the Administrative Agent, for the benefit of the Secured
Parties, pursuant to a Loan Document.
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SECTION 5.1.7. Patent Security Agreement, Copyright Security Agreement
and Trademark Security Agreement. The Administrative Agent shall have received
the Patent Security Agreement, the Copyright Security Agreement and the
Trademark Security Agreement, as applicable, each dated as of the Effective
Date, duly executed and delivered by SRC and (and any other Subsidiary of the
Borrower that is required to execute and deliver such security agreement
pursuant to the Credit Agreement and that has not done so prior to the Effective
Date), as applicable.
SECTION 5.1.8. Financial Information, etc. The Administrative Agent
shall have received, with counterparts for each Lender,
(a) audited consolidated financial statements of the Borrower
and its Subsidiaries as at December 31, 1998, without Impermissible
Qualification and the results of which shall be satisfactory to the
Administrative Agent; and
(b) a pro forma balance sheet, as of March 31, 1999, certified
by the chief financial or accounting Authorized Officer of the Borrower
(the "Pro Forma Balance Sheet"), giving effect to the contemplated
financing, the contemplated SRC Acquisition and reflecting the existing
and proposed legal and capital structure (both debt and equity) of the
Borrower and its Subsidiaries, which shall be satisfactory to the
Administrative Agent in all respects.
SECTION 5.1.9. Compliance Certificate. The Administrative Agent shall
have received, with counterparts for each Lender, a Compliance Certificate on a
pro forma basis as if the Credit Extension to be made on the Effective Date had
occurred as of March 31, 1999 and as to such items therein as the Administrative
Agent reasonably requests, dated the Effective Date, duly executed (and with all
schedules thereto duly completed) and delivered by the chief executive,
financial or accounting Authorized Officer of the Borrower.
SECTION 5.1.10. Solvency, etc. The Administrative Agent shall have
received, with counterparts for each Lender, a certificate duly executed and
delivered by the chief financial or accounting Authorized Officer of the
Borrower, dated the Effective Date, in the form of Exhibit M attached to the
Existing Credit Agreement.
SECTION 5.1.11. Subsidiary Guaranty. The Administrative Agent shall
have received, with counterparts for each Lender, a supplement to the Subsidiary
Guaranty, dated as of the Effective Date, duly executed and delivered by SRC
(and any other Subsidiary of the Borrower that is required to execute and
deliver the Subsidiary Guaranty pursuant to the Credit Agreement and that has
not done so prior to the Effective Date).
SECTION 5.1.12. Interco Subordination Agreement. The Administrative
Agent shall have received, with counterparts for each Lender, a copy of the
Interco Subordination Agreement executed by SRC (and any other Subsidiary of the
Borrower that is required to execute and deliver the Interco Subordination
Agreement pursuant to the Credit Agreement and that has not done so prior to the
Effective Date).
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SECTION 5.1.13. Insurance. The Administrative Agent shall have
received, with copies for each Lender, certified copies of the insurance
policies (or binders in respect thereof), from one or more insurance companies
satisfactory to the Administrative Agent, evidencing coverage (with respect to
SRC) required to be maintained pursuant hereto and each Loan Document.
SECTION 5.1.14. Opinion of Counsel. The Administrative Agent shall have
received opinions, dated the Effective Date and addressed to the Administrative
Agent and all Lenders, from (a) Xxxxxx, Xxxxx & Xxxxxxx, LLP, counsel to the
Obligors, and (b) Xxx Xxxxxx, general counsel of the Borrower, in form and
substance reasonably satisfactory to the Administrative Agent.
SECTION 5.1.15. Material Adverse Change. No Material Adverse Effect has
occurred since December 31, 1998, and no material adverse change in the
financial condition, operations, assets, business, properties or prospects of
SRC since September 25, 1998.
SECTION 5.1.16. Affirmation and Consent. The Administrative Agent shall
have received, with counterparts for each Lender, a duly executed copy of an
Affirmation and Consent, dated as of the Effective Date, in form and substance
reasonably satisfactory to the Administrative Agent, duly executed and delivered
by each of the Obligors other than the Borrower.
SECTION 5.1.17. Payment of Outstanding Indebtedness, etc. All
Indebtedness of SRC identified on Schedule I hereto ("Indebtedness to be Paid")
in connection with the SRC Acquisition, together with all interest, all
prepayment premiums and other amounts due and payable with respect thereto,
shall have been paid in full from the proceeds of the Credit Extension made on
the Effective Date and the commitments in respect of such Indebtedness shall
have been terminated.
SECTION 5.1.18. Consents, etc. All governmental and third party
approvals and consents necessary, in connection with the SRC Acquisition, the
financing contemplated pursuant to the Credit Agreement (including the execution
and delivery of this Agreement and each other Loan Document required hereunder
by each Obligor and the performance of their respective Obligations) and
continuing operations of the Borrower, each Guarantor, SRC (after giving effect
to the consummation of the SRC Acquisition) shall have been obtained and be in
full force and effect (and, to the extent requested by the Administrative Agent,
the Administrative Agent shall have received true and correct copies of such
approvals and consents) and all applicable waiting periods shall have expired
without any action being taken or threatened by any competent authority which
would restrain, prevent or otherwise impose adverse conditions on the SRC
Acquisition or the financing thereof.
SECTION 5.1.19. Litigation, etc. There shall exist no pending or to the
knowledge of the Borrower, threatened, material litigation, proceedings or
investigations which could reasonably be expected to have (a) a material adverse
effect on the SRC Acquisition, or (b) a Material Adverse Effect.
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SECTION 5.1.20. Due Diligence. The Administrative Agent shall have
completed and be satisfied in its sole discretion with respect to its
comprehensive due diligence in all matters pertaining to the business,
properties, operations, financial condition or prospects of SRC, including,
without limitation, any documentation as the Administrative Agent may require in
its sole discretion.
SECTION 5.1.21. Consummation of SRC Acquisition. The SRC Acquisition
shall have been consummated in accordance with the SRC Purchase Agreement,
without waiver by Titan Technologies (unless consented to in writing by the
Administrative Agent in its reasonable discretion) of any of its rights under
the SRC Purchase Agreement or related documents. In furtherance of the
foregoing, the Administrative Agent shall have received evidence satisfactory to
it that, in the case of the SRC Acquisition,
(a) Titan Technologies shall have purchased all or
substantially all of the stock of SRC for an aggregate purchase price
not to exceed $37,000,000 (of which $35,000,000 is payable in cash and
approximately $2,000,000 shall be evidenced by the SRC Seller Notes and
excluding related fees, expenses, and/or working capital adjustments),
or such greater amount as the Administrative Agent may (in its sole
discretion) approve in writing; and
(b) the fees and expenses related to the SRC Acquisition shall
not exceed an amount agreed to by the Administrative Agent.
In addition, the Administrative Agent shall have received a certificate, dated
the Effective Date, of an Authorized Officer of the Borrower certifying as to a
true and complete copy of the SRC Purchase Agreement, and all other documents
and instruments delivered in connection with the consummation of the SRC
Acquisition that are required to be delivered pursuant to the terms of the SRC
Purchase Agreement. The Administrative Agent shall be reasonably satisfied with
all amendments, waivers or other modifications of, or other forbearance to
exercise any rights with respect to, any of the terms or provisions of the SRC
Purchase Agreement and the exhibits and schedules thereto.
SECTION 5.1.22. Approval of SRC Acquisition. The Administrative Agent
shall review and be satisfied in its reasonable discretion with (i) the final
legal and capital structure of the SRC Acquisition, (ii) the sources and uses of
proceeds used to consummate the SRC Acquisition and (iii) the terms and
provisions of all documents, agreements and contracts related to the SRC
Acquisition (including the amount of liabilities assumed by the Obligors in
connection with the SRC Acquisition).
SECTION 5.1.23. Closing Fees, Expenses, etc. The Administrative Agent
shall have received for its own account all fees, costs and expenses due and
payable pursuant to Sections 3.3 and 10.3 of the Credit Agreement, if then
invoiced (in reasonable detail).
SECTION 5.1.24. Legal Details, etc. All documents executed or submitted
pursuant hereto shall be reasonably satisfactory in form and substance to the
Administrative Agent and its
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counsel. The Administrative Agent and its counsel shall have received all
information and such counterpart originals or such certified or other copies or
such materials, as the Administrative Agent or its counsel may reasonably
request, and all legal matters incident to the transactions contemplated by this
Agreement shall be satisfactory to the Administrative Agent and its counsel.
SECTION 5.2. All Credit Extensions. The obligation of each Lender and
each Issuer to make any Credit Extension (including the initial Credit
Extension) shall be subject to Sections 2.1.4 and 2.1.5 and the satisfaction of
each of the conditions precedent set forth in this Section 5.2.
SECTION 5.2.1. Compliance with Warranties, No Default, etc. Both before
and after giving effect to any Credit Extension (but, if any Default of the
nature referred to in Section 8.1.5 shall have occurred with respect to any
other Indebtedness, without giving effect to the application, directly or
indirectly, of the proceeds thereof) the following statements shall be true and
correct:
(a) the representations and warranties set forth in Article VI
(excluding, however, those contained in Section 6.7) and in each other
Loan Document shall, in each case, be true and correct with the same
effect as if then made (unless stated to relate solely to an earlier
date, in which case such representations and warranties shall be true
and correct in all material respects as of such earlier date);
(b) except as disclosed by the Borrower to the Administrative
Agent and the Lenders pursuant to Section 6.7,
(i) no labor controversy, litigation, arbitration or
governmental investigation or proceeding shall be pending or,
to the knowledge of the Borrower, threatened against the
Borrower or any of its Subsidiaries which could reasonably be
expected to have a Material Adverse Effect, or which would
adversely affect the legality, validity or enforceability of
this Agreement or any other Loan Document; and
(ii) no development shall have occurred in any labor
controversy, litigation, arbitration or governmental
investigation or proceeding disclosed pursuant to Section 6.7
which could reasonably be expected to have a Material Adverse
Effect; and
(c) no Default shall have then occurred and be continuing.
SECTION 5.2.2. Credit Extension Request, etc. Subject to Section 2.3.2,
the Administrative Agent shall have received a Borrowing Request if Loans are
being requested, or an Issuance Request if a Letter of Credit is being requested
or extended. Each of the delivery of a Borrowing Request or Issuance Request and
the acceptance by the Borrower of the proceeds of such Credit Extension shall
constitute a representation and warranty by the Borrower that on the
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date of such Credit Extension (both immediately before and after giving effect
to such Credit Extension and the application of the proceeds thereof) the
statements made in Section 5.2.1 are true and correct in all material respects.
SECTION 5.2.3. Satisfactory Legal Form. All documents executed or
submitted pursuant hereto by or on behalf of the Borrower or any of its
Subsidiaries or any other Obligors shall be reasonably satisfactory in form and
substance to the Administrative Agent and its counsel; the Administrative Agent
and its counsel shall have received all information, approvals, opinions,
documents or instruments as the Administrative Agent or its counsel may
reasonably request.
ARTICLE VI
REPRESENTATIONS AND WARRANTIES
In order to induce the Secured Parties to enter into this Agreement and
to make Credit Extensions hereunder, the Borrower represents and warrants to
each Secured Party as set forth in this Article.
SECTION 6.1. Organization, etc. The Borrower and each of its
Subsidiaries is (a) validly organized and existing and in good standing under
the laws of the state or jurisdiction of its incorporation or organization, and
(b) duly qualified to do business and is in good standing as a foreign entity in
each jurisdiction where the nature of its business requires such qualification,
except where the failure to so qualify would not result in a Material Adverse
Effect, and has full power and authority and holds all requisite governmental
licenses, permits and other approvals to enter into and perform its Obligations
under this Agreement and each other Loan Document to which it is a party and to
own and hold under lease its property and to conduct its business substantially
as currently conducted by it except where the failure to hold such licenses,
permits and other approvals would not result in a Material Adverse Effect.
SECTION 6.2. Due Authorization, Non-Contravention, etc. The execution,
delivery and performance by the Borrower of this Agreement and each other Loan
Document executed or to be executed by it, the execution, delivery and
performance by each other Obligor of each Loan Document executed or to be
executed by it, are in each case within each such Person's powers, have been
duly authorized by all necessary action, and do not
(a) contravene any such Person's Organic Documents;
(b) contravene any contractual restriction binding on or
affecting any such Person except any such contravention which would not
have a Material Adverse Effect;
(c) contravene (i) any court decree or order binding on or
affecting any such Person or (ii) any law or governmental regulation
binding on or affecting any such Person; or
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(d) result in, or require the creation or imposition of, any
Lien on any of such Person's properties (except as permitted by this
Agreement).
SECTION 6.3. Government Approval, Regulation, etc. Except as set forth
in Item 6.3 of the Disclosure Schedule, no authorization or approval or other
action by, and no notice to or filing with, any governmental authority or
regulatory body or other Person other than those that have been duly obtained or
made and which are in full force and effect is required for the due execution,
delivery or performance by the Borrower or any other Obligor of any Loan
Document to which it is a party. Neither the Borrower nor any of its
Subsidiaries is an "investment company" within the meaning of the Investment
Company Act of 1940, as amended, or a "holding company", or a "subsidiary
company" of a "holding company", or an "affiliate" of a "holding company" or of
a "subsidiary company" of a "holding company", within the meaning of the Public
Utility Holding Company Act of 1935, as amended.
SECTION 6.4. Validity, etc. This Agreement and each other Loan Document
executed by the Borrower will, on the due execution and delivery thereof,
constitute, the legal, valid and binding obligations of the Borrower,
enforceable against the Borrower in accordance with their respective terms; and
each other Loan Document executed by each other Obligor will, on the due
execution and delivery thereof by such Obligor, constitute the legal, valid and
binding obligation of such Obligor enforceable against such Obligor in
accordance with its terms (except, in any case, as such enforceability may be
limited by applicable bankruptcy, insolvency, reorganization or similar laws
affecting creditors' rights generally and by principles of equity).
SECTION 6.5. Financial Information. The financial statements of the
Borrower and its Subsidiaries furnished to the Administrative Agent and each
Lender for the period ended December 31, 1998, pursuant to Section 5.1 have been
prepared in accordance with GAAP consistently applied, and present fairly the
consolidated financial condition of the Persons covered thereby as at the dates
thereof and the results of their operations for the periods then ended. All
balance sheets, all statements of operations, shareholders' equity and cash flow
and all other financial information of each of the Borrower and its Subsidiaries
furnished pursuant to Section 7.1.1 have been and will for periods following the
Effective Date be prepared in accordance with GAAP consistently applied, and do
or will present fairly the consolidated financial condition of the Persons
covered thereby as at the dates thereof and the results of their operations for
the periods then ended.
SECTION 6.6. No Material Adverse Effect. (a) No Material Adverse Effect
has occurred since December 31, 1998 with respect to the Borrower and its
Subsidiaries (other than SRC), and (b) no material adverse effect on the
business, condition (financial or otherwise), operations, assets, properties or
prospects has occurred since September 25, 1998 with respect to SRC and its
Subsidiaries.
SECTION 6.7. Litigation, Labor Controversies, etc. There is no pending
or, to the knowledge of the Borrower or its Subsidiaries, threatened material
litigation, action, proceeding, investigation or labor controversy (i) affecting
the Borrower or any of its Subsidiaries or any Obligor, or any of their
respective properties, businesses, assets or revenues, which could
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reasonably be expected to have a Material Adverse Effect except as disclosed in
Item 6.7 of the Disclosure Schedule or (ii) which purports to affect the
legality, validity or enforceability of this Agreement or any other Loan
Document.
SECTION 6.8. Subsidiaries. The Borrower has no Subsidiaries, except
those Subsidiaries
(a) which are identified in Item 6.8 of the Disclosure
Schedule; or
(b) which are permitted to have been organized or acquired in
accordance with Sections 7.2.5 or 7.2.10.
SECTION 6.9. Ownership of Properties. The Borrower and each of its
Subsidiaries owns (i) in the case of owned real property, good and marketable
fee title to, and (ii) in the case of owned personal property, good and valid
title to, or, in the case of leased real or personal property, valid and
enforceable leasehold interests (as the case may be) in, all of its properties
and assets, real and personal, tangible and intangible, of any nature
whatsoever, free and clear in each case of all Liens or claims, except for Liens
permitted pursuant to Section 7.2.3.
SECTION 6.10. Taxes. The Borrower and each of its Subsidiaries has
filed all tax returns and reports required by law to have been filed by it and
has paid all taxes and governmental charges thereby shown to be due and owing,
except any such taxes or charges which are being diligently contested in good
faith by appropriate proceedings and for which adequate reserves in accordance
with GAAP shall have been set aside on its books.
SECTION 6.11. Pension and Welfare Plans. During the
twelve-consecutive-month period prior to the date of the execution and delivery
of this Agreement and prior to the date of any Credit Extension hereunder, no
steps have been taken to terminate any Pension Plan under circumstances in which
the Pension Plan has insufficient assets to pay all its benefit liabilities (as
required by section 4041(b)(1) of ERISA), and no contribution failure has
occurred with respect to any Pension Plan, sufficient to give rise to a Lien
under section 302(f) of ERISA. No condition exists or event or transaction has
occurred with respect to any Pension Plan which might result in the incurrence
by the Borrower or any member of the Controlled Group of any material liability,
material fine or material penalty. Except as disclosed in Item 6.11 of the
Disclosure Schedule, neither the Borrower nor any member of the Controlled Group
has any material contingent liability with respect to any post-retirement
benefit under a Welfare Plan, other than liability for continuation coverage
described in Part 6 of Title I of ERISA.
SECTION 6.12. Environmental Warranties. Except as set forth in Item
6.12 of the Disclosure Schedule:
(a) all facilities and property (including underlying
groundwater) owned or leased by the Borrower or any of its Subsidiaries
have been, and continue to be, owned or leased by the Borrower and its
Subsidiaries in material compliance with all Environmental Laws;
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(b) there have been no past, and there are no pending or
threatened
(i) claims, complaints, notices or requests for
information received by the Borrower or any of its
Subsidiaries with respect to any alleged violation of any
Environmental Law which could result in a liability to the
Borrower or its Restricted Subsidiaries in excess of
$1,000,000 individually or in the aggregate, or
(ii) complaints, notices or inquiries to the Borrower
or any of its Subsidiaries regarding potential liability under
any Environmental Law which could result in a liability to the
Borrower or its Restricted Subsidiaries in excess of
$1,000,000 individually or in the aggregate;
(c) there have been no Releases of Hazardous Materials at, on
or under any property now or previously owned or leased by the Borrower
or any of its Subsidiaries that have, or could reasonably be expected
to have, a Material Adverse Effect;
(d) the Borrower and its Subsidiaries have been issued and are
in material compliance with all permits, certificates, approvals,
licenses and other authorizations relating to environmental matters and
necessary for their businesses;
(e) no property now or previously owned or leased by the
Borrower or any of its Subsidiaries is listed or proposed for listing
(with respect to owned property only) on the National Priorities List
pursuant to CERCLA, on the CERCLIS or on any similar state list of
sites requiring investigation or clean-up;
(f) there are no underground storage tanks, active or
abandoned, including petroleum storage tanks, on or under any property
now or previously owned or leased by the Borrower or any of its
Subsidiaries that, singly or in the aggregate, have, or could
reasonably be expected to have, a Material Adverse Effect;
(g) neither the Borrower nor any Subsidiary of the Borrower
has directly transported or directly arranged for the transportation of
any Hazardous Material to any location which is listed or proposed for
listing on the National Priorities List pursuant to CERCLA, on the
CERCLIS or on any similar state list or which is the subject of
federal, state or local enforcement actions or other investigations
which may lead to material claims against the Borrower or such
Subsidiary for any remedial work, damage to natural resources or
personal injury, including claims under CERCLA;
(h) there are no polychlorinated biphenyls or friable asbestos
present at any property now or previously owned or leased by the
Borrower or any Subsidiary of the Borrower that, singly or in the
aggregate, have, or could reasonably be expected to have, a Material
Adverse Effect; and
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(i) no conditions exist at, on or under any property now or
previously owned or leased by the Borrower which, with the passage of
time, or the giving of notice or both, would give rise to material
liability under any Environmental Law.
SECTION 6.13. Accuracy of Information. None of the factual information
heretofore or contemporaneously furnished by or on behalf of the Borrower in
writing to any Secured Party for purposes of or in connection with this
Agreement, or any transaction contemplated hereby or with respect to any
Permitted Acquisition or the financing contemplated hereby (true and complete
copies of which were furnished to the Secured Parties in connection with its
execution and delivery hereof), contains any untrue statement of a material
fact, and none of the other factual information hereafter furnished in
connection with this Agreement or any other Loan Document by the Borrower or any
other Obligor to any Secured Party will contain any untrue statement of a
material fact on the date as of which such information is dated or certified
and, as of the date of the execution and delivery of this Agreement by the
Administrative Agent and each Lender, the information delivered prior to the
date of execution and delivery of this Agreement (unless such information
specifically relates to a prior date) does not, and the factual information
hereafter furnished shall not on the date as of which such information is dated
or certified, omit to state any material fact necessary to make any information
not misleading.
SECTION 6.14. Regulations U and X. No Obligor is engaged in the
business of extending credit for the purpose of purchasing or carrying margin
stock, and no proceeds of any Credit Extensions will be used to purchase or
carry margin stock or otherwise for a purpose which violates, or would be
inconsistent with, F.R.S. Board Regulation U or X. Terms for which meanings are
provided in F.R.S. Board Regulation U or X or any regulations substituted
therefor, as from time to time in effect, are used in this Section with such
meanings.
SECTION 6.15. Year 2000 Problem. Each Obligor has reviewed the areas
within its business and operations which could be adversely affected by, and has
developed or is developing a program to address on a timely basis, the "Year
2000 Problem" (that is, the risk that computer applications used by such Obligor
may be unable to recognize and properly perform date-sensitive functions
involving certain dates prior to and any date after December 31, 1999). Based on
such review and program, no Obligor reasonably believes that the "Year 2000
Problem" could reasonably be expected to have a Material Adverse Effect. At the
request of the Administrative Agent, the Borrower shall provide the
Administrative Agent assurance reasonably acceptable to the Administrative Agent
of the Borrower's Year 2000 compatibility.
SECTION 6.16. Government Contracts. The Borrower is not materially in
default as to the terms of any government contract and has received no notices
of default or notices to cure under any government contract for which the
performance deficiency noted by any Governmental Authority has not been cured or
otherwise resolved to such Governmental Authority's satisfaction.
SECTION 6.17. No Debarment. The Borrower is not subject to any pending
or threatened debarment proceedings.
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SECTION 6.18. Assignment of Payments. The Borrower has the right to
assign to the Administrative Agent all payments due or to become due under each
of the Borrower's or the Restricted Subsidiary's government contracts, and there
exists no uncancelled prior assignment of payments under any of such Persons's
government contracts.
ARTICLE VII
COVENANTS
SECTION 7.1. Affirmative Covenants. The Borrower agrees with each
Lender, each Issuer and the Administrative Agent that until all Commitments have
expired or terminated, all Obligations have been paid and performed in full and
all Letters of Credit have expired or terminated (or the Administrative Agent
shall have received cash (in a cash collateral account on terms satisfactory to
the Administrative Agent) in the amount of all Letters of Credit Outstanding),
the Borrower will, and will cause its Subsidiaries to, perform or cause to be
performed the obligations set forth below.
SECTION 7.1.1. Financial Information, Reports, Notices, etc. The
Borrower will furnish or cause to be furnished to the Administrative Agent (with
sufficient copies for each Lender) copies of the following financial statements,
reports, notices and information:
(a) as soon as available and in any event within 60 days after
the end of each of the first three Fiscal Quarters of each Fiscal Year,
an unaudited consolidated balance sheet of the Borrower and its
Subsidiaries as of the end of such Fiscal Quarter and consolidated
statements of income and cash flow of the Borrower and its Subsidiaries
for such Fiscal Quarter and for the period commencing at the end of the
previous Fiscal Year and ending with the end of such Fiscal Quarter,
and including (in each case), in comparative form the figures for the
corresponding Fiscal Quarter in, and year to date portion of, the
immediately preceding Fiscal Year, certified as complete and correct by
the chief financial or accounting Authorized Officer of the Borrower;
(b) as soon as available and in any event within 105 days
after the end of each Fiscal Year, a copy of the consolidated balance
sheet of the Borrower and its Subsidiaries, and the related
consolidated statements of stockholders' equity and cash flow and the
consolidated statements of income of the Borrower and its Subsidiaries
for such Fiscal Year, setting forth in comparative form the figures for
the immediately preceding Fiscal Year, audited (without any
Impermissible Qualification) by independent public accountants
acceptable to the Administrative Agent, stating that, in performing the
examination necessary to deliver the audited financial statements of
the Borrower, no knowledge was obtained of any Default;
(c) concurrently with the delivery of the financial
information pursuant to clauses (a) and (b), a Compliance Certificate,
executed by the chief executive, financial or accounting Authorized
Officer of the Borrower, showing compliance with the financial
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covenants set forth in Section 7.2.4 and stating that no Default has
occurred and is continuing (or, if a Default has occurred, specifying
the details of such Default and the action that the Borrower has taken
or proposes to take with respect thereto);
(d) as soon as possible and in any event within five days
after the Borrower or any of its Subsidiaries obtains knowledge of the
occurrence of a Default, a statement of the chief executive, financial
or accounting Authorized Officer of the Borrower setting forth details
of such Default and the action which the Borrower has taken and
proposes to take with respect thereto;
(e) as soon as possible and in any event within five days
after the Borrower or any of its Subsidiaries obtains knowledge of (i)
the occurrence of any material adverse development with respect to any
litigation, action, proceeding or labor controversy described in Item
6.7 of the Disclosure Schedule or (ii) the commencement of any
litigation, action, proceeding or labor controversy of the type and
materiality described in Section 6.7, notice thereof and, to the extent
the Administrative Agent requests, copies of all documentation relating
thereto;
(f) promptly after the sending or filing thereof, copies of
all reports, notices, prospectuses and registration statements which
the Borrower or any of its Subsidiaries files with the SEC or any
national securities exchange;
(g) immediately upon becoming aware of (i) the institution of
any steps by the Borrower or any other Person to terminate any Pension
Plan, (ii) the failure to make a required contribution to any Pension
Plan if such failure is sufficient to give rise to a Lien under Section
302(f) of ERISA, (iii) the taking of any action with respect to a
Pension Plan which could result in the requirement that the Borrower
furnish a bond or other security to the PBGC or such Pension Plan, or
(iv) the occurrence of any event with respect to any Pension Plan which
could result in the incurrence by the Borrower of any material
liability, fine or penalty, notice thereof and copies of all
documentation relating thereto;
(h) promptly upon receipt thereof from the Borrower's audit
committee, copies of all "management letters" submitted to the Borrower
by the independent public accountants referred to in clause (b) in
connection with each audit made by such accountants; and
(i) such other financial and other information as any Lender
through the Administrative Agent may from time to time reasonably
request (including information and reports in such detail as the
Administrative Agent may request with respect to the terms of and
information provided pursuant to the Compliance Certificate).
SECTION 7.1.2. Maintenance of Existence; Compliance with Laws, etc. The
Borrower will, and will cause each of its Subsidiaries to,
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(a) except as otherwise permitted by Section 7.2.10, preserve
and maintain its legal existence; and
(b) comply in all material respects with all applicable laws,
rules, regulations and orders, including the payment, before the same
become delinquent, of all taxes, assessments and governmental charges
imposed upon the Borrower or its Subsidiaries or upon their property
except to the extent being diligently contested in good faith by
appropriate proceedings and for which adequate reserves in accordance
with GAAP have been set aside on the books of the Borrower or its
Subsidiaries, as applicable.
SECTION 7.1.3. Maintenance of Properties. The Borrower will, and will
cause each of its Subsidiaries to, maintain, preserve, protect and keep its and
their respective properties in good repair, working order and condition
(ordinary wear and tear excepted), and make necessary repairs, renewals and
replacements so that the business carried on by the Borrower and its
Subsidiaries may be properly conducted at all times, unless the Borrower
determines in good faith that the continued maintenance of such property is no
longer economically desirable.
SECTION 7.1.4. Insurance. The Borrower will, and will cause each of its
Subsidiaries to:
(a) maintain insurance on its property with financially sound
and reputable insurance companies against loss and damage in at least
the amounts (and with only those deductibles) customarily maintained,
and against such risks as are typically insured against in the same
general area, by Persons of comparable size engaged in the same or
similar business as the Borrower and its Subsidiaries; and
(b) all worker's compensation, employer's liability insurance
or similar insurance as may be required under the laws of any state or
jurisdiction in which it may be engaged in business.
Without limiting the foregoing, all insurance policies required pursuant to this
Section shall (i) name the Administrative Agent on behalf of Secured Parties as
mortgagee (in the case of property insurance) or additional insured (in the case
of liability insurance), as applicable, and provide that no cancellation or
modification of the policies will be made without thirty days' prior written
notice, (or ten days' prior written notice with respect to failure to pay the
premium), to the Administrative Agent and (ii) be in addition to any
requirements to maintain specific types of insurance contained in the other Loan
Documents.
SECTION 7.1.5. Books and Records. The Borrower will, and will cause
each of its Subsidiaries to, keep books and records in accordance with GAAP
which accurately reflect all of its business affairs and transactions and permit
the Administrative Agent and each Lender or any of their respective
representatives, at reasonable times and intervals upon reasonable notice to the
Borrower, to visit its offices, to discuss its financial matters with its
officers and employees, and its independent public accountants (and the Borrower
hereby authorizes such independent public accountant to discuss the Borrower's
and Subsidiaries' financial matters with the
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Administrative Agent and each Lender or their representatives whether or not any
representative of the Borrower, is present so long as the Borrower has been
given reasonable prior written notice of such meeting) and to examine (and
photocopy extracts from) any of its books and records. The Borrower shall pay
any fees of such independent public accountant incurred in connection with the
Administrative Agent's or any Lender's exercise of its rights pursuant to this
Section. In addition to having the right to perform field audits of the
Borrower's books and records, the Administrative Agent shall have the right, but
not the obligation, to contact the contracting officer under any government
contract directly to determine the Borrower's or any Restricted Subsidiary's
contract performance status on the government contract; however, any contact
between the Administrative Agent and the contracting officer shall be made on
reasonable notice to the Borrower and in the presence of a representative or
representatives of the Borrower. At the Administrative Agent's request, the
Borrower shall promptly arrange for such communications between the
Administrative Agent and a contracting officer.
SECTION 7.1.6. Environmental Law Covenant. The Borrower will, and will
cause each of its Subsidiaries to,
(a) use and operate all of its facilities and properties in
material compliance with all Environmental Laws, keep all necessary
permits, approvals, certificates, licenses and other authorizations
relating to environmental matters in effect and remain in material
compliance therewith, and handle all Hazardous Materials in material
compliance with all applicable Environmental Laws; and
(b) promptly notify the Administrative Agent and provide
copies upon receipt of all material written claims, complaints, notices
or inquiries relating to the condition of its facilities and properties
in respect of, or as to compliance with, Environmental Laws, and shall
promptly resolve any non-compliance with Environmental Laws and keep
its property free of any Lien imposed by any Environmental Law.
SECTION 7.1.7. Future Subsidiaries; Collateral. The Borrower shall
promptly notify the Administrative Agent upon any Person becoming a Subsidiary,
or upon an Obligor directly or indirectly acquiring additional Capital Stock of
any existing Subsidiary, and
(a) such Person shall, if it is a U.S. Subsidiary, (i) execute
and deliver to the Administrative Agent a supplement to the Subsidiary
Guaranty and a supplement to the Subsidiary Security Agreement and (ii)
to the extent such U.S. Subsidiary is required to pledge stock of a
Subsidiary pursuant to clause (b) of Section 7.1.7, execute and deliver
to the Administrative Agent a supplement to the Subsidiary Pledge
Agreement, if not already a party thereto as a pledgor, in a manner
satisfactory to the Administrative Agent;
(b) the Borrower and each U.S. Subsidiary shall, pursuant to
the applicable Pledge Agreement (as supplemented, if necessary, by a
foreign pledge agreement in form and substance satisfactory to the
Administrative Agent), pledge to the Administrative Agent all of the
outstanding shares of capital stock of (i) each U.S. Subsidiary and
(ii) any Subsidiary that is not a U.S. Subsidiary owned (other than
where such ownership
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is in such U.S. Subsidiary's capacity as a nominee shareholder)
directly by the Borrower or such U.S. Subsidiary (provided, that,
subject to the last sentence of this Section, not more than 65% of the
capital stock of any Foreign Subsidiary shall be so pledged), along
with undated stock powers for such certificates, executed in blank (or,
if any such shares of capital stock are uncertificated, confirmation
and evidence satisfactory to the Administrative Agent that the security
interest in such uncertificated securities has been perfected by the
Administrative Agent, for the benefit of the Secured Parties, in
accordance with the U.C.C. or any other similar or local or foreign law
which may be applicable);
(c) the Borrower and each U.S. Subsidiary shall, pursuant to
the applicable Pledge Agreement, pledge to the Administrative Agent for
its benefit and that of the Secured Parties, all intercompany notes
evidencing Indebtedness in favor of the Borrower or such U.S.
Subsidiary (which shall be in a form acceptable to the Administrative
Agent); and
(d) if such Person owns any real property having a value as
determined in good faith by the Administrative Agent in excess of
$2,500,000, such Obligor will execute and deliver to the Administrative
Agent a Mortgage, together with, in the case of real property,
mortgagee's title insurance policies in amounts, in form and substance
(including, if available, a revolving credit endorsement) and issued by
insurers satisfactory to the Administrative Agent, and such policies
shall be accompanied by evidence of the payment in full of all premiums
thereon.
together, in each case, with such opinions of legal counsel for the Borrower,
which may be the corporate general counsel of the Borrower, (which shall be from
counsel satisfactory to the Administrative Agent) relating thereto, which legal
opinions shall be in form and substance satisfactory to the Administrative
Agent. The Borrower agrees that if, as a result of a change in law after the
date hereof, (i) a Foreign Subsidiary can execute and deliver a supplement to
the Subsidiary Guaranty or execute and deliver a supplement to the Subsidiary
Pledge Agreement as a pledgor or (ii) the Borrower or any Subsidiary can pledge
more than 65% of the Capital Stock of any Foreign Subsidiary or any intercompany
Indebtedness of any Subsidiary evidenced by a note or other instrument, in any
such case without material adverse tax consequences to the Borrower or such
Subsidiary, then the provisions of clause (a) of this Section shall thereafter
apply to any Foreign Subsidiary and/or (as the case may be) the provisions of
clause (b) of this Section shall thereafter apply to 100% of the Capital Stock
of such Foreign Subsidiary.
The Borrower shall, and shall cause each of its Subsidiaries to,
cause the Secured Parties to have at all times a first priority perfected
security interest (subject only to Liens permitted under Section 7.2.3) in all
of the property (real and personal, including Capital Stock owned by such
Obligors) now or hereafter acquired from time to time by the Borrower and such
Subsidiaries to the extent the same is of the type of property that constitutes
"Collateral" (as defined in any Loan Document). Without limiting the generality
of the foregoing, the Borrower shall, and shall cause each of its Subsidiaries
to, promptly execute, deliver and/or file (as applicable) Uniform Commercial
Code financing statements and other instruments and
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documentation deemed necessary by the Administrative Agent to grant and perfect
such security interest, in each case in form and substance satisfactory to the
Administrative Agent.
SECTION 7.1.8. Use Of Proceeds. The Borrower (a) has applied the
proceeds of the Original Acquisition Loans in accordance with the terms of the
Existing Credit Agreement, (b) will apply the Revolving Loans only in accordance
with clauses (i) and (ii) below, (c) will apply the proceeds of the Term B Loans
only in accordance with clause (iv) below and (d) the proceeds of the New
Acquisition Loans only in accordance with clause (iii) below:
(i) for working capital and general corporate purposes of the
Borrower and its Restricted Subsidiaries, including Permitted Acquisitions by
such Persons;
(ii) to pay fees and expenses related to the Loans and the
Commitments under the Existing Credit Agreement; and
(iii) to finance Permitted Acquisitions and to pay transaction
fees and expenses related to the Permitted Acquisitions.
(iv) to (A) pay the consideration for the SRC Acquisition, (B)
refinance certain Indebtedness of SRC, (C) repay a portion of the outstanding
Existing Revolving Loans and (D) pay fees and expenses related to the SRC
Acquisition and the refinancings described in this clause (iv).
SECTION 7.1.9. Contract Obligations. The Borrower shall, and shall
cause each Restricted Subsidiary, to perform in accordance with its terms every
contract, agreement, obligation or other arrangement to which such Person is a
party or by which it or any of its property is bound including government
contracts. In the event that any material default or material performance
deficiency occurs, the Borrower shall notify the Administrative Agent promptly
in writing. The Borrower shall provide the Administrative Agent promptly with
copies of any cure notices or default notices it may receive from a Governmental
Authority on any government contract and detail the proposed corrective action.
At the Administrative Agent's request, the Borrower shall also provide the
Administrative Agent with copies of any stop work notices in effect at the date
of the Administrative Agent's request.
SECTION 7.2. Negative Covenants. The Borrower covenants and agrees with
each Lender, each Issuer and the Administrative Agent that until all Commitments
have expired or terminated, all Obligations have been paid and performed in full
and all Letters of Credit have expired or terminated (or the Administrative
Agent shall have received immediately available funds in a collateral account on
terms satisfactory to the Administrative Agent in the amount of all Letters of
Credit Outstanding), the Borrower will, and will cause its Restricted
Subsidiaries to, perform or cause to be performed the obligations set forth
below.
SECTION 7.2.1. Business Activities. The Borrower will not, and will not
permit any of its Restricted Subsidiaries to, engage in any business activity
except those business activities
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primarily engaged in by the Borrower and its Restricted Subsidiaries as of the
Closing Date and activities reasonably incidental thereto.
SECTION 7.2.2. Indebtedness. The Borrower will not, and will not permit
any of its Restricted Subsidiaries to, create, incur, assume or permit to exist
any Indebtedness, other than:
(a) Indebtedness in respect of the Obligations;
(b) Indebtedness in respect of the SRC Seller Notes;
(c) Indebtedness existing as of the Effective Date which is
identified in Item 7.2.2(c) of the Disclosure Schedule;
(d) unsecured Indebtedness (i) incurred in the ordinary course
of business of the Borrower and its Subsidiaries (including open
accounts extended by suppliers on normal trade terms in connection with
purchases of goods and services which are not overdue for a period of
more than 90 days or, if overdue for more than 90 days, as to which a
dispute exists and adequate reserves in conformity with GAAP have been
established on the books of the Borrower or such Subsidiary) and (ii)
in respect of performance, surety or appeal bonds provided in the
ordinary course of business, but excluding (in each case), Indebtedness
incurred through the borrowing of money or Contingent Liabilities in
respect thereof;
(e) Indebtedness of any Restricted Subsidiary owing to the
Borrower or any other Restricted Subsidiary, which Indebtedness
(i) shall, if payable to the Borrower or a U.S.
Subsidiary, be evidenced by one or more promissory notes in
form and substance satisfactory to the Administrative Agent,
duly executed and delivered in pledge to the Administrative
Agent pursuant to a Loan Document, and shall not be forgiven
or otherwise discharged for any consideration other than
payment in full or in part in cash (provided, that only the
amount repaid in part shall be discharged); and
(ii) if incurred by a Foreign Subsidiary owing to the
Borrower or a Guarantor, shall not (when aggregated with the
amount of Investments made by the Borrower and the Guarantors
in Foreign Subsidiaries under clause (e)(i) of Section 7.2.5),
exceed $3,000,000;
(f) unsecured Indebtedness (not evidenced by a note or other
instrument) of the Borrower owing to a Subsidiary that has previously
executed and delivered to the Administrative Agent the Interco
Subordination Agreement;
(g) Indebtedness of the Borrower and its Restricted
Subsidiaries in respect of Capitalized Lease Liabilities which does not
exceed $1,000,000 in the aggregate; and
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(h) other Indebtedness of the Borrower and its Restricted
Subsidiaries (including purchase money Indebtedness) in an aggregate
amount at any time outstanding not to exceed $5,000,000; provided,
however, that the Borrower and its Restricted Subsidiaries may incur
additional Indebtedness in an amount in excess of $5,000,000, upon
obtaining the prior written consent of the Lenders holding at least 66
2/3% of the Total Exposure Amount;
provided, however, that no Indebtedness otherwise permitted by clause (e) shall
be assumed or otherwise incurred if a Default has occurred and is then
continuing or would result therefrom.
SECTION 7.2.3. Liens. The Borrower will not, and will not permit any of
its Restricted Subsidiaries to, create, incur, assume or permit to exist any
Lien upon any of its property (including Capital Stock of any Person), revenues
or assets, whether now owned or hereafter acquired, except:
(a) Liens securing payment of the Obligations;
(b) Liens existing as of the Effective Date and disclosed in
Item 7.2.3(c) of the Disclosure Schedule securing Indebtedness
described in clause (c) of Section 7.2.2; provided that no such Lien
shall encumber any additional collateral and the amount of Indebtedness
secured by such Lien is not increased from that existing on the
Effective Date;
(c) Liens for taxes, assessments or other governmental charges
or levies not at the time delinquent or thereafter payable without
penalty or being diligently contested in good faith by appropriate
proceedings and for which adequate reserves in accordance with GAAP
shall have been set aside on its books;
(d) Liens in favor of carriers, warehousemen, mechanics,
materialmen and landlords granted in the ordinary course of business
for amounts not overdue or being diligently contested in good faith by
appropriate proceedings and for which adequate reserves in accordance
with GAAP shall have been set aside on its books;
(e) Liens incurred or deposits made in the ordinary course of
business in connection with workmen's compensation, unemployment
insurance or other forms of governmental insurance or benefits, or to
secure performance of tenders, statutory obligations, bids, leases or
other similar obligations (other than for borrowed money) entered into
in the ordinary course of business or to secure obligations on surety
and appeal bonds or performance bonds;
(f) judgment Liens in existence for less than 45 days after
the entry thereof or with respect to which execution has been stayed or
the payment of which is covered in full (subject to a customary
deductible) by insurance maintained with responsible insurance
companies and which do not otherwise result in an Event of Default
under Section 8.1.6;
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(g) easements, rights-of-way, zoning restrictions, minor
defects or irregularities in title and other similar encumbrances not
interfering in any material respect with the value or use of the
property to which such Lien is attached; and
(h) Liens securing payment of Indebtedness of the type
described in clause (h) of Section 7.2.2 used to purchase assets of the
Borrower or any of its Restricted Subsidiaries so long as such Lien
extends only to the asset or assets so financed.
SECTION 7.2.4. Financial Condition and Operations. The Borrower will
not permit to occur any of the events set forth below.
(a) The Borrower will not permit the Total Debt to EBITDA
Ratio as of the last day of any Fiscal Quarter to be greater than the
ratio set forth opposite such date:
Total Debt to EBITDA
Date Ratio
Effective Date 4.00:1.00
third Fiscal Quarter of Fiscal Year 1999, 4.00:1.00
fourth Fiscal Quarter of Fiscal Year 1999, 4.00:1.00
first Fiscal Quarter of Fiscal Year 2000, 4.00:1.00
second Fiscal Quarter of Fiscal Year 2000, 4.00:1.00
and third Fiscal Quarter of Fiscal Year 2000 4.00:1.00
fourth Fiscal Quarter of Fiscal Year 2000, 3.50:1.00
first Fiscal Quarter of Fiscal Year 2001, 3.50:1.00
second Fiscal Quarter of Fiscal Year 2001, 3.50:1.00
and third Fiscal Quarter of Fiscal Year 2001, 3.50:1.00
fourth Fiscal Quarter of Fiscal Year 2001, 3.00:1.00
first Fiscal Quarter of Fiscal Year 2002, 3.00:1.00
second Fiscal Quarter of Fiscal Year 2002, 3.00:1.00
and third Fiscal Quarter of Fiscal Year 2002, 3.00:1.00
fourth Fiscal Quarter of Fiscal Year 2002, 2.75:1.00
first Fiscal Quarter of Fiscal Year 2003, 2.75:1.00
and second Fiscal Quarter of Fiscal Year 2003, 2.75:1:00
third Fiscal Quarter of Fiscal Year 2003, 2.75:1.00
fourth Fiscal Quarter of Fiscal Year 2003, 2.25:1.00
each Fiscal Quarter thereafter 2.25:1.00
; provided, however, that if at any time when the Borrower converts the Existing
Subordinated Debt when the Total Debt to EBITDA Ratio has not been reduced to
3.00:1.00, the applicable
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Total Debt to EBITDA Ratio from and including the date of such conversion shall
equal the Total Debt to EBITDA Ratio then in effect as set forth above (x)
reduced by .25 at any time when the outstanding amount of the Existing
Subordinated Debt is less than $13,000,000, and (y) reduced by an additional .25
(for a total reduction of .50) at any time when the outstanding amount of the
Existing Subordinated Debt is less than $5,000,000.
(b) The Borrower shall not permit its Net Worth as of the end
of any Fiscal Quarter to be less than the sum of (i) $42,500,000, plus
(ii) 50% of Net Income for each such period in excess of zero, plus
(iii) 80% of net equity cash proceeds received after the Effective
Date.
(c) The Borrower will not permit the Fixed Charge Coverage
Ratio as of the end of any Fiscal Quarter occurring during any period
set forth below to be less than the ratio set forth opposite such
period:
Period Fixed Charge Coverage Ratio
Ending on the Effective Date 1.20:1.00
Each Fiscal Quarter thereafter 1.20:1.00
(d) The Borrower shall not permit the EBITDA of itself and its
Restricted Subsidiaries on a consolidated basis for the Fiscal Year set
forth below, to be less than the amount set forth opposite such Fiscal
Year:
Fiscal Year Amount
---------------- ------------
Fiscal Year 1999 $33,000,000
Fiscal Year 2000 $37,500,000
Fiscal Year 2001 $42,500,000
Fiscal Year 2002 $50,000,000
Fiscal Year 2003 $60,000,000
Fiscal Year 2004 $66,000,000
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(e) The Borrower shall not permit its Quick Ratio as of the
last day of any Fiscal Quarter to be less than the ratio set forth
opposite such date:
Date Ratio
------------------------------------------ ---------
second Fiscal Quarter of Fiscal Year 1999, 1.05:1.00
and third Fiscal Quarter of Fiscal Year 1999 1.05:1.00
fourth Fiscal Quarter of Fiscal Year 1999, 1.10:1.00
first Fiscal Quarter of Fiscal Year 2000, 1.10:1.00
second Fiscal Quarter of Fiscal Year 2000, 1.10:1.00
and third Fiscal Quarter of Fiscal Year 2000 1.10:1.00
fourth Fiscal Quarter of Fiscal Year 2000, 1.15:1.00
first Fiscal Quarter of Fiscal Year 2001, 1.15:1.00
second Fiscal Quarter of Fiscal Year 2001, 1.15:1.00
and third Fiscal Quarter of Fiscal Year 2001 1.15:1.00
fourth Fiscal Quarter of Fiscal Year 2001, 1.20:1.00
first Fiscal Quarter of Fiscal Year 2002, 1.20:1.00
second Fiscal Quarter of Fiscal Year 2002, 1.20:1.00
and third Fiscal Quarter of Fiscal Year 2002 1.20:1.00
fourth Fiscal Quarter of Fiscal Year 2002, 1.25:1.00
each Fiscal Quarter thereafter, 1.25:1.00.
SECTION 7.2.5. Investments. The Borrower will not, and will not permit
any of its Restricted Subsidiaries to, purchase, make, incur, assume or permit
to exist any Investment in any other Person other than Restricted Subsidiaries,
except:
(a) Investments existing on the Effective Date and identified
in Item 7.2.5(a) of the Disclosure Schedule;
(b) Cash Equivalent Investments;
(c) without duplication and subject to the proviso contained
in clause (e), Investments to the extent permitted as Indebtedness
pursuant to Section 7.2.2;
(d) without duplication, Investments permitted as Capital
Expenditures pursuant to Section 7.2.7;
(e) Investments by way of contributions to capital or
purchases of equity (i) by the Borrower in any Restricted Subsidiaries
or by such Restricted Subsidiary in other Restricted Subsidiaries; or
(ii) by any Subsidiary in the Borrower;
(f) Investments constituting (i) accounts receivable arising,
(ii) trade debt granted, or (iii) deposits made in connection with the
purchase price of goods or services, in each case in the ordinary
course of business;
(g) Investments by way of Permitted Acquisitions;
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(h) 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;
(i) Investments consisting of any deferred portion of the
sales price received by the Borrower or any Subsidiary in connection
with any asset sale permitted under Section 7.2.11; and
(j) after the Effective Date, other Investments (other than
any acquisition of any Person) in an amount not to exceed $10,000,000
over the remaining term of this Agreement;
provided, however, that
(k) any Investment which when made complies with the
requirements of clauses (a), (b) or (c) of the definition of the term
"Cash Equivalent Investment" may continue to be held notwithstanding
that such Investment if made thereafter would not comply with such
requirements;
(l) no Investment otherwise permitted by clauses (d), (e), (g)
or (j) shall be permitted to be made if any Default has occurred and is
continuing or would result therefrom; and
(m) after the Effective Date the aggregate amount of
acquisitions (whether pursuant to an acquisition of stock, assets or
otherwise) by the Borrower or any Restricted Subsidiary of any Person
or the assets of any Person shall not exceed $40,000,000 over the
remaining term of this Agreement (excluding the amount of any such
acquisition which has received the prior written consent of the
Required Lenders).
SECTION 7.2.6. Restricted Payments, etc. The Borrower will not, and
will not permit any of its Restricted Subsidiaries to, declare or make a
Restricted Payment, or make any deposit for any Restricted Payment, other than:
(a) dividends or distributions payable in common stock of the
Borrower or preferred stock of the Borrower and its Restricted
Subsidiaries; and
(b) Restricted Payments made by Restricted Subsidiaries to the
Borrower or wholly owned Subsidiaries.
(c) The Borrower and any of its Restricted Subsidiaries may
redeem Capital Stock, provided, that the following conditions are met:
(i) the Total Debt to EBITDA Ratio, immediately
following such redemption is less than 3.00:1.00, calculated
on a pro forma basis; and
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(ii) the Fixed Charge Coverage Ratio immediately
following the redemption shall not be less than the ratio
required for the period in which such redemption occurs, as
set forth in Section 7.2.4(c), calculated on a pro forma
basis; and
(iii) the aggregate value of such redemptions shall
not exceed $3,000,000, in Fiscal Year 1998, $3,500,000 in
Fiscal Year 1999, and $4,000,000 in any Fiscal Year
thereafter; and
(iv) the aggregate value of all such redemptions
shall not exceed $8,000,000; and
(v) the unborrowed Revolving Loan Commitment Amount
shall not be less than $7,500,000 at the time of such
redemption; and
(vi) at the time of such Restricted Payment, both
before and after giving effect to such Restricted Payment, no
Default or Event of Default shall have occurred and be
continuing or caused thereby.
SECTION 7.2.7. Capital Expenditures, etc. The Borrower will not, and
will not permit any of its Subsidiaries to, make or commit to make Capital
Expenditures in any Fiscal Year, except
Subject to clauses (d) and (h) of Section 7.2.5, Capital
Expenditures (other than in the form of Capitalized Lease Liabilities)
which do not aggregate in excess of the amount set forth below opposite
such Fiscal Year:
Capital
Fiscal Year Expenditure Amount
----------- ------------------
1999 $ 10,000,000
2000 $ 10,000,000
2001 $ 11,000,000
2002 $ 11,000,000
2003 $ 12,000,000
2004 $ 12,000,000
SECTION 7.2.8. No Prepayment of Subordinated Debt. The Borrower will
not, and will not permit any of its Subsidiaries to,
(a) without the consent of the Required Lenders, make any
payment or prepayment of principal of, or premium or interest on, any
Subordinated Debt (i) other than, in the case of interest only, the
stated, scheduled date for such payment of interest set forth in the
Sub Debt Documents governing such Subordinated Debt, or (ii) which
would violate the terms of this Agreement or the Sub Debt Documents
governing such Subordinated Debt;
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(b) refinance, redeem, retire, purchase, defease or otherwise
acquire any Subordinated Debt; provided, however, that the Borrower may
redeem the Existing Subordinated Debt if
(i) (A) the average of the daily closing prices of
its common stock for the period ending five days prior to the
call for such redemption, is at least 25% greater than the
conversion price then in effect, and (B) the closing price of
its common stock on the trading date prior to the date of the
call for such redemption, is at least 25% greater than the
conversion price then in effect; and
(ii) no Default or Event of Default has occurred and
is then continuing or would occur as a result of such
redemption call; or
(c) make any deposit (including the payment of amounts into a
sinking fund or other similar fund) for any of the foregoing purposes.
SECTION 7.2.9. Stock of Restricted Subsidiaries. The Borrower will not,
and will not permit any of its Restricted Subsidiaries to, (i) issue any Capital
Stock (whether for value or otherwise) to any Person other than (in the case of
Restricted Subsidiaries) officers or employees of the Restricted Subsidiaries,
in connection with incentive compensation programs or employee benefit plans,
and the Borrower or another wholly owned Restricted Subsidiary or (ii) other
than as set forth in Section 7.2.6, become liable in respect of any obligation
(contingent or otherwise) to purchase, redeem, retire, acquire or make any other
payment in respect of any shares of Capital Stock of the Borrower or any
Restricted Subsidiary or any option, warrant or other right to acquire any such
shares of Capital Stock.
SECTION 7.2.10. Consolidation, Merger, etc. The Borrower will not, and
will not permit any of its Restricted Subsidiaries to, liquidate or dissolve,
consolidate with, or merge into or with, any other Person, or purchase or
otherwise acquire all or substantially all of the assets of any Person (or of
any division thereof), except
(a) any Restricted Subsidiary may liquidate or dissolve
voluntarily into, and may merge with and into, the Borrower or any
other Restricted Subsidiary (provided, however, that a Guarantor may
only liquidate or dissolve into, or merge with and into, the Borrower
or another Guarantor), and the assets or stock of any Restricted
Subsidiary may be purchased or otherwise acquired by the Borrower or
any other Restricted Subsidiary (provided, however, that the assets or
stock of any Guarantor may only be purchased or otherwise acquired by
the Borrower or another Guarantor); provided, further, that in no event
shall any Pledged Subsidiary consolidate with or merge with and into
any Restricted Subsidiary other than another Pledged Subsidiary unless
after giving effect thereto, the Administrative Agent shall have a
perfected pledge of, and security interest in and to, at least the same
percentage of the issued and outstanding shares of Capital Stock of the
surviving Person as the Administrative Agent had immediately prior to
such merger or consolidation in form and substance satisfactory to the
Administrative Agent and its counsel, pursuant to such documentation
and opinions as shall be necessary in the
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opinion of the Administrative Agent to create, perfect or maintain the
collateral position of the Administrative Agent and the Secured Parties
therein as contemplated by this Agreement; and
(b) so long as no Default has occurred and is continuing or
would occur after giving effect thereto, the Borrower or any of its
Restricted Subsidiaries may (to the extent permitted by clause (g) of
Section 7.2.5) purchase all or substantially all of the assets or stock
of any Person (or any division thereof), or acquire such Person by
merger.
SECTION 7.2.11. Permitted Dispositions. Other than in connection with
the Borrower's incentive compensation arrangements, the Borrower will not, and
will not permit any of its Restricted Subsidiaries to, sell, transfer, lease,
contribute or otherwise convey (including by way of merger), or grant options,
warrants or other rights with respect to, any of the Borrower's or such
Restricted Subsidiaries' assets (including accounts receivable and capital stock
of Restricted Subsidiaries) to any Person in one transaction or series of
transactions unless such disposition is (i) in the ordinary course of its
business, (ii) permitted by Section 7.2.10, (iii) the disposition of Titan
Wireless in connection with an initial public offering (A) upon satisfaction of
the Administrative Agent that no Default shall have occurred, then be continuing
or would result from the initial public offering, and (B) provided Titan
Wireless repays intercompany indebtedness to the Borrower in an amount not less
than $12,000,000, or (iv) of assets having an aggregate value not in excess of
$1,000,000 in any Fiscal Year so long as the Borrower complies with Section
3.1.1(c).
SECTION 7.2.12. Modification of Certain Agreements. The Borrower will
not, and will not permit any of its Restricted Subsidiaries to, consent to any
amendment, supplement, waiver or other modification of, or enter into any
forbearance from exercising any rights with respect to the terms or provisions
contained in,
(a) the Sub Debt Documents, other than any amendment,
supplement, waiver or modification which (i) extends the date or
reduces the amount of any required repayment, prepayment or redemption
of the principal of such Subordinated Debt, (ii) reduces the rate or
extends the date for payment of the interest, premium (if any) or fees
payable on such Subordinated Debt or (iii) makes the covenants, events
of default or remedies in such Sub Debt Documents less restrictive on
the Borrower; or
(b) each purchase agreement pursuant to which a Permitted
Acquisition occurs (including, without limitation, the SRC Purchase
Agreement); or
(c) the Borrower's or any Restricted Subsidiary's Organic
Documents to the extent that any such change would be adverse to the
interests of the Secured Parties; or
(d) the SRC Seller Notes to (i) shorten the maturity thereof,
(ii) increase the interest rate thereof, (iii) increase the principal
amount thereof (other than pursuant to the SRC Purchase Agreement as in
effect on the Effective Date), (iv) grant any security therefor or (v)
amend, modify or otherwise change any other provision which would be
adverse to the interests of the Lenders.
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SECTION 7.2.13. Transactions with Affiliates. The Borrower will not,
and will not permit any of its Restricted Subsidiaries to, enter into or cause
or permit to exist any arrangement or contract (including for the purchase,
lease or exchange of property or the rendering of services) with any of its
other Affiliates, unless such arrangement or contract (i) is on fair and
reasonable terms no less favorable to the Borrower or such Restricted Subsidiary
than it could obtain in an arm's-length transaction with a Person that is not an
Affiliate and (ii) is of the kind which would be entered into by a prudent
Person in the position of the Borrower or such Restricted Subsidiary with a
Person that is not one of its Affiliates.
SECTION 7.2.14. Restrictive Agreements, etc. The Borrower will not, and
will not permit any of its Restricted Subsidiaries to, enter into any agreement
prohibiting
(a) the creation or assumption of any Lien upon its
properties, revenues or assets, whether now owned or hereafter
acquired;
(b) the ability of any Obligor to amend or otherwise modify
this Agreement or any other Loan Document; or
(c) the ability of any Restricted Subsidiary to make any
payments, directly or indirectly, to the Borrower, including by way of
dividends, advances, repayments of loans, reimbursements of management
and other intercompany charges, expenses and accruals or other returns
on investments.
The foregoing prohibitions shall not apply to restrictions contained in this
Agreement and any other Loan Document.
SECTION 7.2.15. Sale and Leaseback. The Borrower will not, and will not
permit any of its Restricted Subsidiaries to, directly or indirectly enter into
any agreement or arrangement providing for the sale or transfer by it of any
property (now owned or hereafter acquired) to a Person and the subsequent lease
or rental of such property or other similar property from such Person, unless
upon such sale or transfer the Borrower has applied the Net Proceeds of such
sale and leaseback pursuant to Section 3.1.1(c).
ARTICLE VIII
EVENTS OF DEFAULT
SECTION 8.1. Listing of Events of Default. Each of the following events
or occurrences described in this Article shall constitute an "Event of Default".
SECTION 8.1.1. Non-Payment of Obligations. The Borrower shall default
in the payment or prepayment when due of
(a) any principal of or interest on any Loan, or any
Reimbursement Obligation or any deposit of cash for collateral purposes
pursuant to Section 2.6.4; or
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(b) any fee described in Article III or any other monetary
Obligation and such default shall continue unremedied for a period of
three days (including one Business Day) after such amount was due.
SECTION 8.1.2. Breach of Warranty. Any representation or warranty of
any Obligor made or deemed to be made in any Loan Document (including any
certificates delivered pursuant to Article V) is or shall be incorrect when made
or deemed to have been made in any material respect.
SECTION 8.1.3. Non-Performance of Certain Covenants and Obligations.
The Borrower shall default in the due performance or observance of any of its
obligations under Section 7.1.1, Section 7.1.8 or Section 7.2 or any Obligor
shall default in the due performance or observance of its obligations under (i)
Articles III or IV of the Subsidiary Guaranty, (ii) Articles III or IV of a
Security Agreement, or (iii) Articles III or IV of a Pledge Agreement.
SECTION 8.1.4. Non-Performance of Other Covenants and Obligations. Any
Obligor shall default in the due performance and observance of any other
agreement contained herein or in any other Loan Document executed by it, and
such default shall continue unremedied for a period of 30 days after notice
thereof shall have been given to the Borrower by the Administrative Agent or any
Lender.
SECTION 8.1.5. Default on Other Indebtedness. A default shall occur in
the payment when due (subject to any applicable grace period), whether by
acceleration or otherwise, of any Indebtedness (other than Indebtedness
described in Section 8.1.1) of the Borrower or any of its Subsidiaries or any
other Obligor having a principal amount, individually or in the aggregate, in
excess of $2,000,000, or a default shall occur in the performance or observance
of any obligation or condition with respect to such Indebtedness if the effect
of such default is to accelerate the maturity of any such Indebtedness or such
default shall continue unremedied for any applicable period of time sufficient
to permit the holder or holders of such Indebtedness, or any trustee or agent
for such holders, to cause or declare such Indebtedness to become due and
payable or to require such Indebtedness to be prepaid, redeemed, purchased or
defeased, or require an offer to purchase or defease such Indebtedness to be
made, prior to its expressed maturity.
SECTION 8.1.6. Judgments. Any judgment or order for the payment of
money in excess of $2,000,000 (exclusive of any amounts fully covered by
insurance (less any applicable deductible) and as to which the insurer has
acknowledged its responsibility to cover such judgment or order) shall be
rendered against the Borrower or any of its Subsidiaries or any other Obligor
and such judgment shall not have been vacated or discharged or stayed or bonded
pending appeal within 30 days after the entry thereof.
SECTION 8.1.7. Pension Plans. Any of the following events shall occur
with respect to any Pension Plan
(a) the institution of any steps by the Borrower, any member
of its Controlled Group or any other Person to terminate a Pension Plan
if, as a result of such termination,
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the Borrower or any such member could be required to make a
contribution to such Pension Plan, or could reasonably expect to incur
a liability or obligation to such Pension Plan, in excess of
$1,000,000; or
(b) a contribution failure occurs with respect to any Pension
Plan sufficient to give rise to a Lien under section 302(f) of ERISA.
SECTION 8.1.8. Change in Control. Any Change in Control shall occur.
SECTION 8.1.9. Bankruptcy, Insolvency, etc. The Borrower, any of its
Restricted Subsidiaries, any other Subsidiary which is material to the Borrower
or any other Obligor shall
(a) become insolvent or generally fail to pay, or admit in
writing its inability or unwillingness generally to pay, debts as they
become due;
(b) apply for, consent to, or acquiesce in the appointment of
a trustee, receiver, sequestrator or other custodian for any
substantial part of the property of any thereof, or make a general
assignment for the benefit of creditors;
(c) in the absence of such application, consent or
acquiescence in or permit or suffer to exist the appointment of a
trustee, receiver, sequestrator or other custodian for a substantial
part of the property of any thereof, and such trustee, receiver,
sequestrator or other custodian shall not be discharged within 60 days;
provided, that the Borrower, each Subsidiary and each other Obligor
hereby expressly authorizes each Secured Party to appear in any court
conducting any relevant proceeding during such 60-day period to
preserve, protect and defend their rights under the Loan Documents;
(d) permit or suffer to exist the commencement of any
bankruptcy, reorganization, debt arrangement or other case or
proceeding under any bankruptcy or insolvency law or any dissolution,
winding up or liquidation proceeding, in respect thereof, and, if any
such case or proceeding is not commenced by the Borrower, any
Subsidiary or any Obligor, such case or proceeding shall be consented
to or acquiesced in by the Borrower, such Subsidiary or such Obligor,
as the case may be, or shall result in the entry of an order for relief
or shall remain for 60 days undismissed; provided, that the Borrower,
each Subsidiary and each Obligor hereby expressly authorizes each
Secured Party to appear in any court conducting any such case or
proceeding during such 60-day period to preserve, protect and defend
their rights under the Loan Documents; or
(e) take any action authorizing, or in furtherance of, any of
the foregoing.
SECTION 8.1.10. Impairment of Security, etc. Any Loan Document or any
Lien granted thereunder shall (except in accordance with its terms), in whole or
in part, terminate, cease to be effective or cease to be the legally valid,
binding and enforceable obligation of any Obligor party thereto; any Obligor or
any other party shall, directly or indirectly, contest in any manner such
effectiveness, validity, binding nature or enforceability; or, except as
permitted
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under any Loan Document, any Lien securing any Obligation shall, in whole or in
part, cease to be a perfected first priority Lien.
SECTION 8.1.11. Failure of Subordination. Unless otherwise waived or
consented to by the Administrative Agent, the Lenders and the Issuers in
writing, the subordination provisions relating to any Subordinated Debt (the
"Subordination Provisions") shall fail to be enforceable by the Administrative
Agent, the Lenders and the Issuers in accordance with the terms thereof, or the
monetary Obligations shall fail to constitute "Senior Indebtedness" (or similar
term) referring to the Obligations; or the Borrower or any of its Subsidiaries
shall, directly or indirectly, disavow or contest in any manner (i) the
effectiveness, validity or enforceability of any of the Subordination
Provisions, (ii) that the Subordination Provisions exist for the benefit of the
Administrative Agent, the Lenders and the Issuers or (iii) that all payments of
principal of or premium and interest on the Subordinated Debt, or realized from
the liquidation of any property of any Obligor, shall be subject to any of such
Subordination Provisions.
SECTION 8.1.12. Government Contracts. Any government contract is
terminated for default or any "show cause" letter is not ultimately cured.
SECTION 8.2. Action if Bankruptcy. If any Event of Default described in
clauses (a) through (d) of Section 8.1.9 shall occur, the Commitments (if not
theretofore terminated) shall automatically terminate and the outstanding
principal amount of all outstanding Loans and all other Obligations (including
Reimbursement Obligations) shall automatically be and become immediately due and
payable, without presentment, protest, notice or demand (all of which are hereby
expressly waived by the Borrower) and the Borrower or any other Obligor shall
automatically and immediately be obligated to deposit with the Administrative
Agent cash collateral in an amount equal to all Letter of Credit Outstandings.
SECTION 8.3. Action if Other Event of Default. If any Event of Default
(other than any Event of Default described in clauses (a) through (d) of Section
8.1.9) shall occur for any reason, whether voluntary or involuntary, and be
continuing, the Administrative Agent, upon the direction of the Required
Lenders, shall by notice to the Borrower declare all or any portion of the
outstanding principal amount of the Loans and other Obligations (including
Reimbursement Obligations) to be due and payable and/or the Commitments (if not
theretofore terminated) to be terminated, whereupon the full unpaid amount of
such Loans and other Obligations which shall be so declared due and payable
shall be and become immediately due and payable, without further presentment,
protest, notice or demand (all of which are hereby expressly waived by the
Borrower) and/or, as the case may be, the Commitments shall terminate and the
Borrower and the Obligors shall automatically and immediately be obligated to
deposit with the Administrative Agent cash collateral in an amount equal to all
Letter of Credit Outstandings.
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ARTICLE IX
THE CREDIT AGENTS
SECTION 9.1. Actions. Each Lender hereby appoints (a) Scotiabank as its
Administrative Agent and Imperial as its Documentation Agent under and for
purposes of this Agreement, the Notes and each other Loan Document, and (b)
Scotiabank as its Agent (as defined in the Collateral Documents) under and for
purposes of the Collateral Documents. Each Lender authorizes the Credit Agents
to act on behalf of such Lender under this Agreement, the Notes and each other
Loan Document and, in the absence of other written instructions from the
Required Lenders received from time to time by the Credit Agents (with respect
to which the Credit Agents agree that they will comply, except as otherwise
provided in this Section or as otherwise advised by counsel in order to avoid
contravention of applicable law), to exercise such powers hereunder and
thereunder as are specifically delegated to or required of the Credit Agents by
the terms hereof and thereof, together with such powers as may be reasonably
incidental thereto. Each Lender hereby indemnifies (which indemnity shall
survive any termination of this Agreement) the Credit Agents, pro rata according
to such Lender's Total Percentage, from and against any and all liabilities,
obligations, losses, damages, claims, costs or expenses of any kind or nature
whatsoever which may at any time be imposed on, incurred by, or asserted
against, the Credit Agents in any way relating to or arising out of this
Agreement, the Notes and any other Loan Document, including reasonable
attorneys' fees, and as to which the Credit Agents are not reimbursed by the
Borrower; provided, however, that no Lender shall be liable for the payment of
any portion of such liabilities, obligations, losses, damages, claims, costs or
expenses which are determined by a court of competent jurisdiction in a final
proceeding to have resulted from the Credit Agents' gross negligence or wilful
misconduct. The Credit Agents shall not be required to take any action hereunder
or under any other Loan Document, or to prosecute or defend any suit in respect
of this Agreement or any other Loan Document, unless they are indemnified
hereunder to their satisfaction. If any indemnity in favor of the Credit Agents
shall be or become, in the Credit Agents' determination, inadequate, the Credit
Agents may call for additional indemnification from the Lenders and cease to do
the acts indemnified against hereunder until such additional indemnity is given.
SECTION 9.2. Funding Reliance, etc. Unless the Administrative Agent
shall have been notified by telephone, confirmed in writing, by any Lender by
3:00 p.m., New York time, on the Business Day prior to a Borrowing that such
Lender will not make available the amount which would constitute its Percentage
of such Borrowing on the date specified therefor, the Administrative Agent may
assume that such Lender has made such amount available to the Administrative
Agent and, in reliance upon such assumption, make available to the Borrower a
corresponding amount. If and to the extent that such Lender shall not have made
such amount available to the Administrative Agent, such Lender and the Borrower
severally agree to repay the Administrative Agent forthwith on demand such
corresponding amount together with interest thereon, for each day from the date
the Administrative Agent made such amount available to the Borrower to the date
such amount is repaid to the Administrative Agent, at the interest rate
applicable at the time to Loans comprising such Borrowing (in the case of the
Borrower) and (in the case of a Lender), at the Federal Funds Rate (for the
first two Business Days after which such
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amount has not been repaid, and thereafter at the interest rate applicable to
Loans comprising such Borrowing.
SECTION 9.3. Exculpation. Neither the Credit Agents nor any of their
directors, officers, employees or agents shall be liable to any Lender for any
action taken or omitted to be taken by them under this Agreement or any other
Loan Document, or in connection herewith or therewith, except for their own
wilful misconduct or gross negligence, nor responsible for any recitals or
warranties herein or therein, nor for the effectiveness, enforceability,
validity or due execution of this Agreement or any other Loan Document, nor for
the creation, perfection or priority of any Liens purported to be created by any
of the Loan Documents, or the validity, genuineness, enforceability, existence,
value or sufficiency of any collateral security, nor to make any inquiry
respecting the performance by the Borrower of its obligations hereunder or under
any other Loan Document. Any such inquiry which may be made by the Credit Agents
shall not obligate it to make any further inquiry or to take any action. The
Credit Agents shall be entitled to rely upon advice of counsel concerning legal
matters and upon any notice, consent, certificate, statement or writing which
the Credit Agents believe to be genuine and to have been presented by a proper
Person.
SECTION 9.4. Successor. Either of the Credit Agents may resign from its
agency position at any time upon at least 30 days' prior notice to the Borrower
and all Lenders. If either of the Credit Agents at any time shall resign, the
Required Lenders may, upon at least 3 days' (so long as one of such days is a
Business Day) prior notice to the Borrower and all Lenders, appoint another
Lender as a successor Administrative Agent, Documentation Agent, or Agent, as
appropriate, which shall thereupon become the Administrative Agent,
Documentation Agent or Agent, as appropriate, hereunder. If no successor
Administrative Agent, Documentation Agent or Agent, as appropriate, shall have
been so appointed by the Required Lenders, and shall have accepted such
appointment, within 30 days after the retiring Credit Agent's giving notice of
resignation, then the retiring Credit Agent may, on behalf of the Lenders, upon
at least 3 days' prior notice to the Borrower and all Lenders, appoint a
successor Administrative Agent, Documentation Agent or Agent, as appropriate,
which shall be one of the Lenders or a commercial banking institution organized
under the laws of the U.S. (or any State thereof) or a U.S. branch or agency of
a commercial banking institution, and having (x) a combined capital and surplus
of at least $250,000,000 and (y) a credit rating of AA or better by Xxxxx'x or a
comparable rating by S&P; provided, however, that if, after expending all
reasonable commercial efforts, such retiring Credit Agent is unable to find a
commercial banking institution which is willing to accept such appointment and
which meets the qualifications set forth in clause (y) above, such retiring
Credit Agent, shall be permitted to appoint as its successor from all available
commercial banking institutions willing to accept such appointment such
institution having the highest credit rating of all such available and willing
institutions. Upon the acceptance of any appointment as such Credit Agent
hereunder by a successor Credit Agent, such successor Credit Agent shall be
entitled to receive from the retiring Credit Agent such documents of transfer
and assignment as such successor Credit Agent may reasonably request, and shall
thereupon succeed to and become vested with all rights, powers, privileges and
duties of the retiring Credit Agent, and the retiring Credit Agent shall be
discharged from its duties and
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obligations under this Agreement. After any retiring Credit Agent's resignation
hereunder as the Credit Agent, the provisions of
(a) this Article IX shall inure to its benefit as to any
actions taken or omitted to be taken by it while it was a Credit Agent
under this Agreement; and
(b) Section 10.3 and Section 10.4 shall continue to inure to
its benefit.
SECTION 9.5. Credit Extensions by Scotiabank and Imperial. Each of
Scotiabank and Imperial shall have the same rights and powers with respect to
(x) the Credit Extensions made by it or any of its Affiliates, and (y) the Notes
held by it or any of its Affiliates as any other Lender and may exercise the
same as if it were not a Credit Agent. Such Credit Agent and its Affiliates may
accept deposits from, lend money to, and generally engage in any kind of
business with the Borrower or any Subsidiary or Affiliate of the Borrower as if
Scotiabank or Imperial, as appropriate were not a Credit Agent hereunder.
SECTION 9.6. Credit Decisions. Each Lender acknowledges that it has,
independently of the Credit Agents and each other Lender, and based on such
Lender's review of the financial information of the Borrower, this Agreement,
the other Loan Documents (the terms and provisions of which being satisfactory
to such Lender) and such other documents, information and investigations as such
Lender has deemed appropriate, made its own credit decision to extend its
Commitments. Each Lender also acknowledges that it will, independently of the
Credit Agents and each other Lender, and based on such other documents,
information and investigations as it shall deem appropriate at any time,
continue to make its own credit decisions as to exercising or not exercising
from time to time any rights and privileges available to it under this Agreement
or any other Loan Document.
SECTION 9.7. Copies, etc. Each Credit Agent shall give prompt notice to
each Lender of each notice or request required or permitted to be given to such
Credit Agent by the Borrower pursuant to the terms of this Agreement (unless
concurrently delivered to the Lenders by the Borrower). Such Credit Agent will
distribute to each Lender each document or instrument received for its account
and copies of all other communications received by such Credit Agent from the
Borrower for distribution to the Lenders by such Credit Agent in accordance with
the terms of this Agreement or any other Loan Document.
ARTICLE X
MISCELLANEOUS PROVISIONS
SECTION 10.1. Waivers, Amendments, etc. The provisions of this
Agreement and of each other Loan Document may from time to time be amended,
modified or waived, if such amendment, modification or waiver is in writing and
consented to by the Borrower and the Required Lenders; provided, however, that
no such amendment, modification or waiver shall:
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(a) extend any Commitment Termination Date or modify this
Section 10.1 without the consent of all Lenders;
(b) increase the aggregate amount of any Lender's Percentage
of any Commitment Amount, increase the aggregate amount of any Loans
required to be made by a Lender pursuant to its Commitments or reduce
any fees described in Article III payable to any Lender without the
consent of such Lender;
(c) extend the Stated Maturity Date for any Lender's Loan, or
reduce the principal amount of or rate of interest on any Lender's Loan
or extend the date on which interest or fees are payable in respect of
such Lender's Loans, in each case, without the consent of such Lender
(it being understood and agreed, however, that any vote to rescind any
acceleration made pursuant to Section 8.2 and Section 8.3 of amounts
owing with respect to the Loans and other Obligations shall only
require the vote of the Required Lenders);
(d) change the definition of "Required Lenders" or any
requirement hereunder that any particular action be taken by all
Lenders without the consent of all Lenders;
(e) increase the Stated Amount of any Letter of Credit unless
consented to by the Issuer of such Letter of Credit;
(f) release (i) any Guarantor from its obligations under a
Guaranty or (ii) all or substantially all of the collateral under the
Loan Documents, in either case without the consent of all Lenders as
expressly provided herein or therein;
(g) change any of the terms of clause (d) of Section 2.1.4 or
Section 2.3.2 without the consent of Scotiabank; or
(h) affect adversely the interests, rights or obligations of
the Administrative Agent (in its capacity as the Administrative Agent),
or any Issuer (in its capacity as Issuer), unless consented to by the
Administrative Agent or such Issuer, as the case may be.
No failure or delay on the part of the Administrative Agent, any Issuer or any
Lender in exercising any power or right under this Agreement or any other Loan
Document shall operate as a waiver thereof, nor shall any single or partial
exercise of any such power or right preclude any other or further exercise
thereof or the exercise of any other power or right. No notice to or demand on
the Borrower or any other Obligor in any case shall entitle it to any notice or
demand in similar or other circumstances. No waiver or approval by the
Administrative Agent, any Issuer or any Lender under this Agreement or any other
Loan Document shall, except as may be otherwise stated in such waiver or
approval, be applicable to subsequent transactions. No waiver or approval
hereunder shall require any similar or dissimilar waiver or approval thereafter
to be granted hereunder.
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SECTION 10.2. Notices. All notices and other communications provided to
any party hereto under this Agreement or any other Loan Document shall be in
writing or by facsimile and addressed, delivered or transmitted to such party at
its address or facsimile number set forth below its signature hereto or set
forth in the Lender Assignment Agreement or at such other address or facsimile
number as may be designated by such party in a notice to the other parties. Any
notice, if mailed and properly addressed with postage prepaid or if properly
addressed and sent by pre-paid courier service, shall be deemed given when
received; any notice, if transmitted by facsimile, shall be deemed given when
the confirmation of transmission thereof is received by the transmitter.
SECTION 10.3. Payment of Costs and Expenses. The Borrower agrees to pay
on demand all reasonable expenses of the Administrative Agent (including the
reasonable fees, costs and out-of-pocket expenses of counsel to the
Administrative Agent, special counsel to the Administrative Agent, and of local
counsel, if any, who may be retained by counsel to the Administrative Agent) in
connection with
(a) (i) the syndication efforts of Scotiabank and any due
diligence investigation; provided, however, that the Borrower shall not
pay for expenses incurred in connection with assignments which occur
after the Closing Date and (ii) the negotiation, preparation, execution
and delivery and administration of this Agreement and of each other
Loan Document, including schedules and exhibits, and any amendments,
waivers, consents, supplements or other modifications to this Agreement
or any other Loan Document as may from time to time hereafter be
required, whether or not the transactions contemplated hereby are
consummated; and
(b) the filing, recording, refiling or rerecording of any Loan
Document and/or any Uniform Commercial Code financing statements
relating thereto and all amendments, supplements, amendments and
restatements and other modifications to any thereof and any and all
other documents or instruments of further assurance required to be
filed or recorded or refiled or rerecorded by the terms hereof or the
terms of any Loan Document; and
(c) the preparation and review of the form of any document or
instrument relevant to this Agreement or any other Loan Document.
The Borrower further agrees to pay, and to save each Secured Party harmless from
all liability for, any stamp or other taxes which may be payable in connection
with the execution or delivery of this Agreement, the Credit Extensions
hereunder, or the issuance of the Notes, Letters of Credit or any other Loan
Documents. The Borrower also agrees to reimburse each Secured Party upon demand
for all reasonable out-of-pocket expenses (including reasonable attorneys' fees
and legal expenses of counsel to each Secured Party incurred by such Secured
Party in connection with (x) the negotiation of any restructuring or "work-out"
with the Borrower, whether or not consummated, of any Obligations and (y) the
enforcement of any Obligations.
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SECTION 10.4. Indemnification. In consideration of the execution and
delivery of this Agreement by each Secured Party, the Borrower hereby
indemnifies, exonerates and holds each Secured Party and each of their
respective officers, directors, employees and agents (collectively, the
"Indemnified Parties") free and harmless from and against any and all actions,
causes of action, suits, losses, costs, liabilities and damages, and expenses
incurred in connection therewith (irrespective of whether any such Indemnified
Party is a party to the action for which indemnification hereunder is sought),
including reasonable attorneys' fees and disbursements, whether incurred in
connection with actions between or among the parties hereto or the parties
hereto and third parties (collectively, the "Indemnified Liabilities"), incurred
by the Indemnified Parties or any of them as a result of, or arising out of, or
relating to
(a) any transaction financed or to be financed in whole or in
part, directly or indirectly, with the proceeds of any Credit
Extension, including all Indemnified Liabilities arising in connection
with transactions contemplated hereby or by any other Loan Document or
transactions which are financed with proceeds of any Loan or which are
supported by any Letter of Credit;
(b) the entering into and performance of this Agreement and
any other Loan Document by any of the Indemnified Parties (including
any action brought by or on behalf of the Borrower as the result of any
determination by the Required Lenders pursuant to Article V not to fund
any Credit Extension), provided that any such action is resolved in
favor of such Indemnified Party;
(c) any investigation, litigation or proceeding related to any
acquisition or proposed acquisition by the Borrower or any of its
Subsidiaries of all or any portion of the stock or assets of any
Person, whether or not an Indemnified Party is party thereto;
(d) any investigation, litigation or proceeding related to any
environmental cleanup, audit, compliance or other matter relating to
the protection of the environment or the Release by the Borrower or any
of its Subsidiaries of any Hazardous Material;
(e) the presence on or under, or the escape, seepage, leakage,
spillage, discharge, emission, discharging or releases from, any real
property owned or operated by the Borrower or any Subsidiary thereof of
any Hazardous Material (including any losses, liabilities, damages,
injuries, costs, expenses or claims asserted or arising under any
Environmental Law), regardless of whether caused by, or within the
control of, the Borrower or such Subsidiary; or
(f) each Lender's Environmental Liability (the indemnification
herein shall survive repayment of the Notes and any transfer of the
property of the Borrower or any of its Subsidiaries by foreclosure or
by a deed in lieu of foreclosure for any Lender's Environmental
Liability, regardless of whether caused by, or within the control of,
the Borrower or such Subsidiary);
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except for any such Indemnified Liabilities arising for the account of a
particular Indemnified Party by reason of the relevant Indemnified Party's gross
negligence or wilful misconduct. The Borrower and its successors and assigns
hereby waive, release and agree not to make any claim or bring any cost recovery
action against, any Secured Party under CERCLA or any state equivalent, or any
similar law now existing or hereafter enacted. It is expressly understood and
agreed that to the extent that any of such Persons is strictly liable under any
Environmental Laws, the Borrower's obligation to such Person under this
indemnity shall likewise be without regard to fault on the part of the Borrower
with respect to the violation or condition which results in liability of such
Person. If and to the extent that the foregoing undertaking may be unenforceable
for any reason, the Borrower hereby agrees to make the maximum contribution to
the payment and satisfaction of each of the Indemnified Liabilities which is
permissible under applicable law.
SECTION 10.5. Survival. The obligations of the Borrower under Sections
4.3, 4.4, 4.5, 4.6, 10.3 and 10.4, and the obligations of the Lenders under
Section 9.1, shall in each case survive any assignment from one Lender to
another (in the case of Sections 10.3 and 10.4) and any termination of this
Agreement, the payment in full of all the Obligations and the termination of all
the Commitments. The representations and warranties made by the Borrower and
each other Obligor in this Agreement and in each other Loan Document shall
survive the execution and delivery of this Agreement and each such other Loan
Document. The Fee Letter shall, upon the Effective Date, supercede in all
respects, the Fee Letter dated as of June 8, 1998 between the Borrower and
Scotiabank.
SECTION 10.6. Severability. Any provision of this Agreement or any
other Loan Document which is prohibited or unenforceable in any jurisdiction
shall, as to such provision and such jurisdiction, be ineffective to the extent
of such prohibition or unenforceability without invalidating the remaining
provisions of this Agreement or such Loan Document or affecting the validity or
enforceability of such provision in any other jurisdiction.
SECTION 10.7. Headings. The various headings of this Agreement and of
each other Loan Document are inserted for convenience only and shall not affect
the meaning or interpretation of this Agreement or such other Loan Document or
any provisions hereof or thereof.
SECTION 10.8. Execution in Counterparts, Effectiveness, etc. This
Agreement may be executed by the parties hereto in several counterparts, each of
which shall be an original and all of which shall constitute together but one
and the same agreement. This Agreement shall become effective when counterparts
hereof executed on behalf of the Borrower, the Administrative Agent and each
Lender (or notice thereof satisfactory to the Administrative Agent) shall have
been received by the Administrative Agent and notice thereof shall have been
given by the Administrative Agent to the Borrower and each Lender.
SECTION 10.9. Governing Law; Entire Agreement. THIS AGREEMENT, THE
NOTES AND EACH OTHER LOAN DOCUMENT (INCLUDING PROVISIONS WITH
RESPECT TO INTEREST, LOAN CHARGES AND COMMITMENT FEES) SHALL
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EACH BE DEEMED TO BE A CONTRACT MADE UNDER AND GOVERNED BY THE INTERNAL LAWS OF
THE STATE OF NEW YORK (INCLUDING FOR SUCH PURPOSE SECTIONS 5-1401 AND 5-1402 OF
THE GENERAL OBLIGATIONS LAW OF THE STATE OF NEW YORK), EXCEPT TO THE EXTENT THAT
THE VALIDITY OR PERFECTION OF A SECURITY INTEREST OR MORTGAGE HEREUNDER, OR
REMEDIES HEREUNDER, IN RESPECT OF ANY PARTICULAR COLLATERAL ARE GOVERNED BY THE
LAWS OF A JURISDICTION OTHER THAN THE STATE OF NEW YORK.
This Agreement, the Notes, the other Loan Documents and the Fee Letter
constitute the entire understanding among the parties hereto with respect to the
subject matter hereof and thereof and supersede any prior agreements, written or
oral, with respect thereto; provided, however, that all provisions regarding
indemnification and expenses in the Existing Credit Agreement including,
Sections 3.3, 10.3 and 10.4 thereunder, shall survive the amendment and
restatement of the Existing Credit Agreement and shall continue and be binding
on the parties hereto.
SECTION 10.10. Successors and Assigns. This Agreement shall be binding
upon and shall inure to the benefit of the parties hereto and their respective
successors and assigns; provided, however, that:
(a) the Borrower may not assign or transfer its rights or
obligations hereunder without the prior written consent of the
Administrative Agent and all Lenders; and
(b) the rights of sale, assignment and transfer of the Lenders
are subject to Section 10.11.
SECTION 10.11. Sale and Transfer of Loans and Notes; Participations in
Loans and Notes. Each Lender may assign, or sell participations in, its Loans,
Letters of Credit and Commitments to one or more other Persons in accordance
with this Section 10.11.
SECTION 10.11.1. Assignments. Any Lender,
(a) with the consent of the Borrower and the Administrative
Agent (which consents shall not be unreasonably delayed or withheld
and, which consent, in the case of the Borrower, shall not be required
during the continuation of an Event of Default) may at any time assign
and delegate to one or more commercial banks; other financial
institutions; special-purpose investment funds which are organized for
the specific purpose of making, acquiring participations in or
investing in loans of the type made pursuant to this Agreement; and
funds that typically invest in bank loans, and
(b) upon notice to the Borrower and the Administrative Agent,
may assign and delegate to any of its Affiliates, any other Lender or
an Approved Fund
(each Person described in either of the foregoing clauses as being the Person to
whom such assignment and delegation is to be made, being hereinafter referred to
as an "Assignee Lender"), all or any fraction of such Lender's total Loans,
Letter of Credit Outstandings and Commitments
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in a minimum aggregate amount of $5,000,000 if such assignment is to a party
other than an Affiliate or another Lender, a fund or an Approved Fund (or, if
less, the entire remaining amount of such Lender's Loans, Letter of Credit
Outstandings and Commitments). Each Obligor and the Administrative Agent shall
be entitled to continue to deal solely and directly with a Lender in connection
with the interests so assigned and delegated to an Assignee Lender until
(c) notice of such assignment and delegation, together with
(i) payment instructions, (ii) the Internal Revenue Service Forms or
other statements contemplated or required to be delivered pursuant to
Section 4.6, if applicable, and (iii) addresses and related information
with respect to such Assignee Lender, shall have been delivered to the
Borrower and the Administrative Agent by such assignor Lender and such
Assignee Lender;
(d) such Assignee Lender shall have executed and delivered to
the Borrower and the Administrative Agent a Lender Assignment
Agreement, accepted by the Administrative Agent; and
(e) the processing fees described below shall have been paid.
From and after the date that the Administrative Agent accepts such Lender
Assignment Agreement, (x) the Assignee Lender thereunder shall be deemed
automatically to have become a party hereto and to the extent that rights and
obligations hereunder have been assigned and delegated to such Assignee Lender
in connection with such Lender Assignment Agreement, shall have the rights and
obligations of a Lender hereunder and under the other Loan Documents, and (y)
the assignor Lender, to the extent that rights and obligations hereunder have
been assigned and delegated by it in connection with such Lender Assignment
Agreement, shall be released from its obligations hereunder and under the other
Loan Documents. Within five Business Days after its receipt of notice that the
Administrative Agent has received and accepted an executed Lender Assignment
Agreement (and if requested by the Assignee Lender), but subject to clause (c),
the Borrower shall execute and deliver to the Administrative Agent (for delivery
to the relevant Assignee Lender) a new Note evidencing such Assignee Lender's
assigned Loans and Commitments and, if the assignor Lender has retained Loans
and Commitments hereunder (and if requested by such Lender), a replacement Note
in the principal amount of the Loans and Commitments retained by the assignor
Lender hereunder (such Note to be in exchange for, but not in payment of, the
Note then held by such assignor Lender). Each such Note shall be dated the date
of the predecessor Note. The assignor Lender shall xxxx each predecessor Note
"exchanged" and deliver each of them to the Borrower. Accrued interest on that
part of each predecessor Note evidenced by a new Note, and accrued fees, shall
be paid as provided in the Lender Assignment Agreement. Accrued interest on that
part of each predecessor Note evidenced by a replacement Note shall be paid to
the assignor Lender. Accrued interest and accrued fees shall be paid at the same
time or times provided in the predecessor Note and in this Agreement. Such
assignor Lender or such Assignee Lender must also pay a processing fee in the
amount of $3,500 to the Administrative Agent upon delivery of any Lender
Assignment Agreement unless such Assignee Lender is another Lender, an Affiliate
of such assignor Lender or an Approved Fund. Notwithstanding any other term of
this Section, the agreement of
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Scotiabank to provide the Swing Line Loan Commitment shall not impair or
otherwise restrict in any manner the ability of Scotiabank to make any
assignment of its Loans or Commitments, it being understood and agreed that
Scotiabank may terminate its Swing Line Loan Commitment, either in whole or in
part, in connection with the making of any assignment so long as the assignee
has agreed to assume the Swing Line Loan Commitment. Any attempted assignment
and delegation not made in accordance with this Section 10.11.1 shall be null
and void. Notwithstanding anything to the contrary set forth above, (i) any
Lender may (without requesting the consent of the Borrower or the Administrative
Agent) pledge its Loans to a Federal Reserve Bank in support of borrowings made
by such Lender from such Federal Reserve Bank, and (ii) any Lender that is a
fund that invests in bank loans may (without the consent of the Borrower or the
Administrative Agent) pledge all or any portion of its rights in connection with
this Agreement to holders of obligations owed, or securities issued, by such
fund as security for such obligations or securities, or to the trustee for, or
other representative of, such holders, provided, that any foreclosure or other
exercise of remedies by such holder or trustee shall be subject to the
provisions of this Section regarding assignments in all respects. No pledge
described in the immediately preceding clause (ii) shall release such Lender
from its obligations hereunder.
(f) In the event that S&P or Xxxxx'x, shall, after the date
that any Person becomes a Lender, downgrade the long-term certificate
of deposit ratings of such Lender, and the resulting ratings shall be
below BBB- or Baa3, respectively, or the equivalent, then the Borrower,
the Swingline Lender and each Issuer shall each have the right, but not
the obligation, upon notice to such Lender and the Administrative
Agent, to replace such Lender with a Replacement Lender acceptable to
the Borrower and the Administrative Agent (such consents not to be
unreasonably withheld or delayed; provided, that no such consent shall
be required if the Replacement Lender is an existing Lender), and upon
any such downgrading of any Lender's long-term certificate of deposit
rating, each such Lender hereby agrees to transfer and assign (in
accordance with Section 10.11.1) all of its Commitments, Loans, Notes
and other rights and obligations under this Agreement and all other
Loan Documents (including Reimbursement Obligations) to such
Replacement Lender; provided, however, that (i) such assignment shall
be without recourse, representation or warranty (other than that such
Lender owns the Commitments, Loans and Notes being assigned, free and
clear of any Liens) and (ii) the purchase price paid by the Replacement
Lender shall be in the amount of such Lender's Loans and its Percentage
of outstanding Reimbursement Obligations, together with all accrued and
unpaid interest and fees in respect thereof, plus all other amounts
(other than the amounts (if any) demanded and unreimbursed under
Sections 4.2, 4.3, 4.5 and 4.6, which shall be paid by the Borrower),
owing to such Lender hereunder. Upon any such termination or
assignment, such Lender shall cease to be a party hereto but shall
continue to be entitled to the benefits of any provisions of this
Agreement which by their terms survive the termination of this
Agreement.
(g) Upon receipt by the Borrower of the predecessor Note
marked "canceled", the Borrower shall issue a replacement Note or
Notes, as the case may be, to such Replacement Lender and such
institution shall become a "Lender" for all purposes under this
Agreement and the other Loan Documents.
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The Borrower hereby designates the Administrative Agent to serve as the
Borrower's agent, solely for the purpose of this Section, to maintain a register
(the "Register") on which the Administrative Agent will record each Lender's
Commitment, the Loans made by each Lender and the Notes evidencing such Loans,
and each repayment in respect of the principal amount of the Loans of each
Lender and annexed to which the Administrative Agent shall retain a copy of each
Lender Assignment Agreement delivered to the Administrative Agent pursuant to
this Section. Failure to make any recordation, or any error in such recordation,
shall not affect the Borrower's or any other Obligor's Obligations in respect of
such Loans or Notes. The entries in the Register shall be conclusive, in the
absence of manifest error, and the Borrower, the Administrative Agent and the
Lenders shall treat each Person in whose name a Loan and related Note is
registered as the owner thereof for all purposes of this Agreement,
notwithstanding notice or any provision herein to the contrary. A Lender's
Commitment and the Loans made pursuant thereto and the Notes evidencing such
Loans may be assigned or otherwise transferred in whole or in part only by
registration of such assignment or transfer in the Register. Any assignment or
transfer of a Lender's Commitment or the Loans or the Notes evidencing such
Loans made pursuant thereto shall be registered in the Register only upon
delivery to the Administrative Agent of a Lender Assignment Agreement duly
executed by the assignor thereof. No assignment or transfer of a Lender's
Commitment or the Loans made pursuant thereto or the Notes evidencing such Loans
shall be effective unless such assignment or transfer shall have been recorded
in the Register by the Administrative Agent as provided in this Section.
SECTION 10.11.2. Participations. Any Lender may sell to one or more
commercial banks, financial institutions, any of its Affiliates, a fund, an
Approved Fund or another Lender (each of such commercial banks, financial
institutions, any of its Affiliates, a fund, an Approved Fund and another Lender
being herein called a "Participant") participating interests in any of the
Loans, Commitments, or other interests of such Lender hereunder; provided,
however, that
(a) no participation contemplated in this Section 10.11 shall
relieve such Lender from its Commitments or its other obligations
hereunder or under any other Loan Document;
(b) such Lender shall remain solely responsible for the
performance of its Commitments and such other obligations;
(c) the Borrower and each other Obligor and the Administrative
Agent shall continue to deal solely and directly with such Lender in
connection with such Lender's rights and obligations under this
Agreement and each of the other Loan Documents;
(d) no Participant, unless such Participant is an Affiliate of
such Lender or is itself a Lender, shall be entitled to require such
Lender to take or refrain from taking any action hereunder or under any
other Loan Document, except that such Lender may agree with any
Participant that such Lender will not, without such Participant's
consent, take any actions of the type described in clause (a), (b), (f)
or, to the extent requiring the consent of each Lender, clause (c) of
Section 10.1; and
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(e) the Borrower shall not be required to pay any amount under
this Agreement that is greater than the amount which it would have been
required to pay had no participating interest been sold.
The Borrower acknowledges and agrees that each Participant, for purposes of
Sections 4.3, 4.4, 4.5, 4.6, 4.8, 4.9, 7.1.1, 10.3 and 10.4, shall be considered
a Lender. Each Participant shall only be indemnified for increased costs
pursuant to Section 4.3, 4.5 or 4.6 if and to the extent that the Lender which
sold such participating interest to such Participant concurrently is entitled to
make, and does make, a claim on the Borrower for such increased costs. Any
Lender that sells a participating interest in any Loan, Commitment or other
interest to a Participant under this Section 10.11.2 shall indemnify and hold
harmless the Borrower and the Administrative Agent from and against any taxes,
penalties, interest or other costs or losses (including reasonable attorneys'
fees and expenses) incurred or payable by the Borrower or the Administrative
Agent as a result of the failure of the Borrower or the Administrative Agent to
comply with its obligations to deduct or withhold any Taxes from any payments
made pursuant to this Agreement to such Lender or the Administrative Agent, as
the case may be, which Taxes would not have been incurred or payable if such
Participant had been a Non-U.S. Lender that was entitled to deliver to the
Borrower, the Administrative Agent or such Lender, and did in fact so deliver, a
duly completed and valid Form 1001 or 4224 (or applicable successor form)
entitling such Participant to receive payments under this Agreement without
deduction or withholding of any United States federal taxes.
SECTION 10.12. Other Transactions. Nothing contained herein shall
preclude the Administrative Agent, any Issuer or any other Lender from engaging
in any transaction, in addition to those contemplated by this Agreement or any
other Loan Document, with the Borrower or any of its Affiliates in which the
Borrower or such Affiliate is not restricted hereby from engaging with any other
Person.
SECTION 10.13. Confidentiality. The Administrative Agent, the Issuer
and the Lenders shall hold all non-public information (which has been identified
as such by the Borrower or any of its Subsidiaries) provided to them by the
Borrower or any of its Subsidiaries pursuant to or in connection with this
Agreement in accordance with their customary procedures for handling
confidential information of this nature, but may make disclosure to any of their
examiners, regulators (including the National Association of Insurance
Commissioners), Affiliates, outside auditors, counsel and other professional
advisors in connection with this Agreement or any other Loan Document or as
reasonably required by any potential bona fide transferee, participant or
assignee, or in connection with the exercise of remedies under a Loan Document,
or as requested by any governmental agency or representative thereof or pursuant
to legal process; provided, however, that unless specifically prohibited by
applicable law or court order, the Administrative Agent, the Issuer and each
Lender shall promptly notify the Borrower of any request by any governmental
agency or representative thereof (other than any such request in connection with
an examination of the financial condition of the Administrative Agent, the
Issuer or such Lender by such governmental agency) for disclosure of any such
non-public information and, where practicable, prior to disclosure of such
information; prior to any such disclosure pursuant to this Section 10.13, the
Administrative Agent, the Issuer and each Lender shall require any such bona
-94-
fide transferee, participant and assignee receiving a disclosure of non-public
information to agree, for the benefit of the Borrower and its Subsidiaries, in
writing to be bound by this Section 10.13; and to require such Person to require
any other Person to whom such Person discloses such non-public information to be
similarly bound by this Section 10.13; and except as may be required by an order
of a court of competent jurisdiction and to the extent set forth therein, no
Lender shall be obligated or required to return any materials furnished by the
Borrower or any of its Subsidiaries.
SECTION 10.14. Forum Selection and Consent to Jurisdiction. ANY
LITIGATION BASED HEREON, OR ARISING OUT OF, UNDER, OR IN CONNECTION WITH, THIS
AGREEMENT OR ANY OTHER LOAN DOCUMENT, OR ANY COURSE OF CONDUCT, COURSE OF
DEALING, STATEMENTS (WHETHER ORAL OR WRITTEN) OR ACTIONS OF THE ADMINISTRATIVE
AGENT, THE LENDERS, ANY ISSUER OR THE BORROWER IN CONNECTION HEREWITH OR
THEREWITH SHALL BE BROUGHT AND MAINTAINED EXCLUSIVELY IN THE COURTS OF THE STATE
OF NEW YORK OR IN THE UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF
NEW YORK; PROVIDED, HOWEVER, THAT ANY SUIT SEEKING ENFORCEMENT AGAINST ANY
COLLATERAL OR OTHER PROPERTY MAY BE BROUGHT, AT THE ADMINISTRATIVE AGENT'S
OPTION, IN THE COURTS OF ANY JURISDICTION WHERE SUCH COLLATERAL OR OTHER
PROPERTY MAY BE FOUND. THE BORROWER HEREBY IRREVOCABLY APPOINTS CSC UNITED
STATES CORPORATION COMPANY (THE "PROCESS AGENT"), WITH AN OFFICE ON THE DATE
HEREOF AT 000 XXXXXX XXXXXX, XXX XXXX, XXX XXXX 00000, AS ITS AGENT TO RECEIVE,
ON ITS BEHALF AND ON BEHALF OF ITS PROPERTY, SERVICE OF COPIES OF THE SUMMONS
AND COMPLAINT AND ANY OTHER PROCESS WHICH MAY BE SERVED IN ANY SUCH ACTION OR
PROCEEDING. SUCH SERVICE MAY BE MADE BY MAILING OR DELIVERING A COPY OF SUCH
PROCESS TO THE BORROWER IN CARE OF THE PROCESS AGENT AT THE PROCESS AGENT'S
ABOVE ADDRESS, AND THE BORROWER HEREBY IRREVOCABLY AUTHORIZES AND DIRECTS THE
PROCESS AGENT TO ACCEPT SUCH SERVICE ON ITS BEHALF. THE BORROWER IRREVOCABLY
CONSENTS TO THE SERVICE OF PROCESS BY REGISTERED MAIL, POSTAGE PREPAID, OR BY
PERSONAL SERVICE WITHIN OR WITHOUT THE STATE OF NEW YORK AT THE ADDRESS FOR
NOTICES SPECIFIED IN SECTION 10.2. THE BORROWER HEREBY EXPRESSLY AND IRREVOCABLY
WAIVES, TO THE FULLEST EXTENT PERMITTED BY LAW, ANY OBJECTION WHICH IT MAY HAVE
OR HEREAFTER MAY HAVE TO THE LAYING OF VENUE OF ANY SUCH LITIGATION BROUGHT IN
ANY SUCH COURT REFERRED TO ABOVE AND ANY CLAIM THAT ANY SUCH LITIGATION HAS BEEN
BROUGHT IN AN INCONVENIENT FORUM. TO THE EXTENT THAT THE BORROWER HAS OR
HEREAFTER MAY ACQUIRE ANY IMMUNITY FROM JURISDICTION OF ANY COURT OR FROM ANY
LEGAL PROCESS (WHETHER THROUGH SERVICE OR NOTICE, ATTACHMENT PRIOR TO JUDGMENT,
ATTACHMENT IN AID OF EXECUTION OR OTHERWISE) WITH RESPECT TO ITSELF OR ITS
PROPERTY, THE BORROWER HEREBY IRREVOCABLY WAIVES
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TO THE FULLEST EXTENT PERMITTED BY LAW SUCH IMMUNITY IN RESPECT OF ITS
OBLIGATIONS UNDER THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS.
SECTION 10.15. Waiver of Jury Trial. THE ADMINISTRATIVE AGENT, EACH
LENDER, EACH ISSUER AND THE BORROWER HEREBY KNOWINGLY, VOLUNTARILY AND
INTENTIONALLY WAIVE TO THE FULLEST EXTENT PERMITTED BY LAW ANY RIGHTS THEY MAY
HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION BASED HEREON, OR ARISING
OUT OF, UNDER, OR IN CONNECTION WITH, THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT,
OR ANY COURSE OF CONDUCT, COURSE OF DEALING, STATEMENTS (WHETHER ORAL OR
WRITTEN) OR ACTIONS OF THE ADMINISTRATIVE AGENT, SUCH LENDER, SUCH ISSUER OR THE
BORROWER IN CONNECTION HEREWITH OR THEREWITH. THE BORROWER ACKNOWLEDGES AND
AGREES THAT IT HAS RECEIVED FULL AND SUFFICIENT CONSIDERATION FOR THIS PROVISION
(AND EACH OTHER PROVISION OF EACH OTHER LOAN DOCUMENT TO WHICH IT IS A PARTY)
AND THAT THIS PROVISION IS A MATERIAL INDUCEMENT FOR THE ADMINISTRATIVE AGENT,
EACH LENDER AND EACH ISSUER ENTERING INTO THIS AGREEMENT AND EACH SUCH OTHER
LOAN DOCUMENT.
-96-
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their respective officers thereunto duly authorized as of the day
and year first above written.
THE TITAN CORPORATION
By:
Title: President/CEO
Address: 0000 Xxxxxxx Xxxx Xxxx
Xxx Xxxxx, XX 00000
Facsimile No.: (000) 000-0000
Attention: General Counsel
-00-
XXX XXXX XX XXXX XXXXXX,
as the Administrative Agent
By:
Title:
Address: Xxx Xxxxxxx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Facsimile No.: (000) 000-0000
Attention: Xxxxx Xxxxxx
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IMPERIAL BANK,
as the Documentation Agent
By:
Title:
Address:
Facsimile No.:
Attention:
-00-
XXXXXXX
XXX XXXX XX XXXX XXXXXX
By:
Title:
-100-
FIRST UNION COMMERCIAL CORPORATION
By:
Title:
-101-
PARIBAS
By:
Title:
By:
Title:
-102-
COMERICA BANK - CALIFORNIA
By:
Title:
-103-
IMPERIAL BANK
By:
Title:
-104-
[THIS PAGE INTENTIONALLY LEFT BLANK]
-105-
FRANKLIN FLOATING RATE TRUST
By:
Title:
-106-
PILGRIM PRIME RATE TRUST
By: Pilgrim Investments, Inc., as
its investment manager
By:
Title:
-107-
STATE STREET BANK AND TRUST COMPANY
By:
Title:
-108-
SCHEDULE I
DISCLOSURE SCHEDULE TO CREDIT AGREEMENT
ITEM 6.7 Litigation.
ITEM 6.8 Existing Subsidiaries.
ITEM 6.9 Plant Sites and Property Matters.
ITEM 6.11 Employee Benefit Plans.
ITEM 6.12 Environmental Matters.
ITEM 6.13 Intellectual Property.
ITEM 7.2.2(b) Indebtedness to be Paid.
CREDITOR OUTSTANDING PRINCIPAL AMOUNT
ITEM 7.2.3(c) Ongoing Liens.
ITEM 7.2.5(a) Ongoing Investments.
-1-
SCHEDULE II
PERCENTAGES;
LIBO OFFICE;
DOMESTIC OFFICE
PERCENTAGES
-----------------------------------------------------------------------------
ORIGINAL NEW
REVOLVING ACQUISITION ACQUISITION
NAME AND NOTICE DOMESTIC LOAN LOAN TERM B LOAN LOAN AGGREGATE
ADDRESS OF LENDER LIBO OFFICE OFFICE COMMITMENT COMMITMENT COMMITMENT COMMITMENT COMMITMENT
----------------- ----------- ------ ---------- ---------- ---------- ---------- ----------
The Bank of Nova Scotia Same as Same as 31.25% 31.25% 63.333333% 78.571429% 52.631579%
Atlanta Agency Notice Notice
000 Xxxxxxxxx Xxxxxx, X.X. Xxxxxxx Xxxxxxx
Xxxxx 0000
Xxxxxxx, XX 00000
Attn: Eudia Xxxxx
Paribas Same as Same as 12.50% 12.50% 0% 0% 5.263158%
000 Xxxxxxxxxx Xxxxxx Xxxxxx Xxxxxx
Xxxxx 0000 Address Address
Xxx Xxxxxxxxx, XX 00000
Attn: Xxxx Xxxxx
First Union Same as Same as 18.75% 18.75% 13.333333% 0% 13.157895%
0000 Xxxxx Xxxxxx Xxxx Notice Notice
0xx Xxxxx Xxxxxxx Xxxxxxx
Xxxxx Xxxxx
XxXxxx, XX 00000
Attn: Xxxx XxXxxxx
Comerica Same as Same as 18.75% 18.75% 0% 0% 7.894737%
000 Xxxxx Xxxx Xxxxxx Xxxxxx
Xxxxx Xxxx, XX 00000 Address Address
Attn: Xxxxxx Xxxx
Imperial Bank Same as Same as 18.75% 18.75% 0% 0% 7.894737%
000 X Xxxxxx, Xxxxx 000 Xxxxxx Xxxxxx
Xxx Xxxxx, XX 00000 Address Address
Attn: Xxxx Xxxxxxx
Pilgrim Prime Rate Trust Same as Same as 0% 0% 6.666667% 0% 2.631579%
0 Xxxxxxxxxxx Xxxxxx Xxxxxx Xxxxxx
00 Xxxxx Xxxxxxx Avenue Address Address
Suite 1200
Xxxxxxx, XX 00000
Attn: Xxxxxxx Xxxxxxx
Xxxxxxxx Floating Rate Same as Same as 0% 0% 6.666667% 0% 2.631579%
Trust Notice Notice
777 Mariners Island Xxxxxxx Xxxxxxx
Xxxx., Xxxxx 0
Xxx Xxxxx, XX 00000-
1585
Attn: Xxxxxxxx Xxxxxx
State Street Bank and Same as Same as 0% 0% 10.00% 21.428571% 7.894737%
Trust Company Notice Notice
000 Xxxxxxxx Xxxxxx Address Address
Xxxxxx, XX 00000
Attn: Xxxxx Xxxxxxx
-2-
Table of Contents
Page
ARTICLE I
DEFINITIONS AND ACCOUNTING TERMS
SECTION 1.1. Defined Terms..........................................................................2
SECTION 1.2. Use of Defined Terms..................................................................30
SECTION 1.3. Cross-References......................................................................30
SECTION 1.4. Accounting and Financial Determinations...............................................30
ARTICLE II
COMMITMENTS, BORROWING AND ISSUANCE
PROCEDURES, NOTES AND LETTERS OF CREDIT
SECTION 2.1. Commitments...........................................................................30
SECTION 2.1.1. Revolving Loan Commitment and Swing Line Loan Commitment..............................31
SECTION 2.1.2. Letter of Credit Commitment...........................................................31
SECTION 2.1.3. Term Loan Commitments.................................................................31
SECTION 2.1.4. Lenders Not Permitted or Required to Make Loans.......................................32
SECTION 2.1.5. Issuer Not Permitted or Required to Issue Letters of Credit...........................33
SECTION 2.2. Reduction of the Commitment Amounts...................................................33
SECTION 2.2.1. Optional..............................................................................33
SECTION 2.2.2. Mandatory.............................................................................33
SECTION 2.3. Borrowing Procedures..................................................................33
SECTION 2.3.1. Borrowing Procedure...................................................................34
SECTION 2.3.2. Swing Line Loans......................................................................34
SECTION 2.4. Continuation and Conversion Elections.................................................35
SECTION 2.5. Funding...............................................................................35
SECTION 2.6. Issuance Procedures...................................................................36
SECTION 2.6.1. Other Lenders' Participation..........................................................36
SECTION 2.6.2. Disbursements.........................................................................36
SECTION 2.6.3. Reimbursement.........................................................................37
SECTION 2.6.4. Deemed Disbursements..................................................................37
SECTION 2.6.5. Nature of Reimbursement Obligations...................................................38
SECTION 2.7. Notes.................................................................................38
ARTICLE III
REPAYMENTS, PREPAYMENTS, INTEREST AND FEES
SECTION 3.1. Repayments and Prepayments; Application...............................................39
SECTION 3.1.1. Repayments and Prepayments............................................................39
SECTION 3.1.2. Application...........................................................................42
SECTION 3.2. Interest Provisions...................................................................43
SECTION 3.2.1. Rates.................................................................................43
SECTION 3.2.2. Post-Maturity Rates...................................................................43
SECTION 3.2.3. Payment Dates.........................................................................44
SECTION 3.3. Fees..................................................................................44
SECTION 3.3.1. Commitment Fee........................................................................44
SECTION 3.3.2. Agent's Fee...........................................................................44
SECTION 3.3.3. Letter of Credit Fee..................................................................44
ARTICLE IV
CERTAIN LIBO RATE AND OTHER PROVISIONS
SECTION 4.1. LIBO Rate Lending Unlawful............................................................45
SECTION 4.2. Deposits Unavailable..................................................................45
SECTION 4.3. Increased LIBO Rate Loan Costs, etc...................................................46
SECTION 4.4. Funding Losses........................................................................46
SECTION 4.5. Increased Capital Costs...............................................................47
SECTION 4.6. Taxes.................................................................................47
SECTION 4.7. Payments, Computations, etc...........................................................49
SECTION 4.8. Sharing of Payments...................................................................50
SECTION 4.9. Setoff................................................................................50
SECTION 4.10. Replacement of Lender.................................................................51
ARTICLE V
CONDITIONS TO CREDIT EXTENSIONS
SECTION 5.1. Conditions Precedent to the Effectiveness of this
Agreement.............................................................................52
SECTION 5.1.1. Execution of Counterparts.............................................................52
SECTION 5.1.2. Resolutions, etc......................................................................52
SECTION 5.1.3. Closing Date Certificate..............................................................53
SECTION 5.1.4. Notes.................................................................................53
SECTION 5.1.5. Pledge Agreements.....................................................................53
SECTION 5.1.6. Security Agreements...................................................................54
SECTION 5.1.7. Patent Security Agreement, Copyright Security Agreement and Trademark
Security Agreement....................................................................55
SECTION 5.1.8. Financial Information, etc............................................................55
SECTION 5.1.9. Compliance Certificate................................................................55
SECTION 5.1.10. Solvency, etc.........................................................................55
SECTION 5.1.11. Subsidiary Guaranty...................................................................55
SECTION 5.1.12. Interco Subordination Agreement.......................................................55
SECTION 5.1.13. Insurance.............................................................................56
SECTION 5.1.14. Opinion of Counsel....................................................................56
SECTION 5.1.15. Material Adverse Change...............................................................56
SECTION 5.1.16. Affirmation and Consent...............................................................56
SECTION 5.1.17. Payment of Outstanding Indebtedness, etc..............................................56
SECTION 5.1.18. Consents, etc.........................................................................56
SECTION 5.1.19. Litigation, etc.......................................................................56
SECTION 5.1.20. Due Diligence.........................................................................57
SECTION 5.1.21. Consummation of SRC Acquisition.......................................................57
SECTION 5.1.22. Approval of SRC Acquisition...........................................................57
SECTION 5.1.23. Closing Fees, Expenses, etc...........................................................57
SECTION 5.1.24. Legal Details, etc....................................................................57
SECTION 5.2. All Credit Extensions.................................................................58
SECTION 5.2.1. Compliance with Warranties, No Default, etc...........................................58
SECTION 5.2.2. Credit Extension Request, etc.........................................................58
SECTION 5.2.3. Satisfactory Legal Form...............................................................59
ARTICLE VI
REPRESENTATIONS AND WARRANTIES
SECTION 6.1. Organization, etc.....................................................................59
SECTION 6.2. Due Authorization, Non-Contravention, etc.............................................59
SECTION 6.3. Government Approval, Regulation, etc..................................................60
SECTION 6.4. Validity, etc.........................................................................60
SECTION 6.5. Financial Information.................................................................60
SECTION 6.6. No Material Adverse Effect............................................................60
SECTION 6.7. Litigation, Labor Controversies, etc..................................................60
SECTION 6.8. Subsidiaries..........................................................................61
SECTION 6.9. Ownership of Properties...............................................................61
SECTION 6.10. Taxes.................................................................................61
SECTION 6.11. Pension and Welfare Plans.............................................................61
SECTION 6.12. Environmental Warranties..............................................................61
SECTION 6.13. Accuracy of Information...............................................................63
SECTION 6.14. Regulations U and X...................................................................63
SECTION 6.15. Year 2000 Problem.....................................................................63
SECTION 6.16. Government Contracts..................................................................63
SECTION 6.17. No Debarment..........................................................................63
SECTION 6.18. Assignment of Payments................................................................64
ARTICLE VII
COVENANTS
SECTION 7.1. Affirmative Covenants.................................................................64
SECTION 7.1.1. Financial Information, Reports, Notices, etc..........................................64
SECTION 7.1.2. Maintenance of Existence; Compliance with Laws, etc...................................65
SECTION 7.1.3. Maintenance of Properties.............................................................66
SECTION 7.1.4. Insurance.............................................................................66
SECTION 7.1.5. Books and Records.....................................................................66
SECTION 7.1.6. Environmental Law Covenant............................................................67
SECTION 7.1.7. Future Subsidiaries; Collateral.......................................................67
SECTION 7.1.8. Use Of Proceeds.......................................................................69
SECTION 7.1.9. Contract Obligations..................................................................69
SECTION 7.2. Negative Covenants....................................................................69
SECTION 7.2.1. Business Activities...................................................................69
SECTION 7.2.2. Indebtedness..........................................................................70
SECTION 7.2.3. Liens.................................................................................71
SECTION 7.2.4. Financial Condition and Operations....................................................72
SECTION 7.2.5. Investments...........................................................................74
SECTION 7.2.6. Restricted Payments, etc..............................................................75
SECTION 7.2.7. Capital Expenditures, etc.............................................................76
SECTION 7.2.8. No Prepayment of Subordinated Debt....................................................76
SECTION 7.2.9. Stock of Restricted Subsidiaries......................................................77
SECTION 7.2.10. Consolidation, Merger, etc............................................................77
SECTION 7.2.11. Permitted Dispositions................................................................78
SECTION 7.2.12. Modification of Certain Agreements....................................................78
SECTION 7.2.13. Transactions with Affiliates..........................................................79
SECTION 7.2.14. Restrictive Agreements, etc...........................................................79
SECTION 7.2.15. Sale and Leaseback....................................................................79
ARTICLE VIII
EVENTS OF DEFAULT
SECTION 8.1. Listing of Events of Default..........................................................79
SECTION 8.1.1. Non-Payment of Obligations............................................................79
SECTION 8.1.2. Breach of Warranty....................................................................80
SECTION 8.1.3. Non-Performance of Certain Covenants and Obligations..................................80
SECTION 8.1.4. Non-Performance of Other Covenants and Obligations....................................80
SECTION 8.1.5. Default on Other Indebtedness.........................................................80
SECTION 8.1.6. Judgments.............................................................................80
SECTION 8.1.7. Pension Plans.........................................................................80
SECTION 8.1.8. Change in Control.....................................................................81
SECTION 8.1.9. Bankruptcy, Insolvency, etc...........................................................81
SECTION 8.1.10. Impairment of Security, etc...........................................................81
SECTION 8.1.11. Failure of Subordination..............................................................82
SECTION 8.1.12. Government Contracts..................................................................82
SECTION 8.2. Action if Bankruptcy..................................................................82
SECTION 8.3. Action if Other Event of Default......................................................82
ARTICLE IX
THE CREDIT AGENTS
SECTION 9.1. Actions...............................................................................83
SECTION 9.2. Funding Reliance, etc.................................................................83
SECTION 9.3. Exculpation...........................................................................84
SECTION 9.4. Successor.............................................................................84
SECTION 9.5. Credit Extensions by Scotiabank and Imperial..........................................85
SECTION 9.6. Credit Decisions......................................................................85
SECTION 9.7. Copies, etc...........................................................................85
ARTICLE X
MISCELLANEOUS PROVISIONS
SECTION 10.1. Waivers, Amendments, etc..............................................................85
SECTION 10.2. Notices...............................................................................87
SECTION 10.3. Payment of Costs and Expenses.........................................................87
SECTION 10.4. Indemnification.......................................................................88
SECTION 10.5. Survival..............................................................................89
SECTION 10.6. Severability..........................................................................89
SECTION 10.7. Headings..............................................................................89
SECTION 10.8. Execution in Counterparts, Effectiveness, etc.........................................89
SECTION 10.9. Governing Law; Entire Agreement.......................................................89
SECTION 10.10. Successors and Assigns................................................................90
SECTION 10.11. Sale and Transfer of Loans and Notes; Participations in
Loans and Notes.......................................................................90
SECTION 10.11.1. Assignments...........................................................................90
SECTION 10.11.2. Participations........................................................................93
SECTION 10.12. Other Transactions....................................................................94
SECTION 10.13. Confidentiality.......................................................................94
SECTION 10.14. Forum Selection and Consent to Jurisdiction...........................................95
SECTION 10.15. Waiver of Jury Trial..................................................................96
SCHEDULE I - Disclosure Schedule
SCHEDULE II - Percentages; LIBO Office; Domestic Office
EXHIBIT A-1 - Form of Revolving Note
EXHIBIT A-2 - Form of Original Acquisition Note
EXHIBIT A-3 - Form of Swing Line Note
EXHIBIT A-4 - Form of Term B Note
EXHIBIT A-5 - Form of New Acquisition Note
EXHIBIT B-1 - Form of Borrowing Request
EXHIBIT B-2 - Form of Issuance Request
EXHIBIT C - Form of Continuation/Conversion Notice
EXHIBIT D - Form of Borrower Closing Date Certificate
EXHIBIT E - Form of Compliance Certificate
EXHIBIT G-1 - Form of Borrower Pledge Agreement
EXHIBIT G-2 - Form of Subsidiary Pledge Agreement
EXHIBIT H-1 - Form of Borrower Security Agreement
EXHIBIT H-2 - Form of Subsidiary Security Agreement
EXHIBIT I - Form of Opinion of Counsel to the Obligors
EXHIBIT J - Form of Subsidiary Guaranty
EXHIBIT K - Form of Interco Subordination Agreement
EXHIBIT L - Form of Lender Assignment Agreement
EXHIBIT M - Form of Officer's Solvency Certificate
-vi-
Exhibit A-1
Form of Revolving Credit Agreement
EXHIBIT A-1
REVOLVING NOTE
$[ ] -------, ---, -----
FOR VALUE RECEIVED, the undersigned, THE TITAN CORPORATION, a Delaware
corporation (the "Borrower"), promises to pay to the order of [Name of Lender]
and its registered assigns (the "Revolving Lender") on the Stated Maturity for
all Revolving Loans, the principal sum of [ ] DOLLARS ($[ ]) or, if less, the
aggregate unpaid principal amount of all Revolving Loans made by the Revolving
Lender pursuant to that certain Amended and Restated Credit Agreement, dated as
of June 9, 1999 (as amended, supplemented, amended and restated or otherwise
modified from time to time, the "Credit Agreement"), among the Borrower, the
various financial institutions (including the Lender) as are or may become
parties thereto (collectively, the "Lenders"), The Bank of Nova Scotia, as
administrative agent for the Lenders ("Administrative Agent") and Imperial Bank,
as Documentation Agent. Unless otherwise defined, terms used herein have the
meanings provided in the Credit Agreement.
The Borrower also promises to pay interest on the unpaid principal
amount hereof from time to time outstanding from the date hereof until maturity
(whether by acceleration or otherwise) and, after maturity, until paid, at the
rates per annum and on the dates specified in the Credit Agreement. Payments of
both principal and interest are to be made in lawful money of the United States
of America in same day or immediately available funds to the account designated
by the Administrative Agent pursuant to the Credit Agreement.
This Revolving Note is one of the Revolving Notes referred to in, and
evidences Indebtedness incurred under, the Credit Agreement, to which reference
is made for a description of the security for this Revolving Note and for a
statement of the terms and conditions on which the Borrower is permitted and
required to make prepayments and repayments of principal of the Indebtedness
evidenced by this Revolving Note and on which such Indebtedness may be declared
to be immediately due and payable.
The Borrower hereby irrevocably authorizes the Revolving Lender to make
(or cause to be made) appropriate notations on the grid attached hereto (or on
any continuation of such grid), which notations, if made, shall evidence, inter
alia, the date of and the outstanding principal of, the Revolving Loans
evidenced hereby. Such notations shall be rebuttable presumptive evidence of the
accuracy of the information so set forth; provided, however, that the failure of
the Revolving Lender to make any such notations shall not limit or otherwise
affect any Obligations of the Borrower.
Any assignment or transfer of this Revolving Note shall be effective
solely be registration thereof in the Register pursuant to the Credit Agreement.
All parties hereto, whether as makers, endorsers, or otherwise,
severally waive presentment for payment, demand, protest and notice of dishonor.
THIS REVOLVING NOTE SHALL BE DEEMED TO BE A CONTRACT MADE UNDER AND
GOVERNED BY THE INTERNAL LAWS OF THE STATE OF NEW YORK (INCLUDING FOR SUCH
PURPOSES SECTIONS 5-1401 AND 5-1402 OF THE GENERAL OBLIGATIONS LAW OF THE STATE
OF NEW YORK).
THE TITAN CORPORATION
By
Name:
Title:
Exhibit A-2
Form of Original Acquisition Note
EXHIBIT A-2
ORIGINAL ACQUISITION NOTE
$ June __, 1999
FOR VALUE RECEIVED, the undersigned, THE TITAN CORPORATION, a Delaware
corporation (the "Borrower"), promises to pay to the order of [Name of Lender]
and its registered assigns (the "Term Lender") on the Stated Maturity Date for
all Loans, the principal sum of [ ] DOLLARS ($ ) or, if less, the aggregate
unpaid principal amount of all Term Loans made by the Term Lender pursuant to
that certain Amended and Restated Credit Agreement, dated as of June 9, 1999 (as
amended, supplemented, amended and restated or otherwise modified from time to
time, the "Credit Agreement"), among the Borrower, the various financial
institutions (including the Lender) as are or may become parties thereto
(collectively, the "Lenders"), The Bank of Nova Scotia, as administrative agent
for the Lenders (the "Administrative Agent") and Imperial Bank, as Documentation
Agent. Terms used herein have the meanings provided in the Credit Agreement.
The Borrower also promises to pay interest on the unpaid principal amount
hereof from time to time outstanding from the date hereof until maturity
(whether by acceleration or otherwise) and, after maturity, until paid, at the
rates per annum and on the dates specified in the Credit Agreement. Payments of
both principal and interest are to be made in lawful money of the United States
of America in same day or immediately available funds to the account designated
by the Administrative Agent pursuant to the Credit Agreement.
This Term Note is the Term Note referred to in, and evidences Indebtedness
incurred under, the Credit Agreement, to which reference is made for a
description of the security for this Term Note and for a statement of the terms
and conditions on which the Borrower is permitted and required to make
prepayments and repayments of principal of the Indebtedness evidenced by this
Term Note and on which such Indebtedness may be declared to be immediately due
and payable.
The Borrower hereby irrevocably authorizes the Term Lender to make (or
cause to be made) appropriate notations on the grid attached hereto (or on any
continuation of such grid), which notations, if made, shall evidence, inter
alia, the date of and the outstanding principal of, the Term Loans evidenced
hereby. Such notations shall be rebuttable presumptive evidence of the accuracy
of the information so set forth; provided, however, that the failure of the Term
Lender to make any such notations shall not limit or otherwise affect any
Obligations of the Borrower.
Any assignment or transfer of this Term Note shall be effective solely by
registration thereof in the Register pursuant to the Credit Agreement.
All parties hereto, whether as makers, endorsers, or otherwise, severally
waive presentment for payment, demand, protest and notice of dishonor.
THIS TERM NOTE AND SHALL BE DEEMED TO BE A CONTRACT MADE UNDER AND GOVERNED
BY THE INTERNAL LAWS OF THE STATE OF NEW YORK (INCLUDING FOR SUCH PURPOSES
SECTIONS 5_1401 AND 5_1402 OF THE GENERAL OBLIGATIONS LAW OF THE STATE OF NEW
YORK).
THE TITAN CORPORATION
By:
Name:
Title:
TERM LOAN AND PRINCIPAL PAYMENTS
Amount Unpaid
Amount of of Principal Principal
Term Loan Made Repaid Balance
------------------- Interest ------------------ ---------------------
Alternate LIBO Period Alternat LIBO Alternate LIBO Notation
Date Base Rate Rate (If Applicable) Base Rate Rate Base Rate Rate Total Made By
---------- --------- ----- --------------- --------- ----- ---------- ----- ------- ------------
---------- --------- ----- --------------- --------- ----- ---------- ----- ------- ------------
---------- --------- ----- --------------- --------- ----- ---------- ----- ------- ------------
---------- --------- ----- --------------- --------- ----- ---------- ----- ------- ------------
---------- --------- ----- --------------- --------- ----- ---------- ----- ------- ------------
---------- --------- ----- --------------- --------- ----- ---------- ----- ------- ------------
---------- --------- ----- --------------- --------- ----- ---------- ----- ------- ------------
---------- --------- ----- --------------- --------- ----- ---------- ----- ------- ------------
---------- --------- ----- --------------- --------- ----- ---------- ----- ------- ------------
---------- --------- ----- --------------- --------- ----- ---------- ----- ------- ------------
---------- --------- ----- --------------- --------- ----- ---------- ----- ------- ------------
Exhibit A-3
Form of Swing Line Note
EXHIBIT A-3
SWING LINE NOTE
$----------- ----- --, -----
FOR VALUE RECEIVED, the undersigned, THE TITAN CORPORATION, a Delaware
corporation (the "Borrower") promises to pay to the order of [Name of Lender]
and its registered assigns (the "Swing Line Lender") on the Stated Maturity Date
for all Revolving Loans, the principal sum of [_____________] DOLLARS
($__________) or, if less, the aggregate unpaid principal amount of all Swing
Line Loans made by the Swing Line Lender pursuant to that certain Amended and
Restated Credit Agreement, dated as of June 9, 1999 (as amended, supplemented,
amended and restated or otherwise modified from time to time, the "Credit
Agreement"), among the Borrower, the various financial institutions (including
the Lender) as are or may become parties thereto (collectively, the "Lenders"),
The Bank of Nova Scotia, as administrative agent for the Lenders (the
"Administrative Agent") and Imperial Bank, as Documentation Agent. Unless
otherwise defined, terms used herein have the meanings provided in the Credit
Agreement.
The Borrower also promises to pay interest on the unpaid principal
amount hereof from time to time outstanding from the date hereof until maturity
(whether by acceleration or otherwise) and, after maturity, until paid, at the
rates per annum and on the dates specified in the Credit Agreement. Payments of
both principal and interest are to be made in lawful money of the United States
of America in same day or immediately available funds to the account designated
by the Administrative Agent pursuant to the Credit Agreement.
This Swing Line Note is the Swing Line Note referred to in, and
evidences Indebtedness incurred under, the Credit Agreement, to which reference
is made for a description of the security for this Swing Line Note and for a
statement of the terms and conditions on which the Borrower is permitted and
required to make prepayments and repayments of principal of the Indebtedness
evidenced by this Swing Line Note and on which such Indebtedness may be declared
to be immediately due and payable.
The Borrower hereby irrevocably authorizes the Swing Line Lender to
make (or cause to be made) appropriate notations on the grid attached hereto (or
on any continuation of such grid), which notations, if made, shall evidence,
inter alia, the date of and the outstanding principal of, the Swing Line Loans
evidenced hereby. Such notations shall be rebuttable presumptive evidence of the
accuracy of the information so set forth; provided, however, that the failure of
the Swing Line Lender to make any such notations shall not limit or otherwise
affect any Obligations of the Borrower.
Any assignment or transfer of this Swing Line Note shall be effective
solely by registration thereof in the Register pursuant to the Credit Agreement.
All parties hereto, whether as makers, endorsers, or otherwise,
severally waive presentment for payment, demand, protest and notice of dishonor.
THIS SWING LINE NOTE AND SHALL BE DEEMED TO BE A CONTRACT MADE UNDER
AND GOVERNED BY THE INTERNAL LAWS OF THE STATE OF NEW YORK (INCLUDING FOR SUCH
PURPOSES SECTIONS 5-1401 AND 5-1402 OF THE GENERAL OBLIGATIONS LAW OF THE STATE
OF NEW YORK).
THE TITAN CORPORATION
By
Name:
Title:
SWING LINE LOANS AND PRINCIPAL PAYMENTS
Amount of Amount of Unpaid
Swing Line Principal Principal Notation
Date Loan Made Repaid Balance Total Made By
----------- ------------ ------------ ----------- ------- -----------
----------- ------------ ------------ ----------- ------- -----------
----------- ------------ ------------ ----------- ------- -----------
----------- ------------ ------------ ----------- ------- -----------
----------- ------------ ------------ ----------- ------- -----------
----------- ------------ ------------ ----------- ------- -----------
Exhibit A-4
Form of Term B Note
EXHIBIT A-4
TERM B NOTE
June 9, 1999 $---------
FOR VALUE RECEIVED, the undersigned, THE TITAN CORPORATION, a Delaware
corporation (the "Borrower"), promises to pay to the order of [Name of Lender]
and its registered assigns (the "Term Lender") on the Stated Maturity Date for
all Loans, the principal sum of[_______________] DOLLARS ($_________) or, if
less, the aggregate unpaid principal amount of all Term Loans made by the Term
Lender pursuant to that certain Amended and Restated Credit Agreement, dated as
of June 9, 1999 (as amended, supplemented, amended and restated or otherwise
modified from time to time, the "Credit Agreement"), among the Borrower, the
various financial institutions (including the Lender) as are or may become
parties thereto (collectively, the "Lenders"), The Bank of Nova Scotia, as
administrative agent for the Lenders (the "Administrative Agent") and Imperial
Bank, as Documentation Agent. Terms used herein have the meanings provided in
the Credit Agreement.
The Borrower also promises to pay interest on the unpaid principal
amount hereof from time to time outstanding from the date hereof until maturity
(whether by acceleration or otherwise) and, after maturity, until paid, at the
rates per annum and on the dates specified in the Credit Agreement. Payments of
both principal and interest are to be made in lawful money of the United States
of America in same day or immediately available funds to the account designated
by the Administrative Agent pursuant to the Credit Agreement.
This Term B Note is the Term B Note referred to in, and evidences
Indebtedness incurred under, the Credit Agreement, to which reference is made
for a description of the security for this Term B Note and for a statement of
the terms and conditions on which the Borrower is permitted and required to make
prepayments and repayments of principal of the Indebtedness evidenced by this
Term B Note and on which such Indebtedness may be declared to be immediately due
and payable.
The Borrower hereby irrevocably authorizes the Term Lender to make (or
cause to be made) appropriate notations on the grid attached hereto (or on any
continuation of such grid), which notations, if made, shall evidence, inter
alia, the date of and the outstanding principal of, the Term Loans evidenced
hereby. Such notations shall be rebuttable presumptive evidence of the accuracy
of the information so set forth; provided, however, that the failure of the Term
Lender to make any such notations shall not limit or otherwise affect any
Obligations of the Borrower.
Any assignment or transfer of this Term B Note shall be effective
solely by registration thereof in the Register pursuant to the Credit Agreement.
All parties hereto, whether as makers, endorsers, or otherwise,
severally waive presentment for payment, demand, protest and notice of dishonor.
THIS TERM B NOTE AND SHALL BE DEEMED TO BE A CONTRACT MADE UNDER AND
GOVERNED BY THE INTERNAL LAWS OF THE STATE OF NEW YORK (INCLUDING FOR SUCH
PURPOSES SECTIONS 5_1401 AND 5_1402 OF THE GENERAL OBLIGATIONS LAW OF THE STATE
OF NEW YORK).
THE TITAN CORPORATION
By
Name:
Title:
TERM LOAN AND PRINCIPAL PAYMENTS
Amount of Amount of Principal Unpaid Principal
Term Loan Made Repaid Balance
---------------------- Interest ------------------------ ----------------------
Alternate LIBO Period Alternate LIBO Alternate LIBO Notation
Date Base Rate Rate (If Applicable) Base Rate Rate Base Rate Rate Total Made By
-------- ---------------------- ---------------- ------------------------ --------------------- ------- ---------
-------- ---------------------- ---------------- ------------------------ --------------------- ------- ---------
-------- ---------------------- ---------------- ------------------------ --------------------- ------- ---------
-------- ---------------------- ---------------- ------------------------ --------------------- ------- ---------
-------- ---------------------- ---------------- ------------------------ --------------------- ------- ---------
-------- ---------------------- ---------------- ------------------------ --------------------- ------- ---------
-------- ---------------------- ---------------- ------------------------ --------------------- ------- ---------
-------- ---------------------- ---------------- ------------------------ --------------------- ------- ---------
-------- ---------------------- ---------------- ------------------------ --------------------- ------- ---------
-------- ---------------------- ---------------- ------------------------ --------------------- ------- ---------
-------- ---------------------- ---------------- ------------------------ --------------------- ------- ---------
Exhibit A-5
Form of New Acquisition Note
EXHIBIT A-5
NEW ACQUISITION NOTE
$__________ June 9, 1999
FOR VALUE RECEIVED, the undersigned, THE TITAN CORPORATION, a Delaware
corporation (the "Borrower"), promises to pay to the order of [______________]
and its registered assigns (the "Term Lender") on the Stated Maturity Date for
all Loans, the principal sum of [________________________] ($[____________]) or,
if less, the aggregate unpaid principal amount of all Term Loans made by the
Term Lender pursuant to that certain Amended and Restated Credit Agreement,
dated as of June 9, 1999 (as amended, supplemented, amended and restated or
otherwise modified from time to time, the "Credit Agreement"), among the
Borrower, the various financial institutions (including the Lender) as are or
may become parties thereto (collectively, the "Lenders"), The Bank of Nova
Scotia, as administrative agent for the Lenders (the "Administrative Agent") and
Imperial Bank, as Documentation Agent. Terms used herein have the meanings
provided in the Credit Agreement.
The Borrower also promises to pay interest on the unpaid principal
amount hereof from time to time outstanding from the date hereof until maturity
(whether by acceleration or otherwise) and, after maturity, until paid, at the
rates per annum and on the dates specified in the Credit Agreement. Payments of
both principal and interest are to be made in lawful money of the United States
of America in same day or immediately available funds to the account designated
by the Administrative Agent pursuant to the Credit Agreement.
This New Acquisition Note is the New Acquisition Note referred to in,
and evidences Indebtedness incurred under, the Credit Agreement, to which
reference is made for a description of the security for this New Acquisition
Note and for a statement of the terms and conditions on which the Borrower is
permitted and required to make prepayments and repayments of principal of the
Indebtedness evidenced by this New Acquisition Note and on which such
Indebtedness may be declared to be immediately due and payable.
The Borrower hereby irrevocably authorizes the Term Lender to make (or
cause to be made) appropriate notations on the grid attached hereto (or on any
continuation of such grid), which notations, if made, shall evidence, inter
alia, the date of and the outstanding principal of, the Term Loans evidenced
hereby. Such notations shall be rebuttable presumptive evidence of the accuracy
of the information so set forth; provided, however, that the failure of the Term
Lender to make any such notations shall not limit or otherwise affect any
Obligations of the Borrower.
Any assignment or transfer of this New Acquisition Note shall be
effective solely by registration thereof in the Register pursuant to the Credit
Agreement.
All parties hereto, whether as makers, endorsers, or otherwise,
severally waive presentment for payment, demand, protest and notice of dishonor.
THIS NEW ACQUISITION NOTE AND SHALL BE DEEMED TO BE A CONTRACT MADE
UNDER AND GOVERNED BY THE INTERNAL LAWS OF THE STATE OF NEW YORK (INCLUDING FOR
SUCH PURPOSES SECTIONS 5_1401 AND 5_1402 OF THE GENERAL OBLIGATIONS LAW OF THE
STATE OF NEW YORK).
THE TITAN CORPORATION
By
Name:
Title:
TERM LOAN AND PRINCIPAL PAYMENTS
Amount of Amount of Unpaid Principal
Term Loan Made Principal Repaid Balance
---------------------- Interest ----------------------- ----------------------
Alternate LIBO Period Alternate LIBO Alternate LIBO Notation
Date Base Rate Rate (If Applicable) Base Rate Rate Base Rate Rate Total Made By
-------- --------------------- --------------- ----------------------- ---------------------- ------- --------
-------- --------------------- --------------- ----------------------- ---------------------- ------- --------
-------- --------------------- --------------- ----------------------- ---------------------- ------- --------
-------- --------------------- --------------- ----------------------- ---------------------- ------- --------
-------- --------------------- --------------- ----------------------- ---------------------- ------- --------
-------- --------------------- --------------- ----------------------- ---------------------- ------- --------
-------- --------------------- --------------- ----------------------- ---------------------- ------- --------
-------- --------------------- --------------- ----------------------- ---------------------- ------- --------
Exhibit B-1
Form of Borrowing Request
EXHIBIT B-1
BORROWING REQUEST
The Bank of Nova Scotia,
as Agent
Xxx Xxxxxxx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention:
THE TITAN CORPORATION
Gentlemen and Ladies:
This Borrowing Request is delivered to you pursuant to Section 2.3 of
the Amended and Restated Credit Agreement, dated as of May __, 1999 (as amended,
supplemented, amended and restated or otherwise modified from time to time, the
"Amended and Restated Credit Agreement"), among The Titan Corporation (the
"Borrower"), the various financial institutions as are or may become parties
thereto (collectively, the "Lenders") The Bank of Nova Scotia, as administrative
agent for the Lenders (the "Administrative Agent"), and Imperial Bank, as
documentation agent. Unless otherwise defined herein or the context otherwise
requires, terms used herein have the meanings provided in the Amended and
Restated Credit Agreement.
The Borrower hereby requests that a [Revolving Loan] [Term Loan] [Swing
Line Loan] be made in the aggregate principal amount of $ on , as a *[LIBO Rate
Loan having an Interest Period of [one] [two] [three] [six] month(s)] [Base Rate
Loan].
The Borrower hereby acknowledges that, pursuant to Section 5.2.2 of the
Amended and Restated Credit Agreement, each of the delivery of this Borrowing
Request and the acceptance by the Borrower of the proceeds of the Loans
requested hereby constitute a representation and warranty by the Borrower that,
on the date of such Loans, and immediately before and after giving effect
thereto and to the application of the proceeds therefrom, the statements set
forth in Section 5.2.1 of the Amended and Restated Credit Agreement are true and
correct in all material respects.
--------
* Insert appropriate interest rate option and, if applicable, the number
of months with respect to LIBO Rate Loans. Note that Swing Line Loans
must be made as Base Rate Loans.
The Borrower agrees that if prior to the time of the Borrowing
requested hereby any matter certified to herein by it will not be true and
correct in all material respects at such time as if then made, it will
immediately so notify the Administrative Agent. Except to the extent, if any,
that prior to the time of the Borrowing requested hereby the Agent shall receive
written notice to the contrary from the Borrower, each matter certified to
herein shall be deemed once again to be certified as true and correct in all
material respects at the date of such Borrowing as if then made.
Please wire transfer the proceeds of the Borrowing to the accounts of
the following persons at the financial institutions indicated respectively:
Amount to be Name, Account No.,
Transferred Person to be Paid Address, etc.
------------- ------------------- --------------------
$
Attention:
$
Attention:
$
Balance of such
proceeds
Attention:
IN WITNESS WHEREOF, the Borrower has caused this Borrowing Request to
be executed and delivered, and the certification and representations and
warranties contained herein to be made, by its duly Authorized Officer this __
day of ____________, ____.
THE TITAN CORPORATION
By
Name:
Title:
Exibit B-2
Form of Issuance Request
EXHIBIT B-2
ISSUANCE REQUEST
The Bank of Nova Scotia,
as Agent
Xxx Xxxxxxx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention:
THE TITAN CORPORATION
Gentlemen and Ladies:
This Issuance Request is delivered to you pursuant to Section 2.6 of
the Amended and Restated Credit Agreement, dated as of May __, 1999 (as amended,
supplemented, amended and restated or otherwise modified from time to time, the
"Amended and Restated Credit Agreement"), among The Titan Corporation, a
Delaware corporation (the "Borrower"), the various financial institutions as are
or may become parties thereto which extend a Commitment thereunder
(collectively, the "Lenders") and The Bank of Nova Scotia, as administrative
agent for the Lenders (the "Administrative Agent"), and Imperial Bank, as
documentation agent. Unless otherwise defined herein or the context otherwise
requires, terms used herein have the meanings provided in the Amended and
Restated Credit Agreement.
The Borrower hereby requests that the Issuer *[issue a Letter of Credit
on , (the "Date of Issuance") in the initial Stated Amount of $____________ with
a Stated Expiry Date (as defined therein) of ______________, ____] [extend the
Stated Expiry Date (as defined under Letter of Credit No.__, issued on
_______________, ____, in the initial Stated Amount of $_____________) to a
revised Stated Expiry Date (as defined therein) of ________________, ____].
**[The beneficiary of the requested Letter of Credit will be
___________________________.]
--------
* Insert and complete as appropriate.
** Delete if Issuance Request is for an extension.
The Borrower hereby acknowledges that, pursuant to Section 5.2.2 of the
Amended and Restated Credit Agreement, each of the delivery of this Issuance
Request and the *[issuance] [extension] of the Letter of Credit requested
hereby, all statements set forth in Section 5.2.1 of the Amended and Restated
Credit Agreement are true and correct in all material respects.
The Borrower agrees that if, prior to the time of the [issuance]
[extension] of the Letter of Credit requested hereby, any matter certified to
herein by it will not be true and correct in all material respects at such time
as if then made, it will immediately so notify the Administrative Agent. Except
to the extent, if any, that prior to the time of the [issuance] [extension] of
the Letter of Credit requested hereby the Administrative Agent and the Issuer
shall receive written notice to the contrary from the Borrower, each matter
certified to herein shall be deemed to be certified as true and correct in all
material respects at the date of such [issuance] [extension].
--------
* Insert as appropriate.
IN WITNESS WHEREOF, the Borrower has caused this Issuance Request to be
executed and delivered, and the certification and representations and warranties
contained herein to be made, by its duly Authorized Officer this __ day of
___________, ____.
THE TITAN CORPORATION
By:
Name:
Title:
Exhibit C
Form of Continuation Converstion Notice
EXHIBIT C
CONTINUATION/CONVERSION NOTICE
The Bank of Nova Scotia,
as Agent
Xxx Xxxxxxx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention:
THE TITAN CORPORATION
Gentlemen and Ladies:
This Continuation/Conversion Notice is delivered to you pursuant to
Section 2.4 of the Credit Agreement, dated as of July 29, 1998 (as amended,
supplemented, amended and restated or otherwise modified from time to time, the
"Credit Agreement"), among The Titan Corporation, a Delaware corporation (the
"Borrower"), the various financial institutions as are or may become parties
thereto (collectively, the "Lenders") The Bank of Nova Scotia, as administrative
agent for the Lenders (the "Administrative Agent"), and Imperial Bank, as
documentation agent. Unless otherwise defined herein or the context otherwise
requires, terms used herein have the meanings provided in the Credit Agreement.
The Borrower hereby requests that on ________, ____,
*[(1) **$ of the presently outstanding principal amount of the
[Revolving Loans] [Term Loans] originally made on _______, ____,]
*[(2) and all Loans presently being maintained as ***[Base Rate
Loans] [LIBO Rate Loans],]
(3) be [converted into] [continued as],
(4) ***[LIBO Rate Loans having an Interest Period of [one] [two]
[three] [six] month(s)] [Base Rate Loans].
*[The Borrower hereby:
(a) certifies and warrants that no Default has occurred and
is continuing or will (immediately after giving effect to the
continuation or conversion requested hereby) occur and be continuing;
and
(b) agrees that if prior to the time of such continuation or
conversion any matter certified to herein by it will not be true and
correct at such time as if then made, it will immediately so notify
the Administrative Agent.
Except to the extent, if any, that prior to the time of the
continuation or conversion requested hereby the Administrative Agent shall
receive written notice to the contrary from the Borrower, each matter certified
to herein shall be deemed to be certified at the date of such continuation or
conversion as if then made.]
IN WITNESS WHEREOF, the Borrower has caused this
Continuation/Conversion Notice to be executed and delivered, and the
certification and representations and warranties contained herein to be made, by
its duly Authorized Officer this ___ day of _____________, ____.
THE TITAN CORPORATION
By
Name:
Title:
--------
* Delete if not applicable.
**Subject to minimum amounts and multiples contemplated in Section 2.4.
***Insert appropriate interest rate option and, if applicable, the number of
months with respect to LIBO Rate Loans. * Applicable only if Loans are being
continued as, or converted into, LIBO Rate Loans.
Exhibit D
Form of Borrower Closing Date Certificate
EXHIBIT D
CLOSING DATE CERTIFICATE
THE TITAN CORPORATION
This Closing Date Certificate (this "Certificate") is delivered
pursuant to Section 5.1.3 of the Amended and Restated Credit Agreement, dated as
of June 9, 1999 (as amended, supplemented, amended and restated or otherwise
modified from time to time, the "Amended and Restated Credit Agreement") among
The Titan Corporation, a Delaware corporation (the "Borrower"), the various
financial institutions as are or may become parties thereto (collectively, the
"Lenders"), The Bank of Nova Scotia ("Scotiabank") as administrative agent for
the Lenders (in such capacity, the "Administrative Agent"), and Imperial Bank,
as documentation agent. Capitalized terms not otherwise defined herein shall
have the meanings set forth in the Amended and Restated Credit Agreement.
The undersigned hereby certifies, represents and warrants for and on
behalf of the Borrower, as of the Closing Date, as follows:
1. Consummation of SRC Acquisition. The SRC Acquisition has been consummated in
accordance with the SRC Purchase Agreement, without waiver by Titan Technologies
and Information Systems Corporation of any of its rights under the SRC Purchase
Agreement or related documents.Attached hereto as a true and complete copy of
the SRC Purchase Agreement, and all other documents and instruments delivered in
connection with the consummation of the SRC Acquisition that were required to be
delivered pursuant to the terms of the SRC Purchase Agreement. There have been
no amendments, waivers or other modifications of, or other forbearance to
exercise any rights with respect to, any of the terms or provisions of the SRC
Purchase Agreement and the exhibits and schedules thereto.2. Financial
Information, etc. True and complete copies of each of the following documents
are attached hereto as Annex I:
(a) audited consolidated financial statements of the Borrower
and its Subsidiaries as at December 31, 1998, without Impermissible
Qualification; and
(b) a pro forma opening balance sheet of the Borrower, as of
March 31, 1999, certified by the chief financial or accounting
Authorized Officer of the Borrower, giving effect to the contemplated
financing, the contemplated SRC Acquisition and reflecting the existing
and proposed legal and capital structure (both debt and equity) of the
Borrower and its Subsidiaries.
3. Payment of Outstanding Indebtedness, etc. All Indebtedness identified in
Section 5.1.17 of the Amended and Restated Credit Agreement in connection with
the SRC Acquisition, together with all interest, all prepayment premiums and
other amounts due and payable with respect thereto, has been paid in full from
the proceeds of the Credit Extension made on the Effective Date and the
commitments in respect of such Indebtedness have been terminated.
4. Insurance. Attached hereto as Annex II are certified copies of
certificates of insurance (or binders in respect thereof), from one or more
insurance companies, evidencing coverage (with respect to SRC, Delfin and
VisiCom) required to be maintained pursuant to the Amended and Restated Credit
Agreement and each Loan Document.
5. Material Adverse Change. There has not occurred a Material Adverse
Effect since December 31, 1998 and no material adverse change in the financial
condition, operations, assets, business, properties or prospects of SRC since
September 25, 1998.
6. Compliance with Warranties, No Default, etc. Both before and after
giving effect to the SRC Acquisition, the following statements shall be true and
correct:
(a) the representations and warranties set forth in Article VI (excluding,
however, those contained in Section 6.7) and in each other Loan
Document are, in each case, true and correct with the same effect as if
made as of the date hereof (unless stated to relate solely to an
earlier date, in which case such representations and warranties are
true and correct in all material respects as of such earlier date);
(b) except as disclosed by the Borrower to the Administrative Agent and the
Lenders pursuant to Section 6.7,
(i) no labor controversy, litigation, arbitration or
governmental investigation or proceeding is pending or, to the
knowledge of the Borrower, threatened against the Borrower or
any of its Subsidiaries which could reasonably be expected to
have a Material Adverse Effect, or which would adversely
affect the legality, validity or enforceability of the Amended
and Restated Credit Agreement or any other Loan Document; and
(ii) no development has occurred in any labor
controversy, litigation, arbitration or governmental
investigation or proceeding disclosed pursuant to Section 6.7
which could reasonably be expected to have a Material Adverse
Effect; and
(iii) no Default has occurred and is continuing.
9. Consents, etc. All governmental and third party approvals and
consents necessary or, in the opinion of the Administrative Agent, advisable in
connection with the SRC Acquisition, the financing contemplated pursuant to the
Credit Agreement, (including the execution and delivery of this Agreement and
each other Loan Document required hereunder by each Obligor and the performance
of their respective Obligations) and continuing operations of the Borrower, each
Guarantor, and SRC (after giving effect to the consummation of the SRC
Acquisition) have been obtained and are in full force and effect (and, to the
extent requested by the Administrative Agent, the Administrative Agent shall
have received true and correct copies of such approvals and consents) and all
applicable waiting periods have expired without any action being taken or
threatened by any competent authority which would restrain, prevent or otherwise
impose adverse conditions on the SRC Acquisition or the financing thereof.
10. Immaterial Subsidiaries. The Borrower hereby represents and
warrants that the following Subsidiaries do not have any material assets or any
material liabilities: 1) Titan AfroNet, Inc., 2) Titan Food Pasteurization
Corp., 3) Titan Medical Sterilization Corp., and 4) MERGECO, Inc.
IN WITNESS WHEREOF, the undersigned has caused this Certificate to be
executed and delivered, and the certification, representations and warranties
contained herein to be duly made, by an Authorized Officer this _____ day of
June, 1999.
THE TITAN CORPORATION
By:
Name:
Title:
Exhibit E
Form of Compliance Certificate
EXHIBIT E
COMPLIANCE CERTIFICATE
The Bank of Nova Scotia,
as Administrative Agent
Xxx Xxxxxxx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxxx Xxxxxx
THE TITAN CORPORATION
Gentlemen and Ladies:
This Compliance Certificate is delivered to you pursuant to [Section
5.1.9] [clause (c) of Section 7.1.1] of the Amended and Restated Credit
Agreement, dated as of June 9, 1999 (as amended, supplemented, amended and
restated or otherwise modified from time to time, the "Amended and Restated
Credit Agreement"), among The Titan Corporation, a Delaware corporation (the
"Borrower"), the various financial institutions as are or may become parties
thereto (collectively, the "Lenders"), The Bank of Nova Scotia, as
administrative agent for the Lenders (in such capacity, the "Administrative
Agent"), and Imperial Bank, as documentation agent. Unless otherwise defined in
this Compliance Certificate, terms used herein (including the Attachments
hereto) have the meanings provided in the Amended and Restated Credit Agreement.
Each reference to a Section is to the relevant Section in the Amended and
Restated Credit Agreement.
The Borrower hereby certifies and warrants that as of __________ __,
____ (the "Computation Date"):
i. The Total Debt to EBITDA Ratio was _____:1, as computed on
Attachment 1 hereto.
The maximum Total Debt to EBITDA Ratio permitted pursuant to clause (a)
of Section 7.2.4 is _____:1 and, accordingly, the Total Debt to EBITDA
Ratio covenant [has] [has not] been satisfied.
ii. The Net Worth of the Borrower is $_________________, as
computed on Attachment 3 hereto.
The minimum Net Worth required pursuant to clause (b) of Section 7.2.4
(as computed on Attachment 3 hereto) is $____, and accordingly, the Net
Worth covenant [has][has not] been satisfied.
iii. The Fixed Charge Coverage Ratio was _____:1, as computed on
Attachment 4 hereto.
The minimum Fixed Charge Coverage Ratio permitted pursuant to clause
(c) of Section 7.2.4 is _____:1 and, accordingly, the Fixed Charge
Coverage Ratio covenant [has] [has not] been satisfied.
iv. The EBITDA (for the Fiscal Year in which the Computation Date
occurs) was $___________, as computed on Attachment 2 hereto.
------------
The minimum EBITDA (for the Fiscal Year in which the Computation Date
occurs) required by clause (d) of Section 7.2.4 of the Amended and
Restated Credit Agreement was $ ___________, and accordingly, the
aforementioned requirement has [not] been satisfied.
v. The Quick Ratio was ____ to 1.0, as computed on Attachment 5
hereto. ------------
The minimum Quick Ratio permitted by clause (e) of Section 7.2.4 of the
Amended and Restated Credit Agreement on the Computation Date was ___
to 1.), and accordingly, the aforementioned requirement has [not] been
satisfied.
6. vi. The Indebtedness of any Restricted Subsidiary owing to the
Borrower or any other Restricted Subsidiary under clause
(e)(ii) of Section 7.2.2 of the Amended and Restated Credit
Agreement, which, when incurred by a Foreign Subsidiary owing
to the Borrower or a Guarantor (when aggregated with the
amount of Investments made by the Borrower and the Guarantors
in Foreign Subsidiaries under clause (e)(i) of Section 7.2.5
under the Amended and ------------- ------------- Restated
Credit Agreement) was $___________. Such Indebtedness pursuant
to such clause (e)(ii) of Section 7.2.2, is not allowed to
exceed $3,000,000, and accordingly, such Indebtedness was
[not] permitted.
vii. The Indebtedness of the Borrower and its Restricted
Subsidiaries in respect of Capitalized Lease Liabilities under
clause (g) of Section 7.2.2 of the Amended and Restated Credit
Agreement, in the aggregate, was $_________. Such Indebtedness
pursuant to such clause (g) of Section 7.2.2 of the Amended
and Restated Credit Agreement, is not allowed exceed
$1,000,000 in the aggregate, and accordingly, such
Indebtedness was [not] permitted.
viii. Other Indebtedness of the Borrower and its Restricted
Subsidiaries (including purchase money Indebtedness) under
clause (h) of Section 7.2.2 of the Amended and Restated Credit
Agreement, was, in the aggregate, $____________. Such other
Indebtedness pursuant to clause (h) of Section 7.2.2 of the
Amended and Restated Credit Agreement, is not allowed to
exceed, in an aggregate amount at any time, $5,000,000, and
accordingly, such Indebtedness was [not] permitted.
ix. Other Investments of the Borrower or any of its Restricted
Subsidiaries under clause (j) of Section 7.2.5 of the Amended
and Restated Credit Agreement, was $__________. Such other
Investments pursuant to clause (j) of Section 7.2.5 of the
Amended and Restated Credit Agreement are not permitted to
exceed $10,000,000 over the term of the Amended and Restated
Credit Agreement, and accordingly, to date, such Investments
were [not] permitted.
x. Compliance with clause (c) of Section 7.2.6:
(i) The Total Debt to EBITDA Ratio immediately following
the proposed redemption of Capital Stock of the
Borrower or any of its Restricted Subsections was
___:1.0, calculated on a pro forma --- ----- basis,
giving effect to such proposed redemption. The maximum
Total Debt to EBITDA Ratio so calculated on a pro
forma basis may not exceed --- ----- 3:00:1.00, and,
accordingly, such redemption was [not] permitted. The
aggregate value of Capital Stock redemptions for the
Borrower and its Restricted Subsidiaries under clause
(c)(iii) of Section 7.2.6 of the Amended and Restated
Credit Agreement was $_______. The aggregate value of
such redemptions pursuant to clause (c)(iii) of
Section 7.2.6 of the Amended and Restated Credit
Agreement are not permitted to exceed $__________, and
accordingly, such redemptions were [not] permitted.
(ii) The aggregate value of Capital Stock redemptions for
the Borrower and its Restricted Subsidiaries under
clause (c)(iv) of Section 7.2.6 of the Amended and
Restated Credit Agreement was $_______. The aggregate
value of such redemptions pursuant to clause (c)(iv)
of Section 7.2.6 of the Amended and Restated Credit
Agreement are not permitted to exceed $8,000,000, and
accordingly, to date, such redemptions were [not]
permitted.
(iii) The unborrowed Revolving Loan Commitment Amount at the
time of Capital Stock redemptions for the Borrower and
its Restricted Subsidiaries under clause (c)(v) of
Section 7.2.6 of the Amended and Restated Credit
Agreement was $_______. The unborrowed Revolving Loan
Commitment Amount at the time of such Capital Stock
redemptions pursuant to clause (c)(v) of Section 7.2.6
of the Amended and Restated Credit Agreement are not
permitted to be less than $7,500,000, and accordingly,
to date, such [redemptions] were [not] permitted.
xi. The aggregate amount of Capital Expenditures made or committed
to be made during the Fiscal Year in which the Computation
Date occurs is $__________. The maximum amount of Capital
Expenditures permitted by Section 7.2.7 of the Amended and
Restated Credit Agreement during this Fiscal Year was
$________, and accordingly, the aforementioned requirement has
[not] been satisfied.
xii. The aggregate value of the sales, transfers, leases,
contributions or conveyances (including by way of merger), or
grants of options, warrants or other rights with respect to,
any of the Borrower's or such Restricted Subsidiaries' assets
(including accounts receivable and capital stock of Restricted
Subsidiaries) to any Person in one transaction or series of
transactions, pursuant to clause (iv) of Section 7.2.11 of the
Amended and Restated Credit Agreement made in the Fiscal Year
to date in which the Computation Date occurs was $_______. The
maximum amount of assets, in the aggregate, which may be
disposed of in any Fiscal Year, pursuant to clause (iv) of
Section 7.2.11 of the Amended and Restated Credit Agreement,
is $1,000,000, so long as the Borrower complies with Section
3.1.1(c) of the Amended and Restated Credit Agreement, and
accordingly, the aforementioned disposition [is][was][not]
permitted.
IN WITNESS WHEREOF, the Borrower has caused this Certificate to be duly
executed and delivered by its chief executive, financial or accounting
Authorized Officer this ____ day of __________, ____.
THE TITAN CORPORATION
By: _______________________________
Name:
Title:
ATTACHMENT 1
(to __/__/__ Compliance
Certificate)
TOTAL DEBT TO EBITDA RATIO
on __/__/__
(the "Computation Date")
1. Total Debt:
(a) all obligations of the Borrower and its Restricted
Subsidiaries for borrowed money and all obligations of the
Borrower and its Restricted Subsidiaries evidenced by bonds,
debentures, notes or similar instruments (which, in the case
of the Loans, shall be deemed to equal the aggregate amount of
Loans outstanding on the Computation
Date).................................................$_______
(b) all obligations, contingent or otherwise, relative to the face
amount of all let whether or not drawn, and banker's
acceptances issued for the account of the Borrower and its
Restricted Subsidiaries (which, in the case of Letter of
Credit Outstandings shall be deemed to equal the aggregate
amount of Letter of Credit Outstandings on the Computation
Date).................................................$_______
(c) all monetary obligations of the Borrower or any of its
Restricted Subsidiaries under any leasing or similar
arrangement which have been (or, in accordance with GAAP,
should be) classified as capitalized leases valued at the
capitalized amount
thereof...............................................$_______
(d) all Contingent Liabilities of the Borrower and its Restricted
Subsidiaries in respect of Items 1(a) through 1(c).
..................................................... $_______
(e) The sum of Items 1(a) through
1(d)..................................................$_______
(f) intercompany Indebtedness between the Borrower and any of its
Restricted Subsididiaries........................... $________
(g) TOTAL DEBT: Item 1(e) minus Item 1(f).............$________
2. See Item 1(f) of Attachment 2
3. Applicable Consolidated Debt to EBITDA Ratio: The ratio of Item 1(g) to
Item 2(f)
ATTACHMENT 2
(to__/__/__Compliance
Certificate)
EBITDA
for the four consecutive Fiscal Quarters
ending on ____ (the "Computation Date")
(the "Computation Period")
1. EBITDA:
(a) Net Income:
(i) the aggregate of all amounts which would be included
as net income on the consolidated financial statements
of the Borrower and its Restricted Subsidiaries for
the Computation Period .......................$_______
(ii) any non-cash and non-recurring gains or non-cash and
non-recurring losses, including fees, costs, charges
and other expenses incurred by the Borrower and its
Restricted Subsidiaries in connection with any
discontinued operation, reorganization, consolidation
or restructuring, all in accordance with GAAP
..............................................$_______
(iii) Net Income: Item 1(a)(i) minus Item 1(a)(ii)..$_______
(b) the amount deducted by the Borrower and its Restricted
Subsidiaries, in determining Net Income, representing
amortization..........................................$_______
(c) the amount deducted, in determining Net Income, of all
federal, state and local income taxes (whether paid in cash or
deferred) of the Borrower and its Restricted
Subsidiaries..........................................$_______
(d) Interest Expense of the Borrower and its Restricted
Subsidiaries..........................................$_______
(e) the amount deducted, in determining Net Income, representing
depreciation of assets of the Borrower and its Restricted
Subsidiaries......................................... $_______
(f) EBITDA: the sum of Items 2(a)(iii) through
2(e)................................................. $_______
ATTACHMENT 3
(to __/__/__ Compliance
Certificate)
NET WORTH
for the ____ Fiscal Quarter,
ending on ________, ____
(the "Computation Date")
1. Net Worth: As of the Computation Date, on a consolidated basis for the
Borrower and its Restricted Subsidiaries
a. The sum of Capital Stock taken at par value, capital surplus
and retained earnings (or accumulated deficit) of the Borrower
on the Computation Date:..............................$_______
b. Treasury stock of the Borrower and, to the extent included in
Item 1(a), minority interests in Restricted Subsidiaries of
the Borrower at such date:............................$_______
c. NET WORTH: ITEM 1(a) over Item 1(b):..................$_______
2 . Required Net Worth: As of the Computation Date, on a consolidated basis
for the Borrower and its Restricted Subsidiaries:
(a) $42,500,000
(b) 50% of the aggregate Net Income for the period commencing on
the Closing Date and ending on the last day of the Fiscal
Quarter ending on or immediately prior to the Computation
Date..................................................$_______
(c) 80% of net equity cash proceeds received after the Effective
Date..................................................$_______
(d) Required Net Worth: The sum of Item(2)(a), Item 2(b) and Item
2(c):................................................ $_______
ATTACHMENT 4
(to__/__/__Compliance
Certificate)
FIXED CHARGE COVERAGE RATIO
for the Fiscal Quarter,
ending on ____,____(the "Computation Date")
1. Fixed Change Coverage Ratio
a. EBITDA (see Item 1(f) of Attachment 2)..............$_________
b. Capital Expenditures made during the four consecutive Fiscal
Quarters ending on the Computation
Date............................................... $_________
c. Item 1(a) minus Item 1(b)...........................$_________
d. Interest Expense paid in cash.......................$_________
e. Scheduled principal payments of the Term Loans after giving
effect to any reductions in such scheduled principal
repayments attributable to any optional or mandatory
prepayments of the Term Loans...................... $_________
f. Restricted Payments................................ $_________
g. All federal, state and foreign income taxes actually paid in
cash by the Borrower and its Restricted
Subsidiaries....................................... $_________
h. The sum of Items 1(d) through
1(g)................................................$_________
i. FIXED CHARGE COVERAGE RATIO: The ratio of Item 1(c) to Item
1(h):...............................................$_________
ATTACHMENT 5
to (__/__/__Compliance
Certificate)
QUICK RATIO
for the Fiscal Quarter
ending on _____,____
(the "Computation Date)
1. Quick Ratio: for the Computation Date, on a consolidated basis for the
Borrower and the Restricted Subsidiaries.
a. Cash and Cash Equivalents............................$________
b Net amount of accounts receivable....................$________
c The sum of Item 1(a) and Item 1(b)...................$________
d. Current liabilities (other than non-cash current liabilities)
of the Borrower and the Restricted Subsidiaries (including the
aggregate principal amount of outstanding Revolving Loans and
the current portion of the Term Loan then outstanding and the
current portion of any other long-term
debt)................................................$________
e. QUICK RATIO: The ratio of Item 1(c) to Item 1(d):.....$_______
Exhibit G-1
Form of Borrower Pledge Agreement
EXHIBIT G-1
BORROWER PLEDGE AGREEMENT
This PLEDGE AGREEMENT (as amended, supplemented, amended and restated
or otherwise modified from time to time, the "Pledge Agreement"), dated as of
July 29, 1998, is made by THE TITAN CORPORATION, a Delaware corporation (the
"Pledgor"), in favor of THE BANK OF NOVA SCOTIA ("Scotiabank"), in its capacity
as agent (the "Administrative Agent") for each of the Secured Parties.
W I T N E S S E T H:
WHEREAS, pursuant to a Credit Agreement, dated as of July 29, 1998 (as
amended, supplemented, amended and restated or otherwise modified from time to
time, the "Credit Agreement"), among the Pledgor, the various financial
institutions as are or may become parties thereto (the "Lenders"), Scotiabank,
as agent for the Lenders (the "Administrative Agent"), and Imperial Bank, as
Documentation Agent, the Lenders and the Issuers have extended Commitments to
make Credit Extensions to the Borrower;
WHEREAS, as a condition precedent to the making of the Credit
Extensions (including the initial Credit Extension) under the Credit Agreement,
the Pledgor is required to execute and deliver this Pledge Agreement;
WHEREAS, the Pledgor has duly authorized the execution, delivery and
performance of this Pledge Agreement; and
NOW THEREFORE, for good and valuable consideration the receipt of which
is hereby acknowledged, and in order to induce the Lenders and the Issuers to
make Credit Extensions (including the initial Credit Extension) to the Pledgor
pursuant to the Credit Agreement, the Pledgor agrees, for the benefit of each
Secured Party, as follows:
ARTICLE I
DEFINITIONS
1.1. SECTION Certain Terms. The following terms (whether or not underscored)
when used in this Pledge Agreement, including its preamble and recitals, shall
have the following meanings (such definitions to be equally applicable to the
singular and plural forms thereof):
"Administrative Agent" is defined in the preamble.
"Certificated Interests" means, collectively, all Pledged Interests
evidenced by certificates.
"Collateral" is defined in Section 2.1.
"Credit Agreement" is defined in the first recital.
"Distributions" means all stock dividends, liquidating dividends,
shares of stock resulting from (or in connection with the exercise of) stock
splits, reclassifications, warrants, options, non-cash dividends, mergers,
consolidations, and all other distributions (whether similar or dissimilar to
the foregoing) on or with respect to any Pledged Interests or other shares of
Capital Stock constituting Collateral, but shall not include Dividends.
"Dividends" means cash dividends and cash distributions with respect to
any Pledged Interests or other Pledged Property made in the ordinary course of
business and not a liquidating dividend.
"Lender" and "Lenders" are defined in the first recital.
"LLC" means each limited liability company listed from time to time as
a Pledged Interest Issuer on Attachment 1 hereto.
"LLC Interest" means the entire ownership interest of the Pledgor in
each Pledged Interest Issuer that is a LLC listed on Attachment 1 hereto,
including such Pledgor's capital account, its gain, loss, deduction and credit
of such Pledged Interest Issuer, the Pledgor's interest in all distributions
made or to be made by such Pledged Interest Issuer to the Pledgor and all of the
other rights, titles and interests of the Pledgor as an owner or a member of
such Pledged Interest Issuer, whether set forth in the operating or membership
agreement of such Pledged Interest Issuer, by separate agreement or otherwise.
"Partnership" means each general partnership or limited partnership
listed from time to time as a Pledged Interest Issuer on Attachment 1 hereto.
"Partnership Interest" means the entire ownership interest of the
Pledgor in each Pledged Interest Issuer that is a Partnership listed on
Attachment 1 hereto, including the Pledgor's capital account, its gain, loss,
deduction and credit of such Pledged Interest Issuer, the Pledgor's interest in
all distributions made or to be made by such Pledged Interest Issuer to the
Pledgor and all of the other rights, titles and interests of the Pledgor as an
owner, a general partner or a limited partner of such Pledged Interest Issuer,
whether set forth in the partnership agreement of such Pledged Interest Issuer,
by separate agreement or otherwise.
"Pledge Agreement" is defined in the preamble.
"Pledged Interest Issuers" means each Person identified in Attachment 1
hereto as the issuer of the Pledged Interests (including the maker of each
Pledged Note) identified opposite the name of such Person and each Person whose
ownership, equity or other similar interests, including shares of Capital Stock,
Partnership Interests and LLC Interests, are required to be pledged hereunder
and under the Credit Agreement from time to time.
"Pledged Interests" means (i) all ownership, equity or other similar
interests, including shares of Capital Stock, Partnership Interests and LLC
Interests, of any Pledged Interest Issuer and (ii) all Pledged Notes and other
promissory notes, in each case which are pledged by the Pledgor to the
Administrative Agent hereunder or may from time to time hereafter be pledged by
the Pledgor to the Administrative Agent.
"Pledged Notes" means all promissory notes of any Pledged Interest
Issuer (whether or not in the form of Exhibit C hereto) which are delivered by
the Pledgor to the Administrative Agent as Pledged Property hereunder, as such
promissory notes, in accordance with Section 4.1.6, are amended, modified or
supplemented from time to time, together with any promissory note of any Pledged
Interest Issuer taken in extension or renewal thereof or substitution therefor.
"Pledged Property" means all Pledged Interests and all other
instruments and securities, in each case which are now being pledged by the
Pledgor to the Administrative Agent or may from time to time hereafter be
pledged or required to be pledged by the Pledgor to the Administrative Agent for
the purpose of pledge under this Pledge Agreement or any other Loan Document,
and all proceeds of any of the foregoing.
"Pledgor" is defined in the preamble.
"Secured Obligations" is defined in Section 2.2.
"Securities Act" is defined in Section 6.2.
"Termination Date" means the date on which all Obligations have been
paid in full, all Commitments have been fully terminated and the Letter of
Credit has been canceled or otherwise terminated.
"U.C.C." means the Uniform Commercial Code, as in effect from time to
time in the State of New York; provided, that if by reason of mandatory
provisions of law or the exercise of remedies, the perfection or the effect of
perfection or non-perfection of the Lien granted in any Collateral is governed
by the Uniform Commercial Code as in effect in a jurisdiction other than New
York, "U.C.C." means the Uniform Commercial Code as in effect in such other
jurisdiction for purposes of the provisions hereof relating to such perfection
or effect of perfection or non-perfection or the exercise of remedies.
1.2. SECTION Credit Agreement Definitions. Unless otherwise defined herein or
the context otherwise requires, terms used in this Pledge Agreement, including
its preamble and recitals, have the meanings provided in the Credit Agreement.
1.3. SECTION U.C.C. Definitions. Unless otherwise defined herein or in the
Credit Agreement or the context otherwise requires, terms for which meanings are
provided in the U.C.C. are used in this Pledge Agreement with such meanings.
ARTICLE II
PLEDGE
2.1. SECTION Grant of Security Interest. The Pledgor hereby pledges,
hypothecates, assigns, charges, mortgages, delivers and transfers to the
Administrative Agent, for its benefit and the ratable benefit of each of the
Secured Parties, and the Pledgor hereby grants to the Administrative Agent, for
its benefit and the ratable benefit of the Secured Parties, a continuing
security interest in, all of the following property (the "Collateral"):
(a) all Pledged Interests of each Pledged Interest Issuer identified in
Attachment 1 hereto issued from time to time;
(b) all other Pledged Property, whether now or hereafter delivered to the
Administrative Agent in connection with this Pledge Agreement;
(c) all right, title and interest of the Pledgor, whether now existing or
hereafter arising or acquired, in, to and under any partnership
agreement, limited liability company agreement or similar agreement
which governs the rights and obligations of the holder of ownership,
equity or similar interests in a Pledged Interest Issuer;
(d) all Dividends, Distributions, interest and without duplication, other
payments and rights with respect to any Pledged Property; and
(e) all proceeds of any of the foregoing.
2.2. SECTION Security for Obligations. This Pledge Agreement secures the payment
in full of all Obligations of each Obligor now or hereafter existing under the
Credit Agreement and each other Loan Document, whether for principal, interest,
costs, fees, indemnities, expenses, or otherwise (including all Obligations of
the Pledgor now or hereafter existing under this Pledge Agreement and each other
Loan Document to which such Pledgor is or may become a party), with all such
Obligations being referred to as the "Secured Obligations".
2.3. SECTION Pledge and Transfer of Pledged Property. Any Certificated Interests
representing or evidencing any Collateral shall be delivered to and held by or
on behalf of the Administrative Agent pursuant hereto, shall be in suitable form
for transfer by delivery, and shall be accompanied by all necessary instruments
of transfer or assignment, duly executed in blank by the Pledgor or, if any
Collateral constitutes uncertificated securities, confirmation and evidence
satisfactory to the Administrative Agent that the Pledgor has taken all actions
requested by the Administrative Agent to provide for the transfer to and
perfection by the Administrative Agent of the security interests in such
uncertificated securities for the benefit of the Secured Parties in accordance
with the U.C.C. and any other applicable law.
2.4. SECTION Dividends on Pledged Interests. In the event that any Dividend or
other payment is to be paid on any Pledged Interests (including any payment of
any principal or interest on any Pledged Note) at a time when no Default of the
nature referred to in Section 8.1.9 of the Credit Agreement or Event of Default
has occurred and is continuing or would result therefrom, such Dividend or
payment may be paid directly to the Pledgor. If any such Default or Event of
Default has occurred and is continuing, then any such Dividend or payment shall
be paid directly to the Administrative Agent for the benefit of the Secured
Parties.
2.5. SECTION Continuing Security Interest. This Pledge Agreement shall create a
continuing security interest in the Collateral and shall
(a) remain in full force and effect until the Termination Date;
(b) be binding upon the Pledgor and its successors, transferees and
assigns; and
(c) inure, together with the rights and remedies of the Administrative
Agent hereunder, to the benefit of the Administrative Agent and each
other Secured Party.
Without limiting clause (c), any Lender may assign or otherwise transfer (in
whole or in part) any Note or Loan held by it to any other Person or entity, and
such other Person or entity shall thereupon become vested with all the rights
and benefits in respect thereof granted to such Lender under any Loan Document
(including this Pledge Agreement) or otherwise, subject, however, to any
contrary provisions in such assignment or transfer, and to the provisions of
Section 10.11 and Article IX of the Credit Agreement. Upon (i) the sale,
transfer or other disposition of Collateral in accordance with the Credit
Agreement or (ii) the occurrence of the Termination Date, the security interests
granted herein shall automatically terminate with respect to (x) such Collateral
(in the case of clause (i)) or (y) all Collateral (in the case of clause (ii)),
and at such time the Administrative Agent will, at the Pledgor's sole expense,
deliver to the applicable Pledgor, without any representations, warranties or
recourse of any kind whatsoever, all certificates and instruments previously
delivered to an Administrative Agent representing or evidencing all Pledged
Interests, together with all other Collateral held by the Administrative Agent
hereunder, and execute and deliver to the Pledgor such documents as the Pledgor
shall reasonably request to evidence such termination.
ARTICLE III
REPRESENTATIONS AND WARRANTIES
3.1. SECTION Representations and Warranties, etc. In order to induce the Secured
Parties to enter into the Credit Agreement and to make Credit Extensions
thereunder, the Pledgor represents and warrants to each Secured Party as set
forth in this Article.
SECTION 3.1.1. Ownership, No Liens, etc. The Pledgor is the legal and
beneficial owner of, and has good and marketable title to (and has full right
and authority to pledge and assign) its Collateral, free and clear of all Liens,
options and other charges, except any Lien granted pursuant hereto in favor of
the Secured Parties.
SECTION 3.1.2. Valid Security Interest. The execution and delivery of
this Pledge Agreement, together with (a)(i) in the case of Collateral that
constitutes a Certificated Interest, the delivery of such Collateral to the
Administrative Agent together with undated stock powers executed in blank by the
Pledgor, (ii) in the case of Collateral that constitutes an uncertificated
security, the registration with the Pledged Interest Issuer of such
uncertificated security, or (iii) in the case of Collateral that constitutes
Pledged Notes, delivery of such Collateral and an allonge to such Collateral to
the Administrative Agent, or (b) in the case of other than Certificated
Interests, the filing of U.C.C. financing statements in the filing offices
listed on Attachment 1 hereto, is effective to create a valid, perfected, first
priority security interest in such Collateral and all proceeds thereof, securing
the Secured Obligations. Possession by the Administrative Agent of the Pledged
Interests, if certificated, or registration by the Pledgor of the Pledged
Interests, if uncertificated, is the only action necessary to perfect or protect
such security interest in the Pledged Interests and the proceeds thereof,
subject to Section 9-306 of the U.C.C.
SECTION 3.1.3. As to Pledged Interests. In the case of
(a) any Pledged Interests (other than Pledged Notes) constituting
Collateral,
(i) all of such Pledged Interests are duly authorized, and validly
issued, fully paid, and non-assessable, and constitute that
percentage of the issued and outstanding shares of Capital
Stock, Partnership Interests, LLC Interests and other
ownership interest of each Pledged Interest Issuer set forth
on Attachment I hereto; and
(ii) the Pledgor has delivered to the Administrative Agent true and
complete copies of the partnership, membership, operating or
ownership agreements, as applicable, for each Pledged Interest
Issuer that is a LLC or a Partnership, which agreements are
currently in full force and effect and have not been amended
or modified except as disclosed to the Administrative Agent in
writing;
(b) each Pledged Note, all of such Pledged Notes have been duly authorized,
executed, endorsed, issued and delivered, and are the legal, valid and
binding obligation of the issuers thereof, and are not in default.
SECTION 3.1.4. Location of Pledgor. The jurisdictions in which the
Pledgor is located for purposes of Sections 9-103 and 9-104 of the U.C.C. are
set forth in Attachment 1 hereto.
SECTION 3.1.5. Nature of Pledged Interests. No LLC Interests or
Partnership Interests are represented by certificates.
ARTICLE IV
COVENANTS
4.1. SECTION Covenants. The Pledgor covenants and agrees that, at all times
prior to the Termination Date, it will perform, comply with and be bound by the
obligations set forth in this Article.
4.1.1. SECTION Protect Collateral; Further Assurances, etc. The Pledgor
covenants and agrees that it will not sell, assign, transfer, pledge, or
encumber in any other manner the Collateral (except in favor of the
Administrative Agent hereunder). The Pledgor will warrant and defend the right
and title herein granted unto the Administrative Agent in and to the Collateral
(and all right, title, and interest represented by the Collateral) against the
claims and demands of all other Persons. The Pledgor agrees that from time to
time, at the expense of the Pledgor, it will promptly execute and deliver all
further instruments, and take all further action, that may be necessary or
desirable, or that either Administrative Agent may reasonably request, in order
to perfect and protect any security interest granted or purported to be granted
hereby or to enable the Administrative Agent to exercise and enforce their
rights and remedies hereunder with respect to any Collateral. The Pledgor will
not, without thirty (30) days' prior written notice to the Administrative Agent,
(i) change its name or structure so as to make any financing or other statement
filed pursuant to this Pledge Agreement become seriously misleading or (ii)
change the jurisdiction in which it is located to other than those specified in
Section 3.1.4. The Pledgor will pledge hereunder, immediately upon its
acquisition (directly or indirectly) thereof, any and all additional
Indebtedness owed to the Pledgor pursuant to any note with an Obligor. The
Pledgor further covenants and agrees as follows:
(a) If the Pledgor shall become entitled to receive or shall
receive any stock or other certificate (including any certificate
representing a Dividend or a Distribution in connection with any
reclassification, increase or reduction of capital or any certificate
issued in connection with any reorganization), option or rights,
whether in addition to, in substitution of, as a conversion of, or in
exchange for any portion of the Collateral (or otherwise in respect
thereof), the Pledgor shall accept the same as the agent of the
Administrative Agent, hold the same in trust for the Administrative
Agent and deliver the same forthwith to the Administrative Agent in the
exact form received, duly endorsed (in blank) by the Pledgor to the
Administrative Agent, if required, together with an undated stock power
or other necessary instrument of transfer covering such certificate
duly executed in blank by the Pledgor, to be held by the Administrative
Agent, subject to the terms of this Pledge Agreement, as additional
security for the Secured Obligations. In addition, any sums paid upon
or in respect of the Collateral upon the liquidation or dissolution of
any Pledged Interest Issuer shall be held by the Administrative Agent
as additional security for the Secured Obligations. If any sums of
money or property so paid or distributed in respect of any Collateral
shall be received by the Pledgor, then the Pledgor shall, until such
money or property is paid or delivered to the Administrative Agent,
hold such money or property in trust for the Administrative Agent (on
behalf of the Secured Parties), segregated from other funds of the
Pledgor, as additional collateral securing the Secured Obligations.
(b) Except as otherwise expressly permitted by the Credit
Agreement, without the prior written consent of the Administrative
Agent, the Pledgor will not (i) consent to any material modification,
extension or alteration of the terms of any partnership, membership or
operating agreement of the LLCs or the Partnerships or (ii) accept a
surrender of any partnership, membership or operating agreement of any
of the LLCs or the Partnerships, as applicable, or waive any breach of
or default under any such agreement by any other party thereto.
(c) The Pledgor will advise the Administrative Agent promptly,
in reasonable detail (i) of any Lien or claim made or asserted against
any material part of the Collateral, (ii) of any material change in the
composition of the Collateral, and (iii) of the occurrence of any other
event relating specifically to the Pledgor or its assets which could
reasonably be expected to have a material adverse effect on the
aggregate value of the Collateral or on the security interests created
hereunder.
4.1.2. SECTION Registration of Pledged Interests, etc. Concurrently with the
execution and delivery of this Pledge Agreement, the Pledgor shall execute and
deliver to the applicable Pledged Interest Issuer instructions to register,
substantially in the form of Exhibit A hereto, and cause each Pledged Interest
Issuer to execute and deliver to the Administrative Agent the Initial
Transaction Statement, substantially in the form of Exhibit B hereto, confirming
that each Pledged Interest Issuer (in which the Pledgor owns a Pledged Interest
(other than in the case of a Certificated Interest or a Pledged Note)) has
registered the pledge by the Pledgor effected by this Pledge Agreement on its
books. In addition, the Pledgor agrees that it shall cause each Issuer of
Certificated Securities to execute and deliver to the Administrative Agent an
acknowledgment in a form satisfactory to the Administrative Agent.
4.1.3. SECTION Stock Powers, etc. The Pledgor agrees that all Certificated
Interests constituting Collateral delivered by the Pledgor pursuant to this
Pledge Agreement will be accompanied by duly executed undated blank stock
powers, or other equivalent instruments of transfer acceptable to the
Administrative Agent, as are necessary under all applicable laws to perfect the
Lien in favor of the Secured Parties on such Collateral. The Pledgor will, from
time to time upon the request of the Administrative Agent, promptly deliver to
the Administrative Agent such stock powers, instruments, and similar documents,
satisfactory in form and substance to the Administrative Agent, with respect to
the Collateral as the Administrative Agent may reasonably request and will, from
time to time upon the request of the Administrative Agent after the occurrence,
and during the continuance, of any Event of Default, promptly transfer any
Pledged Interests or other shares of Capital Stock or other ownership interests
constituting Collateral into the name of any nominee designated by the
Administrative Agent.
4.1.4. SECTION Continuous Pledge. The Pledgor will, at all times, keep pledged
to the Administrative Agent pursuant hereto all Pledged Interests and all other
shares of Capital Stock or other ownership interests constituting Collateral,
all Dividends and Distributions with respect thereto (provided that if no Event
of Default or Default described in Section 8.1.9 of the Credit Agreement shall
have occurred or be continuing, such Dividends and Distributions may be used for
working capital or other purposes), all Pledged Notes, all interest, principal
and other proceeds received by the Administrative Agent with respect to the
Pledged Notes, and all other Collateral and other securities, instruments,
proceeds, and rights from time to time received by or distributable to the
Pledgor in respect of any Collateral and will not permit any Pledged Interest
Issuer to issue any Capital Stock or other ownership interests which shall not
have been immediately duly pledged hereunder on a first priority perfected
basis.
4.1.5. SECTION Voting Rights; Dividends, etc. The Pledgor agrees:
(a) after any Default of the nature referred to in Section 8.1.9 of the
Credit Agreement or any Event of Default shall have occurred and be
continuing, promptly upon receipt of notice thereof by the Pledgor and
without any request therefor by either Administrative Agent, such
Pledgor will deliver (properly endorsed where required hereby or
requested by the Administrative Agent) to the Administrative Agent all
Dividends, Distributions, all other cash payments, and all proceeds of
the Collateral, all of which shall be held by the Administrative Agent
for the benefit of the Secured Parties as additional Collateral for use
in accordance with Section 6.4; and
(b) after any Event of Default shall have occurred and be continuing and
the Administrative Agent has notified the Pledgor of the Administrative
Agent's intention to exercise its voting power under this Section.
(i) the Administrative Agent may exercise (to the exclusion of the
Pledgor) the voting power and all other incidental rights of
ownership with respect to any Pledged Interests or other
shares of Capital Stock or other ownership interests
constituting Collateral and the Pledgor hereby grants the
Administrative Agent an irrevocable proxy, exercisable under
such circumstances, to vote the Pledged Interests and such
other Collateral; and
(ii) promptly to deliver to the Administrative Agent such
additional proxies and other documents requested by the
Administrative Agent as may be necessary to allow the
Administrative Agent to exercise such voting power.
All Dividends, Distributions, cash payments and proceeds which may at any time
and from time to time be held by the Pledgor but which the Pledgor is then
obligated to deliver to the Administrative Agent, shall, until delivery to the
Administrative Agent, be held by the Pledgor separate and apart from its other
property in trust for the Secured Parties. The Administrative Agent agrees that
unless an Event of Default shall have occurred and be continuing and the
Administrative Agent shall have given the notice referred to in clause (b), the
Pledgor shall have the exclusive voting power with respect to any shares of
Capital Stock or other ownership interests (including any of the Pledged
Interests) constituting Collateral and the Administrative Agent shall, upon the
written request of the Pledgor, promptly deliver such proxies and other
documents, if any, as shall be reasonably requested by the Pledgor which are
necessary to allow the Pledgor to exercise voting power with respect to any such
share of Capital Stock or other ownership interests (including any of the
Pledged Interests) constituting Collateral; provided, however, that no vote
shall be cast, or consent, waiver, or ratification given, or action taken by the
Pledgor that would impair any Collateral or be inconsistent with or violate any
provision of the Credit Agreement or any other Loan Document.
4.1.6. SECTION Additional Undertakings. The Pledgor will not, without the prior
written consent of the Administrative Agent, take or omit to take any action the
taking or the omission of which could result in any impairment or alteration of
any instrument constituting Collateral. In furtherance of the foregoing, the
Pledgor agrees that it will not, without the prior written consent of the
Administrative Agent which consent shall not be unreasonably withheld:
(a) enter into any agreement amending, supplementing, or waiving any
provision of any Pledged Note (including any underlying instrument
pursuant to which such Pledged Note is issued) or compromising or
releasing or extending the time for payment of any obligation of the
maker thereof; or
(b) take or omit to take any action the taking or the omission of which
would result in any impairment or alteration of any obligation of the
maker of any Pledged Note or other instrument constituting Collateral.
SECTION 4.1.7. Pledgor Remains Liable. Anything herein to the contrary
notwithstanding,
(a) the Pledgor shall remain liable to perform all of its
duties and obligations as an owner of the Pledged Interests, to the
same extent as if this Pledge Agreement had not been executed;
(b) the exercise by either Administrative Agent or any other
Secured Party of any of its rights hereunder shall not release the
Pledgor from any of its duties or obligations as owner of the Pledged
Interests; and
(c) neither Administrative Agent nor any other Secured Party
shall have any obligation or liability as an owner of any Pledged
Interest as applicable, by reason of this Pledge Agreement.
ARTICLE V
THE AGENT
5.1. SECTION Administrative Agent Appointed Attorney-in-Fact. The Pledgor hereby
irrevocably appoints the Administrative Agent as the Pledgor's attorney-in-fact,
with full authority in the place and stead of the Pledgor and in the name of the
Pledgor or otherwise, from time to time in the Administrative Agent's
discretion, after the occurrence and during the continuance of a Default of the
nature referred to in Section 8.1.9 of the Credit Agreement or any other Event
of Default, to take any action and to execute any instrument which such
Administrative Agent may deem necessary or advisable to accomplish the purposes
of this Pledge Agreement:
(a) to ask, demand, collect, xxx for, recover, compromise, receive and give
acquittance and receipts for moneys due and to become due under or in
respect of any of the Collateral;
(b) to receive, endorse, and collect any drafts or other instruments,
documents and chattel paper, in connection with clause (a); and
(c) to file any claims or take any action or institute any proceedings
which such Administrative Agent may deem necessary or desirable for the
collection of any of the Collateral or otherwise to enforce the rights
of such Administrative Agent with respect to any of the Collateral.
The Pledgor hereby acknowledges, consents and agrees that the power of attorney
granted pursuant to this Section is irrevocable and coupled with an interest.
5.2. SECTION Administrative Agent May Perform. If the Pledgor fails to perform
any agreement contained herein, the Administrative Agent may perform, or cause
performance of, such agreement, and the reasonable expenses of the
Administrative Agent incurred in connection therewith shall be jointly and
severally payable by the Pledgor pursuant to Section 6.4.
5.3. SECTION Administrative Agent Have No Duty. The powers conferred on the
Administrative Agent hereunder are solely to protect its interests (on behalf of
the Secured Parties) in the Collateral and shall not impose any duty on it to
exercise any such powers. Except for reasonable care of any Collateral in its
possession and the accounting for moneys actually received by it hereunder, the
Administrative Agent shall have no duty as to any Collateral or responsibility
for
(a) ascertaining or taking action with respect to calls, conversions,
exchanges, maturities, tenders or other matters relative to any Pledged
Property, whether or not the Administrative Agent has or is deemed to
have knowledge of such matters, or
(b) taking any necessary steps to preserve rights against prior parties or
any other rights pertaining to any Collateral.
5.4. SECTION Reasonable Care. The Administrative Agent is required to exercise
reasonable care in the custody and preservation of any of the Collateral in its
possession; provided, however, the Administrative Agent shall be deemed to have
exercised reasonable care in the custody and preservation of any of the
Collateral if it takes such action for that purpose as the Pledgor reasonably
requests in writing at times other than upon the occurrence and during the
continuance of any Event of Default. The failure of the Administrative Agent to
comply with any such request at any time shall not in itself be deemed a failure
to exercise reasonable care.
ARTICLE VI
REMEDIES
6.1. SECTION Certain Remedies. If any Event of Default shall have occurred and
be continuing:
(a) The Administrative Agent may exercise in respect of the Collateral, in
addition to other rights and remedies provided for herein or otherwise
available to it, all the rights and remedies of a secured party on
default under the U.C.C. (whether or not the U.C.C. applies to the
affected Collateral) and also may, without notice except as specified
below, sell the Collateral or any part thereof in one or more parcels
at public or private sale, at any of the Administrative Agent' offices
or elsewhere, for cash, on credit or for future delivery, and upon
such other terms as the Administrative Agent may deem commercially
reasonable. The Pledgor agrees that, to the extent notice of sale
shall be required by law, at least ten days' prior notice to the
Pledgor of the time and place of any public sale or the time after
which any private sale is to be made shall constitute reasonable
notification. The Administrative Agent shall not be obligated to make
any sale of Collateral regardless of notice of sale having been given.
The Administrative Agent may adjourn any public or private sale from
time to time by announcement at the time and place fixed therefor, and
such sale may, without further notice, be made at the time and place
to which it was so adjourned.
(b) The Administrative Agent may
(i) transfer all or any part of the Collateral into the name of
the Administrative Agent or its nominee, with or without
disclosing that such Collateral is subject to the Lien
hereunder,
(ii) notify the parties obligated on any of the Collateral to make
payment to the Administrative Agent of any amount due or to
become due thereunder,
(iii) enforce collection of any of the Collateral by suit or
otherwise, and surrender, release or exchange all or any part
thereof, or compromise or extend or renew for any period
(whether or not longer than the original period) any
obligations of any nature of any party with respect thereto,
(iv) endorse any checks, drafts, or other writings in the Pledgor's
name to allow collection of the Collateral,
(v) take control of any proceeds of the Collateral, and
(vi) execute (in the name, place and stead of the Pledgor)
endorsements, assignments, stock powers and other instruments
of conveyance or transfer with respect to all or any of the
Collateral.
6.2. [SECTION Securities Laws. If the Administrative Agent shall determine to
exercise their right to sell all or any of the Collateral pursuant to Section
6.1, the Pledgor agrees that, upon request of the Administrative Agent, the
Pledgor will, at the Pledgor's own expense:
(a) execute and deliver, and cause each issuer of the Collateral
contemplated to be sold and the directors and officers thereof to
execute and deliver, all such instruments and documents, and do or
cause to be done all such other acts and things, as may be necessary
or, in the opinion of the Administrative Agent, advisable to register
such Collateral under the provisions of the Securities Act of 1933, as
from time to time amended (the "Securities Act") and comparable
legislation in other jurisdictions, and to cause the registration
statement relating thereto to become effective and to remain effective
for such period as prospectuses are required by law to be furnished,
and to make all amendments and supplements thereto and to the related
prospectus which, in the opinion of the Administrative Agent, are
necessary or advisable, all in conformity with the requirements of the
Securities Act and the rules and regulations of the Securities and
Exchange Commission applicable thereto and comparable legislation,
rules and regulations in other jurisdictions;
(b) use its best efforts to qualify the Collateral under the state
securities or "Blue Sky" laws and to obtain all necessary governmental
approvals for the sale of the Collateral, as requested by the
Administrative Agent;
(c) cause each such Pledged Interest Issuer to make available to its
security holders, as soon as practicable, an earnings statement that
will satisfy the provisions of Section 11(a) of the Securities Act and
comparable legislation in other jurisdictions; and
(d) do or cause to be done all such other acts and things as may be
necessary to make such sale of the Collateral or any part thereof valid
and binding and in compliance with applicable law.
The Pledgor further acknowledges the impossibility of ascertaining the amount of
damages that would be suffered by the Administrative Agent and the Secured
Parties by reason of the failure by the Pledgor to perform any of the covenants
contained in this Section and, consequently, agrees that, if the Pledgor shall
fail to perform any of such covenants, the Pledgor shall pay, as liquidated
damages and not as a penalty, an amount equal to the value (as determined by the
Administrative Agent) of the Collateral on the date the Administrative Agent
shall demand compliance with this Section.]
6.3. SECTION Compliance with Restrictions. The Pledgor agrees that in any sale
of any of the Collateral whenever an Event of Default shall have occurred and be
continuing, the Administrative Agent is hereby authorized to comply with any
limitation or restriction in connection with such sale as they may be advised by
counsel is necessary in order to avoid any violation of applicable law
(including compliance with such procedures as may restrict the number of
prospective bidders and purchasers, require that such prospective bidders and
purchasers have certain qualifications, and restrict such prospective bidders
and purchasers to persons who will represent and agree that they are purchasing
for their own account for investment and not with a view to the distribution or
resale of such Collateral), or in order to obtain any required approval of the
sale or of the purchaser by any governmental regulatory authority or official,
and the Pledgor further agrees that such compliance shall not result in such
sale being considered or deemed not to have been made in a commercially
reasonable manner, nor shall the Administrative Agent or any other Secured Party
be liable nor accountable to the Pledgor for any discount allowed by the reason
of the fact that such Collateral is sold in compliance with any such limitation
or restriction.
6.4. SECTION Application of Proceeds. All cash proceeds received by the
Administrative Agent in respect of any sale of, collection from, or other
realization upon, all or any part of the Collateral may, in the discretion of
the Administrative Agent, be held by the Administrative Agent as additional
collateral security for, or then or at any time thereafter be applied (after
payment of any amounts payable to the Administrative Agent pursuant to Section
10.3 of the Credit Agreement and Section 6.5) in whole or in part by the
Administrative Agent against, all or any part of the Secured Obligations in such
order as the Administrative Agent shall elect.
Any surplus of such cash or cash proceeds held by the Administrative
Agent and remaining after the occurrence of the Termination Date shall be paid
over to the Pledgor or to whomsoever may be lawfully entitled to receive such
surplus. 6.5. SECTION Indemnity and Expenses. The Pledgor hereby agrees to
indemnify and hold harmless the Administrative Agent from and against any and
all claims, losses, and liabilities arising out of or resulting from this Pledge
Agreement (including enforcement of this Pledge Agreement), except claims,
losses, or liabilities resulting from an Administrative Agent's gross negligence
or wilful misconduct. Upon demand, the Pledgor agrees that it will pay to the
Administrative Agent the amount of any and all reasonable expenses, including
the reasonable fees and disbursements of their counsel and of any experts and
Administrative Agent, which the Administrative Agent may incur in connection
with:
(a) the administration of this Pledge Agreement, the Credit Agreement and
any other Loan Document;
(b) the custody, preservation, use, or operation of, or the sale of,
collection from, or other realization upon, any of the Collateral;
(c) the exercise or enforcement of any of the rights of the Administrative
Agent hereunder; or
(d) the failure by the Pledgor to perform or observe any of the provisions
hereof.
ARTICLE VII
MISCELLANEOUS PROVISIONS
7.1. SECTION Loan Document. This Pledge Agreement is a Loan Document executed
pursuant to the Credit Agreement and shall (unless otherwise expressly indicated
herein) be construed, administered and applied in accordance with the terms and
provisions thereof, including Article XII thereof.
7.2. SECTION Protection of Collateral. The Administrative Agent may from time to
time, at its option, perform any act which the Pledgor agrees hereunder to
perform and which the Pledgor shall fail to perform after being requested in
writing so to perform (it being understood that no such request need be given
after the occurrence and during the continuance of an Event of Default) and the
Administrative Agent may from time to time take any other action which the
Administrative Agent reasonably deems necessary for the maintenance,
preservation or protection of any of the Collateral or of its security interest
therein.
7.3. SECTION Binding on Successors, Transferees and Assigns; Assignment. This
Pledge Agreement shall be jointly and several binding upon the Pledgor and its
successors, transferees and assigns and shall inure to the benefit of and be
enforceable by each Secured Party and their respective successors, transferees
and assigns; provided, however, that the Pledgor may not assign any of its
obligations hereunder without the prior written consent of all Lenders.
7.4. SECTION Amendments, etc. No amendment to or waiver of any provision of this
Pledge Agreement, nor consent to any departure by the Pledgor herefrom, shall in
any event be effective unless the same shall be in writing and signed by the
Administrative Agent (on behalf of the Lenders or the Required Lenders, as the
case may be) and then such waiver or consent shall be effective only in the
specific instance and for the specific purpose for which given.
7.5. SECTION Notices. All notices and other communications provided for
hereunder shall be in writing (including facsimile communication) and, mailed or
telecopied or delivered to the Pledgor, at the address specified in the Credit
Agreement. All such notices and other communications, when mailed and properly
addressed with postage prepaid or if properly addressed and sent by pre-paid
courier service, shall be deemed given when received; any such notice or
communication, if transmitted by telecopier, shall be deemed given when
transmitted and electronically confirmed.
7.6. SECTION No Waiver; Remedies. No failure on the part of any Secured Party to
exercise, and no delay in exercising, any right hereunder shall operate as a
waiver thereof; nor shall any single or partial exercise of any right hereunder
preclude any other or further exercise thereof or the exercise of any other
right. The remedies herein provided are cumulative and not exclusive of any
remedies provided by law.
7.7. SECTION Captions. Section captions used in this Pledge Agreement are for
convenience of reference only, and shall not affect the construction of this
Pledge Agreement.
7.8. SECTION Severability. Wherever possible each provision of this Pledge
Agreement shall be interpreted in such manner as to be effective and valid under
applicable law, but if any provision of this Pledge Agreement shall be
prohibited by or invalid under such law, such provision shall be ineffective to
the extent of such prohibition or invalidity, without invalidating the remainder
of such provision or the remaining provisions of this Pledge Agreement.
7.9. SECTION Governing Law, Entire Agreement, etc. THIS PLEDGE AGREEMENT SHALL
BE DEEMED TO BE A CONTRACT MADE UNDER AND GOVERNED BY THE INTERNAL LAWS OF THE
STATE OF NEW YORK (INCLUDING FOR SUCH PURPOSE SECTIONS 5-1401 AND 5-1402 OF THE
GENERAL OBLIGATIONS LAW OF THE STATE OF NEW YORK).
7.10. SECTION Counterparts. This Pledge Agreement may be executed by the parties
hereto in several counterparts, each of which shall be deemed to be an original
and all of which shall constitute together but one and the same agreement.
IN WITNESS WHEREOF, the Pledgor has caused this Pledge Agreement to be
duly executed and delivered by its officer thereunto duly authorized as of the
date first above written.
THE TITAN CORPORATION
By
Name:
Title:
ACKNOWLEDGED AND ACCEPTED:
THE BANK OF NOVA SCOTIA,
as Administrative Agent
By
Name:
Title:
EXHIBIT A
to Borrower
Pledge Agreement
INSTRUCTION TO REGISTER PLEDGE
----------- --, ----
[ ]
Attention: ________________
Ladies and Gentlemen:
The undersigned, a [member] [partner] [shareholder] of ___________, [a
___________ limited liability company] [a __________ corporation] [a ___________
partnership] (the "Company"), hereby instructs the Company to register on the
books of the Company the pledge of the undersigned's [membership] [partnership]
interest in favor of The Bank of Nova Scotia, as administrative agent (the
"Administrative Agent"), pursuant to the Pledge Agreement, dated as of July 29,
1998, made by, among others, the undersigned in favor of the Administrative
Agent.
Very truly yours,
THE TITAN CORPORATION
By:______________________
Name:
Title:
cc: The Bank of Nova Scotia
EXHIBIT B
to Borrower
Pledge Agreement
INITIAL TRANSACTION STATEMENT
----------- --, ----
To: The Bank of Nova Scotia
Xxx Xxxxxxx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention:
This statement is to advise you that a pledge of the following
uncertificated securities has been registered in the name of The Bank of Nova
Scotia, as Administrative Agent (the "Administrative Agent"), as follows:
1. Uncertificated Securities:
The entire [limited liability company] [partnership]
interests of THE TITAN CORPORATION in the undersigned [limited
liability company] [_____ partnership] [corporation].
2. Registered Owner:
THE TITAN CORPORATION
3. Pledged in favor of:
The Bank of Nova Scotia,
as the Administrative Agent
4. There are no liens or restrictions of the undersigned
[limited liability company] [_______ partnership]
[corporation] and no adverse claims to which the
uncertificated securities are or may be subject known to the
undersigned [limited liability company] [______ partnership]
[corporation], other than in favor of The Bank of Nova Scotia,
in its capacity as the Administrative Agent.
5. The pledge was registered on _______ __, ____.
6. No transfer of the uncertificated securities shall be made
without the prior written consent of the Administrative Agent.
THIS STATEMENT IS MERELY A RECORD OF THE RIGHTS OF THE ADDRESSEE AS OF
THE TIME OF ITS ISSUANCE. DELIVERY OF THIS STATEMENT, OF ITSELF, CONFERS NO
RIGHTS ON THE RECIPIENT. THIS STATEMENT IS NEITHER A NEGOTIABLE INSTRUMENT NOR A
SECURITY.
Very truly yours,
[NAME OF PLEDGED INTEREST ISSUER]
By:______________________________
Name:
Title:
EXHIBIT C
to Borrower
Pledge Agreement
DEMAND PROMISSORY NOTE
$ , 19__
FOR VALUE RECEIVED, the undersigned, ______________, a _______________
corporation (the "Maker"), promises to pay to the order of ________________, a
___________ _________ (the "Payee"), on demand up to the principal sum of
DOLLARS ($ ) outstanding from time to time, representing the aggregate principal
amount of an intercompany loan made by the Payee to the Maker.
The unpaid principal amount of this promissory note (the "Note") from
time to time outstanding shall accrue interest as agreed to from time to time
between Maker and Payee, with such interest payable as agreed to from time to
time between Maker and Payee. All payments of interest shall be recorded on the
books and records of the Payee. Upon Notice from the Agent (hereinafter defined)
that a Default (as defined in the Credit Agreement, hereinafter defined) of the
nature referred to in Section 8.1.9 of the Credit Agreement or any other Event
of Default (as defined in the Credit Agreement) has occurred and is continuing,
the Maker shall make such payments, in same day funds, to such accounts as the
Agent shall direct in such notice.
This Note is one of the Pledged Notes referred to in the Pledge
Agreement dated as of July 29, 1998 (as amended, supplemented, amended and
restated or otherwise modified, the "Pledge Agreement"), between THE TITAN
CORPORATION (the "Pledgor"), and The Bank of Nova Scotia ("Scotiabank") as the
Administrative Agent, and this Note has been pledged to the Administrative Agent
security for the Secured Obligations (as defined in the Pledge Agreement) under
the Credit Agreement and other Loan Documents. Upon the occurrence and
continuance of an Event of Default under the Credit Agreement, and notice
thereof by the Administrative Agent to the Maker, the Administrative Agent shall
have all rights of the Payee to collect and accelerate, and enforce all rights
with respect to, the Indebtedness evidenced by this Note. Unless otherwise
defined herein or the context otherwise requires, terms used herein have the
meanings provided in the Credit Agreement dated as of July 29, 1998 (as amended,
supplemented, amended and restated or otherwise modified from time to time, the
"Credit Agreement"), among THE TITAN CORPORATION, a Delaware corporation (the
"Borrower"), the various financial institutions as are or may become parties
thereto (the "Lenders"), Scotiabank, as agent for the Lenders (the
"Administrative Agent"), and Imperial Bank, as Documentation Agent.
In addition to, but not in limitation of, the foregoing, the Maker
further agrees to pay all expenses, including reasonable attorneys' fees and
legal expenses, incurred by the holder (including the Administrative Agent as
pledgee) of this Note endeavoring to collect any amounts payable hereunder which
are not paid when due, whether by acceleration or otherwise.
THIS NOTE SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE
INTERNAL LAWS OF THE STATE OF NEW YORK.
THE MAKER HEREBY KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVES ANY
RIGHTS IT MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION BASED ON THIS
NOTE. THE MAKER ACKNOWLEDGES AND AGREES THAT IT HAS RECEIVED FULL AND SUFFICIENT
CONSIDERATION FOR THIS PROVISION AND THAT THIS PROVISION IS A MATERIAL
INDUCEMENT FOR THE PAYEE TO ACCEPT THIS NOTE.
[NAME OF MAKER]
By
Name:
Title:
Pay to the order of THE BANK OF NOVA SCOTIA,
as Administrative Agent
By
Name:
Title:
ATTACHMENT 1
to Borrower
Pledge Agreement
Pledged Interests Authorized Shares Outstanding Shares % of Shares Pledged
----------------- ----------------- ------------------ -------------------
Titan Technologies and Information
Systems Corporation 10,000,000 10,000,000 100
Titan Purification, Inc. 5,000,000 5,000,000 100
DBA Systems, Inc. 10,000,000 100 100
Horizons Technology, Inc. 1,000 1,000 100
Linkabit Wireless, Inc. 85,000,000 10,000,000 100
Unidyne Corporation 1,000 100 100
Titan Software Systems Corporation 20,000,000 10,000,000 100
Pulse Sciences, Inc. 1,000,000 318,412 100
Titan Environmental Corporation 10,000,000 6,000,000 1100
TomoTherapeutics, Inc. 10,000,000 4,999,995 98.198
Federal Services, Inc. 1,000 100 100
Eldyne, Inc. 1,000 100 100
Diversified Control Systems, Inc. 1,000 100 100
Titan Broadband Communications
Corporation 3,800,000 1,000,000 100
Titan Aerochem, Inc. 1,000 1,000 100
Pledged Notes
Principal Amount
Pledged Note Issuer of Pledged Note
----------------------------------- ------------------
Titan Technologies and Information - Demand Promissory Note dated July 29, 1998 $80,000,000
Systems Corporation
Titan Purification, Inc. - Demand Promissory Note dated July 29, 1998 $80,000,000
Systems Corporation - Demand Promissory Note dated July 29, 1998 $80,000,000
DBA Systems, Inc. - Demand Promissory Note dated July 29, 1998 $80,000,000
Horizons Technology, Inc. - Demand Promissory Note dated July 29, 1998 $80,000,000
Linkabit Wireless, Inc. - Demand Promissory Note dated July 29, 1998 $80,000,000
Unidyne Corporation - Demand Promissory Note dated July 29, 1998 $80,000,000
Titan Software Systems Corporation - Demand Promissory Note dated July 29, 1998 $80,000,000
Pulse Sciences, Inc. - Demand Promissory Note dated July 29, 1998 $80,000,000
Titan Environmental Corporation - Demand Promissory Note dated July 29, 1998 $80,000,000
TomoTherapeutics, Inc. - Demand Promissory Note dated July 29, 1998 $80,000,000
Federal Services, Inc. - Demand Promissory Note dated July 29, 1998 $80,000,000
Eldyne, Inc. - Demand Promissory Note dated July 29, 1998 $80,000,000
Diversified Control Systems, Inc. - Demand Promissory Note dated July 29, 1998 $80,000,000
Titan Broadband Communications - Demand Promissory Note dated July 29, 1998 $80,000,000
Corporation
Titan Aerochem, Inc. - Demand Promissory Note dated July 29, 1998 $80,000,000
Validity Corporation - Demand Promissory Note dated July 29, 1998 $80,000,000
Location of Pledgor (Section 3.1.4)
The Titan Corporation
0000 Xxxxxxx Xxxx Xxxx
Xxx Xxxxx, XX 00000
Exhibit G-2
Form of Subsidiary Pledge Agreement
EXHIBIT G-2
SUPPLEMENT SUBSIDIARY PLEDGE AGREEMENT
SUPPLEMENT, dated as of June 9, 1999 (this "Supplement"), to the
Subsidiary Pledge Agreement, dated as of July 29, 1998 (together with all
amendments, supplements, restatements and other modifications, if any, from time
to time thereafter made thereto, the "Pledge Agreement"), among the initial
signatories thereto and each other Person (such capitalized term, and other
terms used in this Supplement, to have the meanings set forth in Article I of
the Pledge Agreement) which from time to time thereafter became a party thereto
pursuant to Section 7.6 thereof (each, individually, a "Pledgor", and,
collectively, the "Pledgors"), in favor of the Secured Parties (as defined in
the Pledge Agreement).
W I T N E S S E T H:
WHEREAS, pursuant to the provisions of Section 7.6 of the Pledge
Agreement, the undersigned is becoming a Pledgor under the Pledge Agreement; and
WHEREAS, the undersigned Pledgor desires to become a "Pledgor" under
the Pledge Agreement in order to induce the Secured Parties to continue to
extend Credit Extensions under the Amended and Restated Credit Agreement, dated
as of June 9, 1999 (as amended, supplemented, amended and restated or otherwise
modified from time to time, the "Amended and Restated Credit Agreement") among
The Titan Corporation, a Delaware corporation (the "Borrower"), the various
financial institutions as are or may become parties thereto (collectively, the
"Lenders"), The Bank of Nova Scotia as administrative agent for the Lenders (in
such capacity, the "Administrative Agent"), and Imperial Bank, as documentation
agent;
NOW, THEREFORE, in consideration of the premises, and for other
consideration (the receipt and sufficiency of which is hereby acknowledged), the
undersigned agrees, for the benefit of each Secured Party, as follows.
SECTION 1. (i) In accordance with the terms of the Pledge Agreement, by
its signature below the undersigned hereby irrevocably agrees to become a
Pledgor under the Pledge Agreement with the same force and effect as if it were
an original signatory thereto and the undersigned Pledgor, hereby (a) agrees to
be bound by and comply with all of the terms and provisions of the Pledge
Agreement applicable to it as a Pledgor and (b) represents and warrants that the
representations and warranties made by it as a Pledgor thereunder are true and
correct as of the date hereof. In furtherance of the foregoing, each reference
to a "Pledgor" in the Pledge Agreement shall be deemed to include the
undersigned Pledgor.
(ii) Attachment I to the Pledge Agreement is hereby amended by
adding the information relating to the undersigned on the Attachment I attached
to this Supplement.
SECTION 2. The undersigned Pledgor hereby represents and warrants that
this Supplement has been duly authorized, executed and delivered by it and that
this Supplement and the Pledge Agreement constitute the legal, valid and binding
obligation of the undersigned Pledgor, enforceable against it in accordance with
its terms.
SECTION 3. Except as expressly supplemented hereby, the Pledge
Agreement shall remain in full force and effect in accordance with its terms.
SECTION 4. In the event any one or more of the provisions contained in
this Supplement should be held invalid, illegal or unenforceable in any respect,
the validity, legality and enforceability of the remaining provisions contained
herein and in the Pledge Agreement shall not in any way be affected or impaired.
SECTION 5. THIS SUPPLEMENT SHALL BE DEEMED TO BE A CONTRACT MADE UNDER
AND GOVERNED BY THE LAWS OF THE STATE OF NEW YORK.
SECTION 6. This Supplement may be executed by the parties hereto in
several counterparts, each of which shall be deemed to be an original and all of
which shall constitute together but one and the same agreement.
IN WITNESS WHEREOF, the parties hereto have caused this Supplement to
be duly executed and delivered by their respective officers thereunto duly
authorized as of the day and year first above written.
SYSTEM RESOURCES CORPORATION
By:
Name:
Title:
DELFIN SYSTEMS, INC.
By:
Name:
Title:
VISICOM LABORATORIES, INC.
By:
Name:
Title:
TITAN WIRELESS, INC.
By:
Name:
Title:
ACCEPTED BY:
THE BANK OF NOVA SCOTIA,
as Administrative Agent
By:
Name:
Title:
Exhibit H-1
Form of Borrower Security Agreement
EXHIBIT H-I
BORROWER SECURITY AGREEMENT
This SECURITY AGREEMENT (as amended, supplemented, amended and restated
or otherwise modified from time to time, the "Security Agreement"), dated as of
July 29, 1998, is made by THE TITAN CORPORATION, a Delaware corporation (the
"Grantor") in favor of THE BANK OF NOVA SCOTIA ("Scotiabank"), in its capacity
as administrative agent (the "Administrative Agent") for each of the Secured
Parties.
W I T N E S S E T H :
WHEREAS, pursuant to a Credit Agreement, dated as of July 29, 1998 (as
amended, supplemented, amended and restated or otherwise modified from time to
time, the "Credit Agreement"), among the Grantor, the various financial
institutions as are or may become parties thereto (the "Lenders"), Scotiabank,
as administrative agent (the "Administrative Agent") and Imperial Bank, as
Documentation Agent, the Lenders and the Issuers have extended Commitments to
make Credit Extensions to the Grantor;
WHEREAS, as a condition precedent to the making of the Credit
Extensions (including the initial Credit Extension) under the Credit Agreement,
the Grantor is required to execute and deliver this Security Agreement;
WHEREAS, the Grantor has duly authorized the execution, delivery and
performance of this Security Agreement; and
NOW THEREFORE, for good and valuable consideration the receipt of which
is hereby acknowledged, and in order to induce the Lenders and the Issuers to
make Credit Extensions (including the initial Credit Extension) to the Grantor
pursuant to the Credit Agreement, the Grantor agrees, for the benefit of each
Secured Party, as follows:
ARTICLE I
DEFINITIONS
1.1. SECTION Certain Terms. The following terms (whether or not underscored)
when used in this Security Agreement, including its preamble and recitals, shall
have the following meanings (such definitions to be equally applicable to the
singular and plural forms thereof):
"Administrative Agent" is defined in the preamble.
"Collateral" is defined in Section 2.1.
"Collateral Account" is defined in clause (b) of Section 4.1.2(b).
"Computer Hardware and Software Collateral" means:
(a) all computer and other electronic data processing hardware, integrated
computer systems, central processing units, memory units, display
terminals, printers, features, computer elements, card readers, tape
drives, hard and soft disk drives, cables, electrical supply hardware,
generators, power equalizers, accessories and all peripheral devices
and other related computer hardware;
(b) all software programs (including both source code, object code and all
related applications and data files), whether now owned, licensed or
leased or hereafter acquired by the Grantor, designed for use on the
computers and electronic data processing hardware described in clause
(a) above;
(c) all firmware associated therewith;
(d) all documentation (including flow charts, logic diagrams, manuals,
guides and specifications) with respect to such hardware, software and
firmware described in the preceding clauses (a) through (c); and
(e) all rights with respect to all of the foregoing, including any and all
copyrights, licenses, options, warranties, service contracts, program
services, test rights, maintenance rights, support rights, improvement
rights, renewal rights and indemnifications and any substitutions,
replacements, additions or model conversions of any of the foregoing.
"Copyright Collateral" means all copyrights (including all copyrights
for semi-conductor chip product mask works) of the Grantor, whether statutory or
common law, registered or unregistered, now or hereafter in force throughout the
world including all of the Grantor's right, title and interest in and to all
copyrights registered in the United States Copyright Office or anywhere else in
the world and also including the copyrights referred to in Item A of Schedule IV
attached hereto, and all applications for registration thereof, whether pending
or in preparation, all copyright licenses, including each copyright license
referred to in Item B of Schedule IV attached hereto, the right to xxx for past,
present and future infringements of any thereof, all rights corresponding
thereto throughout the world, all extensions and renewals of any thereof and all
proceeds of the foregoing, including licenses, royalties, income, payments,
claims, damages and proceeds of suit.
"Credit Agreement" is defined in the first recital.
"Equipment" is defined in clause (a) of Section 2.1.
"Grantor" is defined in the preamble.
"Intellectual Property Collateral" means, collectively, the Computer
Hardware and Software Collateral, the Copyright Collateral, the Patent
Collateral, the Trademark Collateral and the Trade Secrets Collateral.
"Inventory" is defined in clause (b) of Section 2.1
"Lender" and "Lenders" are defined in the first recital.
"Patent Collateral" means:
(a) all letters patent and applications for letters patent
throughout the world, including all patent applications in preparation
for filing anywhere in the world and including each patent and patent
application referred to in Item A of Schedule II attached hereto;
(b) all reissues, divisions, continuations,
continuations-in-part, extensions, renewals and reexaminations of any
of the items described in clause (a);
(c) all patent licenses, including each patent license
referred to in Item B of Schedule II attached hereto; and
(d) all proceeds of, and rights associated with, the foregoing
(including license royalties and proceeds of infringement suits), the
right to xxx third parties for past, present or future infringements of
any patent or patent application, including any patent or patent
application referred to in Item A of Schedule II attached hereto, and
for breach or enforcement of any patent license, including any patent
license referred to in Item B of Schedule II attached hereto, and all
rights corresponding thereto throughout the world.
"Receivables" is defined in clause (c) of Section 2.1.
"Related Contracts" is defined in clause (c) of Section 2.1.
"Secured Obligations" is defined in Section 2.2.
"Security Agreement" is defined in the preamble.
"Termination Date" means the date on which all obligations have
indefeasibly been paid in full, all Commitments have been fully terminated and
all Letters of Credit have been canceled or otherwise terminated.
"Trademark Collateral" means:
(a) all trademarks, trade names, corporate names, company
names, business names, fictitious business names, trade styles, service
marks, certification marks, collective marks, logos, other source of
business identifiers, prints and labels on which any of the foregoing
have appeared or appear, designs and general intangibles of a like
nature (all of the foregoing items in this clause (a) being
collectively called a "Trademark"), now existing anywhere in the world
or hereafter adopted or acquired, whether currently in use or not, all
registrations and recordings thereof and all applications in connection
therewith, whether pending or in preparation for filing, including
registrations, recordings and applications in the United States Patent
and Trademark Office or in any office or agency of the United States of
America or any State thereof or any foreign country, including those
referred to in Item A of Schedule III attached hereto;
(b) all Trademark licenses, including each Trademark license
referred to in Item B of Schedule III attached hereto;
(c) all reissues, extensions or renewals of any of the items
described in clauses (a) and (b);
(d) all of the goodwill of the business connected with the use
of, and symbolized by the items described in, clauses (a) and (b); and
(e) all proceeds of, and rights associated with, the
foregoing, including any claim by the Grantor against third parties for
past, present or future infringement or dilution of any Trademark,
Trademark registration or Trademark license, including any Trademark,
Trademark registration or Trademark license referred to in Item A and
Item B of Schedule III attached hereto, or for any injury to the
goodwill associated with the use of any such Trademark or for breach or
enforcement of any Trademark license.
"Trade Secrets Collateral" means all common law and statutory trade
secrets and all other confidential or proprietary or useful information and all
know-how obtained by or used in or contemplated at any time for use in the
business of the Grantor (all of the foregoing being collectively called a "Trade
Secret"), whether or not such Trade Secret has been reduced to a writing or
other tangible form, including all documents and things embodying, incorporating
or referring in any way to such Trade Secret, all Trade Secret licenses,
including each Trade Secret license referred to in Schedule V attached hereto,
and including the right to xxx for and to enjoin and to collect damages for the
actual or threatened misappropriation of any Trade Secret and for the breach or
enforcement of any such Trade Secret license.
"U.C.C." means the Uniform Commercial Code, as in effect from time to
time in the State of New York.
SECTION 1.2 Credit Agreement Definitions. Unless otherwise defined herein or the
context otherwise requires, terms used in this Security Agreement, including its
preamble and recitals, have the meanings provided in the Credit Agreement.
SECTION 1.3 U.C.C. Definitions. Unless otherwise defined herein or in the Credit
Agreement or the context otherwise requires, terms for which meanings are
provided in the U.C.C. are used in this Security Agreement, including its
preamble and recitals, with such meanings.
ARTICLE II
SECURITY INTEREST
SECTION 2.1 Grant of Security. The Grantor hereby assigns and pledges to the
Administrative Agent for its benefit and the ratable benefit of each of the
Secured Parties, and hereby grants to the Administrative Agent for its benefit
and the ratable benefit of each of the Secured Parties, a security interest in
all of the following, whether now or hereafter existing or acquired by the
Grantor (the "Collateral"):
(a) all equipment in all of its forms of the Grantor, wherever located,
including all parts thereof and all accessions, additions, attachments,
improvements, substitutions and replacements thereto and therefor and
all accessories related thereto (any and all of the foregoing being the
"Equipment");
(b) all inventory in all of its forms of the Grantor, wherever located,
including
(i) all raw materials and work in process therefor, finished goods
thereof, and materials used or consumed in the manufacture or
production thereof,
(ii) all goods in which the Grantor has an interest in mass or a
joint or other interest or right of any kind (including goods
in which the Grantor has an interest or right as consignee),
and
(iii) all goods which are returned to or repossessed by the Grantor,
and all accessions thereto, products thereof and documents therefor
(any and all such inventory, materials, goods, accessions, products and
documents being the "Inventory");
(c) all accounts, contracts, contract rights, chattel paper, documents,
instruments, and general intangibles (including tax refunds) of the
Grantor, whether or not arising out of or in connection with the sale
or lease of goods or the rendering of services, and all rights of the
Grantor now or hereafter existing in and to all security agreements,
guaranties, leases and other contracts securing or otherwise relating
to any such accounts, contracts, contract rights, chattel paper,
documents, instruments, and general intangibles, excluding any rights
in the foregoing items of Collateral as to which the grant of a
security interest would violate a valid and enforceable restriction on
such grant, unless and until any required consents have been obtained
(any and all such accounts, contracts, contract rights, chattel paper,
documents, instruments, and general intangibles being the
"Receivables", and any and all such security agreements, guaranties,
leases and other contracts being the "Related Contracts").
(d) all Intellectual Property Collateral of the Grantor;
(e) all books, records, writings, data bases, information and other
property relating to, used or useful in connection with, evidencing,
embodying, incorporating or referring to, any of the foregoing in this
Section 2.1;
(f) all of the Grantor's other property and rights of every kind and description
and interests therein; and
(g) all products, offspring, rents, issues, profits, returns, income and
proceeds of and from any and all of the foregoing Collateral (including
proceeds which constitute property of the types described in clauses
(a), (b), (c), (d), (e) and (f), and, to the extent not otherwise
included, all payments under insurance which the Grantor is entitled to
receive (whether or not the Administrative Agent is the loss payee
thereof), or any indemnity, warranty or guaranty, payable by reason of
loss or damage to or otherwise with respect to any of the foregoing
Collateral).
SECTION 2.2 Security for Obligations. This Security Agreement secures the
payment of all Obligations of the Grantor now or hereafter existing under the
Credit Agreement and each other Loan Document, whether for principal, interest,
costs, fees, expenses or otherwise, with all such obligations being collectively
referred to as the "Secured Obligations".
SECTION 2.3 Continuing Security Interest; Transfer of Notes. This Security
Agreement shall create a continuing security interest in the Collateral and
shall
(a) remain in full force and effect until the Termination Date;
(b) be binding upon the Grantor and its successors, transferees and
assigns; and
(c) inure, together with the rights and remedies of the Administrative
Agent hereunder, to the benefit of the Administrative Agent and each
other Secured Party.
Without limiting the generality of the foregoing clause (c), any Lender may
assign or otherwise transfer (in whole or in part) any Note or Credit Extension
held by it to any other Person or entity, and such other Person or entity shall
thereupon become vested with all the rights and benefits in respect thereof
granted to such Lender under any Loan Document (including this Security
Agreement) or otherwise, subject, however, to any contrary provisions in such
assignment or transfer, and to the provisions of Section 10.11 and Article IX of
the Credit Agreement. Upon (i) the sale, transfer or other disposition of
Collateral in accordance with the Credit Agreement or (ii) the occurrence of the
Termination Date, the security interests granted herein shall automatically
terminate with respect to (x) such Collateral (in the case of clause (i)) or (y)
all Collateral (in the case of clause (ii)), and at such time the Administrative
Agent will, at the Grantor's sole expense, execute and deliver to the Grantor
(without any representations, warranties or recourse to the Administrative
Agent), such documents as the Grantor shall reasonably request to evidence such
termination.
SECTION 2.4 Grantor Remains Liable. Anything herein to the contrary
notwithstanding
(a) the Grantor shall remain liable under the contracts and agreements
included in the Collateral to the extent set forth therein, and shall
perform all of its duties and obligations under such contracts and
agreements to the same extent as if this Security Agreement had not
been executed;
(b) the exercise by the Administrative Agent of any of its rights hereunder
shall not release the Grantor from any of its duties or obligations
under any such contracts or agreements included in the Collateral; and
(c) neither the Administrative Agent nor any other Secured Party shall have
any obligation or liability under any such contracts or agreements
included in the Collateral by reason of this Security Agreement, nor
shall the Administrative Agent or any other Secured Party be obligated
to perform any of the obligations or duties of the Grantor thereunder
or to take any action to collect or enforce any claim for payment
assigned hereunder.
ARTICLE III
REPRESENTATIONS AND WARRANTIES
3.1. SECTION Representations and Warranties. The Grantor represents and warrants
to each Secured Party as set forth in this Section.
3.1.1. SECTION Location of Collateral, etc. All of the Equipment, Inventory of
the Grantor is located at the places specified in Item A, Item B and Item C,
respectively, of Schedule I hereto. None of the Equipment and Inventory has,
within the four months preceding the date of this Security Agreement, been
located at any place other than the places specified in Item A and Item B,
respectively, of Schedule I hereto except as set forth in a footnote thereto.
The place(s) of business and chief executive office of the Grantor and the
office(s) where the Grantor keeps its records concerning the Receivables, and
all originals of all chattel paper which evidence Receivables, are located at
the address set forth in Item D of Schedule I hereto. The Grantor has no trade
names other than those set forth in Item E of Schedule I hereto. During the four
months preceding the date hereof, the Grantor has not been known by any legal
name different from the one set forth on the signature page hereto, nor has the
Grantor been the subject of any merger or other corporate reorganization, except
as set forth in Item F of Schedule I hereto. If the Collateral includes any
Inventory located in the State of California, the Grantor is not a "retail
merchant" within the meaning of Section 9102 of the Uniform Commercial Code -
Secured Transactions of the State of California. All Receivables evidenced by a
promissory note or other instrument, negotiable document or chattel paper have
been duly endorsed and accompanied by duly executed instruments of transfer or
assignment, all in form and substance satisfactory to the Administrative Agent
and delivered and pledged to the Administrative Agent pursuant to Section 4.1.7.
3.1.2. SECTION Ownership, No Liens, etc. The Grantor owns its Collateral free
and clear of any Lien, security interest, charge or encumbrance except for the
security interest created by this Security Agreement and except as permitted by
the Credit Agreement. No effective financing statement or other instrument
similar in effect covering all or any part of the Collateral is on file in any
recording office, except such as may have been filed in favor of the
Administrative Agent relating to this Security Agreement or as have been filed
in connection with Liens permitted pursuant to Section 7.2.3 of the Credit
Agreement.
3.1.3. SECTION Possession and Control. The Grantor has exclusive possession and
control of its Equipment and Inventory.
3.1.4. SECTION Negotiable Documents, Instruments and Chattel Paper. The Grantor
has, contemporaneously herewith, delivered to the Administrative Agent
possession of all originals of all negotiable documents, instruments and chattel
paper currently owned or held by the Grantor (duly endorsed in blank, if
requested by the Administrative Agent).
3.1.5. SECTION Intellectual Property Collateral. With respect to any
Intellectual Property Collateral the loss, impairment or infringement of which
might have a Material Adverse Effect:
(a) such Intellectual Property Collateral is subsisting and has not been
adjudged invalid or unenforceable, in whole or in part;
(b) such Intellectual Property Collateral is valid and enforceable;
(c) the Grantor has made all necessary filings and recordations to
protect its interest in such Intellectual Property Collateral,
including recordations of all of its interests in the Patent
Collateral and Trademark Collateral in the United States Patent and
Trademark Office and in corresponding offices throughout the world
and its claims to the Copyright Collateral in the United States
Copyright Office and in corresponding offices throughout the world;
(d) other than as previously disclosed to the Administrative Agent, the
Grantor is the exclusive owner of the entire and unencumbered right,
title and interest in and to such Intellectual Property Collateral
and no claim has been made that the use of such Intellectual Property
Collateral does or may violate the asserted rights of any third
party; and
(e) the Grantor has performed and will continue to perform all acts and
has paid and will continue to pay all required fees and taxes to
maintain each and every item of Intellectual Property Collateral in
full force and effect throughout the world, as applicable.
The Grantor owns directly or is entitled to use by license or otherwise, all
patents, Trademarks, Trade Secrets, copyrights, mask works, licenses,
technology, know-how, processes and rights with respect to any of the foregoing
used in, necessary for or of importance to the conduct of the Grantor's
business.
3.1.6. SECTION Validity, etc. This Security Agreement creates a valid security
interest in the Collateral, securing the payment of the Secured Obligations, and
all filings and other actions necessary or desirable to perfect and protect such
security interest have been duly taken.
3.1.7. SECTION Authorization, Approval, etc. Except as have been obtained or
made and are in full force and effect, no authorization, approval or other
action by, and no notice to or filing with, any governmental authority or
regulatory body is required either
(a) for the grant by the Grantor of the security interest granted hereby or
for the execution, delivery and performance of this Security Agreement
by the Grantor; or
(b) for the perfection of or the exercise by the Administrative Agent of
its rights and remedies hereunder.
3.1.8. SECTION Compliance with Laws. The Grantor is in compliance with the
requirements of all applicable laws (including the provisions of the Fair Labor
Standards Act), rules, regulations and orders of every governmental authority,
the non-compliance with which might have a Material Adverse Effect or which
might materially adversely affect the value of the Collateral or the worth of
the Collateral as collateral security.
ARTICLE IV
COVENANTS
4.1. SECTION Certain Covenants. The Grantor covenants and agrees that until the
Termination Date has occurred, the Grantor will perform, comply with and be
bound by the obligations set forth in this Article.
4.1.1. SECTION As to Equipment and Inventory. The Grantor hereby agrees that it
shall
(a) keep all the Equipment and Inventory (other than Inventory sold in the
ordinary course of business, or except as otherwise provided in the
Credit Agreement or any of the other Loan Documents) at the places
therefor specified in Section 3.1.1 or, upon 30 days' prior written
notice to the Administrative Agent, at such other places in a
jurisdiction where all representations and warranties set forth in
Article III shall be true and correct, and all action required pursuant
to the first sentence of Section 4.1.7 shall have been taken with
respect to the Equipment and Inventory (collectively, "Specified
Locations"); provided, however, that the Grantor may move and/or
maintain certain items of Equipment at locations other than at
Specified Locations so long as the value of Collateral of this type of
the Grantor and similar Collateral (as defined in the Subsidiary
Security Agreement) of the Restricted Subsidiaries, shall not exceed
$2,000,000 at any time;
(b) cause the Equipment to be maintained and preserved in the same
condition, repair and working order as when new, ordinary wear and tear
excepted, and in accordance with any manufacturer's manual or good
business practice; and forthwith, or in the case of any loss or damage
to any of the Equipment, as quickly as practicable after the occurrence
thereof, make or cause to be made all repairs, replacements, and other
improvements in connection therewith which are necessary or desirable
to such end; and promptly furnish to the Administrative Agent a
statement respecting any material loss or damage to any of the
Equipment; and
(c) pay promptly when due all property and other taxes, assessments and
governmental charges or levies imposed upon, and all claims (including
claims for labor, materials and supplies) against, the Equipment and
Inventory, except to the extent the validity thereof is being contested
in good faith by appropriate proceedings and for which adequate
reserves in accordance with GAAP have been set aside.
4.1.2. SECTION As to Receivables and Related Contracts.
(a) The Grantor shall keep its place(s) of business and chief executive
office and the office(s) where it keeps its records concerning the
Receivables, and all originals of all chattel paper which evidences
Receivables, located at the address(es) set forth in Item D of Schedule
I hereto, or, upon 30 days' prior written notice to the Administrative
Agent, at such other locations in a jurisdiction where all actions
required by the first sentence of Section 4.1.7 shall have been taken
with respect to the Receivables; not change its name except upon 30
days' prior written notice to the Administrative Agent; hold and
preserve such records and chattel paper; and permit representatives of
the Administrative Agent at any time during normal business hours to
inspect (upon reasonable prior written notice so long as no Event of
Default shall have occurred or be continuing) and make abstracts from
such records and chattel paper. In addition, the Grantor shall give the
Administrative Agent a supplement to Schedule I hereto ---------- on
each date a Compliance Certificate is required to be delivered to the
Administrative Agent under the Credit Agreement, which shall set forth
any changes to the information set forth in Section 3.1.1.
(b) Upon written notice by the Administrative Agent to the Grantor pursuant
to this clause, all proceeds of Collateral received by the Grantor
shall be delivered in kind to the Administrative Agent for deposit to a
deposit account (the "Collateral Account") of the Grantor maintained
with the Administrative Agent, and the Grantor shall not commingle any
such proceeds, and shall hold separate and apart from all other
property, all such proceeds in express trust for the benefit of the
Administrative Agent until delivery thereof is made to the
Administrative Agent. The Administrative Agent will not give the notice
referred to in the preceding sentence unless there shall have occurred
and be continuing a Default of the nature set forth in Section 8.1.9 of
the Credit Agreement or an Event of Default.
(c) The Administrative Agent shall have the right to apply any amount in
the Collateral Account to the payment of any Secured Obligations which
are due and payable or payable upon demand, or to the payment of any
Secured Obligations at any time that an Event of Default shall exist.
(d) The Grantor shall not cause the aggregate value of Receivables or
Related Contracts or rights thereunder and the value of similar
Receivables and Related Contracts (as defined in the Subsidiary
Security Agreement) as to which a Lien in favor of the Administrative
Agent cannot be granted hereunder pursuant to clause (c) of Section
2.1, or pursuant to the Subsidiary Security Agreement, to exceed
$2,000,000 at any time.
4.1.3. SECTION As to Collateral.
(a) Until the occurrence and continuance of a Default of the nature set
forth in Section 8.1.9 of the Credit Agreement or an Event of Default,
and such time as the Administrative Agent shall notify the Grantor of
the revocation of such power and authority the Grantor may in the
ordinary course of its business (except as otherwise permitted under
the Credit Agreement), at its own expense, sell, lease or furnish under
the contracts of service any of the Inventory normally held by the
Grantor for such purpose, and use and consume, in the ordinary course
of its business (except as otherwise permitted under the Credit
Agreement), any raw materials, work in process or materials normally
held by the Grantor for such purpose, will, at its own expense,
endeavor to collect, as and when due, all amounts due with respect to
any of the Collateral, including the taking of such action with respect
to such collection as the Administrative Agent may reasonably request
following the occurrence of a Default of the nature set forth in
Section 8.1.9 of the Credit Agreement or an Event of Default or, in the
absence of such request, as the Grantor may deem advisable, and may
grant, in the ordinary course of business (except as otherwise
permitted under the Credit Agreement), to any party obligated on any of
the Collateral, any rebate, refund or allowance to which such party may
be lawfully entitled, and may accept, in connection therewith, the
return of goods, the sale or lease of which shall have given rise to
such Collateral. The Administrative Agent, however, may, at any time
following a Default of the nature set forth in Section 8.1.9 of the
Credit Agreement or an Event of Default, whether before or after any
revocation of such power and authority or the maturity of any of the
Secured Obligations, notify any parties obligated on any of the
Collateral to make payment to the Administrative Agent of any amounts
due or to become due thereunder and enforce collection of any of the
Collateral by suit or otherwise and surrender, release, or exchange all
or any part thereof, or compromise or extend or renew for any period
(whether or not longer than the original period) any indebtedness
thereunder or evidenced thereby. Upon request of the Administrative
Agent following a Default of the nature set forth in Section 8.1.9 of
the Credit Agreement or an Event of Default, the Grantor will, at its
own expense, notify any parties obligated on any of the Collateral to
make payment to the Administrative Agent of any amounts due or to
become due thereunder.
(b) The Administrative Agent is authorized to endorse, in the name of the
Grantor, any item, howsoever received by the Administrative Agent,
representing any payment on or other proceeds of any of the Collateral.
4.1.4. SECTION As to Intellectual Property Collateral. The Grantor covenants and
agrees to comply with the following provisions as such provisions relate to any
Intellectual Property Collateral of the Grantor that:
(a) The Grantor shall not, unless the Grantor shall either (i) reasonably
and in good faith determine (and notice of such determination shall
have been delivered to the Administrative Agent) that any of the Patent
Collateral is of negligible economic value to the Grantor, or (ii) have
a valid business purpose to do otherwise, do any act, or omit to do any
act, whereby any of the Patent Collateral may lapse or become abandoned
or dedicated to the public or unenforceable.
(b) The Grantor shall not, and the Grantor shall not permit any of its
licensees to, unless the Grantor shall either (i) reasonably and in
good faith determine (and notice of such determination shall have been
delivered to the Administrative Agent) that any of the Trademark
Collateral is of negligible economic value to the Grantor, or (ii) have
a valid business purpose to do otherwise,
(i) fail to continue to use any of the Trademark Collateral in
order to maintain all of the Trademark Collateral in full
force free from any claim of abandonment for non-use,
(ii) fail to maintain as in the past the quality of products and
services offered under all of the Trademark Collateral,
(iii) fail to employ all of the Trademark Collateral registered with
any Federal or state or foreign authority with an appropriate
notice of such registration,
(iv) adopt or use any other Trademark which is confusingly similar
or a colorable imitation of any of the Trademark Collateral,
(v) use any of the Trademark Collateral registered with any
Federal or state or foreign authority except for the uses for
which registration or application for registration of all of
the Trademark Collateral has been made, and
(vi) do or permit any act or knowingly omit to do any act whereby
any of the Trademark Collateral may lapse or become invalid or
unenforceable.
(c) The Grantor shall not, unless the Grantor shall either
(i) reasonably and in good faith determine (and notice of such
determination shall have been delivered to the Administrative
Agent) that any of the Copyright Collateral or any of the
Trade Secrets Collateral is of negligible economic value to
the Grantor, or
(ii) have a valid business purpose to do otherwise, do or permit
any act or knowingly omit to do any act whereby any of the
Copyright Collateral or any of the Trade Secrets Collateral
may lapse or become invalid or unenforceable or placed in the
public domain except upon expiration of the end of an
unrenewable term of a registration thereof.
(d) The Grantor shall notify the Administrative Agent immediately if it
knows, or has reason to know, that any application or registration
relating to any material item of the Intellectual Property Collateral
may become abandoned or dedicated to the public or placed in the public
domain or invalid or unenforceable, or of any adverse determination or
development (including the institution of, or any such determination or
development in, any proceeding in the United States Patent and
Trademark Office, the United States Copyright Office or any foreign
counterpart thereof or any court) regarding the Grantor's ownership of
any of the Intellectual Property Collateral, its right to register the
same or to keep and maintain and enforce the same.
(e) In no event shall the Grantor or any of its agents, employees,
designees or licensees file an application for the registration of any
Intellectual Property Collateral with the United States Patent and
Trademark Office, the United States Copyright Office or any similar
office or agency in any other country or any political subdivision
thereof, unless it promptly upon such filing informs the Administrative
Agent, and upon request of the Administrative Agent, executes and
delivers any and all agreements, instruments, documents and papers as
the Administrative Agent may reasonably request to evidence the
Administrative Agent's security interest in such Intellectual Property
Collateral and the goodwill and general intangibles of the Grantor
relating thereto or represented thereby.
(f) The Grantor shall take all necessary steps, including in any proceeding
before the United States Patent and Trademark Office, the United States
Copyright Office or any similar office or agency in any other country
or any political subdivision thereof, to maintain and pursue any
application (and to obtain the relevant registration) filed with
respect to, and to maintain any registration of, the Intellectual
Property Collateral, including the filing of applications for renewal,
affidavits of use, affidavits of incontestability and opposition,
interference and cancellation proceedings and the payment of fees and
taxes (except to the extent that dedication, abandonment or
invalidation is permitted under the foregoing clauses (a), (b) and
(c)). ----------- --- ---
(g) The Grantor shall, contemporaneously herewith, execute and deliver to
the Administrative Agent a Patent Security Agreement, a Trademark
Security Agreement and a Copyright Security Agreement in the forms of
Exhibit A, Exhibit B and Exhibit C hereto, respectively, and shall
execute and deliver to the Administrative Agent any other document
required to acknowledge or register or perfect the Administrative
Agent's interest in any part of the Intellectual Property Collateral.
4.1.5. SECTION Insurance. The Grantor will maintain or cause to be maintained
with responsible insurance companies insurance with respect to its business and
properties (including the Equipment and Inventory) against such casualties and
contingencies and of such types and in such amounts as is required pursuant to
the Credit Agreement and will, upon the request of the Administrative Agent,
furnish a certificate of a reputable insurance broker setting forth the nature
and extent of all insurance maintained by the Grantor in accordance with this
Section. Without limiting the foregoing, the Grantor further agrees as follows:
(a) Each policy for property insurance shall show the Administrative Agent
as loss payee.
(b) Each policy for liability insurance shall show the Administrative Agent
as an additional insured.
(c) Each insurance policy shall provide that at least 30 days' prior
written notice of cancellation or of lapse shall be given to the
Administrative Agent by the insured (or at least 10 days' prior written
notice of cancellation shall be given with respect to failure to pay
the premium).
(d) The Grantor shall, if so requested by the Administrative Agent, deliver
to the Administrative Agent a copy of each insurance policy.
4.1.6. SECTION Transfers and Other Liens. The Grantor shall not:
(a) sell, assign (by operation of law or otherwise) or otherwise dispose of
any of the Collateral, except as permitted by the Credit Agreement; or
(b) create or suffer to exist any Lien or other charge or encumbrance upon
or with respect to any of the Collateral to secure Indebtedness of any
Person or entity, except for the security interest created by this
Security Agreement and except as permitted by the Credit Agreement.
4.1.7. SECTION Further Assurances, etc. The Grantor agrees that, from time to
time at its own expense, it will promptly execute and deliver all further
instruments and documents, and take all further action, that may be necessary or
desirable (provided that it is reasonable), or that the Administrative Agent may
reasonably request, in order to perfect, preserve and protect any security
interest granted or purported to be granted hereby or to enable the
Administrative Agent to exercise and enforce its rights and remedies hereunder
with respect to any Collateral. Without limiting the generality of the
foregoing, the Grantor will
(a) xxxx conspicuously each document (evidencing title) included in the
Inventory, each chattel paper included in the Receivables and each
Related Contract and, at the request of the Administrative Agent, upon
the occurrence and during the continuance of an Event of Default each
of its records pertaining to the Collateral with a legend, in form and
substance satisfactory to the Administrative Agent, indicating that
such document, chattel paper, Related Contract or Collateral is subject
to the security interest granted hereby;
(b) if any Receivable shall be evidenced by a promissory note or other
instrument, negotiable document or chattel paper, deliver and pledge to
the Administrative Agent hereunder such promissory note, instrument,
negotiable document or chattel paper duly endorsed and accompanied by
duly executed instruments of transfer or assignment, all in form and
substance satisfactory to the Administrative Agent;
(c) execute and file such financing or continuation statements, or
amendments thereto, and such other instruments or notices [(including
any assignment of claim form under or pursuant to the federal
assignment of claims statute, 31 U.S.C. ss. 3726, any successor or
amended version thereof or any regulation promulgated under or pursuant
to any version thereof)], as may be necessary or desirable (provided
that it is reasonable), or as the Administrative Agent may reasonably
request, in order to perfect and preserve the security interests and
other rights granted or purported to be granted to the Administrative
Agent hereby; and
(d) furnish to the Administrative Agent, from time to time at the
Administrative Agent's request, statements and schedules further
identifying and describing the Collateral and such other reports in
connection with the Collateral as the Administrative Agent may
reasonably request, all in reasonable detail.
With respect to the foregoing and the grant of the security interest hereunder,
the Grantor hereby authorizes the Administrative Agent to file one or more
financing or continuation statements, and amendments thereto, relative to all or
any part of the Collateral without the signature of the Grantor where permitted
by law. A carbon, photographic or other reproduction of this Security Agreement
or any financing statement covering the Collateral or any part thereof shall be
sufficient as a financing statement where permitted by law.
ARTICLE V
THE ADMINISTRATIVE AGENT
5.1. SECTION Administrative Agent Appointed Attorney-in-Fact. The Grantor hereby
irrevocably appoints the Administrative Agent the Grantor's attorney-in-fact,
with full authority in the place and stead of the Grantor and in the name of the
Grantor or otherwise, from time to time in the Administrative Agent's
discretion, following the occurrence and continuation of a Default of the nature
set forth in Section 8.1.9 of the Credit Agreement or an Event of Default, to
take any action and to execute any instrument which the Administrative Agent may
deem necessary or advisable to accomplish the purposes of this Security
Agreement, including:
(a) to ask, demand, collect, xxx for, recover, compromise, receive and give
acquittance and receipts for moneys due and to become due under or in
respect of any of the Collateral;
(b) to receive, endorse, and collect any drafts or other instruments,
documents and chattel paper, in connection with clause (a) above;
(c) to file any claims or take any action or institute any proceedings
which the Administrative Agent may deem necessary or desirable for the
collection of any of the Collateral or otherwise to enforce the rights
of the Administrative Agent with respect to any of the Collateral; and
(d) to perform the affirmative obligations of the Grantor hereunder
(including all obligations of the Grantor pursuant to Section 4.1.7).
The Grantor hereby acknowledges, consents and agrees that the power of attorney
granted pursuant to this Section is irrevocable and coupled with an interest.
5.2. SECTION Administrative Agent May Perform. If any Grantor fails to perform
any agreement contained herein, the Administrative Agent may itself perform, or
cause performance of, such agreement, and the expenses of the Administrative
Agent incurred in connection therewith shall be payable by the Grantor pursuant
to Section 6.2.
5.3. SECTION Administrative Agent Has No Duty. In addition to, and not in
limitation of, Section 2.4, the powers conferred on the Administrative Agent
hereunder are solely to protect its interest (on behalf of the Secured Parties)
in the Collateral and shall not impose any duty on it to exercise any such
powers. Except for reasonable care of any Collateral in its possession and the
accounting for moneys actually received by it hereunder, the Administrative
Agent shall have no duty as to any Collateral or as to the taking of any
necessary steps to preserve rights against prior parties or any other rights
pertaining to any Collateral.
SECTION 5.4. Reasonable Care. The Administrative Agent is required to
exercise reasonable care in the custody and preservation of any of the
Collateral in its possession; provided, however, the Administrative Agent shall
be deemed to have exercised reasonable care in the custody and preservation of
any of the Collateral, if it takes such action for that purpose as any Grantor
reasonably requests in writing at times other than upon the occurrence and
during the continuance of any Event of Default, but failure of the
Administrative Agent to comply with any such request at any time shall not in
itself be deemed a failure to exercise reasonable care.
ARTICLE VI
REMEDIES
6.1. SECTION Certain Remedies. If any Event of Default shall have occurred and
be continuing:
(a) The Administrative Agent may exercise in respect of the Collateral, in
addition to other rights and remedies provided for herein or otherwise
available to it, all the rights and remedies of a secured party on
default under the U.C.C. (whether or not the U.C.C. applies to the
affected Collateral) and also may
(i) require the Grantor to, and the Grantor hereby agrees that it
will, at its expense and upon request of the Administrative
Agent forthwith, assemble all or part of the Collateral as
directed by the Administrative Agent and make it available to
the Administrative Agent at a place to be designated by the
Administrative Agent which is reasonably convenient to both
parties, and
(ii) without notice except as specified below, sell the Collateral
or any part thereof in one or more parcels at public or
private sale, at any of the Administrative Agent's offices or
elsewhere, for cash, on credit or for future delivery, and
upon such other terms as the Administrative Agent may deem
commercially reasonable. The Grantor agrees that, to the
extent notice of sale shall be required by law, at least ten
days' prior notice to the Grantor of the time and place of any
public sale or the time after which any private sale is to be
made shall constitute reasonable notification. The
Administrative Agent shall not be obligated to make any sale
of Collateral regardless of notice of sale having been given.
The Administrative Agent may adjourn any public or private
sale from time to time by announcement at the time and place
fixed therefor, and such sale may, without further notice, be
made at the time and place to which it was so adjourned.
(iii) All cash proceeds received by the Administrative Agent in
respect of any sale of, collection from, or other realization
upon all or any part of the Collateral may, in the discretion
of the Administrative Agent, be held by the Administrative
Agent as collateral for, and/or then or at any time thereafter
applied (after payment of any amounts payable to the
Administrative Agent pursuant to Section 6.2) in whole or in
part by the Administrative Agent for the ratable benefit of
the Secured Parties against, all or any part of the Secured
Obligations in such order as the Administrative Agent shall
elect. Any surplus of such cash or cash proceeds held by the
Administrative Agent and remaining after payment in full in
cash of all the Secured Obligations shall be paid over to the
applicable Grantor or to whomsoever may be lawfully entitled
to receive such surplus. 6.2. SECTION Indemnity and Expenses.
(a) The Grantor agrees to indemnify the Administrative Agent from and
against any and all claims, losses and liabilities arising out of or
resulting from this Security Agreement (including enforcement of this
Security Agreement), except claims, losses or liabilities resulting
from the Administrative Agent's gross negligence or wilful misconduct.
(b) The Grantor will upon demand pay to the Administrative Agent the amount
of any and all reasonable expenses, including the reasonable fees and
disbursements of its counsel and of any experts and agents, which the
Administrative Agent may incur in connection with
(i) the administration of this Security Agreement,
(ii) the custody, preservation, use or operation of, or the sale
of, collection from, or other realization upon, any of the
Collateral, and
(iii) the exercise or enforcement of any of the rights of the
Administrative Agent or the Secured Parties hereunder, or (iv)
the failure by any Grantor to perform or observe any of the
provisions hereof.
ARTICLE VII
MISCELLANEOUS PROVISIONS
7.1. SECTION Loan Document. This Security Agreement is a Loan Document executed
pursuant to the Credit Agreement and shall (unless otherwise expressly indicated
herein) be construed, administered and applied in accordance with the terms and
provisions thereof including Article X thereof.
7.2. SECTION Amendments; etc. No amendment to or waiver of any provision of this
Security Agreement nor consent to any departure by any Grantor here from, shall
in any event be effective unless the same shall be in writing and signed by the
Administrative Agent (on behalf of the Lenders or the Required Lenders, as the
case may be), and then such waiver or consent shall be effective only in the
specific instance and for the specific purpose for which given.
7.3. SECTION Notices. All notices and other communications provided for
hereunder shall be in writing (including facsimile communication) and, if to any
Grantor, mailed or telecopied or delivered to it, addressed to it at the address
specified in the Credit Agreement, if to either Administrative Agent, mailed or
telecopied or delivered to it, addressed to it at the address of such
Administrative Agent specified in the Credit Agreement. All such notices and
other communications, when mailed and properly addressed with postage prepaid or
if properly addressed and sent by pre-paid courier service, shall be deemed
given when received; any such notice or communication, if transmitted by
telecopier, shall be deemed given when transmitted and electronically confirmed.
7.4. SECTION Captions. Section captions used in this Security Agreement are for
convenience of reference only, and shall not affect the construction of this
Security Agreement.
7.5. SECTION Severability. Wherever possible each provision of this Security
Agreement shall be interpreted in such manner as to be effective and valid under
applicable law, but if any provision of this Security Agreement shall be
prohibited by or invalid under such law, such provision shall be ineffective to
the extent of such prohibition or invalidity, without invalidating the remainder
of such provision or the remaining provisions of this Security Agreement.
7.6. SECTION Counterparts. This Security Agreement may be executed by the
parties hereto in several counterparts, each of which shall be deemed an
original and all of which shall constitute together but one and the same
agreement.
7.7. SECTION Governing Law, Entire Agreement, etc. THIS SECURITY AGREEMENT SHALL
BE DEEMED TO BE A CONTRACT MADE UNDER AND GOVERNED BY THE INTERNAL LAWS OF THE
STATE OF NEW YORK (INCLUDING FOR SUCH PURPOSE SECTIONS 5-1401 AND 5-1402 OF THE
GENERAL OBLIGATIONS LAW OF THE STATE OF NEW YORK), EXCEPT TO THE EXTENT THAT THE
VALIDITY OR PERFECTION OF THE SECURITY INTEREST HEREUNDER, OR REMEDIES
HEREUNDER, IN RESPECT OF ANY PARTICULAR COLLATERAL ARE GOVERNED BY THE LAWS OF A
JURISDICTION OTHER THAN THE STATE OF NEW YORK. THIS SECURITY AGREEMENT AND THE
OTHER LOAN DOCUMENTS CONSTITUTE THE ENTIRE UNDERSTANDING AMONG THE PARTIES
HERETO WITH RESPECT TO THE SUBJECT MATTER HEREOF AND SUPERSEDE ANY PRIOR
AGREEMENTS, WRITTEN OR ORAL, WITH RESPECT THERETO.
IN WITNESS WHEREOF, the Grantor has caused this Security
Agreement to be duly executed and delivered by its officer thereunto duly
authorized as of the date first above written.
THE TITAN CORPORATION
By
Name:
Title:
THE BANK OF NOVA SCOTIA, as Administrative Agent
By
Name:
Title:
SCHEDULE I
to Security Agreement
Item A. Location of Equipment
Description Location
1.
2.
3.
Item B. Location of Inventory
Description Location
1.
2.
3.
Item C. Location of Lock Boxes
Contact
Bank Name and Address Account Number Person
1.
2.
3.
Item D. Place(s) of Business and Chief Executive Office
Item E. Trade Names
Item F. Merger or Other Corporate Reorganization
SCHEDULE II
to Security Agreement
Item A. Patents
Issued Patents
Pending Patent Applications
Patent Applications in Preparation
Item B. Patent Licenses
SCHEDULE III
to Security Agreement
Item A. Trademarks
Registered Trademarks
Pending Trademark Applications
Trademark Applications in Preparation
Item B. Trademark Licenses
SCHEDULE IV
to Security Agreement
Item A. Copyrights/Mask Works
Registered Copyrights/Mask Works
Copyright/Mask Work Pending Registration Applications
Copyright/Mask Work Registration Applications in Preparation
Item B. Copyright/Mask Work Licenses
SCHEDULE V
to Security Agreement
Trade Secret or Know-How Licenses
EXHIBIT A
to Security Agreement
PATENT SECURITY AGREEMENT
This PATENT SECURITY AGREEMENT (this "Agreement"), dated as of July 29,
1998, is made between THE TITAN CORPORATION, a Delaware corporation (the
"Grantor"), and THE BANK OF NOVA SCOTIA ("Scotiabank"), in its capacity as
Administrative Agent (the "Administrative Agent") for each of the Secured
Parties;
W I T N E S S E T H :
WHEREAS, pursuant to a Credit Agreement, dated as of July 29, 1998 (as
amended, supplemented, amended and restated or otherwise modified from time to
time, the "Credit Agreement"), among the Grantor, the various financial
institutions as are or may become parties thereto (the "Lenders"), Scotiabank,
as Administrative Agent for the Lenders (the "Administrative Agent") and
Imperial Bank, as Documentation Agent, the Lenders and the Issuers have extended
Commitments to make Credit Extensions to the Grantor;
WHEREAS, in connection with the Credit Agreement, the Grantor has
executed and delivered a Borrower Security Agreement, dated as of July 29, 1998
(as amended, supplemented, amended and restated or otherwise modified from time
to time, the "Security Agreement";
WHEREAS, as a condition precedent to the making of the Credit
Extensions (including the initial Credit Extension) under the Credit Agreement,
the Grantor is required to execute and deliver this Security Agreement; and
WHEREAS, the Grantor has duly authorized the execution, delivery and
performance of this Security Agreement;
NOW THEREFORE, for good and valuable consideration the receipt of which
is hereby acknowledged, and in order to induce the Lenders and the Issuers to
make Credit Extensions (including the initial Credit Extension) to the Grantor
pursuant to the Credit Agreement, the Grantor agrees, for the benefit of each
Secured Party, as follows.
1. SECTION Definitions. Unless otherwise defined herein or the context otherwise
requires, terms used in this Agreement, including its preamble and recitals,
have the meanings provided (or incorporated by reference) in the Security
Agreement.
2. SECTION Grant of Security Interest. For good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, to secure all of the
Secured Obligations, the Grantor does hereby mortgage, pledge and hypothecate to
the Administrative Agent, and grant to the Administrative Agent a security
interest in, for its benefit and the benefit of each Secured Party, all of the
following property (the "Patent Collateral"), whether now owned or hereafter
acquired or existing by it:
(a) all letters patent and applications for letters patent
throughout the world, including all patent applications in preparation
for filing anywhere in the world and including each patent and patent
application referred to in Item A of Attachment 1 attached hereto;
(b) all reissues, divisions, continuations,
continuations-in-part, extensions, renewals and reexaminations of any
of the items described in clause (a);
(c) all patent licenses, including each patent license
referred to in Item B of Attachment 1 attached hereto; and
(d) all proceeds of, and rights associated with, the foregoing
(including license royalties and proceeds of infringement suits), the
right to xxx third parties for past, present or future infringements of
any patent or patent application, including any patent or patent
application referred to in Item A of Attachment 1 attached hereto, and
for breach or enforcement of any patent license, including any patent
license referred to in Item B of Attachment 1 attached hereto, and all
rights corresponding thereto throughout the world.
3. SECTION Security Agreement. This Agreement has been executed and delivered by
the Grantor for the purpose of registering the security interest of the
Administrative Agent in the Patent Collateral with the United States Patent and
Trademark Office and corresponding offices in other countries of the world. The
security interest granted hereby has been granted as a supplement to, and not in
limitation of, the security interest granted to the Administrative Agent for its
benefit and the benefit of each Secured Party under the Security Agreement. The
Security Agreement (and all rights and remedies of the Administrative Agent and
each Secured Party thereunder) shall remain in full force and effect in
accordance with its terms.
4. SECTION Release of Security Interest. Upon the Termination Date, the
Administrative Agent shall, at the Grantor's expense, execute and deliver to the
Grantor all instruments and other documents as may be necessary or proper to
release the lien on and security interest in the Patent Collateral which has
been granted hereunder.
5. SECTION Acknowledgment. The Grantor does hereby further acknowledge and
affirm that the rights and remedies of the Administrative Agent with respect to
the security interest in the Patent Collateral granted hereby are more fully set
forth in the Security Agreement, the terms and provisions of which (including
the remedies provided for therein) are incorporated by reference herein as if
fully set forth herein. 6. SECTION Loan Document, etc. This Agreement is a Loan
Document executed pursuant to the Credit Agreement and shall (unless otherwise
expressly indicated herein) be construed, administered and applied in accordance
with the terms and provisions of the Credit Agreement.
7. SECTION Counterparts. This Agreement may be executed by the parties hereto in
several counterparts, each of which shall be deemed to be an original and all of
which shall constitute together but one and the same agreement.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed and delivered by their respective officers thereunto duly
authorized as of the day and year first above written.
THE TITAN CORPORATION
By
Name:
Title:
THE BANK OF NOVA SCOTIA, as Administrative Agent
By
Name:
Title:
ATTACHMENT 1
to Patent Security Agreement
Item A. Patents
Item B. Patent Licenses
EXHIBIT B
to Security Agreement
TRADEMARK SECURITY AGREEMENT
This TRADEMARK SECURITY AGREEMENT (this "Agreement"), dated as of July
29, 1998, is made between THE TITAN CORPORATION, a Delaware corporation (the
"Grantor"), and THE BANK OF NOVA SCOTIA ("Scotiabank"), as Administrative Agent
(the "Administrative Agent") for each of the Secured Parties;
W I T N E S S E T H :
WHEREAS, pursuant to a Credit Agreement, dated as of July 29, 1998 (as
amended, supplemented, amended and restated or otherwise modified from time to
time, the "Credit Agreement"), among the Grantor, the various financial
institutions as are or may become parties thereto (the "Lenders"), Scotiabank,
as Administrative Agent for the Lenders (the "Administrative Agent") and
Imperial Bank, as Documentation Agent, the Lenders have extended Commitments to
make Credit Extensions to the Grantor;
WHEREAS, in connection with the Credit Agreement, the Grantor has
executed and delivered a Borrower Security Agreement, dated as of July 29, 1998
(as amended, supplemented, amended and restated or otherwise modified from time
to time, the "Security Agreement";
WHEREAS, as a condition precedent to the making of the Credit
Extensions (including the initial Credit Extension) under the Credit Agreement,
the Grantor is required to execute and deliver this Security Agreement; and
WHEREAS, the Grantor has duly authorized the execution, delivery and
performance of this Security Agreement;
NOW THEREFORE, for good and valuable consideration the receipt of which
is hereby acknowledged, and in order to induce the Lenders and the Issuers to
make Credit Extensions (including the initial Credit Extension) to the Grantor
pursuant to the Credit Agreement, the Grantor agrees, for the benefit of each
Secured Party, as follows.
1. SECTION Definitions. Unless otherwise defined herein or the context otherwise
requires, terms used in this Agreement, including its preamble and recitals,
have the meanings provided (or incorporated by reference) in the Security
Agreement.
2. SECTION Grant of Security Interest. For good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, to secure all of the
Secured Obligations, the Grantor does hereby mortgage, pledge and hypothecate to
the Administrative Agent, and grant to the Administrative Agent a security
interest in, for its benefit and the benefit of each Secured Party, all of the
following property (the "Trademark Collateral"), whether now owned or hereafter
acquired or existing by it:
(a) all trademarks, trade names, corporate names, company
names, business names, fictitious business names, trade styles, service
marks, certification marks, collective marks, logos, other source of
business identifiers, prints and labels on which any of the foregoing
have appeared or appear, designs and general intangibles of a like
nature (all of the foregoing items in this clause (a) being
collectively called a "Trademark"), now existing anywhere in the world
or hereafter adopted or acquired, whether currently in use or not, all
registrations and recordings thereof and all applications in connection
therewith, whether pending or in preparation for filing, including
registrations, recordings and applications in the United States Patent
and Trademark Office or in any office or agency of the United States of
America or any State thereof or any foreign country, including those
referred to in Item A of Attachment 1 attached hereto;
(b) all Trademark licenses, including each Trademark license
referred to in Item B of Attachment 1 attached hereto;
(c) all reissues, extensions or renewals of any of the items
described in clauses (a) and (b);
(d) all of the goodwill of the business connected with the use
of, and symbolized by the items described in, clauses (a) and (b); and
(e) all proceeds of, and rights associated with, the
foregoing, including any claim by the Grantor against third parties for
past, present or future infringement or dilution of any Trademark,
Trademark registration or Trademark license, including any Trademark,
Trademark registration or Trademark license referred to in Item A and
Item B of Attachment 1 attached hereto, or for any injury to the
goodwill associated with the use of any such Trademark or for breach or
enforcement of any Trademark license.
3. SECTION Security Agreement. This Agreement has been executed and delivered by
the Grantor for the purpose of registering the security interest of the
Administrative Agent in the Trademark Collateral with the United States Patent
and Trademark Office and corresponding offices in other countries of the world.
The security interest granted hereby has been granted as a supplement to, and
not in limitation of, the security interest granted to the Administrative Agent
for its benefit and the benefit of each Secured Party under the Security
Agreement. The Security Agreement (and all rights and remedies of the
Administrative Agent and each Secured Party thereunder) shall remain in full
force and effect in accordance with its terms.
4. SECTION Release of Security Interest. Upon the Termination Date, the
Administrative Agent shall, at the Grantor's expense, execute and deliver to the
Grantor all instruments and other documents as may be necessary or proper to
release the lien on and security interest in the Trademark Collateral which has
been granted hereunder.
5. SECTION Acknowledgment. The Grantor does hereby further acknowledge and
affirm that the rights and remedies of the Administrative Agent with respect to
the security interest in the Trademark Collateral granted hereby are more fully
set forth in the Security Agreement, the terms and provisions of which
(including the remedies provided for therein) are incorporated by reference
herein as if fully set forth herein.
6. SECTION Loan Document, etc. This Agreement is a Loan Document executed
pursuant to the Credit Agreement and shall (unless otherwise expressly indicated
herein) be construed, administered and applied in accordance with the terms and
provisions of the Credit Agreement.
7. SECTION Counterparts. This Agreement may be executed by the parties hereto in
several counterparts, each of which shall be deemed to be an original and all of
which shall constitute together but one and the same agreement.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed and delivered by their respective officers thereunto duly
authorized as of the day and year first above written.
THE TITAN CORPORATION
By
Name:
Title:
THE BANK OF NOVA SCOTIA, as Administrative Agent
By
Name:
Title:
ATTACHMENT 1
to Trademark
Security Agreement
Item A. Trademarks
EXHIBIT C
to Security Agreement
COPYRIGHT SECURITY AGREEMENT
This COPYRIGHT SECURITY AGREEMENT (this "Agreement"), dated as of July
29, 1998, is made between THE TITAN CORPORATION, a Delaware corporation (the
"Grantor"), and THE BANK OF NOVA SCOTIA ("Scotiabank"), in its capacity as
Administrative Agent (the "Administrative Agent") for each of the Secured
Parties;
W I T N E S S E T H :
WHEREAS, pursuant to a Credit Agreement, dated as of July 29, 1998 (as
amended, supplemented, amended and restated or otherwise modified from time to
time, the "Credit Agreement"), among the Grantor, the various financial
institutions as are or may become parties thereto (the "Lenders"), Scotiabank,
as Administrative Agent for the Lenders (in such capacity, the "Administrative
Agent") and Imperial Bank, as Documentation Agent. The Lenders have extended
Commitments to make Credit Extensions to the Grantor;
WHEREAS, in connection with the Credit Agreement, the Grantor has
executed and delivered a Borrower Security Agreement, dated as of July 29, 1998
(as amended, supplemented, amended and restated or otherwise modified from time
to time, the "Security Agreement";
WHEREAS, as a condition precedent to the making of the Credit
Extensions (including the initial Credit Extension) under the Credit Agreement,
the Grantor is required to execute and deliver this Security Agreement; and
WHEREAS, the Grantor has duly authorized the execution, delivery and
performance of this Security
Agreement;
NOW THEREFORE, for good and valuable consideration the receipt of which
is hereby acknowledged, and in order to induce the Lenders and the Issuers to
make Credit Extensions (including the initial Credit Extension) to the Grantor
pursuant to the Credit Agreement, the Grantor agrees, for the benefit of each
Secured Party, as follows.
1. SECTION Definitions. Unless otherwise defined herein or the context otherwise
requires, terms used in this Agreement, including its preamble and recitals,
have the meanings provided (or incorporated by reference) in the Security
Agreement.
2. SECTION Grant of Security Interest. For good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, to secure all of the
Secured Obligations, the Grantor does hereby mortgage, pledge and hypothecate to
the Administrative Agent, and grant to the Administrative Agent a security
interest in, for its benefit and the benefit of each Secured Party, all of the
following property (the "Copyright Collateral"), whether now owned or hereafter
acquired or existing by it, being all copyrights (including all copyrights for
semi-conductor chip product mask works) of the Grantor, whether statutory or
common law, registered or unregistered, now or hereafter in force throughout the
world including all of the Grantor's right, title and interest in and to all
copyrights registered in the United States Copyright Office or anywhere else in
the world and also including the copyrights referred to in Item A of Attachment
1 attached hereto, and all applications for registration thereof, whether
pending or in preparation, all copyright licenses, including each copyright
license referred to in Item B of Attachment 1 attached hereto, the right to xxx
for past, present and future infringements of any thereof, all rights
corresponding thereto throughout the world, all extensions and renewals of any
thereof and all proceeds of the foregoing, including licenses, royalties,
income, payments, claims, damages and proceeds of suit.
3. SECTION Security Agreement. This Agreement has been executed and delivered by
the Grantor for the purpose of registering the security interest of the
Administrative Agent in the Copyright Collateral with the United States
Copyright Office and corresponding offices in other countries of the world. The
security interest granted hereby has been granted as a supplement to, and not in
limitation of, the security interest granted to the Administrative Agent for its
benefit and the benefit of each Secured Party under the Security Agreement. The
Security Agreement (and all rights and remedies of the Administrative Agent and
each Secured Party thereunder) shall remain in full force and effect in
accordance with its terms.
4. SECTION Release of Security Interest. Upon the Termination Date, the
Administrative Agent shall, at the Grantor's expense, execute and deliver to the
Grantor all instruments and other documents as may be necessary or proper to
release the lien on and security interest in the Copyright Collateral which has
been granted hereunder.
5. SECTION Acknowledgment. The Grantor does hereby further acknowledge and
affirm that the rights and remedies of the Administrative Agent with respect to
the security interest in the Copyright Collateral granted hereby are more fully
set forth in the Security Agreement, the terms and provisions of which
(including the remedies provided for therein) are incorporated by reference
herein as if fully set forth herein.
6. SECTION Loan Document, etc. This Agreement is a Loan Document executed
pursuant to the Credit Agreement and shall (unless otherwise expressly indicated
herein) be construed, administered and applied in accordance with the terms and
provisions of the Credit Agreement.
7. SECTION Counterparts. This Agreement may be executed by the parties hereto in
several counterparts, each of which shall be deemed to be an original and all of
which shall constitute together but one and the same agreement.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed and delivered by their respective officers thereunto duly
authorized as of the day and year first above written.
THE TITAN CORPORATION
By
Name:
Title:
THE BANK OF NOVA SCOTIA, as Administrative Agent
By
Name:
Title:
Exhibit H-2
Form of Subsidiary Security Agreement
EXHIBIT H-2
SUPPLEMENT SUBSIDIARY SECURITY AGREEMENT
SUPPLEMENT, dated as of June 9, 1999 (this "Supplement"), to the Subsidiary
Security Agreement, dated as of July 29, 1998 (together with all amendments,
supplements, restatements and other modifications, if any, from time to time
thereafter made thereto, the "Security Agreement"), among the initial
signatories thereto and each other Person (such capitalized term, and other
terms used in this Supplement, to have the meanings set forth in Article I of
the Security Agreement) which from time to time thereafter became a party
thereto pursuant to Section 7.4 thereof (each, individually, a "Guarantor", and,
collectively, the "Guarantors"), in favor of the Secured Parties (as defined in
the Guaranty).
W I T N E S S E T H:
WHEREAS, pursuant to the provisions of Section 7.4 of the Security
Agreement, the undersigned is becoming a Grantor under the Security Agreement;
and
WHEREAS, the undersigned Grantor desires to become a "Grantor" under
the Security Agreement in order to induce the Secured Parties to continue to
extend Credit Extensions under the Amended and Restated Credit Agreement, dated
as of June 9, 1999 (as amended, supplemented, amended and restated or otherwise
modified from time to time, the "Amended and Restated Credit Agreement") among
The Titan Corporation, a Delaware corporation (the "Borrower"), the various
financial institutions as are or may become parties thereto (collectively, the
"Lenders"), The Bank of Nova Scotia as administrative agent for the Lenders (in
such capacity, the "Administrative Agent"), and Imperial Bank, as documentation
agent;
NOW, THEREFORE, in consideration of the premises, and for other
consideration (the receipt and sufficiency of which is hereby acknowledged), the
undersigned agrees, for the benefit of each Secured Party, as follows.
SECTION 1. (i) In accordance with the terms of the Security Agreement,
by its signature below the undersigned hereby irrevocably agrees to become a
Grantor under the Security Agreement with the same force and effect as if it
were an original signatory thereto and the undersigned Grantor, hereby (a)
agrees to be bound by and comply with all of the terms and provisions of the
Security Agreement applicable to it as a Grantor and (b) represents and warrants
that the representations and warranties made by it as a Grantor thereunder are
true and correct as of the date hereof. In furtherance of the foregoing, each
reference to a "Grantor" in the Security Agreement shall be deemed to include
the undersigned Grantor.
(ii) Schedules I through V of the Security Agreement are
hereby amended by adding the information relating to the undersigned on the
respective Schedules attached to this Supplement.
SECTION 2. The undersigned Grantor hereby represents and warrants that
this Supplement has been duly authorized, executed and delivered by it and that
this Supplement and the Security Agreement constitute the legal, valid and
binding obligation of the undersigned Grantor, enforceable against it in
accordance with its terms.
SECTION 3. Except as expressly supplemented hereby, the Security
Agreement shall remain in full force and effect in accordance with its terms.
SECTION 4. In the event any one or more of the provisions contained in
this Supplement should be held invalid, illegal or unenforceable in any respect,
the validity, legality and enforceability of the remaining provisions contained
herein and in the Security Agreement shall not in any way be affected or
impaired.
SECTION 5. THIS SUPPLEMENT SHALL BE DEEMED TO BE A CONTRACT MADE UNDER
AND GOVERNED BY THE LAWS OF THE STATE OF NEW YORK.
SECTION 6. This Supplement may be executed by the parties hereto in
several counterparts, each of which shall be deemed to be an original and all of
which shall constitute together but one and the same agreement.
IN WITNESS WHEREOF, the parties hereto have caused this Supplement to
be duly executed and delivered by their respective officers thereunto duly
authorized as of the day and year first above written.
SYSTEM RESOURCES CORPORATION
By:
Name:
Title:
DELFIN SYSTEMS
By:
Name:
Title:
VISICOM LABORATORIES, INC.
By:
Name:
Title:
TITAN WIRELESS, INC.
By:
Name:
Title:
ACCEPTED BY:
THE BANK OF NOVA SCOTIA,
as Administrative Agent
By:
Name:
Title:
SCHEDULE I
to Security Agreement
([NAME OF GRANTOR])
Item A. Location of Equipment
Description Location
1.
2.
3.
Item B. Location of Inventory
Description Location
1.
2.
3.
Item C. Location of Lock Boxes
Contact
Bank Name and Address Account Number Person
1.
2.
3.
Item D. Place(s) of Business and Chief Executive Office
Item E. Trade Names
Item F. Merger or Other Corporate Reorganization
SCHEDULE II
to Security Agreement
([NAME OF GRANTOR])
Item A. Patents
Issued Patents
*Country Patent No. Issue Date Inventor(s) Title
Pending Patent Applications
*Country Serial No. Filing Date Inventor(s) Title
Patent Applications in Preparation
Expected
*Country Docket No. Filing Date Inventor(s) Title
Item B. Patent Licenses
*Country or Effective Expiration Subject
Territory Licensor Licensee Date Date Matter
SCHEDULE III
to Security Agreement
([NAME OF GRANTOR])
Item A. Trademarks
Registered Trademarks
*Country Trademark Registration No. Registration Date
Pending Trademark Applications
*Country Trademark Serial No. Filing Date
Trademark Applications in Preparation
Expected Products/
*Country Trademark Docket No. Filing Date Services
Item B. Trademark Licenses
*Country or Effective Expiration
Territory Trademark Licensor Licensee Date Date
SCHEDULE IV
to Security Agreement
([NAME OF GRANTOR])
Item A. Copyrights/Mask Works
Registered Copyrights/Mask Works
*Country Registration No. Registration Date Author(s)
Title
Copyright/Mask Work Pending Registration Applications
*Country Serial No. Filling Date Author(s)
Title
Copyright/Mask Work Registration Applications in Preparation
Expected
*Country Docket No. Filing Date Author(s)
Title
Item B. Copyright/Mask Work Licenses
*Country or Effective Expiration Subject
Territory Licensor Licensee Date Date Matter
SCHEDULE V
to Security Agreement
{([NAME OF GRANTOR])
Trade Secret or Know-How Licenses
*Country or Effective Expiration Subject
Territory Licensor Licensee Date Date Matter
Exhibit I
Form of Opinion of Counsel to the Obligors
Exhibit-I
Form of Opinion of Counsel to the Obligors
EXHIBIT I
June 9, 0000
Xxx Xxxx xx Xxxx Xxxxxx, as Administrative Agent
000 Xxxxxxxxx Xxxxxx, X.X., Xxxxx 0000
Xxxxxxx, Xxxxxxx 00000
Re: The Titan Corporation
Ladies and Gentlemen:
This letter is furnished to you in connection with the Amended and Restated
Credit Agreement, dated as of June 9, 1999 (the "Credit Agreement"), among The
Titan Corporation (the "Borrower"), various financial institutions from time to
time parties thereto (the "Lenders"), The Bank of Nova Scotia as the agent for
the Lenders (in such capacity, the "Administrative Agent"), and Imperial Bank as
the documentation agent. Unless otherwise defined, terms used herein have the
meanings provided in the Credit Agreement.
In connection with this opinion, I have examined originals or copies, certified
or otherwise identified to my satisfaction, of such certificates or comparable
documents of public officials and of officers and other representatives of the
Borrower, the New Subsidiaries (as defined below) and the Existing Subsidiaries
(as defined below), and such other agreements, instruments and other documents,
as I have deemed necessary for the purposes of this opinion.
In addition, in connection with this opinion, I have examined originals or
copies, certified or otherwise identified to my satisfaction, of the following
documents:
a. the Credit Agreement;
b. the Term B Notes, each dated as of June 9, 1999, executed on behalf of
the Borrower and payable to each of the Lenders with a Term B Loan Commitment;
c. the New Acquisition Notes, each dated as of June 9, 1999, executed on
behalf of the Borrower and payable to each of the Lenders with a New Acquisition
Loan Commitment;
d. Supplement dated as of June 9, 1999 to the Borrower Pledge Agreement
(the "Borrower Pledge Supplement"), executed by the Borrower in favor of the
Administrative Agent;
e. Supplement dated as of June 9, 1999 to the Subsidiary Pledge Agreement
(the "Subsidiary Pledge Supplement"), executed by the New Subsidiaries in favor
of the Administrative Agent;
f. Supplement dated as of June 9, 1999 to the Subsidiary Guaranty (the
"Subsidiary Guaranty Supplement"), executed by the New Subsidiaries in favor of
the Administrative Agent;
g. Supplement dated as of June 9, 1999 to the Subsidiary Security Agreement
(the "Subsidiary Security Supplement"), executed by the New Subsidiaries in
favor of the Administrative Agent;
h. Patent Security Agreements, each dated as of June 9, 1999, between each
of Systems Resources Corporation ("SRC"), Delfin Systems, Inc. ("Delfin") and
VisiCom Laboratories, Inc. ("VisiCom"), and the Administrative Agent
(collectively, the "Patent Security Agreements");
i. Trademark Security Agreements, each dated as of June 9, 1999, between
each of SRC, Delfin, VisiCom and Unidyne Corporation (now known as Titan Unidyne
Corporation), and the Administrative Agent (collectively, the "Trademark
Security Agreements");
j. Copyright Security Agreements, each dated as of June 9, 1999, between
each of SRC, Delfin, VisiCom, Diversified Control Systems, Inc., Eldyne, Inc.
and Titan Software Systems Corporation (now known as Xxxxxxx.Xxx, Inc.), and the
Administrative Agent (collectively, the "Copyright Security Agreements");
k. Intercompany Subordination Agreement, dated as of June 9, 1999, among
the Borrower and the New Subsidiaries;
l. Obligor Affirmation and Consent, dated as of June 9, 1999, by the
Existing Subsidiaries in favor of the Administrative Agent and the Lenders (the
"Obligor Affirmation");
m. copies of the Articles and Certificates of Incorporation and By_Laws for
the entities on Exhibit "A" attached hereto (collectively, the "Organic
Documents");
n. copies of the resolutions of the Board of Directors for the entities
listed in Exhibit "A" attached hereto; and
o. copies of the good standing/status certificates listed in Exhibit "B"
attached hereto.
For purposes of this opinion, the agreements, documents, notes and instruments
referred to in clauses (a) through (l) above are hereinafter collectively
referred to as the "Transaction Documents". The Persons described on Exhibit "C"
are sometimes collectively referred to herein as the "New Subsidiaries." The
Persons described on Exhibit "D" are sometimes collectively referred to herein
as the "Existing Subsidiaries".
Based upon the foregoing, and subject to the limitations, assumptions,
exceptions and qualifications set forth below, I am of the opinion that as of
the date hereof:
1. The Borrower is (i) a corporation duly incorporated and existing
and in good standing under the laws of Delaware and (ii) duly
qualified to do business in each jurisdiction where the nature of
its business requires such qualification except where the failure
to so qualify would not constitute a Material Adverse Effect. The
Borrower has full power and authority, and holds all requisite
governmental licenses, permits and other approvals, to enter into
and perform its Obligations under each Transaction Document to
which it is a party and to conduct its business substantially as
currently conducted by it.
2. Each New Subsidiary is (i) a corporation duly incorporated and
existing and in good standing under the laws of the state of its
incorporation and (ii) duly qualified to do business in each
jurisdiction where the nature of its business requires such
qualification except where the failure to so qualify would not
constitute a Material Adverse Effect. Each New Subsidiary has full
power and authority, and holds all requisite governmental
licenses, permits and other approvals, to enter into and perform
its Obligations under each Transaction Document to which it is a
party and to conduct its business substantially as currently
conducted by it such that the failure to hold such licenses,
permits, and other approvals would not constitute a Material
Adverse Effect.
3. The Borrower has duly authorized by all necessary corporate action
the execution, delivery and performance of each Transaction
Document to which it is a party, and the execution, delivery and
performance thereof do not
(a) contravene the Organic Documents of the Borrower;
(b) contravene any law or governmental regulation or, to the
best of my knowledge, any contractual restriction, court
decree or order binding on or affecting the Borrower, the
contravention of which constitute a Material Adverse
Effect; or
(c) result in, or require the creation or imposition of, any
Lien under any agreement or instrument on any properties
of the Borrower, other than a Lien in favor of the
Administrative Agent pursuant to the terms of a
Transaction Document.
4. Each New Subsidiary and each Existing Subsidiary has duly
authorized by all necessary corporate action the execution,
delivery and performance of each Transaction Document to which it
is a party, and the execution, delivery and performance thereof do
not
(a) contravene the Organic Documents of such New Subsidiary or
Existing Subsidiary, as the case may be;
(b) contravene any law or governmental regulation or, to the
best of my knowledge, any contractual restriction, court
decree or order binding on or affecting such New
Subsidiary or Existing Subsidiary, as the case may be, the
contravention of which constitute a Material Adverse
Effect; or
(c) result in, or require the creation or imposition of, any
Lien under any agreement or instrument on any properties
of such New Subsidiary or Existing Subsidiary, as the case
may be, other than a Lien in favor of the Administrative
Agent pursuant to the terms of a Transaction Document.
5. No authorization or approval or other action by, and no notice to
or filing with, any governmental authority or regulatory body is
required for the due execution, delivery or performance by the
Borrower or any New Subsidiary or Existing Subsidiary of any of
the Transaction Documents to which it is a party and which would
contribute a Material Adverse Effect.
6. There is no pending, nor, to the best of my knowledge after due
inquiry, threatened litigation, action, proceeding, investigation
or labor controversy affecting the Borrower or any of its
properties, business, assets or revenues which may cause a
Material Adverse Effect or which purports to affect the legality,
validity or enforceability of any of the Transaction Documents.
7. There is no pending, nor, to the best of my knowledge after due
inquiry, threatened litigation, action, proceeding, investigation
or labor controversy affecting each New Subsidiary, each Existing
Subsidiary or any of its properties, business, assets or revenues
which may cause a Material Adverse Effect or which purports to
affect the legality, validity or enforceability of any of the
Transaction Documents.
8. The Pledged Interests (as defined in the Borrower Pledge
Agreement), other than Pledged Notes (as defined in the Borrower
Pledge Agreement), issued by the New Subsidiaries listed in
Attachment I to the Borrower Pledge Supplement have been duly
authorized and validly issued, are fully paid and non_assessable
and constitute all of the issued and outstanding shares of stock
of such New Subsidiaries.
9 The Pledged Interests (as defined in the Subsidiary Pledge
Agreement), other than Pledged Notes (as defined in the Subsidiary
Pledge Agreement), issued by the New Subsidiaries listed in
Attachment I to the Subsidiary Pledge Supplement have been duly
authorized and validly issued, are fully paid and non_assessable
and constitute all of the issued and outstanding shares of stock
of such New Subsidiaries.
I assume for purposes of this opinion that each individual, corporation, limited
liability company, partnership, association, joint_stock company, trust,
unincorporated organization, joint venture or Governmental Authority (foreign or
domestic) (each, a "Person") who is a party to any of the Transaction Documents
(other than the Borrower, the New Subsidiaries and the Existing Subsidiaries) is
duly organized, validly existing and in good standing under the laws of its
jurisdiction of organization; that each of such Transaction Documents has been
duly authorized by each Person who is a party thereto (other than the Borrower,
the New Subsidiaries and the Existing Subsidiaries); that each of the
Transaction Documents has been duly executed and delivered by each Person who is
a party thereto (other than the Borrower, the New Subsidiaries and the Existing
Subsidiaries) and constitutes or will constitute the legal, valid and binding
obligation of each Person (other than the Borrower, the New Subsidiaries and the
Existing Subsidiaries), enforceable in accordance with its terms; and that each
Person (other than the Borrower, the New Subsidiaries and the Existing
Subsidiaries) that is a party to any Transaction Document has the requisite
corporate or other organizational power and authority to perform its obligations
under such Transaction Document. I am not expressing any opinion as to the
effect of any compliance or non_compliance by any agent, bank, or other lender
with any state or federal laws or regulations applicable to the transactions
contemplated by the Transaction Documents because of the nature of such Person's
business.
For purposes of my opinions in paragraphs 1 and 2 above with respect to good
standing, I have relied upon the certificates described in Exhibit "B" attached
hereto.
Whenever a statement herein is qualified by "knowledge" or any similar phrase,
it is intended to indicate that, during the course of my representation of
Borrower, the New Subsidiaries and the Existing Subsidiaries, no information
that would give me current actual knowledge of the inaccuracy of such statement
has come to my attention.
The opinions expressed above are limited to the laws of the State of California,
the general corporate laws of the State of Delaware, and the Federal laws of the
United States, and do not express any opinion herein concerning any other law.
I express no opinion regarding any laws, rules or regulations that relate to or
limit the effect of the Transaction Documents with respect to contracts with any
governmental agency involving matters of national security or other sensitive
military or governmental activities.
The opinions expressed herein have been rendered at your request, are solely for
your benefit in connection with the transactions contemplated by the Transaction
Documents and may not be relied upon by you in any other manner or by any other
Person in any manner or for any purpose and may not be communicated or published
by you to any other Person for any purpose without my prior written approval in
each instance.
Very truly yours,
By:__________________________
Xxx Xxxxxx, General Counsel
EXHIBIT "A"
LIST OF ENTITIES FOR WHOM ARTICLES/CERTIFICATES
OF INCORPORATION AND BY_LAWS WERE REVIEWED BY GENERAL COUNSEL
1. The Titan Corporation
2. System Resources Corporation
3. Delfin Systems, Inc.
4. VisiCom Laboratories, Inc.
5. Titan Food Pasteurization Corp.
6. Titan Medical Sterilization Corp.
7. Titan Wireless, Inc.
8. Titan Affront, Inc.
9. Mergeco, Inc.
EXHIBIT "B"
The Titan Corporation
Document Description Date
1 Delaware, Certificate of Good Standing 05/17/99
2 Alabama, Certificate of Good Standing, foreign 05/06/99
3 California, Certificate of Good Standing, foreign 05/05/99
4 Colorado, Certificate of Good Standing, foreign 04/30/99
5 Connecticut, Certificate of Good Standing, foreign 05/05/99
6 District of Columbia, Certificate of Good Standing,
foreign 04/14/99
7 Florida, Certificate of Good Standing,
foreign corporation 05/05/99
8 Indiana, Certificate of Good Standing, foreign 05/05/99
9 Kansas, Certificate of Good Standing, foreign 06/07/99
10 Louisiana, Certificate of Good Standing, foreign 05/19/99
11 Massachusetts, Certificate of Good Standing
(Titan Systems) foreign 05/26/99
12 Nebraska, Certificate of Good Standing,
(The Titan Corporation/Titan Systems Division) foreign 05/21/99
13 Nevada, Certificate of Good Standing,
(The Titan Corporation of Delaware)foreign 05/13/99
14 New Jersey, Certificate of Good Standing, foreign 05/20/99
15 New Mexico, Certificate of Good Standing, foreign 05/20/99
16 Ohio, Certificate of Good Standing, (California
Titan Corporation), foreign 05/21/99
17 Oklahoma, Certificate of Good Standing, foreign 05/20/99
18 South Carolina, Certificate of Good Standing, foreign 05/20/99
19 Tennessee, Certificate of Good Standing, foreign 05/19/99
20 Texas, Certificate of Good Standing, foreign 05/19/99
21 Virginia, Certificate of Good Standing,
(Titan Systems Virginia, Inc.) foreign 05/20/99
Titan Medical Sterilization Corp.
22 Certificate of Good Standing,
Titan Medical Sterilization Corp. 06/02/99
Titan Food Pasteurization Corp.
23 Certificate of Good Standing,
Titan Food Pasteurization Corp. 06/02/99
Sakon, LLC
24 Certificate of Good Standing, Sakon, LLC 06/02/99
Titan AfroNet, Inc.
25 Certificate of Good Standing, Titan AfroNet, Inc. 06/03/99
Titan Wireless, Inc.
26 Certificate of Good Standing, Titan Wireless, Inc. 06/03/99
Delfin Systems
a California corporation
27 California, Certificate of Good Standing 05/04/99
28 Colorado, Certificate of Good Standing Pending
29 Maryland, Certificate of Good Standing, foreign 05/06/99
30 Virginia, Certificate of Good Standing, foreign 05/04/99
VisiCom Laboratories, Inc.
a Delaware corporation
31 Delaware, Certificate of Good Standing 04/29/99
32 California, Certificate of Good Standing, foreign 04/30/99
Systems Resources Corporation
a Delaware corporation
33 Delaware, Certificate of Good Standing 05/04/99
34 California, Certificate of Good Standing,
foreign (Global Systems Resources 05/06/99
35 Massachusetts, Certificate of Good Standing, foreign 05/04/99
36 Maryland, Certificate of Good Standing, domestic
(Systems Resources, Inc.) 05/06/99
37 New Jersey, Certificate of Good Standing,
foreign (Global System Resources) 05/05/99
38 North Carolina, Certificate of Good Standing, foreign 05/05/99
39 Ohio, Certificate of Good Standing, foreign 05/05/99
40 Virginia, Certificate of Good Standing,
foreign (Global Systems Resources
Corporation/System Resources Corporation) 05/04/99
EXHIBIT "C"
List of New Subsidiaries
System Resources Corporation, a Delaware corporation
Delfin Systems, Inc., a California corporation
VisiCom Laboratories, Inc., a Delaware corporation (formerly, VisiCom
Laboratories, Inc., a California corporation)
Titan Food Pasteurization Corp., a Delaware corporation
Titan Medical Sterilization Corp., a Delaware corporation
Titan Wireless, Inc., a Delaware corporation
Titan AfroNet, Inc., a Delaware corporation
Mergeco, Inc., a Delaware corporation
EXHIBIT "D"
List of Existing Subsidiaries
Titan Technologies and Information Systems Corporation, a Delaware corporation
Titan Environmental Corporation, a Delaware corporation
Tomotherapeutics, Inc., a Delaware corporation
Linkabit Wireless, Inc., a Delaware corporation
Pulse Sciences, Inc., a California corporation
Federal Services, Inc., a California corporation
Titan Unidyne Corporation, a Delaware corporation (formerly, Unidyne
Corporation, a Virginia corporation)
Eldyne, Inc., a California corporation
Diversified Control Systems, Inc., a Delaware corporation
Titan Aerochem, Inc., a Delaware corporation
Titan Broadband Communications Corporation, a Delaware corporation
Xxxxxxx.Xxx, Inc. (formerly, Titan Software Systems Corporation), a Delaware
corporation
Titan Scan Corp. (formerly, Titan Purification, Inc.), a Delaware corporation
DBA Systems, Inc., a Florida corporation
Validity Corporation, a California corporation
Horizons Technology, Inc., a Delaware corporation
Exhibit I cont.
Form of Opinion of Counsel to the Obligors
June 9, 0000
Xxx Xxxx xx Xxxx Xxxxxx, as Administrative Agent
000 Xxxxxxxxx Xxxxxx, X.X., Xxxxx 0000
Xxxxxxx, Xxxxxxx 00000
Re: The Titan Corporation
Ladies and Gentlemen:
This letter is furnished to you in connection with the Amended and Restated
Credit Agreement, dated as of June 9, 1999 (the "Credit Agreement"), among The
Titan Corporation (the "Borrower"), various financial institutions from time to
time parties thereto (the "Lenders"), The Bank of Nova Scotia as the agent for
the Lenders (in such capacity, the "Administrative Agent"), and Imperial Bank as
the documentation agent. Unless otherwise defined, terms used herein have the
meanings provided in the Credit Agreement. The Uniform Commercial Code as in
effect in the State of New York is referred to herein as the "UCC". The Uniform
Commercial Code as in effect in the State of California is referred to herein as
the "California UCC."
We have acted as special counsel to the Borrower, the Existing Subsidiaries (as
defined below) and the New Subsidiaries (as defined below) in connection with
the preparation of the Transaction Documents (as defined below). In that regard,
we have examined originals or copies, certified or otherwise identified to our
satisfaction, of the following documents:
a. the Credit Agreement;
b. the Term B Notes, each dated as of June 9, 1999, executed on behalf of the
Borrower and payable to each of the Lenders with a Term B Loan Commitment;
c. the New Acquisition Notes, each dated as of June 9, 1999, executed on behalf
of the Borrower and payable to each of the Lenders with a New Acquisition Loan
Commitment;
d. Supplement dated as of June 9, 1999 to the Subsidiary Pledge Agreement (the
"Subsidiary Pledge Supplement"), executed by the New Subsidiaries in favor of
the Administrative Agent;
e. Supplement dated as of June 9, 1999 to the Subsidiary Guaranty (the
"Subsidiary Guaranty Supplement"), executed by the New Subsidiaries in favor of
the Administrative Agent;
f. Supplement dated as of June 9, 1999 to the Subsidiary Security Agreement (the
"Subsidiary Security Supplement"), executed by the New Subsidiaries in favor of
the Administrative Agent;
g. Patent Security Agreements, each dated as of June 9, 1999, between each of
Systems Resources Corporation ("SRC"), Delfin Systems, Inc. ("Delfin") and
Visicom Laboratories, Inc. ("Visicom"), and the Administrative Agent
(collectively, the "Patent Security Agreements");
h. Trademark Security Agreements, each dated as of June 9, 1999, between each of
SRC, Delfin, Visicom and Titan Unidyne Corporation (formerly known as Unidyne
Corporation), and the Administrative Agent (collectively, the "Trademark
Security Agreements");
i. Copyright Security Agreements, each dated as of June 9, 1999, between each of
SRC, Delfin, Visicom, Diversified Control Systems, Inc., Eldyne, Inc. and
Xxxxxxx.Xxx, Inc. (formerly known as Titan Software Systems Corporation), and
the Administrative Agent (collectively, the "Copyright Security Agreements");
j. Intercompany Subordination Agreement, dated as of June 9, 1999, among the
Borrower and the New Subsidiaries;
k. Obligor Affirmation and Consent, dated as of June 9, 1999, by the Existing
Subsidiaries in favor of the Administrative Agent and the Lenders (the "Obligor
Affirmation");
l. the Term Notes, each dated July 29, 1998, executed on behalf of the Borrower
and payable to each of the Original Acquisition Loan Lenders;
m. the Revolving Notes, each dated July 29, 1998, executed on behalf of the
Borrower and payable to each of the Lenders with a Revolving Loan Commitment;
n. the Swing Line Notes, each dated July 29, 1998, executed on behalf of the
Borrower and payable to each of the Lenders with a Swing Line Loan Commitment;
o. the Borrower Security Agreement, dated as of July 29, 1998, between the
Borrower and the Administrative Agent;
p. the Subsidiary Security Agreement, dated as of July 29, 1998, executed by the
Existing Subsidiaries (as defined below) in favor of the Administrative Agent;
q. the Borrower Pledge Agreement, dated as of July 29, 1998, as amended by the
Obligor Affirmation, between the Borrower and the Administrative Agent;
r. the Subsidiary Pledge Agreement, dated as of July 29, 1998, executed by the
Existing Subsidiaries in favor of the Administrative Agent;
s. the Trademark Security Agreements, each dated as of July 29, 1998, between
each of the Borrower, Horizons Technology, Inc. ("Horizons"), DBA Systems, Inc.
("DBA Systems"), Linkabit Wireless, Inc. ("Linkabit"), Titan Broadband
Communications Corporation ("Broadband Communications") and Titan Software
Systems Corporation (now known as Xxxxxxx.Xxx, Inc.) ("Software Systems") and
the Administrative Agent, and the Supplements to Trademark Security Agreement,
each dated as of June 9, 1999 between each of the Borrower, DBA Systems and
Horizons and the Administrative Agent;
t. the Patent Security Agreements, each dated as of July 29, 1998, between each
of the Borrower, Horizons, DBA Systems, Pulse Sciences, Inc. ("Pulse"),
Linkabit, Broadband Communications and Tomotherapeutics, Inc.
("Tomotherapeutics") and the Administrative Agent, and the Supplements to Patent
Security Agreement, each dated as of June 9, 1999 between each of the Borrower,
Linkabit and Broadband Communications and the Administrative Agent;
u. the Copyright Security Agreements, each dated as of July 29, 1998, between
each of the Borrower, Horizons, Linkabit, Broadband Communications and Validity
Corporation ("Validity"), and the Administrative Agent, and the Supplements to
Copyright Security Agreement, each dated as of June 9, 1999 between each of the
Borrower and Linkabit and the Administrative Agent;
v. the Subsidiary Guaranty, dated as of July 29, 1998, among the Borrower, the
Existing Subsidiaries and the Administrative Agent (the "Subsidiary Guaranty");
w. the Intercompany Subordination Agreement, dated as of July 29, 1998, among
the Existing Subsidiaries and the Borrower;
x. copies of financing statements on Form UCC_1 (the "Borrower Financing
Statements") under the California UCC, naming the Borrower as debtor and the
Administrative Agent as secured party, covering the collateral described in the
Borrower Security Agreement, as amended, and the Borrower Pledge Agreement, as
supplemented by the Borrower Pledge Supplement (the "Borrower Collateral"); and
y. execution copies of financing statements on Form UCC_1 (the "Subsidiary
Financing Statements") under the California UCC, naming each of the Subsidiaries
(as defined below) as debtors and the Administrative Agent as secured party,
covering the collateral described in the Subsidiary Security Agreement, as
supplemented by the Subsidiary Security Supplement, and the Subsidiary Pledge
Agreement, as supplemented by the Subsidiary Pledge Supplement (the "Subsidiary
Collateral"; and together with the Borrower Collateral, the "Collateral").
For purposes of this opinion, the agreements, documents, notes and instruments
referred to in clauses (a) through (k) above are hereinafter collectively
referred to as the "Transaction Documents" and the agreements, documents, notes
and instruments referred to in clauses (l) through (w) above are hereinafter
collectively referred to as the "Existing Documents." The Transaction Documents
and the Existing Documents are sometimes referred to herein as the "Loan
Documents." The Persons described on Exhibit "A" are sometimes collectively
referred to herein as the "New Subsidiaries." The Persons described on Exhibit
"B" are sometimes collectively referred to herein as the "Existing
Subsidiaries". The New Subsidiaries and the Existing Subsidiaries are
collectively referred to herein as the "Subsidiaries". As used in this opinion,
the term "Secured Obligations" shall mean all obligations (monetary or
otherwise, whether absolute or contingent, matured or unmatured) of the Borrower
and the Subsidiaries arising under or in connection with the Credit Agreement
and the Loan Documents, including without limitation, the respective obligations
of the Borrower and the Subsidiaries to repay the Original Acquisition Loan, the
Term B Loan, the New Acquisition Loan, the Revolving Loans, and the Swing Line
Loans (as such terms are defined in the Credit Agreement).
As to certain factual matters, we have, with your consent, relied upon
certificates or opinions of officers, counsel or other representatives of the
Borrower and the Subsidiaries and the representations and warranties of the
Borrower and the Subsidiaries in the Loan Documents, all without independent
verification by us. In addition, we have obtained and relied upon such
certificates and assurances from public officials as we have deemed necessary.
We have investigated such questions of law for the purpose of rendering this
opinion as we have deemed necessary. Members of our firm who are involved with
this matter are admitted to the bars in the States of California and New York.
For the purposes of our opinion, we have assumed, with your consent and without
independent investigation, the correctness and accuracy of the opinion, dated
June 9, 1999, of Xxx Xxxxxx, Esq., general counsel to the Borrower. We are
opining herein only as to the effect on the subject transaction of the present
internal laws of the States of New York and California and Federal law (without
regard to conflicts of laws or principles), excluding municipal and local
ordinances and regulations. We express no opinion with respect to the
applicability to or the effect on the subject transaction of the laws of any
other jurisdiction. We expressly disclaim any responsibility to revise or
supplement this opinion should any such laws be changed by, or compilations of
any such laws be updated to reflect, legislative or regulatory action, judicial
decision or otherwise after the date hereof. Nor do we opine upon any laws,
rules or regulations that relate to or limit the effect of the Loan Documents
with respect to contracts with any governmental agency involving matters of
national security or other sensitive military or governmental activities.
GENERAL ASSUMPTIONS AND LIMITATIONS
Our opinions expressed below are subject to the following assumptions and
limitations:
(1) We have assumed the genuineness of all signatures on the documents
reviewed by us, the authenticity of all such documents submitted to us as
originals, and the conformity to the originals of all such documents submitted
to us as photocopies or conformed copies and the authenticity of the originals
of such latter documents.
(2) We have assumed that: (i) the Administrative Agent and the Lenders
have not waived, subordinated or agreed to any modification of the attachment,
perfection or priority of the security interests created by the Loan Documents
or acted in any way inconsistent with the maintenance, perfection, or priority
of such security interests; (ii) the tangible personal property constituting the
Collateral located in California and described on the Financing Statements filed
in the appropriate California governmental office will at all relevant times be
located in the State of California; (iii) at all relevant times, each of the
parties to the Loan Documents (a) is validly existing and in good standing in
the respective jurisdiction of its organization and has satisfied all applicable
governmental requirements and other laws and requirements, in each case to the
extent necessary to its execution, delivery and performance of the Loan
Documents to which it is a party, (b) has the requisite power and authority,
respectively, to act with respect to the authorization, execution, delivery and
performance of such documents and agreements to which it is a party, and (c) has
duly and validly authorized, executed and delivered each of such documents and
agreements to which it is a party; (iv) the execution, delivery and performance
of the Loan Documents by each party do not conflict with, result in a breach or
violation of, or constitute a default under, any of the terms, conditions or
provisions of the articles or certificate of incorporation or by_laws of each
such party; and (v) the Loan Documents are enforceable against each of the
parties (other than the Borrower, the New Subsidiaries and the Existing
Subsidiaries) in accordance with their terms.
(3) We have assumed that: (i) other than the Loan Documents, there are
no agreements or understandings among the parties, written or oral, and no usage
of trade or course of prior dealing among the parties which would, in either
case, define, modify, limit, supplement or qualify the terms of any of the Loan
Documents, and (ii) each of the Borrower, the New Subsidiaries and the Existing
Subsidiaries has rights in the Collateral owned by it such that each item of the
Collateral constitutes property in which a security interest can be granted
under the UCC, and that each of the Borrower, the New Subsidiaries and the
Existing Subsidiaries has received value under the Transaction Documents, all as
required by Section 9_203 of the UCC for a security interest to attach to
collateral and be enforceable.
(4) We have assumed that all applicable California taxes due and
payable by the Administrative Agent and the Lenders have been paid.
OPINIONS
Based upon the foregoing, and subject to the limitations, qualifications,
assumptions and exceptions set forth below, we are of the opinion that:
2. Each of the Transaction Documents to which the Borrower is a party
constitutes the legal, valid and binding obligation of the Borrower enforceable
against the Borrower in accordance with its terms.
3. Each of the Transaction Documents to which each New Subsidiary is a party
constitutes the legal, valid and binding obligation of such New Subsidiary
enforceable against such New Subsidiary in accordance with its terms.
4. The Subsidiary Guaranty, as supplemented by the Subsidiary Guaranty
Supplement, and as reaffirmed by the Obligor Affirmation, constitutes the legal,
valid and binding obligation of each Subsidiary party thereto, enforceable
against such Subsidiary in accordance with its terms.
5. The Borrower Pledge Agreement, as amended by the Obligor Affirmation, creates
a valid security interest in favor of the Administrative Agent in the Collateral
(as defined in the Borrower Pledge Agreement, as amended by the Obligor
Affirmation), as security for the Secured Obligations, and the Administrative
Agent having and maintaining possession of the certificates representing the
Pledged Interests (as defined in the Borrower Pledge Agreement), other than
Pledged Notes (as defined in the Borrower Pledge Agreement), together with stock
powers duly executed in blank by the Borrower delivered to the Administrative
Agent today results in the perfection of such security interest, and, further,
the Administrative Agent is a "protected purchaser" of such Pledged Interests.
6. The Subsidiary Pledge Agreement, as supplemented by the Subsidiary Pledge
Supplement, creates a valid security interest in favor of the Administrative
Agent in the Collateral (as defined in the Subsidiary Pledge Agreement, as
supplemented by the Subsidiary Pledge Supplement), as security for the Secured
Obligations, and the Administrative Agent having and maintaining possession of
the certificates representing the Pledged Interests (as defined in the
Subsidiary Pledge Agreement), other than Pledged Notes (as defined in the
Subsidiary Pledge Agreement), together with stock powers duly executed in blank
by the relevant Subsidiary delivered to the Administrative Agent today results
in the perfection of such security interest, and, further, the Administrative
Agent is a "protected purchaser" of such Pledged Interests.
7. The provisions of the Borrower Security Agreement are effective under the
laws of the State of New York to create in favor of the Administrative Agent a
legal and valid security interest in all right, title and interest of the
Borrower in and to all Borrower Collateral, in which a security interest can be
created under the UCC (the "Borrower UCC Collateral"), including, without
limitation (a) all "equipment" and "inventory" (each as defined in the UCC), now
or hereafter owned by the Borrower, and located in California, (b) all
"accounts" and "general intangibles" (each as defined in the UCC) now or
hereafter owned by the Borrower, to the extent that the Borrower is deemed to be
located in California within the meaning of Section 9_103 of the UCC, and (c)
all "proceeds" (as defined in the UCC) of such "equipment", "inventory",
"accounts" and "general intangibles" (located in California or, with respect to
intangible collateral, to the extent the Borrower continues to be located in
California within the meaning of Section 9_103 of the UCC).
8. The provisions of the Subsidiary Security Agreement, as supplemented by the
Subsidiary Security Supplement, are effective under the laws of the State of New
York to create in favor of the Administrative Agent a legal and valid security
interest in all right, title and interest of each Subsidiary in and to all
Subsidiary Collateral, in which a security interest can be created under the UCC
(the "Subsidiary UCC Collateral"), including, without limitation (a) all
"equipment" and "inventory" (each as defined in the UCC), now or hereafter owned
by each Subsidiary, and located in California, (b) all "accounts" and "general
intangibles" (each as defined in the UCC) now or hereafter owned by each
Subsidiary, to the extent that each Subsidiary is deemed to be located in
California within the meaning of Section 9_103 of the UCC, and (c) all
"proceeds" (as defined in the UCC) of such "equipment", "inventory", "accounts"
and "general intangibles" (located in California or, with respect to intangible
collateral, to the extent each such Subsidiary continues to be located in
California within the meaning of Section 9_103 of the UCC).
9. The Financing Statements that are to be filed in California (the "California
Financing Statements") are in appropriate form for filing under the California
UCC and, upon the filing of such Financing Statements in the office of the
California Secretary of State (the "Filing Office") and the payment of customary
fees and charges which are required in connection with such filings, the
Administrative Agent's security interest in all right, title and interest of the
Borrower and the Subsidiaries in and to the Borrower UCC Collateral and
Subsidiary UCC Collateral, respectively, shall be fully perfected, to the extent
that a security interest in such collateral can be perfected by the filing of
such financing statements in such office.
10. Except for the filing of the Financing Statements in the Filing Office and
the payment of the fees and charges described in paragraph 8 above, no other
recordation or filing need be made, and no other action need be taken, in order
to perfect or maintain the perfection of the Administrative Agent's security
interest in the Borrower UCC Collateral and the Subsidiary UCC Collateral to the
extent such security interest may be perfected under the laws of California,
other than the filings and actions described above (regarding Pledged Interests)
or below.
11. No consent, approval, authorization or order of, or filing or registration
with, any Federal or New York State governmental agency or body is required to
be made in connection with the execution, delivery and performance by the
Borrower of the Transaction Documents to which it is a party.
12. The Copyright Security Agreements create in favor of the Administrative
Agent a valid security interest in each of the copyrights listed in Schedule A
thereto which is duly and validly registered in the United States Copyright
Office (each a "Copyright" and collectively the "Copyrights"). Upon the proper
filing of the California Financing Statements in the office of the California
Secretary of State and the recordation of the Copyright Security Agreements in
the United States Copyright Office, the Administrative Agent will have a
perfected security interest in each Copyright to the extent the holder of each
Copyright is located in California within the meaning of Section 9-103 of the
UCC.
13. The Patent Security Agreements create in favor of the Administrative Agent a
valid security interest in each of the patents listed in Schedule A thereto
which is duly and validly issued by the United States Patent and Trademark
Office (each a "Patent" and collectively the "Patents"). Upon the proper filing
of the California Financing Statements in the office of the California Secretary
of State and the recordation of the Patent Security Agreements in the United
States Patent and Trademark Office, the Administrative Agent will have a
perfected security interest in each Patent to the extent the holder of each
Patent is located in California within the meaning of Section 9-103 of the UCC.
14. The Trademark Security Agreements create in favor of the Administrative
Agent a valid security interest in each of the trademarks listed in Schedule A
thereto which is duly and validly registered in the United States Patent and
Trademark Office (each a "Trademark" and collectively the "Trademarks"). Upon
the proper filing of the California Financing Statements in the office of the
California Secretary of State and the recordation of the Trademark Security
Agreements in the United States Patent and Trademark Office, the Administrative
Agent will have a perfected security interest in each Trademark to the extent
the holder of each Trademark is located in California within the meaning of
Section 9-103 of the UCC.
15. Each of the Existing Documents remain in full force and effect and the
security interests (and the perfection of such security interests to the extent
such security interests are perfected immediately prior to the execution and
delivery of the Transaction Documents) created by the Existing Documents in
favor of the Administrative Agent will not become unperfected by reason of the
execution and delivery of the Credit Agreement.
ADDITIONAL ASSUMPTIONS, QUALIFICATIONS,
LIMITATIONS AND EXCEPTIONS
Our opinions expressed above are subject to the following additional
qualifications, assumptions, limitations and exceptions:
(i) Our opinion is based upon our review only of those laws, statutes,
rules and regulations which, in our experience, are normally applicable to
transactions which are similar to the transactions contemplated by the Loan
Documents, and we are not expressing any opinion as to the effect of compliance
by any party to the Loan Documents with any laws, statutes, rules or regulations
applicable to the transactions because of the nature of such party's business,
and we have assumed that the Borrower, the Existing Subsidiaries and the New
Subsidiaries are not subject to any licensing or other regulatory requirements
or provisions under New York, California or Federal law, other than those
generally affecting persons conducting business for profit, which would affect
the ability of the Borrower, the Existing Subsidiaries or the New Subsidiaries
to perform their respective obligations under the Loan Documents. However, to
our best knowledge, the Borrower, the Existing Subsidiaries and the New
Subsidiaries are not subject to any licensing or other regulatory requirements
or provisions under New York, California or Federal law (other than (a) security
clearance required for government contracts and (b) regulations that apply to
Persons doing business with the United State government).
(ii) Whenever a statement herein is qualified by "known to us", "to our
best knowledge" or similar phrase, it is intended to indicate that, during the
course of our representation of the Borrower, the Existing Subsidiaries and the
New Subsidiaries, no information that would give us current actual knowledge of
the inaccuracy of such statement has come to the attention of those attorneys in
this firm who have rendered legal services in connection with the representation
described in the introductory paragraph of this opinion letter. We have not,
however, undertaken any further independent investigation to determine the
accuracy of any such statement, and any limited inquiry undertaken by us during
the preparation of this opinion letter should not be regarded as such an
investigation or imply that we have any duty to make such an investigation; no
inference as to our knowledge of any matters bearing on the accuracy of any such
statement should be drawn from the fact of our representation of the Borrower,
the Existing Subsidiaries and the New Subsidiaries in connection with this
transaction.
(iii) For purposes of our opinions 4 and 5 above, (i) we have assumed
that the Administrative Agent and the other Lenders do not have notice of any
adverse claim to the Pledged Interests, (ii) the Collateral defined in the
Borrower Pledge Agreement (as amended) and the Subsidiary Pledge Agreement (as
amended by the Subsidiary Pledge Supplement) is and will remain physically
within the State of New York, (iii) "protected purchaser" shall have the meaning
set forth in UCC Section 8303, and (iv) such opinions do not apply to any
proceeds or other distributions received in connection therewith. For the
purposes of opinions 11 through 13 above we have assumed that the holder of the
Copyrights, Patents and Trademarks at the time of filing and recordation of each
of the Copyright Security Agreements, the Patent Security Agreements and the
Trademark Security Agreements, respectively, is as indicated on the Schedules
attached thereto.
(iv) Our opinions set forth in paragraphs 1, 2, 3 and 14 above are
limited by the following:
a) applicable bankruptcy, receivership, insolvency,
reorganization, moratorium or other similar laws affecting the enforcement of
the rights and remedies of creditors, secured parties and parties to executory
contracts generally; and such duties and standards as are or may be imposed on
creditors, including, without limitation, good faith, materiality,
reasonableness, and fair dealing under the UCC or any other applicable law or
judicial decision; and
b) general principles of equity (regardless of whether such
enforceability is considered in a proceeding in equity or at law) and the
exercise of equitable powers by a court of competent jurisdiction (and no
opinion is given herein as to any specific or equitable relief of any kind or as
to the availability of equitable remedies);
(v) Our opinions are limited by the following:
a) applicable laws relating to fraudulent conveyances and
preferential transfers, as to which we express no opinion; and
b) law and public policy governing provisions of any of the
Loan Documents providing contribution to a party or indemnifying or
prospectively releasing a party with respect to a liability.
(vi) Our opinions are subject to the constitutionality and continued
validity of all statutes and laws reviewed and relied upon by us in connection
with rendering the opinions set forth herein.
(vii) We advise you that courts may not strictly enforce certain
covenants contained in the Loan Documents or allow acceleration of the maturity
of the debt evidenced by thereby if it concludes that such enforcement or
acceleration would be unreasonable under the then existing circumstances.
(viii) We express no opinion as to the validity, enforceability or
perfection of any security interest in (a) any property with respect to which
any federal filing, registration or consent is necessary to assign or perfect an
interest therein (except as expressly stated in paragraphs 11, 12 and 13 above),
(b) any equipment, rail cars or vehicles as to which perfection of a security
interest is dependent upon a notation being made on a certificate of title or
the like, (c) any property the creation of a security interest in which is
excluded from the California UCC or the UCC (e.g., claims for wages, loans made
by an insurance company, rights of setoff, tort claims, etc.), (d) any consumer
goods, equipment used in farming operations, farm products, crops, timber or
minerals and the like (including oil and gas) or accounts resulting from the
sale thereof, any beneficial interest in a trust or a decedent's estate or
letters of credit (all as defined in the California UCC or the UCC), or
accounts, chattel paper, documents, instruments or general intangibles (all as
defined in the UCC) which are or will be due from the United States, any state
of the United States, county, municipality or other governmental body or any
agency, department or instrumentality thereof, unless the same has been assigned
to the Lenders pursuant to the Assignment of Claims Act of 1940, as amended, or
any similar law or regulation relating to the assignment or pledge thereof; in
that connection, however, the creation and perfection of a security interest in
such collateral is accomplished under the Loan Documents together with the
filing of the Borrower Financing Statements and the Subsidiary Financing
Statements and the Administrative Agent's taking possession of the Pledged
Interests as noted above, (e) balances, credits, deposits, accounts, deposit
accounts or monies maintained at an office or branch of the Lenders other than
an office or branch located within the State of California, (f) goods which are
moveable in nature, (g) any interest in or claim in or under any policy of
insurance, except a claim to proceeds payable by reason of loss or damage under
insurance policies maintained with respect to inventory or equipment as required
by and in compliance with the Loan Documents, (h) goods as against a consignor
which has delivered or may hereafter deliver such goods to the Borrower, the
Existing Subsidiaries or the New Subsidiaries under a true consignment (as
distinguished from a consignment intended as security), (i) goods which are
installed in or affixed to, or become a part of a product or mass with, goods
which are not items of Collateral, (j) inventory in the event of any failure by
the Borrower, the Existing Subsidiaries or the New Subsidiaries to have compiled
or to comply fully with the Fair Labor Standards Act of 1932, as amended,
including Sections 206 and 207 thereof, or (k) fixtures. Furthermore, we express
no opinion (a) regarding whether any particular item of Collateral is or is not
a "fixture", or (b) with respect to the priority of any lien or security
interest under the Loan Documents (other than the specific opinion rendered
above in paragraphs 4 and 5 regarding "protected purchasers"). We bring to your
attention the fact that security interests in deposit accounts subject to the
California UCC are perfected by notice to the depositary institution, and not by
filing of a financing statement.
(ix) Certain rights, remedies, and waivers contained in the Loan
Documents may be limited or rendered ineffective by applicable laws or judicial
decisions governing such provisions or are otherwise limited by the restrictions
of public policy.
(x) We call to your attention the fact that under the California UCC,
the effectiveness of financing statements will lapse five years after the date
of filing thereof, and your security interests perfected pursuant to such
financing statements will become unperfected, unless continuation statements are
filed within six months prior to the end of such five_year period. We also call
to your attention to the fact that security interests under the California UCC
perfected pursuant to such financing statements in any of the Collateral will be
terminated (a) as to any Collateral acquired by a debtor more than four months
after such party changes its name, identity or corporate structure to such an
extent as to make its financing statements seriously misleading, unless a new
appropriate financing statement indicating the new name, identity or
organizational structure of such party is properly filed before the expiration
of four months after such change and (b) as to any collateral consisting of
accounts, general intangibles or mobile goods, four months after a debtor
changes its chief executive office (or, if earlier, when perfection under the
laws of the applicable state would have lapsed under the first sentence of this
paragraph), unless such security interests are perfected in such new
jurisdiction before that termination. We further call your attention to the fact
that, with respect to any collateral consisting of goods which are (a) relocated
to another jurisdiction, refiling in such jurisdiction may be required to
continue perfection under the laws of such jurisdiction, and (b) relocated from
another jurisdiction to California, refiling in California within four months is
required to continue any perfection obtained under the law of such other
jurisdiction; provided, however, goods relocated from another jurisdiction to
California complying with the description of the collateral in the financing
statements (described above) will not require any such refiling.
(xi) We bring to your attention the fact that (a) security interests
granted with respect to after_acquired property are not enforceable or perfected
until the party granting the security interest has acquired rights in such
properties, (b) that certain rights of debtors and duties of secured parties
described in Sections 1102(3) and 9501(3) of the California UCC and Sections
1_102(3) and 9_501(3) of the UCC may not be waived, released or disclaimed by
agreement prior to a default, (c) security interests in favor of the
Administrative Agent and the Lenders may be affected in the future by
circumstances covered by Section 9301(4) of the California UCC and Section
9_301(4) of the UCC, and (d) our opinions are further subject to the limitations
with respect to buyers in the ordinary course of business imposed by Section
9307 and 9308 of the California UCC and Sections 9_307 and 9_308 of the UCC and
the limitations with respect to documents, instruments and securities imposed by
Section 9309 of the California UCC and Section 9_309 of the UCC.
(xii) This opinion insofar as it opines on the creation of a security
interest is limited to the creation of security interests under the laws of the
States of New York and California.
(xiii) We express no opinion with respect to the validity, binding
effect or enforceability of any provision of the Loan Documents which purports
to authorize the Administrative Agent or the Lenders to sign or file financing
statements without the signature of the applicable debtor (except to the extent
a secured party may be permitted to execute and file financing statements
without the signature of the debtor under Section 9402(2) of the California UCC
and Section 9_402(2) of the UCC).
(xiv) The creation or enforceability of any security interest granted
in accounts receivable is subject (except as provided in Section 9318 of the
California UCC and Section 9_318 of the UCC, as applicable) to the rights of
account debtors, and the terms of any contracts between the respective debtor
and such account debtors, and any claims or defenses of such account debtors
against the respective debtor arising under or outside such contracts.
(xv) We call your attention to the fact that, under certain
circumstances described in Section 9306 of the California UCC and Section 9_306
of the UCC, the right of a secured party to enforce a security interest in the
proceeds of collateral may be limited (unless the proceeds consist of the
collateral described in the financing statements (described above) and the
security interest in such proceeds can be perfected by the proper filing of such
financing statements).
(xvi) We advise you that guarantors of personal property secured
obligations may be treated as "debtors" under the California UCC and the UCC,
thereby accorded rights and remedies of debtors established by the California
UCC and the UCC.
(xvii) We express no opinion as to (a) the title to or the descriptions
of, any security interest in any property described in the Loan Documents in
which a security interest has been granted pursuant to the Loan Documents; (b)
the existence or effect of liens, security interests, charges, encumbrances or
claims of right or ownership with respect thereto (other than the security
interests granted in favor of the Administrative Agent); (c) whether such
property is the property intended to secure the obligations of the Borrower
under the Loan Documents; and (d) any matter affecting or in any way related to
title. We draw your attention to the fact that certain third party liens may
impact the priority of the Administrative Agent's security interest in the
Collateral.
(xviii) We express no opinion with respect to the validity or
enforceability of any provision of the Loan Documents that:
a) In effect, liquidates damages for the breach of a contract;
b) Imposes what a court may deem to be penalties (prepayment
penalties or otherwise), forfeitures, late payment charges or an increased rate
of interest, upon delinquency or default in the payment of sums due under the
Loan Documents or any other defaults;
c) Seeks to define what constitutes good faith or commercially
reasonable behavior. We note that a court might not permit the exercise of any
right or remedy provided in the Loan Documents if, under the circumstances then
existing, such exercise is deemed to be inconsistent with the covenant of good
faith and fair dealing implied under applicable law to exist in all agreements
or if the party seeking to exercise such right or remedy fails to act in a
commercially reasonable manner or fails to fulfill other duties imposed by
statute or judicial decisions. We do believe, however, that subject to the
limitations expressed elsewhere in this opinion, enforcement and/or (to the
extent permitted under the Loan Documents) acceleration would be available if an
event of default occurs as a result of a material breach of a material covenant
contained in the Loan Documents;
d) To the extent public policy limits provisions of the Loan
Documents, purports to indemnify or otherwise exonerate any party to the Loan
Documents from the consequences of its inadvertent failure to take actions
required to be taken by it thereunder, it being acknowledged that certain
defenses, such as waiver, estoppel and laches, may not be waivable in any event;
e) Purports to grant to the Administrative Agent and the
Lenders any "self help" or summary remedies;
f) Purports to waive the right of the Borrower, the Existing
Subsidiaries or the New Subsidiaries to object to subject matter jurisdiction or
venue, or to assert any defense based on lack of subject matter jurisdiction or
venue;
g) Purports to waive the Borrower's, the Existing
Subsidiaries' or the New Subsidiaries' right to a jury trial; and/or
h) Purports to exculpate or release any party thereto from
liability for the acts or omissions of such party proximately causing damages or
injuries as the result of such party's ordinary or gross negligence or willful
or intentional misconduct, or which purports to impose a duty upon the Borrower
or any other person, firm or entity, to indemnify any other party when any
claimed damages result from the ordinary or gross negligence or willful or
intentional misconduct of the party seeking such indemnity to the extent such
provisions violate public policy.
(xix) We bring your attention to the fact that requirements in the Loan
Documents specifying that provisions thereof may only be waived in writing may
not be valid, binding or enforceable to the extent that an oral agreement or an
implied agreement by trade practice or course of conduct has been created
modifying any provisions of such documents.
(xx) We express no opinion, as to the legality, validity, binding
nature, enforceability or otherwise with respect to (a) broadly stated waivers
of suretyship defenses, presentment, protest, demand, notice, appraisement,
valuation, stay, extension, moratorium, redemption or other rights granted by
law to the extent such waivers are held to be against public policy or
prohibited by law, (b) any provision of any Loan Document that may be deemed to
provide for the application of monies deposited in any account maintained with
the Administrative Agent or the Lender or collected by any of the foregoing
notwithstanding that no event of default shall have occurred and be continuing,
(c) any provisions which purport to create a power of attorney, proxy or agency
relationship, (d) any provision in the Loan Documents that provides for a power
of attorney or for the appointment of a receiver as a matter of right, (e)
except as expressly addressed by the opinions set forth above, any schedule or
exhibit to any of the Loan Documents, (f) the enforceability of any indemnity or
reimbursement obligation by the Borrower, the Existing Subsidiaries or the New
Subsidiaries concerning environmental remediation or the costs of compliance
with any environmental protection law to the extent public policy restricts or
objects such provisions, or (g) any provision of the Loan Documents that
purports to allow a set off by the Administrative Agent or the Lenders against
funds held by the Borrower, the Existing Subsidiaries or the New Subsidiaries in
trust, special accounts or other segregated accounts.
(xxi) We advise you that certain actions may have to be undertaken by
the Administrative Agent and/or the Lenders if revisions to Article 9 of the
Uniform Commercial Code proposed by the American Law Institute are adopted by
any relevant jurisdiction.
This Opinion relates only to the matters expressly addressed above, is
applicable only as to the date hereof, and we express no opinion with respect to
any other matters. We disclaim any obligation to update this opinion for events
occurring after the date hereof.
Our opinions contained herein are rendered solely in connection with the
transactions contemplated under the Loan Documents and may not be relied upon in
any manner by any Person other than the addressees hereof, any successor or
assignee of any addressee (including successive assignees) and any Person who
shall acquire a participation interest in the interest of the Lenders
(collectively, the "Reliance Parties"), or by any Reliance Party for any other
purpose. Our opinions herein shall not be quoted or otherwise included,
summarized or referred to in any publication or document, in whole or in part,
for any purposes whatsoever, or furnished to any Person other than a Reliance
Party (or a Person considering whether to become a Reliance Party), except as
may be required of any Reliance Party by applicable law or regulation or in
accordance with any auditing or oversight function or request of regulatory
agencies to which a Reliance Party is subject.
Very truly yours,
Xxxxxx Xxxxx & Xxxxxxx
Exhibit "A"
List of New Subsidiaries
System Resources Corporation, a Delaware corporation
Delfin Systems, Inc., a California corporation
VisiCom Laboratories, Inc., a Delaware corporation (formerly, VisiCom
Laboratories, Inc., a California corporation)
Titan Food Pasteurization Corp., a Delaware corporation
Titan Medical Sterilization Corp., a Delaware corporation
Titan Wireless, Inc., a Delaware corporation
Titan Afronet, Inc., a Delaware corporation
Mergeco, Inc., a Delaware corporation
Titan Unidyne Corporation, a Delaware corporation (formerly, Unidyne
Corporation, a Virginia corporation)*
Eldyne, Inc.. a California corporation**
Diversified Control Systems, Inc., a Delaware corporation**
Xxxxxxx.Xxx, Inc. (formerly, Titan Software Systems Corporation), a Delaware
corporation**
*Titan Unidyne Corporation shall be deemed a "New Subsidiary" only with respect
to the Trademark Security Agreement executed by Titan Unidyne Corporation in
favor of the Administrative Agent.
**Eldyne, Inc., Diversified Control Systems, Inc. and Xxxxxxx.Xxx, Inc. shall be
deemed a "New Subsidiary" only with respect to the Copyright Security Agreement
executed by each of them in favor of the Administrative Agent.
Exhibit "B"
List of Existing Subsidiaries
Titan Technologies and Information Systems Corporation, a Delaware corporation
Titan Environmental Corporation, a Delaware corporation
Tomotherapeutics, Inc., a Delaware corporation
Linkabit Wireless, Inc., a Delaware corporation
Pulse Sciences, Inc., a California corporation
Federal Services, Inc., a California corporation
Titan Unidyne Corporation, a Delaware corporation (formerly, Unidyne
Corporation, a Virginia corporation)
Eldyne, Inc.. a California corporation
Diversified Control Systems, Inc., a Delaware corporation
Titan Aerochem, Inc., a Delaware corporation
Titan Broadband Communications Corporation, a Delaware corporation
Xxxxxxx.Xxx, Inc. (formerly, Titan Software Systems Corporation), a Delaware
corporation
Titan Scan Corp. (formerly, Titan Purification, Inc.), a Delaware corporation
DBA Systems, Inc., a Florida corporation
Validity Corporation, a California corporation
Horizons Technology, Inc., a Delaware corporation
Prepared by:
Xxxx Xxxx X. Xxxxxx
Reviewed by:
J. Xxxxxxx Xxxx
Xxxxxxx X. Xxxxxxxx
Signed by:
Xxxxx X. Xxxxxxx
Exhibit J
Form of Subsidiary Guarantee
EXHIBIT J
SUBSIDIARY GUARANTY
This SUBSIDIARY GUARANTY (as amended, supplemented, amended and
restated or otherwise modified from time to time, the "Guaranty"), dated as of
July 29, 1998, is made by each Subsidiary (such capitalized term, and other
terms used in this Guaranty, to have the meanings set forth in Article I) of THE
TITAN CORPORATION, a Delaware corporation (the "Borrower"), now or after the
date hereof (including pursuant to Section 5.5) a party to this Guaranty
(individually referred to as a "Guarantor" and collectively referred to as the
"Guarantors") in favor of each of the Secured Parties, including THE BANK OF
NOVA SCOTIA, in its capacity as the Administrative Agent.
W I T N E S S E T H:
WHEREAS, pursuant to a Credit Agreement, dated as of July 29, 1998 (as
amended, supplemented, amended and restated or otherwise modified from time to
time, the "Credit Agreement"), among the Borrower, the various financial
institutions as are, or may from time to time become, parties thereto
(collectively referred to as the "Lenders"), the Administrative Agent, and
Imperial Bank, as Documentation Agent, the Lenders and the Issuers have extended
Commitments to make Credit Extensions to the Borrower;
WHEREAS, as a condition precedent to the making of the Credit
Extensions (including the initial Credit Extension) under the Credit Agreement,
each Guarantor is required to execute and deliver this Guaranty;
WHEREAS, each Guarantor has duly authorized the execution, delivery and
performance of this Guaranty; and
WHEREAS, it is in the best interests of each Guarantor to execute this
Guaranty inasmuch as such Guarantor will derive substantial direct and indirect
benefits from the Credit Extensions made from time to time to the Borrower by
the Lenders and the Issuers pursuant to the Credit Agreement;
NOW THEREFORE, for good and valuable consideration the receipt of which
is hereby acknowledged, and in order to induce the Lenders and the Issuers to
make Credit Extensions (including the initial Credit Extension) to the Borrower,
each Guarantor jointly and severally agrees, for the benefit of each Secured
Party, as follows:
ARTICLE I
DEFINITIONS
1.1. SECTION Certain Terms. The following terms (whether or not underscored)
when used in this Guaranty, including its preamble and recitals, shall have the
following meanings (such definitions to be equally applicable to the singular
and plural forms thereof):
"Borrower" is defined in the preamble.
"Credit Agreement" is defined in the first recital.
"Guarantor" and "Guarantors" is defined in the preamble.
"Guaranty" is defined in the preamble.
"Lenders" is defined in the first recital.
"Termination Date" means the date on which all Obligations have
indefeasibly been paid in full, all Commitments have been fully terminated and
all Letters of Credit have been canceled or otherwise terminated.
1.2. SECTION Credit Agreement Definitions. Unless otherwise defined herein or
the context otherwise requires, terms used in this Guaranty, including its
preamble and recitals, have the meanings provided in the Credit Agreement.
ARTICLE II
GUARANTY PROVISIONS
2.1. SECTION Guaranty. Each Guarantor hereby jointly and severally absolutely,
unconditionally and irrevocably
(a) guarantees the full and punctual payment when due, whether at stated
maturity, by required prepayment, declaration, acceleration, demand or
otherwise, of all Obligations of the Borrower and each other Obligor
now or hereafter existing, whether for principal, interest (including
interest accruing at the then applicable rate provided in the Credit
Agreement after the occurrence of any Default set forth in Section
8.1.9 of the Credit Agreement, whether or not a claim for post-filing
or post-petition interest is allowed under applicable law following the
institution of a proceeding under bankruptcy, insolvency or similar
laws), fees, Reimbursement Obligations, expenses or otherwise
(including all such amounts which would become due but for the
operation of the automatic stay under Section 362(a) of the United
States Bankruptcy Code, 11 U.S.C.ss.362(a), and the operation of
Sections 502(b) and 506(b) of the United States Bankruptcy Code, 11
U.S.C.ss.502(b) andss.506(b)); and
(b) indemnifies and holds harmless each Secured Party for any and all costs
and expenses (including reasonable attorneys' fees and expenses)
incurred by such Secured Party in enforcing any rights under this
Guaranty;
provided, however, that each Guarantor shall only be liable under this Guaranty
for the maximum amount of such liability that can be hereby incurred without
rendering this Guaranty, as it relates to such Guarantor, voidable under
applicable law relating to fraudulent conveyance or fraudulent transfer, and not
for any greater amount. This Guaranty constitutes a guaranty of payment when due
and not of collection, and each Guarantor specifically agrees that it shall not
be necessary or required that any Secured Party exercise any right, assert any
claim or demand or enforce any remedy whatsoever against the Borrower, any other
Obligor or any other Person before or as a condition to the obligations of such
Guarantor hereunder.
2.2. SECTION Reinstatement, etc. Each Guarantor hereby jointly and severally
agrees that this Guaranty shall continue to be effective or be reinstated, as
the case may be, if at any time any payment (in whole or in part) of any of the
Obligations is invalidated, declared to be fraudulent or preferential, set
aside, rescinded or must otherwise be restored by any Secured Party, upon the
insolvency, bankruptcy, reorganization (or similar event) of the Borrower, any
other Obligor or otherwise, all as though such payment had not been made.
2.3. SECTION Guaranty Absolute, etc. This Guaranty shall in all respects be a
continuing, absolute, unconditional and irrevocable guaranty of payment, and
shall remain in full force and effect until the Termination Date has occurred.
Each Guarantor jointly and severally guarantees that the Obligations of the
Borrower and each other Obligor will be paid strictly in accordance with the
terms of the Credit Agreement and each other Loan Document under which they
arise, regardless of any law, regulation or order now or hereafter in effect in
any jurisdiction affecting any of such terms or the rights of any Secured Party
with respect thereto. The liability of each Guarantor under this Guaranty shall
be joint and several, absolute, unconditional and irrevocable irrespective of:
(a) any lack of validity, legality or enforceability of the Credit
Agreement or any other Loan Document;
(b) the failure of any Secured Party
(i) to assert any claim or demand or to enforce any right or
remedy against the Borrower, any other Obligor or any other
Person (including any other guarantor) under the provisions of
the Credit Agreement, any other Loan Document or otherwise, or
(ii) to exercise any right or remedy against any other guarantor
(including each Guarantor) of, or collateral securing, any
Obligations;
(c) any change in the time, manner or place of payment of, or in any other
term of, all or any part of the Obligations, or any other extension,
compromise or renewal of any Obligation;
(d) any reduction, limitation, impairment or termination of any Obligations
for any reason, including any claim of waiver, release, surrender,
alteration or compromise, and shall not be subject to (and each
Guarantor hereby waives any right to or claim of) any defense or
setoff, counterclaim, recoupment or termination whatsoever by reason of
the invalidity, illegality, nongenuineness, irregularity, compromise,
unenforceability of, or any other event or occurrence affecting, any
Obligations or otherwise;
(e) any amendment to, rescission, waiver, or other modification of, or any
consent to or departure from, any of the terms of the Credit Agreement
or any other Loan Document;
(f) any addition, exchange, release, surrender or non-perfection of any
collateral, or any amendment to or waiver or release or addition of, or
consent to or departure from, any other guaranty held by any Secured
Party securing any of the Obligations; or
(g) any other circumstance which might otherwise constitute a defense
available to, or a legal or equitable discharge of, the Borrower, any
other Obligor, any surety or any guarantor.
2.4. SECTION Setoff . Each Guarantor hereby irrevocably authorizes the
Administrative Agent and each other Secured Party, without the requirement that
any notice be given to such Guarantor (such notice being expressly waived by
each Guarantor), upon the occurrence and during the continuance of any Default
described in clauses (a) through (d) of Section 8.1.9 of the Credit Agreement as
it relates to the Borrower or, with the consent of the Required Lenders, upon
the occurrence and during the continuance of any other Event of Default, to
set-off and appropriate and apply to the payment of the Obligations owing to the
Secured Parties (whether or not then due, and whether or not the Administrative
Agent or such other Secured Party has made any demand for payment of the
Obligations), any and all balances, claims, credits, deposits (general or
special, time or demand, provisional or final), accounts or money of such
Guarantor then or thereafter maintained with such Secured Party; provided,
however, that any such appropriation and application shall be subject to the
provisions of Section 4.8 of the Credit Agreement. Each Secured Party agrees to
notify the applicable Guarantor and the Administrative Agent after any such
setoff and application made by such Secured Party; provided, however, that the
failure to give such notice shall not affect the validity of such setoff and
application. The rights of each Secured Party under this Section are in addition
to other rights and remedies (including other rights of setoff under applicable
law or otherwise) which such Secured Party may have.
2.5. SECTION Waiver, etc. Each Guarantor hereby waives promptness, diligence,
notice of acceptance and any other notice with respect to any of the Obligations
and this Guaranty and any requirement that the Administrative Agent or any other
Secured Party protect, secure, perfect or insure any Lien, or any property
subject thereto, or exhaust any right or take any action against the Borrower,
any other Obligor or any other Person (including any other guarantor) or entity
or any collateral securing the Obligations, as the case may be.
2.6. SECTION Postponement of Subrogation, etc. Each Guarantor agrees that it
will not exercise any rights which it may acquire by way of rights of
subrogation under this Guaranty or any other Loan Document to which it is a
party, nor shall any Guarantor seek or be entitled to seek any contribution or
reimbursement from the Borrower or any other Obligor, in respect of any payment
made hereunder, under any other Loan Document or otherwise, until following the
Termination Date. Any amount paid to any Guarantor on account of any such
subrogation rights prior to the Termination Date shall be held in trust for the
benefit of the Secured Parties and shall immediately be paid and turned over to
the Administrative Agent for the benefit of the Secured Parties in the exact
form received by such Guarantor (duly endorsed in favor of the Administrative
Agent, if required), to be credited and applied against the Obligations, whether
matured or unmatured, in accordance with Section 2.8; provided, however, that if
(a) any Guarantor has made payment to the Secured Parties of all or any
part of the Obligations; and
(b) the Termination Date has occurred;
then at such Guarantor's request, the Administrative Agent, (on behalf of the
Secured Parties) will, at the expense of such Guarantor, execute and deliver to
such Guarantor appropriate documents (without recourse and without
representation or warranty) necessary to evidence the transfer by subrogation to
such Guarantor of an interest in the Obligations resulting from such payment by
such Guarantor. In furtherance of the foregoing, at all times prior to the
Termination Date, each Guarantor shall refrain from taking any action or
commencing any proceeding against the Borrower or any other Obligor (or its
successors or assigns, whether in connection with a bankruptcy proceeding or
otherwise) to recover any amounts in the respect of payments made under this
Guaranty to any Secured Party. Notwithstanding the foregoing, to the extent
necessary to toll the statute of limitations, such Guarantor may take such
action required to preserve any rights it has by way of rights of subrogation as
consented to by the Administrative Agent in its reasonable discretion.
2.7. SECTION Successors, Transferees and Assigns, etc. This Guaranty shall:
(a) be binding upon each Guarantor, and its successors, transferees and
assigns; and
(b) inure to the benefit of and be enforceable by the Administrative Agent
and each other Secured Party.
Without limiting the generality of clause (b), any Lender may assign or
otherwise transfer (in whole or in part) any Note or Credit Extension held by it
to any other Person and such other Person shall thereupon become vested with all
rights and benefits in respect thereof granted to such Lender under any Loan
Document (including this Guaranty) or otherwise, subject, however, to any
contrary provisions in such assignment or transfer, and to the provisions of
Article X of the Credit Agreement.
2.8. SECTION Payments; Application. Each Guarantor hereby agrees with each
Secured Party as follows:
(a) Each Guarantor agrees that all payments made by such Guarantor
hereunder will be made in Dollars to the Administrative Agent, without
set-off, counterclaim or other defense and in accordance with Sections
4.6 and 4.7 of the Credit Agreement, free and clear of and without
deduction for any Taxes, the Guarantor hereby agreeing to comply with
and be bound by the provisions of Sections 4.6 and 4.7 of the Credit
Agreement in respect of all payments made by it hereunder and the
provisions of which Sections are hereby incorporated into and made a
part of this Guaranty by this reference as if set forth herein;
provided, that references to the "Borrower" in such Sections shall be
deemed to be references to each -------- Guarantor, and references to
"this Agreement" shall be deemed to be references to this Guaranty.
(b) All payments made hereunder shall be applied upon receipt as follows:
(i) first, to the payment of all Obligations owing to the
Administrative Agent;
(ii) second, after payment in full of the amounts specified in
clause (b)(i), to the ratable payment of all other Obligations
owing to the Secured Parties; and
(iii) third, after payment in full of the amounts specified in
clauses (b)(i) and (b)(ii), and following the Termination
Date, to such Guarantor or any other Person lawfully entitled
to receive such surplus.
SECTION 2.9. Acceleration of Guaranty. Each Guarantor hereby jointly
and severally agrees that, in the event of an Event of Default under Section
8.1.9 of the Credit Agreement, and if such Default shall occur at a time when
any of the Obligations may not then be due and payable, each Guarantor jointly
and severally agrees that it will pay to the Administrative Agent (for the
benefit of the Secured Parties) forthwith the full amount which would be payable
hereunder by each Guarantor if all such Obligations were then due and payable.
ARTICLE III
REPRESENTATIONS AND WARRANTIES
3.1. SECTION Representations. In order to induce the Secured Parties to enter
into the Credit Agreement and make Credit Extensions thereunder, each Guarantor
represents and warrants to each Secured Party that the representations and
warranties contained in Article VI of the Credit Agreement, insofar as the
representations and warranties contained therein are applicable to it and its
properties, are true and correct in all material respects, each such
representation and warranty set forth in such Article (insofar as applicable as
aforesaid) and all other terms of the Credit Agreement to which reference is
made therein, together with all related definitions and ancillary provisions,
being hereby incorporated into this Guaranty by this reference as though
specifically set forth in this Article. Furthermore, each Guarantor represents
that it has knowledge of the Borrower's and each other Obligor's financial
condition and affairs and that it has adequate means to obtain from the Borrower
and each other Obligor on an ongoing basis information relating thereto and to
the Borrower's and such Obligor's ability to pay and perform the Obligations,
and agrees to assume the responsibility for keeping, and to keep, so informed
for so long as this Guaranty is in effect. Each Guarantor acknowledges and
agrees that the Secured Parties shall have no obligation to investigate the
financial condition or affairs of any Obligor for the benefit of such Guarantor
nor to advise such Guarantor of any fact respecting, or any change in, the
financial condition or affairs of the Borrower or any other Obligor that might
become known to any Secured Party at any time, whether or not such Secured Party
knows or believes or has reason to know or believe that any such fact or change
is unknown to such Guarantor, or might (or does) materially increase the risk of
such Guarantor as guarantor, or might (or would) affect the willingness of such
Guarantor to continue as a guarantor of the Obligations.
ARTICLE IV
COVENANTS, ETC.
4.1. SECTION Covenants. Each Guarantor covenants and agrees that, at all times
prior to the Termination Date, it will perform, comply with and be bound by all
of the agreements, covenants and obligations contained in the Credit Agreement
(including Article VII thereof) which are applicable to such Guarantor or its
properties, each such agreement, covenant and obligation contained in the Credit
Agreement and all other terms of the Credit Agreement to which reference is made
herein, together with all related definitions and ancillary provisions, being
hereby incorporated into this Guaranty by this reference as though specifically
set forth in this Article.
ARTICLE V
MISCELLANEOUS PROVISIONS
5.1. SECTION Loan Document. This Guaranty is a Loan Document executed pursuant
to the Credit Agreement and shall (unless otherwise expressly indicated herein)
be construed, administered and applied in accordance with the terms and
provisions thereof, including Article X thereof.
5.2. SECTION Binding on Successors, Transferees and Assigns; Assignment. In
addition to, and not in limitation of, Section 2.7, this Guaranty shall be
jointly and severally binding upon each Guarantor and its successors,
transferees and assigns and shall inure to the benefit of and be enforceable by
each Secured Party and their respective successors, transferees and assigns (to
the full extent provided pursuant to Section 2.7); provided, however, that no
Guarantor may (unless otherwise permitted under the terms of the Credit
Agreement) assign any of its obligations hereunder without the prior written
consent of all Lenders.
5.3. SECTION Amendments, etc. No amendment to or waiver of any provision of this
Guaranty, nor consent to any departure by any Guarantor herefrom, shall in any
event be effective unless the same shall be in writing and signed by the
Administrative Agent (on behalf of the Lenders or the Required Lenders, as the
case may be, pursuant to Section 10.1 of the Credit Agreement) and then such
waiver or consent shall be effective only in the specific instance and for the
specific purpose for which given.
5.4. SECTION Notices. All notices and other communications provided for
hereunder shall be in writing (including facsimile communication) and, mailed or
telecopied or delivered to each Guarantor, in care of the Borrower at the
address or facsimile number of the Borrower specified in the Credit Agreement.
All such notices and other communications, when mailed and properly addressed
with postage prepaid or if properly addressed and sent by pre-paid courier
service, shall be deemed given when received; any such notice or communication,
if transmitted by facsimile, shall be deemed given when the confirmation of
transmission thereof is received by the transmitter.
5.5. SECTION Additional Subsidiary Guarantors. Upon the execution and delivery
by any other Person of an instrument in the form of Annex I hereto, such Person
shall become a "Guarantor" hereunder with the same force and effect as if
originally named as a "Guarantor" herein. The execution and delivery of any such
instrument shall not require the consent of any other Guarantor hereunder. The
rights and obligations of each Guarantor hereunder shall remain in full force
and effect notwithstanding the addition of any new Guarantor as a party to this
Guaranty.
5.6. SECTION No Waiver; Remedies. In addition to, and not in limitation of,
Section 2.3 and Section 2.5, no failure on the part of any Secured Party to
exercise, and no delay in exercising, any right hereunder shall operate as a
waiver thereof; nor shall any single or partial exercise of any right hereunder
preclude any other or further exercise thereof or the exercise of any other
right. The remedies herein provided are cumulative and not exclusive of any
remedies provided by law.
5.7. SECTION Captions. Section captions used in this Guaranty are for
convenience of reference only, and shall not affect the construction of this
Guaranty.
5.8. SECTION Severability. Wherever possible each provision of this Guaranty
shall be interpreted in such manner as to be effective and valid under
applicable law, but if any provision of this Guaranty shall be prohibited by or
invalid under such law, such provision shall be ineffective to the extent of
such prohibition or invalidity, without invalidating the remainder of such
provision or the remaining provisions of this Guaranty.
5.9. SECTION Governing Law, Entire Agreement, etc. THIS GUARANTY SHALL BE DEEMED
TO BE A CONTRACT MADE UNDER AND GOVERNED BY THE INTERNAL LAWS OF THE STATE OF
NEW YORK (INCLUDING FOR SUCH PURPOSE SECTIONS 5-1401 AND 5-1402 OF THE GENERAL
OBLIGATIONS LAW OF THE STATE OF NEW YORK). THIS GUARANTY AND THE OTHER LOAN
DOCUMENTS CONSTITUTE THE ENTIRE UNDERSTANDING AMONG THE PARTIES HERETO WITH
RESPECT TO THE SUBJECT MATTER HEREOF AND SUPERSEDE ANY PRIOR AGREEMENTS, WRITTEN
OR ORAL, WITH RESPECT THERETO.
5.10. SECTION Forum Selection and Consent to Jurisdiction. ANY LITIGATION BASED
HEREON, OR ARISING OUT OF, UNDER, OR IN CONNECTION WITH, THIS GUARANTY OR ANY
OTHER LOAN DOCUMENT, OR ANY COURSE OF CONDUCT, COURSE OF DEALING, STATEMENTS
(WHETHER ORAL OR WRITTEN) OR ACTIONS OF THE SECURED PARTIES OR ANY GUARANTOR
SHALL BE BROUGHT AND MAINTAINED IN THE COURTS OF THE STATE OF NEW YORK, NEW YORK
COUNTY OR IN THE UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF NEW
YORK; PROVIDED, HOWEVER, THAT ANY SUIT SEEKING ENFORCEMENT AGAINST ANY PROPERTY
MAY BE BROUGHT, AT THE ADMINISTRATIVE AGENT'S OPTION, IN THE COURTS OF ANY
JURISDICTION WHERE SUCH PROPERTY MAY BE FOUND. EACH GUARANTOR HEREBY IRREVOCABLY
APPOINTS CSC UNITED STATES CORPORATION COMPANY (THE "PROCESS AGENT"), WITH AN
OFFICE ON THE DATE HEREOF AT 000 XXXXXX XXXXXX, XXX XXXX, XXX XXXX 00000, AS ITS
ADMINISTRATIVE AGENT TO RECEIVE, ON ITS BEHALF AND ON BEHALF OF ITS PROPERTY,
SERVICE OF COPIES OF THE SUMMONS AND COMPLAINT AND ANY OTHER PROCESS WHICH MAY
BE SERVED IN ANY SUCH ACTION OR PROCEEDING. SUCH SERVICE MAY BE MADE BY MAILING
OR DELIVERING A COPY OF SUCH PROCESS TO SUCH GUARANTOR IN CARE OF THE PROCESS
AGENT AT THE PROCESS AGENT'S ABOVE ADDRESS, AND EACH GUARANTOR HEREBY
IRREVOCABLY AUTHORIZES AND DIRECTS THE PROCESS AGENT TO ACCEPT SUCH SERVICE ON
ITS BEHALF. EACH GUARANTOR IRREVOCABLY CONSENTS TO THE SERVICE OF PROCESS BY
REGISTERED MAIL, POSTAGE PREPAID, OR BY PERSONAL SERVICE WITHIN OR WITHOUT THE
STATE OF NEW YORK ADDRESSED TO SUCH GUARANTOR, CARE OF THE BORROWER, AT THE
ADDRESS FOR NOTICES SPECIFIED IN THE CREDIT AGREEMENT. EACH GUARANTOR HEREBY
EXPRESSLY AND IRREVOCABLY SUBMITS TO THE JURISDICTION OF THE COURTS OF THE STATE
OF NEW YORK AND OF THE UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF
NEW YORK FOR THE PURPOSE OF ANY SUCH LITIGATION AS SET FORTH ABOVE AND
IRREVOCABLY AGREES TO BE BOUND BY ANY JUDGMENT RENDERED THEREBY IN CONNECTION
WITH SUCH LITIGATION. EACH GUARANTOR HEREBY EXPRESSLY AND IRREVOCABLY WAIVES, TO
THE FULLEST EXTENT PERMITTED BY LAW, ANY OBJECTION WHICH IT MAY HAVE OR
HEREAFTER MAY HAVE TO THE LAYING OF VENUE OF ANY SUCH LITIGATION BROUGHT IN ANY
SUCH COURT REFERRED TO ABOVE AND ANY CLAIM THAT ANY SUCH LITIGATION HAS BEEN
BROUGHT IN AN INCONVENIENT FORUM. TO THE EXTENT THAT ANY GUARANTOR HAS OR
HEREAFTER MAY ACQUIRE ANY IMMUNITY FROM JURISDICTION OF ANY COURT OR FROM ANY
LEGAL PROCESS (WHETHER THROUGH SERVICE OR NOTICE, ATTACHMENT PRIOR TO JUDGMENT,
ATTACHMENT IN AID OF EXECUTION OR OTHERWISE) WITH RESPECT TO ITSELF OR ITS
PROPERTY, SUCH GUARANTOR HEREBY IRREVOCABLY WAIVES SUCH IMMUNITY IN RESPECT OF
ITS OBLIGATIONS UNDER THIS GUARANTY AND THE OTHER LOAN DOCUMENTS.
5.11. SECTION Waiver of Jury Trial. EACH GUARANTOR HEREBY KNOWINGLY, VOLUNTARILY
AND INTENTIONALLY WAIVES ANY RIGHTS IT MAY HAVE TO A TRIAL BY JURY IN RESPECT OF
ANY LITIGATION BASED HEREON, OR ARISING OUT OF, UNDER, OR IN CONNECTION WITH,
THIS GUARANTY OR ANY OTHER LOAN DOCUMENT OR ANY COURSE OF CONDUCT, COURSE OF
DEALING, STATEMENTS (WHETHER ORAL OR WRITTEN) OR ACTIONS OF THE SECURED PARTIES
OR SUCH GUARANTOR. EACH GUARANTOR ACKNOWLEDGES AND AGREES THAT IT HAS RECEIVED
FULL AND SUFFICIENT CONSIDERATION FOR THIS PROVISION AND THAT THIS PROVISION IS
A MATERIAL INDUCEMENT FOR THE SECURED PARTIES ENTERING INTO THE CREDIT AGREEMENT
AND THE OTHER LOAN DOCUMENTS.
5.12. SECTION Counterparts. This Guaranty may be executed by the parties hereto
in several counterparts, each of which shall be deemed to be an original and all
of which shall constitute together but one and the same agreement.
IN WITNESS WHEREOF, each Guarantor has caused this Guaranty to be duly
executed and delivered by its officer thereunto duly authorized as of the date
first above written.
TITAN TECHNOLOGIES AND
INFORMATION SYSTEMS CORPORATION
By:
Name:
Title:
TITAN PURIFICATION, INC.
By:
Name:
Title:
DBA SYSTEMS, INC.
By:
Name:
Title:
VALIDITY CORPORATION
By:
Name:
Title:
LINKABIT WIRELESS, INC.
By:
Name:
Title:
UNIDYNE CORPORATION
By:
Name:
Title:
TITAN SOFTWARE SYSTEMS CORPORATION
By:
Name:
Title:
PULSE SCIENCES, INC.
By:
Name:
Title:
TITAN ENVIRONMENTAL CORPORATION
By:
Name:
Title:
TOMOTHERAPEUTICS, INC.
By:
Name:
Title:
FEDERAL SERVICES, INC.
By:
Name:
Title:
ELDYNE, INC.
By:
Name:
Title:
DIVERSIFIED CONTROL SYSTEMS, INC.
By:
Name:
Title:
TITAN BROADBAND COMMUNICATIONS
CORPORATION
By:
Name:
Title:
TITAN AEROCHEM, INC.
By:
Name:
Title:
HORIZONS TECHNOLOGY, INC.
By:
Name:
Title:
ACCEPTED AND AGREED FOR ITSELF
AND ON BEHALF OF THE SECURED PARTIES:
THE BANK OF NOVA SCOTIA,
as Administrative Agent
By:_________________________________
Name:
Title:
ANNEX I to
the Subsidiary Guaranty
SUPPLEMENT, dated as of ________________, ____ (this
"Supplement"), to the Subsidiary Guaranty, dated as of _____
__, ____ (together with all amendments, supplements,
restatements and other modifications, if any, from time to
time thereafter made thereto, the "Guaranty"), among the
initial signatories thereto and each other Person (such
capitalized term, and other terms used in this Supplement, to
have the meanings set forth in Article I of the Guaranty)
which from time to time thereafter became a party thereto
pursuant to Section 5.5 thereof (each, individually, a
"Guarantor", and, collectively, the "Guarantors"), in favor of
the Secured Parties (as defined in the Guaranty).
W I T N E S S E T H:
WHEREAS, pursuant to the provisions of Section 5.5 of the Guaranty, the
undersigned is becoming a
Guarantor under the Guaranty; and
WHEREAS, the undersigned Guarantor desires to become a "Guarantor"
under the Guaranty in order to induce the Secured Parties to continue to extend
Credit Extensions under the Credit Agreement;
NOW, THEREFORE, in consideration of the premises, and for other
consideration (the receipt and sufficiency of which is hereby acknowledged), the
undersigned agrees, for the benefit of each Secured Party, as follows.
SECTION 1. In accordance with the terms of the Guaranty, by its
signature below the undersigned hereby irrevocably agrees to become a Guarantor
under the Guaranty with the same force and effect as if it were an original
signatory thereto and the undersigned Guarantor, hereby (a) agrees to be bound
by and comply with all of the terms and provisions of the Guaranty applicable to
it as a Guarantor and (b) represents and warrants that the representations and
warranties made by it as a Guarantor thereunder are true and correct as of the
date hereof. In furtherance of the foregoing, each reference to a "Guarantor" in
the Guaranty shall be deemed to include the undersigned Guarantor.
SECTION 2. The undersigned Guarantor hereby represents and warrants
that this Supplement has been duly authorized, executed and delivered by it and
that this Supplement and the Guaranty constitute the legal, valid and binding
obligation of the undersigned Guarantor, enforceable against it in accordance
with its terms.
SECTION 3. Except as expressly supplemented hereby, the Guaranty shall
remain in full force and effect in accordance with its terms.
SECTION 4. In the event any one or more of the provisions contained in
this Supplement should be held invalid, illegal or unenforceable in any respect,
the validity, legality and enforceability of the remaining provisions contained
herein and in the Guaranty shall not in any way be affected or impaired.
SECTION 5. THIS SUPPLEMENT SHALL BE DEEMED TO BE A CONTRACT MADE UNDER
AND GOVERNED BY THE LAWS OF THE STATE OF NEW YORK.
SECTION 6. This Supplement may be executed by the parties hereto in
several counterparts, each of which shall be deemed to be an original and all of
which shall constitute together but one and the same agreement.
IN WITNESS WHEREOF, the parties hereto have caused this Supplement to
be duly executed and delivered by their respective officers thereunto duly
authorized as of the day and year first above written.
[NAME OF ADDITIONAL SUBSIDIARY GUARANTOR]
By:
Name:
Title:
ACCEPTED BY:
THE BANK OF NOVA SCOTIA,
as Administrative Agent
By:
Name:
Title:
Exhibit K
Form of Interco Subordination Agreement
EXHIBIT K
INTERCOMPANY SUBORDINATION AGREEMENT
THIS INTERCOMPANY SUBORDINATION AGREEMENT (this "Subordination
Agreement"), dated as of June 9, 1999, made by and among each of the undersigned
Persons (such capitalized term, and other terms used herein without definition,
to have the meanings ascribed thereto in Section 1 below) and such other Persons
that may from time to time become a party hereto pursuant to the terms hereof or
of the Amended and Restated Credit Agreement referred to below (collectively,
the "Subordinated Creditors"), and THE TITAN CORPORATION, a Delaware corporation
(the "Borrower"), in favor of the Administrative Agent and each of the Secured
Parties.
W I T N E S S E T H:
WHEREAS, the Borrower has entered into a Amended and Restated Credit
Agreement, dated as of June 9, 1999 (as amended, supplemented, amended and
restated or otherwise modified from time to time, the "Amended and Restated
Credit Agreement"), among the Borrower, the various financial institutions as
are, or may from time to time become, parties thereto (together with their
successors, transferees and assigns, the "Lenders"), The Bank of Nova Scotia, as
administrative agent (the "Administrative Agent") for the Lenders, and Imperial
Bank, as Documentation Agent pursuant to which the Lenders and the Issuers have
agreed to make Credit Extensions on the terms and subject to the conditions set
forth therein;
WHEREAS, as a condition precedent to the making of the Credit
Extensions (including the initial Credit Extension) under the Amended and
Restated Credit Agreement, the Subordinated Creditors and the Borrower are
required to execute and deliver this Subordination Agreement;
WHEREAS, each Subordinated Creditor has duly authorized the execution,
delivery and performance of this Subordination Agreement; and
WHEREAS, it is in the best interests of each Subordinated Creditor to
execute this Subordination Agreement inasmuch as each Subordinated Creditor will
derive substantial direct and indirect benefits from the Credit Extensions made
from time to time to the Borrower by the Lenders pursuant to the Amended and
Restated Credit Agreement;
NOW, THEREFORE, in consideration of the above premises and in order to
induce the Lenders and the Issuers to continue to make Credit Extensions to the
Borrower pursuant to the Amended and Restated Credit Agreement, and for other
good and valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, the parties hereto hereby agree as set forth above and as follows:
AGREEMENT
SECTION 1. Definitions. Terms used but not defined herein have the meanings
given to them in the Amended and Restated Credit Agreement. As used in this
Subordination Agreement, the following terms shall have the meanings specified
below:
"Administrative Agent" is defined in the first recital.
"Amended and Restated Credit Agreement" is defined in the first
recital.
"Borrower" is defined in the preamble.
"Intercompany Debt" means, on any date, any Indebtedness of the
Borrower related to or resulting from any loan or advance from, or any
non-equity investment by, or any management or similar fees payable to, or any
obligation to pay for goods or services to, any Subsidiary of the Borrower.
"Lender" is defined in the first recital.
"Senior Indebtedness" is defined in clause (a) of Section 2.
"Subordinated Creditor" is defined in the preamble.
"Subordination Agreement" is defined in the preamble.
SECTION 2. Agreement to Subordinate.
(a) Subject to the terms of the Amended and Restated Credit
Agreement, the Borrower and each of the Subordinated Creditors agree that the
Intercompany Debt is and shall be subject, subordinate and rendered junior, to
the extent and in the manner hereinafter set forth, in right of payment, to the
prior payment in cash in full of all Obligations of the Borrower now existing or
hereafter arising, whether for (i) principal, (ii) interest (including, without
limitation, interest accruing after the filing of a petition initiating any
proceeding referred to in clause (a) of Section 3, whether or not ----------
--------- allowed as a claim in such proceeding), (iii) reasonable costs, (iv)
reasonable fees (including, without limitation, reasonable attorneys' fees and
disbursements), (v) reasonable expenses, and (vi) otherwise (the Obligations
specified in clauses(a)(i) through (a)(vi) above are referred to collectively as
the ------------- ------- "Senior Indebtedness"). For purposes of this
Subordination Agreement, the Senior Indebtedness shall not --------------------
be deemed to have been paid in cash in full until the Lenders shall have
received full payment of the Senior Indebtedness in cash, which payment shall
have been retained by the Lenders for a period of time in excess of all
applicable preference or other similar periods under applicable bankruptcy,
insolvency or creditors' rights laws. Each of the Borrower and the Subordinated
Creditors waive notice of acceptance of this Subordination Agreement by the
Lenders, and the Subordinated Creditors waive notice of and consent to the
making, amount and terms of the Senior Indebtedness which may exist or be
created from time to time and any renewal, extension, amendment or modification
thereof, and any other lawful action which any Lender or Lenders in its and
their sole and absolute discretion may take or omit to take with respect
thereto. The provisions of this Section shall constitute a continuing offer made
for the benefit of and to all Lenders and each Lender is hereby irrevocably
authorized to enforce such provisions.
(b) In the event that the Borrower shall make, and/or any
Subordinated Creditor shall receive from any source whatsoever, any payment on
Intercompany Debt in contravention of this Subordination Agreement or the terms
of the Amended and Restated Credit Agreement, then and in any such event such
payment shall be deemed to be the property of, segregated, received and held in
trust for the benefit of and shall be promptly paid over and delivered to the
Administrative Agent for the pro rata benefit of the Lenders.
(c) The Borrower shall not make, and no Subordinated Creditor
shall receive or accept from any source whatsoever, any payment in respect of
any Intercompany Debt if any Default of the type described in Section 8.1.1 or
Section 8.1.9 of the Amended and Restated Credit Agreement or any other Event of
Default shall have occurred and be continuing or would result therefrom, unless
and until (i) the Senior Indebtedness has been paid in cash in full, (ii) in the
case of an Event of Default referred to above other than a Default of the nature
set forth in Section 8.1.9 of the Amended and Restated Credit -------------
Agreement, such Event of Default has been cured or waived or (iii) the
Administrative Agent has otherwise consented in writing.
SECTION 3. In Furtherance of Subordination.
(a) Upon any distribution of all or any of the assets of the
Borrower in the event of
(i) any insolvency or bankruptcy case or proceeding,
or any receivership, liquidation, reorganization or other similar case or
proceeding in connection therewith, relative to the Borrower, or to its
creditors, as such, or to its assets,
(ii) any liquidation, dissolution or other winding up
of the Borrower, whether voluntary or involuntary and whether or not involving
insolvency or bankruptcy, or
(iii) any assignment for the benefit of creditors or
any other marshaling of assets and liabilities of the Borrower,
then, and in any such event, unless the Administrative Agent shall otherwise
agree in writing, the Lenders shall receive payment in cash in full of all
amounts due or to become due (whether or not the Senior Indebtedness has been
declared due and payable prior to the date on which the Senior Indebtedness
would otherwise have become due and payable) on or in respect of all Senior
Indebtedness (including post-petition interest) before the Subordinated
Creditors or anyone claiming through or on their behalf (including any receiver,
trustee, or otherwise) are entitled to receive from any source whatsoever any
payment on account of principal of (or premium, if any) or interest on or other
amounts payable in respect of the Intercompany Debt, and to that end, any
payment or distribution of any kind or character, whether in cash, property or
securities, which may be payable or deliverable in respect of the Intercompany
Debt in any such case, proceeding, dissolution, liquidation or other winding up
or event, shall be paid or delivered directly to the Administrative Agent for
the application (in the case of cash) to, or as collateral (in the case of
non-cash property or securities) for, the payment or prepayment of the Senior
Indebtedness until the Senior Indebtedness shall have been paid in cash in full.
(b) If any proceedings, liquidation, dissolution or winding up
referred to in clause (a) above is commenced by or against the Borrower,
(i) the Administrative Agent or the Lenders are hereby
irrevocably authorized and empowered (in their own names or in the name of the
Borrower or otherwise), but shall have no obligation, to demand, xxx for,
collect and receive every payment or distribution in respect of the Intercompany
Debt above and give acquittance therefor and to file claims and proofs of claim
and take such other action (including, without limitation, voting the
Intercompany Debt or enforcing any security interest or other lien securing
payment of the Intercompany Debt) as the Lenders or the Administrative Agent may
reasonably deem necessary or advisable for the exercise or enforcement of any of
the rights or interests of the Lenders or the Administrative Agent hereunder;
provided that in the event the Administrative Agent or the Lenders take such
action, the Administrative Agent or the Lenders shall apply all proceeds first,
to the payment of the costs ----- of enforcement of this Subordination
Agreement, and second, to the pro rata payment of the ------ --- ---- Senior
Indebtedness; and
(ii) the Subordinated Creditors shall duly and
promptly take such action as the Lenders or the Administrative Agent may request
(A) to collect the Intercompany Debt for the account of the Lenders and the
Administrative Agent and to file appropriate claims or proofs of claim in
respect of the Intercompany Debt, (B) to execute and deliver to the Lenders or
the Administrative Agent such powers of attorney, assignments, or other
instruments as the Lenders or the Administrative Agent may reasonably request in
order to enable them to enforce any and all claims with respect to, and any
security interests and other liens securing payment of, the Intercompany Debt
and (C) to collect and receive any and all payments or distributions which may
be payable or deliverable upon or with respect to the Intercompany Debt.
(c) All payments from any source whatsoever or distributions
of assets of the Borrower, whether in cash, property or securities upon or with
respect to the Intercompany Debt which are received by the Subordinated
Creditors contrary to the provisions of this Subordination Agreement shall be
received in trust for the pro rata benefit of the Lenders, shall be segregated
from other funds and property held by --- ---- the Subordinated Creditors and
shall be forthwith paid over to the Administrative Agent in the same form as so
received (with any necessary indorsement) to be applied, pro rata (in the case
of cash) to, or --- ---- held as collateral (in the case of noncash property or
securities) for, the payment or prepayment of the Senior Indebtedness, whether
matured or unmatured, in accordance with the terms of this Subordination
Agreement.
(d) The Lenders and the Administrative Agent are hereby
authorized to demand specific performance of this Subordination Agreement,
whether or not the Borrower or any Subordinated Creditor shall have complied
with any of the provisions hereof applicable to it, at any time when the
Subordinated Creditors or any one of them shall have failed to comply with any
of the provisions of this Subordination Agreement applicable to it. The
Subordinated Creditors hereby irrevocably waive any defense (other than the
defense of payment in full of the Senior Indebtedness) based on the adequacy of
a remedy at law which might be asserted as a bar to such remedy of specific
performance.
SECTION 4. No Enforcement or Commencement of Any Proceedings. Each
Subordinated Creditor agrees that, so long as any Senior Indebtedness shall
remain unpaid, or any Commitment shall be in effect, it will not accelerate the
maturity of the Intercompany Debt or commence, or join with any creditor other
than the Lenders in commencing any proceeding referred to in clause (a) of
Section 3.
SECTION 5. Rights of Subrogation. The Subordinated Creditors agree that no
payment or distribution to the Lenders or the Administrative Agent pursuant to
the provisions of this Subordination Agreement shall entitle the Subordinated
Creditors to exercise any rights of subrogation in respect thereof until all
Senior Indebtedness has been paid in cash in full and the Commitments have been
terminated. The Subordinated Creditors agree that the subordination provisions
contained herein shall not be affected by any action, or failure to act, by the
Administrative Agent or the Lenders which results, or may result, in affecting,
impairing or extinguishing any right of reimbursement or subrogation or other
right or remedy of the Subordinated Creditors against the Borrower.
Notwithstanding the foregoing, to the extent necessary to toll the statute of
limitations, the Subordinated Creditors may take such action required to
preserve any rights they have by way of rights of subrogation as consented to by
the Administrative Agent in its reasonable discretion.
SECTION 6. Subordination Legend; Further Assurances. The Subordinated
Creditors and the Borrower will cause each note and instrument (if any)
evidencing the Intercompany Debt to be endorsed with the following legend:
"The indebtedness evidenced by this instrument is subordinated
to the prior payment in cash in full of the Senior Indebtedness (as
defined in the Intercompany Subordination Agreement, dated as of June
9, 1999) pursuant to, and to the extent provided in, the Intercompany
Subordination Agreement by the maker hereof and payee named herein in
favor of the Lenders and any person now or hereafter designated as
their agent."
Each of the Subordinated Creditors and the Borrower hereby agrees to xxxx its
books of account in such a manner as shall be effective to give proper notice of
the effect of this Subordination Agreement and will, in the case of any
Intercompany Debt which is not evidenced by any note or instrument, following
the occurrence and subject to the continuation of a Default of the type
described in Section 8.1.1 or 8.1.9 of the Amended and Restated Credit Agreement
or Event of Default, upon the Administrative Agent's request, cause such
Intercompany Debt to be evidenced by an appropriate note or instrument or
instruments endorsed with the above legend. Each of the Subordinated Creditors
and the Borrower will at its expense and at any time and from time to time
promptly execute and deliver all further instruments and documents and take all
further action that may be necessary or that the Lenders or the Administrative
Agent may reasonably request in order to protect any right or interest granted
or purported to be granted hereunder or to enable the Lenders or the
Administrative Agent to exercise and enforce their rights and remedies
hereunder.
SECTION 7. No Change in or Disposition of Intercompany Debt. The
Subordinated Creditors will not, without the prior written consent of the
Administrative Agent:
(a) sell, assign to any Person other than a Subordinated
Creditor, transfer, endorse, pledge, encumber or otherwise dispose of any of the
Intercompany Debt;
(b) permit the terms of any of the Intercompany Debt to be
changed in such a manner as to have a material adverse effect upon the rights or
interests of the Lenders or the Administrative Agent; or
(c) upon the occurrence and during the continuation of any
Default of the type described in Section 8.1.1 or Section 8.1.9 of the Amended
and Restated Credit Agreement or Event of Default, take, or permit to be taken,
any action to assert, collect or enforce the Intercompany Debt or any part
thereof.
SECTION 8. Agreement by the Borrower. The Borrower agrees that it will not
make any payment on any of the Intercompany Debt, or take any other action, in
contravention of the provisions of this Subordination Agreement.
SECTION 9. Obligations Hereunder Not Affected. All rights and interest of
the Lenders and the Administrative Agent hereunder, and all agreements and
obligations of the Subordinated Creditors and the Borrower hereunder, shall
remain in full force and effect irrespective of:
(a) any lack of validity or enforceability of any document
evidencing Senior Indebtedness;
(b) any change in the time, manner or place of payment of, or
any other term of, all or any of the Senior Indebtedness, or any other amendment
or waiver of or any consent to departure from any of the documents evidencing or
relating to the Senior Indebtedness;
(c) any exchange, release or non-perfection of any collateral,
or any release or amendment or waiver of or consent to departure from any
guaranty or Loan Document, for all or any of the Senior Indebtedness;
(d) any failure of any Lender or the Administrative Agent to
assert any claim or to enforce any right or remedy against any other party
hereto under the provisions of this Subordination Agreement, the Amended and
Restated Credit Agreement or any other Loan Document other than this
Subordination Agreement;
(e) any reduction, limitation, impairment or termination of
the Senior Indebtedness for any reason (other than the defense of payment in
full of the Senior Indebtedness), including any claim of waiver, release,
surrender, alteration or compromise, and shall not be subject to (and the
Borrower and each Subordinated Creditor hereby waive any right to or claim of)
any defense (other than the defense of payment in full of the Senior
Indebtedness) or setoff, counterclaim, recoupment or termination whatsoever by
reason of invalidity, illegality, nongenuineness, irregularity, compromise,
unenforceability of, or any other event or occurrence affecting, any Senior
Indebtedness; and
(f) any other circumstance which might otherwise constitute a
defense (other than the defense of payment in full of the Senior Indebtedness)
available to, or a discharge of, the Borrower in respect of the Senior
Indebtedness or the Subordinated Creditors in respect of this Subordination
Agreement.
This Subordination Agreement shall continue to be effective or be reinstated, as
the case may be, if at any time any payment of any of the Senior Indebtedness is
rescinded or must otherwise be returned by any Lender or the Administrative
Agent upon the insolvency, bankruptcy or reorganization of the Borrower or
otherwise, all as though such payment had not been made. The Subordinated
Creditors acknowledge and agree that the Lenders and the Administrative Agent
may in accordance with the terms of the Amended and Restated Credit Agreement,
without notice or demand and without affecting or impairing the Subordinated
Creditors' obligations hereunder, from time to time (i) renew, compromise,
extend, increase, accelerate or otherwise change the time for payment of, or
otherwise change the terms of the Senior Indebtedness or any part thereof,
including, without limitation, to increase or decrease the rate of interest
thereon or the principal amount thereof; (ii) take or hold security for the
payment of the Senior Indebtedness and exchange, enforce, foreclose upon, waive
and release any such security; (iii) apply such security and direct the order or
manner of sale thereof as the Administrative Agent and the Lenders, in their
sole discretion, may determine; (iv) release and substitute one or more
endorsers, warrantors, borrowers or other obligors; and (v) exercise or refrain
from exercising any rights against the Borrower or any other Person.
SECTION 10. Representations and Warranties. Each of the Subordinated
Creditors, in respect of itself and the Intercompany Debt owing to it, and the
Borrower, as the case may be, hereby represents and warrants as follows:
(a) the Subordinated Creditors own the Intercompany Debt now
outstanding free and clear of any Lien other than pursuant to any general
security agreement then in effect;
(b) this Subordination Agreement constitutes a legal, valid
and binding obligation of each Subordinated Creditor and the Borrower,
enforceable in accordance with its terms (subject to the effects of bankruptcy,
insolvency, fraudulent conveyance, reorganization, moratorium and other similar
laws relating to or affecting creditors' rights generally, general equitable
principles (whether considered in a proceeding in equity or at law) and an
implied covenant of good faith and fair dealing).
SECTION 11. Amendments, Waivers. No amendment or waiver of any provision of
this Subordination Agreement nor consent or any departure by the Subordinated
Creditors or the Borrower here from, shall in any event be effective unless the
same shall be in writing and signed by the Administrative Agent and the other
parties hereto, and then such waiver, amendment or consent shall be effective
only in the specific instance and for the specific purpose for which given. Any
waiver, forbearance, failure or delay by the Administrative Agent or the Lenders
in exercising, or the exercise or beginning of exercise by the Administrative
Agent or the Lenders of, any right, power or remedy, simultaneous or later shall
not preclude the further, simultaneous or later exercise thereof, and every
right, power or remedy of the Administrative Agent and the Lenders shall
continue in full force and effect until such right, power or remedy is
specifically waived in a writing executed or authorized by such Lenders.
SECTION 12. Expenses. The Subordinated Creditors and the Borrower jointly
and severally agree to pay, upon demand, to the Administrative Agent or the
Lenders, as applicable, any and all reasonable costs and expenses, including,
without limitation, reasonable attorneys' fees and disbursements which the
Lenders or the Administrative Agent may incur in connection with the exercise or
enforcement of any of the rights or interest of the Lenders or the
Administrative Agent hereunder.
SECTION 13. Address for Notices. All notices and other communications
provided for hereunder shall be in writing (including facsimile communication)
and mailed or telecopied or delivered to either party hereto, if to the
Borrower, the Administrative Agent or any Lender, addressed to it at the address
of the Borrower or such Lender or the Administrative Agent (as the case may be)
listed in the Amended and Restated Credit Agreement or in the Lender Assignment
Agreement, as applicable, and, if to other parties hereto, addressed to such
parties in care of the Borrower at the address specified in the Amended and
Restated Credit Agreement. All such notices and other communications, when
mailed and properly addressed with postage prepaid or if properly addressed and
sent by pre-paid courier service, shall be deemed given when received; any such
notice or communication, if transmitted by facsimile, shall be deemed given when
the confirmation of transmission thereof is received by the transmitter.
SECTION 14. Entire Agreement; Severability. This Subordination Agreement
contains the entire subordination agreement among the parties hereto with
respect to the subject matter hereof. If any of the provisions of this
Subordination Agreement shall be held invalid or unenforceable, this
Subordination Agreement shall be construed as if not containing those
provisions, and the rights and obligations of the parties hereto shall be
construed and enforced accordingly.
SECTION 15. Cumulative Rights. The rights, powers and remedies of the
Lenders and the Administrative Agent under this Subordination Agreement shall be
in addition to all rights, powers and remedies given to the Lenders and the
Administrative Agent by virtue of any contract, statute or rule of law, all of
which rights, powers and remedies shall be cumulative and may be exercised
successively or concurrently. The parties hereto expressly acknowledge and agree
that the Lenders and the Administrative Agent are intended, and by this
reference expressly made, third party beneficiaries of the provisions of this
Subordination Agreement.
SECTION 16. Continuing Agreement; Transfer of Notes. This Subordination
Agreement is a continuing agreement of subordination and the Lenders may, from
time to time and without notice to the Subordinated Creditors, extend credit to
or make other financial arrangements with the Borrower in reliance hereon. This
Subordination Agreement shall (a) remain in full force and effect until the
Senior Indebtedness shall have been paid in cash in full and all Commitments
terminated, (b) be binding upon the Subordinated Creditors, the Borrower and
their respective successors, transferees and assigns, and (c) inure to the
benefit of and be enforceable by the Administrative Agent and each Lender and
their respective successors, transferees and assigns. Without limiting the
generality of the foregoing, any Lender may, subject to the provisions of the
Amended and Restated Credit Agreement, assign or otherwise transfer the Senior
Indebtedness held by it to any other Person, subject to Section 10.11 of the
Amended and Restated Credit Agreement and such other Person shall thereupon
become vested with all the rights in respect thereof granted to such Lender
herein or otherwise.
SECTION 17. Governing Law. THIS SUBORDINATION AGREEMENT SHALL BE GOVERNED
BY AND CONSTRUED IN ACCORDANCE WITH THE INTERNAL LAWS OF THE STATE OF NEW YORK.
SECTION 18. Forum Selection and Consent to Jurisdiction. ANY LITIGATION
BASED HEREON, OR ARISING OUT OF, UNDER, OR IN CONNECTION WITH, THIS
SUBORDINATION AGREEMENT, OR ANY COURSE OF CONDUCT, COURSE OF DEALING, STATEMENTS
(WHETHER VERBAL OR WRITTEN) OR ACTIONS OF THE ADMINISTRATIVE AGENT OR ANY OF THE
LENDERS OR ANY SUBORDINATED CREDITOR OR THE BORROWER SHALL BE BROUGHT AND
MAINTAINED EXCLUSIVELY IN THE COURTS OF THE STATE OF NEW YORK OR IN THE UNITED
STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF NEW YORK. THE BORROWER AND
EACH SUBORDINATED CREDITOR HEREBY EXPRESSLY AND IRREVOCABLY SUBMITS TO THE
JURISDICTION OF THE COURTS OF THE STATE OF NEW YORK AND OF THE UNITED STATES
DISTRICT COURT FOR THE SOUTHERN DISTRICT OF NEW YORK FOR THE PURPOSE OF ANY SUCH
LITIGATION AS SET FORTH ABOVE AND IRREVOCABLY AGREES TO BE BOUND BY ANY
JUDGEMENT RENDERED THEREBY IN CONNECTION WITH SUCH LITIGATION. THE BORROWER AND
EACH SUBORDINATED CREDITOR IRREVOCABLY CONSENT TO THE SERVICE OF PROCESS BY
REGISTERED MAIL, POSTAGE PREPAID, OR BY PERSONAL SERVICE WITHIN OR WITHOUT THE
STATE OF NEW YORK AT THE ADDRESS FOR NOTICES OF SUCH PARTY SPECIFIED IN SECTION
13. THE BORROWER AND EACH SUBORDINATED CREDITOR HEREBY EXPRESSLY AND IRREVOCABLY
WAIVES, TO THE FULLEST EXTENT PERMITTED BY LAW, ANY OBJECTION WHICH IT MAY HAVE
OR HEREAFTER MAY HAVE TO THE LAYING OF VENUE OF ANY SUCH LITIGATION BROUGHT IN
ANY SUCH COURT REFERRED TO ABOVE AND ANY CLAIM THAT ANY SUCH LITIGATION HAS BEEN
BROUGHT IN AN INCONVENIENT FORUM. TO THE EXTENT THAT THE BORROWER OR SUCH
SUBORDINATED CREDITOR HAS OR HEREAFTER MAY ACQUIRE ANY IMMUNITY FROM
JURISDICTION OF ANY COURT OR FROM ANY LEGAL PROCESS (WHETHER THROUGH SERVICE OR
NOTICE, ATTACHMENT PRIOR TO JUDGMENT, ATTACHMENT IN AID OF EXECUTION OR
OTHERWISE) WITH RESPECT TO ITSELF OR ITS PROPERTY, EACH OF THE BORROWER AND EACH
OF SUCH SUBORDINATED CREDITORS HEREBY IRREVOCABLY WAIVES SUCH IMMUNITY IN
RESPECT OF ITS OBLIGATIONS UNDER THIS SUBORDINATION AGREEMENT.
SECTION 19. Waiver of Jury Trial. THE BORROWER AND EACH SUBORDINATED
CREDITOR AND, BY ACCEPTING THIS SUBORDINATION AGREEMENT AND THE BENEFITS
THEREOF, THE ADMINISTRATIVE AGENT AND ANY LENDER HEREBY KNOWINGLY, VOLUNTARILY
AND INTENTIONALLY WAIVES ANY RIGHTS IT MAY HAVE TO A TRIAL BY JURY IN RESPECT OF
ANY LITIGATION BASED HEREON, OR ARISING OUT OF, UNDER, OR IN CONNECTION WITH,
THIS SUBORDINATION AGREEMENT OR ANY COURSE OF CONDUCT, COURSE OF DEALING,
STATEMENTS (WHETHER ORAL OR WRITTEN) OR ACTIONS OF THE BORROWER OR SUCH
SUBORDINATED CREDITOR AND EACH SUCH PERSON ACKNOWLEDGES AND AGREES THAT IT HAS
RECEIVED FULL AND SUFFICIENT CONSIDERATION FOR THIS PROVISION AND THAT THIS
PROVISION IS A MATERIAL INDUCEMENT FOR THE LENDERS CONTINUING TO MAKE CREDIT
EXTENSIONS, ENTERING INTO THE AMENDED AND RESTATED CREDIT AGREEMENT AND FOR THE
SUBORDINATED CREDITORS ENTERING INTO THIS SUBORDINATION AGREEMENT.
SECTION 20. Execution in Counterparts. This Subordination 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 all of which when taken together shall constitute one and the same
agreement.
IN WITNESS WHEREOF, the parties have caused this Subordination
Agreement to be duly executed and delivered as of the date first above written.
THE TITAN CORPORATION
By:
Name:
Title:
SYSTEM RESOURCES CORPORATION
By:
Name:
Title:
DELFIN SYSTEMS
By:
Name:
Title:
VISICOM LABORATORIES, INC.
By:
Name:
Title:
TITAN WIRELESS, INC.
By:
Name:
Title:
Exhibit L
Form of Lender Assignment Agreement
EXHIBIT L
LENDER ASSIGNMENT AGREEMENT
---- --, ----
To: The Titan Corporation,
as Borrower
The Bank of Nova Scotia,
as Administrative Agent
THE TITAN CORPORATION
Gentlemen and Ladies:
We refer to clause (d) of Section 10.11.1 of the Credit Agreement,
dated as of June 9, 1999 (as amended, supplemented, amended and restated or
otherwise modified from time to time, the "Credit Agreement"), among The Titan
Corporation, a Delaware corporation (the "Borrower"), the various financial
institutions as are or may become parties thereto (collectively, the "Lenders"),
The Bank of Nova Scotia, as administrative agent for the Lenders (the
"Administrative Agent") and Imperial Bank, as Documentation Agent. Unless
otherwise defined herein or the context otherwise requires, terms used herein
have the meanings provided in the Credit Agreement.
As of ____ __, ____ (the "Assignment Date"), THE BANK OF NOVA SCOTIA
(the "Assignor") irrevocably sells, transfers, conveys and assigns, without
recourse, representation or warranty (except as expressly set forth herein), to
[ASSIGNEE] (the "Assignee") and the Assignee irrevocably purchases from the
Assignor that portion of the Loans and Commitments of the Lender as set forth in
Schedule I hereto (the "Assigned Portion") so that after giving effect to the
foregoing assignment and delegation, the Assignor's and the Assignee's
Percentages for the purposes of the Credit Agreement and each other Loan
Document will be as set forth on Schedule I hereto.
In addition, this agreement constitutes notice to each of you, pursuant
to clause (c) of Section 10.11.1 of the Credit Agreement, of the assignment and
delegation to the Assignee of the Assigned Portion of the Credit Extensions and
Commitments of the Assignor outstanding under the Credit Agreement as of the
Assignment Date.
The Assignee shall pay to the Assignor on the Assignment Date an amount
equal to (a) all accrued and unpaid interest on the Assigned Portion and (b) all
accrued and unpaid commitment fees payable under Section 3.3.1 of the Credit
Agreement with respect to the Assigned Portion. In any event, the Assignee is
entitled to receive all payments on account of interest, principal and fees
accrued with respect to the Assigned Portion for the period from and after the
Assignment Date.
The Assignee hereby acknowledges and confirms that it has received a
copy of the Credit Agreement and the exhibits related thereto, together with
copies of the documents which were required to be delivered under the Credit
Agreement as a condition to the making of the Credit Extensions thereunder. The
Assignee further confirms and agrees that in becoming a Lender and in making its
Commitments and Credit Extensions under the Credit Agreement, such actions have
and will be made without recourse to, or representation or warranty by, the
Administrative Agent.
The Assignor represents and warrants that it is legally authorized to
enter into and deliver this agreement and represents that it is the legal and
beneficial owner of the Assigned Portion. Except as set forth in the previous
sentence, the Assignor makes no representation or warranty and assumes no
responsibility with respect to any statements, warranties or representations
made pursuant to or in connection with this agreement, or the execution,
legality, validity, enforceability, genuineness, sufficiency or value of this
agreement, the Credit Agreement, any other Loan Document or any other instrument
or document furnished pursuant hereto or thereto, including the financial
condition of the Borrower or any of their Subsidiaries or the performance or
observance by any Lender of any of its obligations under the Credit Agreement,
any other Loan Document or any other instrument or document furnished pursuant
hereto or thereto. The Assignee represents and warrants that it is legally
authorized to enter into and deliver this agreement and confirms that it has
received a copy of the Credit Agreement, together with copies of the most recent
financial statements delivered pursuant to Section 7.1.1 of the Credit Agreement
and such other documents and information as it has deemed appropriate to make
its own credit analysis and decision to enter into this agreement. In addition,
the Assignee independently and without reliance upon the Assignor, the Agents or
any other Lender, and based on such documents and information as it shall deem
appropriate at the time, shall continue to make its own credit decisions in
taking or not taking action under the Credit Agreement, the other Loan Documents
and the other instruments and documents delivered in connection therewith.
Except as otherwise provided in the Credit Agreement, effective as of the
Assignment Date
(a) the Assignee
(i) shall be deemed automatically to have become a
party to the Credit Agreement and shall have all the rights
and obligations of a "Lender" under the Credit Agreement and
the other Loan Documents as if it were an original signatory
thereto to the extent specified in the second paragraph
hereof;
(ii) agrees to be bound by the terms and conditions
set forth in the Credit Agreement and the other Loan Documents
as if it were an original signatory thereto; and
(b) the Assignor shall be released from its obligations under
the Credit Agreement and the other Loan Documents to the extent
specified in the second paragraph hereof.
[The parties hereto understand that no processing fee of the type
referred to in Section 10.11.1 of the Credit Agreement shall be due in
connection with this Assignment.]
[The Assignor and the Assignee hereby agree that the
[Assignor][Assignee] will pay to the Administrative Agent the processing fee
referred to in Section 10.11.1 of the Credit Agreement.]
The Assignee hereby advises each of you that the Assignee's
administrative details with respect to the assigned Credit Extensions and
Commitments are on file with the Administrative Agent and requests the
Administrative Agent to acknowledge receipt of this document.
The Assignee agrees (for the benefit of the Assignor, the Borrower and
the Administrative Agent) to furnish, if required by clause (e) of Section 4.6
of the Credit Agreement, the applicable Internal Revenue Service forms or other
forms required thereunder no later than the date of acceptance hereof by the
Agents. In addition, the Assignee represents and warrants (for the benefit of
the Assignor, the Borrower and the Administrative Agent) that, under applicable
law and treaties in effect as of the date hereof, no United States federal taxes
will be required to be withheld by the Administrative Agent or the Borrower with
respect to any payments to be made to the Assignee in respect of the Credit
Agreement.
Notwithstanding any other provisions hereof, if the consents of the
Borrower and the Administrative Agent are required under Section 10.11.1 of the
Credit Agreement, the assignment and delegation contemplated in this agreement
shall not be effective unless such consents shall have been obtained and in any
event no such assignment and delegation shall be effective unless and until such
assignment has been recorded in the Register by the Administrative Agent.
This Agreement may be executed by the Assignor and Assignee in separate
counterparts, each of which when so executed and delivered shall be deemed to be
an original and all of which taken together shall constitute one and the same
agreement.
IN WITNESS WHEREOF, each of the undersigned has executed and
delivered this Lender Assignment Agreement as of the date first written above.
THE BANK OF NOVA SCOTIA
By:
Name:
Title:
[ASSIGNEE]
By:
Name:
Title:
ACCEPTED AND AGREED TO:
THE BANK OF NOVA SCOTIA,
as Administrative Agent
By:
Name:
Title:
THE TITAN CORPORATION
By:
Name:
Title:
SCHEDULE I
LENDER INFORMATION
LENDER PERCENTAGE DOMESTIC OFFICE LIBOR OFFICE
------------------------ --------------- --------------------------- -------------------
THE BANK OF NOVA SCOTIA, [ ] Loans.................... % ON FILE WITH ON FILE WITH
as Assignor ADMINISTRATIVE ADMINISTRATIVE
AGENT AGENT
[ASSIGNEE], [ ] Loans.................... % [ ] [ ]
as Assignee Attn: [ ] Attn: [ ]
Tel.: [ ] Tel.: [ ]
Fax: [ ] Fax: [ ]
Wiring Instructions for the Assignee:
------------------------------------
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Exhibit M
Form of Officer's Solvency Certificate
EXHIBIT M
SOLVENCY CERTIFICATE
This Certificate (this "Certificate") is delivered pursuant to Section
5.1.10 of the Amended and Restated Credit Agreement, dated as of June 9, 1999
(as amended, supplemented, amended and restated or otherwise modified from time
to time, the "Amended and Restated Credit Agreement"), among The Titan
Corporation, a Delaware corporation (the "Borrower"), the various financial
institutions as are, or may from time to time become, parties thereto (together
with their successors, transferees, and assigns, the "Lenders"), The Bank of
Nova Scotia, as administrative agent (the "Administrative Agent") for the
Lenders and Imperial Bank, as Documentation Agent. Unless otherwise defined
herein, terms used herein have the meanings provided in the Amended and Restated
Credit Agreement.
The undersigned hereby certifies that [s]he is the [chief financial]
Authorized Officer of the Borrower (in such capacity, the "CFO") and that he is
authorized to execute and deliver this Certificate on behalf of the Borrower.
The undersigned further certifies on behalf of the Borrower, that:
(a) The CFO has continued to monitor the financial condition
and operations of the Borrower and its Subsidiaries, and the CFO has knowledge
of and has participated in the negotiation of the transactions contemplated by
the Amended and Restated Credit Agreement and the other Loan Documents.
(b) The CFO and his staff are familiar with the process
through which the consolidated financial statements of the Borrower and its
Subsidiaries were generated and prepared.
(c) The CFO is familiar with the process through which the Pro
Forma Balance Sheet was generated and prepared. In making the statements set
forth in paragraph (f) hereof, the CFO has considered the current and
anticipated future capital requirements of the Borrower and its Subsidiaries for
the current and future conduct of the businesses of the Borrower and its
Subsidiaries.
(d) Based on the information reflected in the Pro Forma
Balance Sheet and the CFO's involvement in the process of collecting such
information, the CFO has no reason to believe that the Pro Forma Balance Sheet
and related financial statements are not
(i) a fair and reasonable presentation of the pro
forma financial condition and operations of the Borrower and its Subsidiaries,
as of the date hereof, on a going-concern basis; and
(ii) a reasonable projection of the financial
position, results of operations and cash flows of the Borrower and its
Subsidiaries
in each case on the basis of the assumptions stated in the Pro Forma Balance
Sheet, which assumptions the CFO believes to be reasonable.
(e) Immediately following the consummation of the transactions
contemplated by the Amended and Restated Credit Agreement and the other Loan
Documents, the Borrower will be able to pay its Debts (as defined below) as they
become due, will have assets which will have a "fair saleable value" greater
than its Debts as they become absolute and matured, and will have assets which
will have a fair value greater than the sum of all its Debts.
(f) Both before and immediately after giving effect to each
transaction contemplated by the Amended and Restated Credit Agreement and the
other Loan Documents, the Borrower does not have unreasonably small capital and
it is not engaged in businesses or transactions, and (to the best of my
knowledge) does not intend that it will be engaged in any businesses or
transactions, for which it has unreasonably small capital.
(g) Both before and immediately after giving effect to each
transaction contemplated by the Amended and Restated Credit Agreement and the
other Loan Documents, the Borrower does not intend to incur, nor believe that it
has incurred, Debts beyond its ability to pay them as they mature.
(h) Both before and immediately after giving effect to each
transaction contemplated by the Amended and Restated Credit Agreement and each
other Loan Document, the Borrower has not incurred any obligation under, or in
connection therewith, with actual intent to hinder, delay or defraud either
present or future creditors of the Borrower or any of its Subsidiaries.
(i) For purposes hereof, "Debts" means all liabilities,
obligations, commitments and indebtedness of any and every kind and nature
(including all obligations to trade creditors), whether heretofore or now owing,
arising, due, or payable by the Borrower to any person and howsoever evidenced,
created, incurred, acquired, or owing, whether primary, secondary, direct,
contingent, fixed, or otherwise (the foregoing to include, without limitation,
all monetary obligations arising under the Amended and Restated Credit
Agreement).
(j) The "fair salable value" of the Borrower's assets and
investments means the amount which may be realized within a reasonable time,
either through collection or sale of such investments and other assets at the
regular market value, based upon the amount which could be obtained for the
property in question within such period by a capable and diligent business
person from an interested buyer who is willing to purchase under ordinary
selling conditions. Although no determination of the "fair salable value" has
been made, it is my opinion that the asset amounts reflected upon the historic
records of the Borrower do not exceed the "fair salable value."
(k) The CFO hereby acknowledges, on behalf of the Borrower,
that the Administrative Agent and each of the Lenders have relied upon the
statements contained herein and such statements are a material inducement for
the Administrative Agent and each of the Lenders to enter into the Amended and
Restated Credit Agreement and the other Loan Documents.
Notwithstanding anything to the contrary herein, the CFO (i) is executing this
Certificate on behalf of the Borrower solely in his representative capacity and
not in his individual capacity, and (ii) shall not have any liability whatsoever
for any statements, certifications or representations made herein, other than
liability arising directly out of his intentional misconduct or gross
negligence.
IN WITNESS WHEREOF, the undersigned Authorized Officer has executed
this Certificate on this ____ day of June, 1999.
THE TITAN CORPORATION
By:
Name:
Title:
