EXHIBIT 10.9
$170,000,000
CREDIT AGREEMENT
among
INTEGRATED DEFENSE TECHNOLOGIES, INC.,
as Borrower,
IDT HOLDING, L.L.C.,
and
THE DOMESTIC SUBSIDIARIES OF THE BORROWER
FROM TIME TO TIME PARTIES HERETO,
as Guarantors,
THE LENDERS PARTIES HERETO
and
FIRST UNION NATIONAL BANK,
as Administrative Agent
and
CIBC WORLD MARKETS CORP.,
as Syndication Agent
and
CREDIT LYONNAIS NEW YORK BRANCH,
as Documentation Agent
and
FIRST UNION SECURITIES, INC. and CIBC WORLD MARKETS CORP.,
as Co-Lead Arrangers and Joint Bookrunners
Dated as of September 29, 2000
TABLE OF CONTENTS
Page
ARTICLE I DEFINITIONS............................................................................................1
Section 1.1 Defined Terms..........................................................................1
Section 1.2 Other Definitional Provisions.........................................................27
Section 1.3 Accounting Terms......................................................................27
ARTICLE II THE LOANS; AMOUNT AND TERMS..........................................................................28
Section 2.1 Revolving Loans.......................................................................28
Section 2.2 Tranche A Term Loan Facility..........................................................30
Section 2.3 Tranche B Term Loan Facility..........................................................31
Section 2.4 Letter of Credit Subfacility..........................................................33
Section 2.5 Swingline Loan Subfacility............................................................36
Section 2.6 Fees..................................................................................38
Section 2.7 Commitment Reductions.................................................................39
Section 2.8 Prepayments...........................................................................39
Section 2.9 Minimum Principal Amount of Tranches..................................................41
Section 2.10 Default Rate and Payment Dates........................................................42
Section 2.11 Conversion Options....................................................................42
Section 2.12 Computation of Interest and Fees......................................................42
Section 2.13 Pro Rata Treatment and Payments.......................................................43
Section 2.14 Non-Receipt of Funds by the Administrative Agent......................................45
Section 2.15 Inability to Determine Interest Rate..................................................46
Section 2.16 Illegality............................................................................46
Section 2.17 Requirements of Law...................................................................47
Section 2.18 Indemnity.............................................................................48
Section 2.19 Taxes.................................................................................48
Section 2.20 Indemnification; Nature of Issuing Lender's Duties....................................50
ARTICLE III REPRESENTATIONS AND WARRANTIES......................................................................51
Section 3.1 Financial Condition...................................................................51
Section 3.2 No Change.............................................................................52
Section 3.3 Corporate Existence; Compliance with Law..............................................52
Section 3.4 Corporate Power; Authorization; Enforceable Obligations...............................52
Section 3.5 No Legal Bar; No Default..............................................................53
Section 3.6 No Material Litigation................................................................53
Section 3.7 Investment Company Act................................................................53
Section 3.8 Margin Regulations....................................................................53
Section 3.9 ERISA.................................................................................53
Section 3.10 Environmental Matters.................................................................54
Section 3.11 Purpose of Loans......................................................................55
Section 3.12 Subsidiaries..........................................................................55
Section 3.13 Ownership.............................................................................56
Section 3.14 Indebtedness..........................................................................56
Section 3.15 Taxes.................................................................................56
Section 3.16 Intellectual Property.................................................................56
Section 3.17 Solvency..............................................................................57
Section 3.18 Investments...........................................................................57
Section 3.19 Location of Collateral................................................................57
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Page
Section 3.20 No Burdensome Restrictions............................................................57
Section 3.21 Brokers' Fees.........................................................................57
Section 3.22 Labor Matters.........................................................................57
Section 3.23 Security Documents....................................................................58
Section 3.24 Accuracy and Completeness of Information..............................................58
Section 3.25 Consummation of Acquisition; Representations and Warranties from Other Documents......58
Section 3.26 Government Contracts..................................................................58
ARTICLE IV CONDITIONS PRECEDENT.................................................................................59
Section 4.1 Conditions to Closing Date and Initial Revolving Loans, Tranche A Term Loans and
Tranche B Term Loans..................................................................59
Section 4.2 Conditions to All Extensions of Credit................................................65
ARTICLE V AFFIRMATIVE COVENANTS.................................................................................66
Section 5.1 Financial Statements..................................................................66
Section 5.2 Certificates; Other Information.......................................................68
Section 5.3 Payment of Obligations................................................................69
Section 5.4 Conduct of Business and Maintenance of Existence......................................69
Section 5.5 Maintenance of Property; Insurance....................................................69
Section 5.6 Inspection of Property; Books and Records; Discussions................................70
Section 5.7 Notices...............................................................................70
Section 5.8 Environmental Laws....................................................................71
Section 5.9 Financial Covenants...................................................................72
Section 5.10 Additional Subsidiary Guarantors......................................................74
Section 5.11 Compliance with Law...................................................................74
Section 5.12 Pledged Assets........................................................................75
Section 5.13 Bank Group Meeting....................................................................75
Section 5.14 Employee Benefit Plans................................................................75
Section 5.15 Interest Rate Protection..............................................................75
Section 5.16 Environmental Compliance..............................................................76
Section 5.17 Further Assurances....................................................................76
Section 5.18 Spin-Off..............................................................................77
ARTICLE VI NEGATIVE COVENANTS...................................................................................77
Section 6.1 Indebtedness..........................................................................77
Section 6.2 Liens.................................................................................78
Section 6.3 Guaranty Obligations..................................................................78
Section 6.4 Nature of Business....................................................................79
Section 6.5 Consolidation, Merger, Sale or Purchase of Assets, etc................................79
Section 6.6 Advances, Investments and Loans.......................................................80
Section 6.7 Transactions with Affiliates..........................................................80
Section 6.8 Ownership of Subsidiaries; Restrictions...............................................81
Section 6.9 Fiscal Year; Organizational Documents; Material Contracts.............................81
Section 6.10 Limitation on Restricted Actions......................................................81
Section 6.11 Restricted Payments...................................................................82
Section 6.12 Prepayments of Indebtedness, etc......................................................82
Section 6.13 Sale Leasebacks.......................................................................82
Section 6.14 No Further Negative Pledges...........................................................82
Section 6.15 Parent Holding Company................................................................83
Section 6.16 Lease Obligations.....................................................................83
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Section 6.17 Management Fee........................................................................83
ARTICLE VII EVENTS OF DEFAULT...................................................................................83
Section 7.1 Events of Default.....................................................................83
Section 7.2 Acceleration; Remedies................................................................86
ARTICLE VIII THE AGENT..........................................................................................87
Section 8.1 Appointment...........................................................................87
Section 8.2 Delegation of Duties..................................................................87
Section 8.3 Exculpatory Provisions................................................................87
Section 8.4 Reliance by Administrative Agent......................................................88
Section 8.5 Notice of Default.....................................................................88
Section 8.6 Non-Reliance on Administrative Agent and Other Lenders................................89
Section 8.7 Indemnification.......................................................................89
Section 8.8 Administrative Agent in Its Individual Capacity.......................................90
Section 8.9 Successor Administrative Agent........................................................90
ARTICLE IX MISCELLANEOUS........................................................................................90
Section 9.1 Amendments, Waivers and Release of Collateral.........................................90
Section 9.2 Notices...............................................................................92
Section 9.3 No Waiver; Cumulative Remedies........................................................93
Section 9.4 Survival of Representations and Warranties............................................94
Section 9.5 Payment of Expenses and Taxes.........................................................94
Section 9.6 Successors and Assigns; Participations; Purchasing Lenders............................95
Section 9.7 Adjustments; Set-off..................................................................97
Section 9.8 Table of Contents and Section Headings................................................98
Section 9.9 Counterparts..........................................................................99
Section 9.10 Effectiveness.........................................................................99
Section 9.11 Severability..........................................................................99
Section 9.12 Integration...........................................................................99
Section 9.13 Governing Law.........................................................................99
Section 9.14 Consent to Jurisdiction and Service of Process........................................99
Section 9.15 [RESERVED]...........................................................................100
Section 9.16 Confidentiality......................................................................100
Section 9.17 Acknowledgments......................................................................100
Section 9.18 Waivers of Jury Trial................................................................101
ARTICLE X GUARANTY.............................................................................................101
Section 10.1 The Guaranty.........................................................................101
Section 10.2 Bankruptcy...........................................................................102
Section 10.3 Nature of Liability..................................................................102
Section 10.4 Independent Obligation...............................................................102
Section 10.5 Authorization........................................................................102
Section 10.6 Reliance.............................................................................103
Section 10.7 Waiver; No Discharge or Diminishment of Guarantee....................................103
Section 10.8 Limitation on Enforcement............................................................105
Section 10.9 Confirmation of Payment..............................................................105
Section 10.10 Termination..........................................................................105
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SCHEDULES
----------
Schedule 1.1(a) Account Designation Letter
Schedule 1.1(b) Schedule of Acquired Companies
Schedule 1.1(c) Permitted Liens
Schedule 2.1(a) Schedule of Lenders and Commitments
Schedule 2.1(b)(i) Form of Notice of Borrowing
Schedule 2.1(e) Form of Revolving Note
Schedule 2.2(d) Form of Tranche A Term Note
Schedule 2.3(d) Form of Tranche B Term Note
Schedule 2.4(a) Existing Letters of Credit
Schedule 2.5(d) Form of Swingline Note
Schedule 2.11 Form of Notice of Conversion/Extension
Schedule 2.19 Section 2.19 Certificate
Schedule 3.6 Litigation
Schedule 3.9 ERISA
Schedule 3.10 Environmental Matters
Schedule 3.12 Subsidiaries
Schedule 3.16 Intellectual Property
Schedule 3.19(a) Location of Real Property
Schedule 3.19(b) Location of Collateral
Schedule 3.19(c) Chief Executive Offices
Schedule 3.22 Labor Matters
Schedule 4.1(b) Form of Secretary's Certificate
Schedule 4.1(j) Form of Solvency Certificate
Schedule 5.2(f) Borrowing Base Certificate
Schedule 5.5(b) Insurance
Schedule 5.10 Form of Joinder Agreement
Schedule 5.16 Environmental Compliance Requirements
Schedule 5.17(c) Schedule of Required Material Contract Assignments
Schedule 6.1(b) Indebtedness
Schedule 9.2 Schedule of Lenders' Lending Offices
Schedule 9.6(c) Form of Commitment Transfer Supplement
CREDIT AGREEMENT, dated as of September 29, 2000, among INTEGRATED
DEFENSE TECHNOLOGIES, INC., a Delaware corporation (the "BORROWER"), IDT
HOLDING, L.L.C., a Delaware limited liability company (the "PARENT"), those
Domestic Subsidiaries of the Borrower identified as a "Guarantor" on the
signature pages hereto and such other Domestic Subsidiaries of the Borrower as
may from time to time become a party hereto (collectively, the "GUARANTORS"),
the several banks and other financial institutions as may from time to time
become parties to this Agreement (collectively, the "LENDERS"; and individually,
a "LENDER"), FIRST UNION NATIONAL BANK, a national banking association, as
administrative agent for the Lenders hereunder (in such capacity, the
"ADMINISTRATIVE AGENT"), CIBC WORLD MARKETS CORP., as syndication agent (the
"SYNDICATION AGENT"), CREDIT LYONNAIS NEW YORK BRANCH, as documentation agent
(the "DOCUMENTATION AGENT"), and FIRST UNION SECURITIES, INC. and CIBC WORLD
MARKETS CORP., as co-lead arrangers and joint bookrunners (collectively, the
"CO-LEAD ARRANGERS" and "JOINT BOOKRUNNERS").
W I T N E S S E T H:
WHEREAS, the Borrower has requested that the Lenders make loans and
other financial accommodations to the Borrower in the amount of up to
$170,000,000, as more particularly described herein;
WHEREAS, the Lenders have agreed to make such loans and other financial
accommodations to the Borrower on the terms and conditions contained herein;
NOW, THEREFORE, in consideration of the premises and the mutual
covenants contained herein, the parties hereto hereby agree as follows:
ARTICLE I
DEFINITIONS
Section 1.1 DEFINED TERMS.
As used in this Agreement, terms defined in the preamble to this
Agreement have the meanings therein indicated, and the following terms have the
following meanings:
"ACCOUNT DESIGNATION LETTER" shall mean the Notice of Account
Designation Letter dated the Closing Date from the Borrower to the
Administrative Agent substantially in the form attached hereto as SCHEDULE
1.1(a).
"ACQUIRED COMPANIES" shall mean, collectively, the companies listed on
SCHEDULE 1.1(b).
"ACQUISITION" shall mean the acquisition of the Acquired Companies by
the Borrower pursuant to the Acquisition Documents.
"ACQUISITION DOCUMENTS" shall mean that Agreement and Plan of Merger
dated as of June 27, 2000 among the Borrower, Tech-Sym Corporation and T-S
Acquisition Corp., as amended, modified or supplemented from time to time.
"ADDITIONAL CREDIT PARTY" shall mean each Person that becomes a
Guarantor by execution of a Joinder Agreement in accordance with Section 5.10.
"ADMINISTRATIVE AGENT" shall have the meaning set forth in the first
paragraph of this Agreement and any successors in such capacity.
"AFFILIATE" shall mean as to any Person, any other Person (excluding
any Subsidiary) which, directly or indirectly, is in control of, is controlled
by, or is under common control with, such Person. For purposes of this
definition, a Person shall be deemed to be "controlled by" a Person if such
Person possesses, directly or indirectly, power either (a) to vote 10% or more
of the securities having ordinary voting power for the election of directors of
such Person or (b) to direct or cause the direction of the management and
policies of such Person whether by contract or otherwise.
"AGENTS" shall mean the Administrative Agent and the Syndication Agent.
"AGREEMENT" shall mean this Credit Agreement, as amended, modified or
supplemented from time to time in accordance with its terms.
"AGGREGATE REVOLVING COMMITTED AMOUNT" shall have the meaning set forth
in Section 2.1.
"ALTERNATE BASE RATE" shall mean, for any day, a rate per annum equal
to the greater of (a) the Prime Rate in effect on such day and (b) the Federal
Funds Effective Rate in effect on such day plus 1/2 of 1%. For purposes hereof:
"PRIME RATE" shall mean, at any time, the rate of interest per annum publicly
announced from time to time by First Union at its principal office in Charlotte,
North Carolina as its prime rate. Each change in the Prime Rate shall be
effective as of the opening of business on the day such change in the Prime Rate
occurs. The parties hereto acknowledge that the rate announced publicly by First
Union as its Prime Rate is an index or base rate and shall not necessarily be
its lowest or best rate charged to its customers or other banks; and "FEDERAL
FUNDS EFFECTIVE RATE" shall mean, for any day, 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 on the next succeeding
Business Day by the Federal Reserve Bank of New York, or, if such rate is not so
published on the next succeeding Business Day, the average of the quotations for
the day of such transactions received by the Administrative Agent from three
federal funds brokers of recognized standing selected by it. If for any reason
the Administrative Agent shall have determined (which determination shall be
conclusive in the absence of manifest error) that it is unable to ascertain the
Federal Funds Effective Rate, for any reason, including the inability or failure
of the Administrative Agent to
2
obtain sufficient quotations in accordance with the terms thereof, the Alternate
Base Rate shall be determined without regard to clause (b) of the first sentence
of this definition, as appropriate, until the circumstances giving rise to such
inability no longer exist. Any change in the Alternate Base Rate due to a change
in the Prime Rate or the Federal Funds Effective Rate shall be effective on the
opening of business on the date of such change.
"ALTERNATE BASE RATE LOANS" shall mean Loans that bear interest at an
interest rate based on the Alternate Base Rate.
"APPLICABLE PERCENTAGE" shall mean, for any day, the rate per annum set
forth below opposite the applicable level then in effect, it being understood
that the Applicable Percentage for (i) Revolving Loans and Tranche A Term Loans
which are Alternate Base Rate Loans shall be the percentage set forth under the
column "Alternate Base Rate Margin for Revolving Loans and Tranche A Term
Loans", (ii) Revolving Loans and Tranche A Term Loans which are LIBOR Rate Loans
shall be the percentage set forth under the column "LIBOR Rate Margin for
Revolving Loans, Tranche A Term Loans and Letter of Credit Fee", (iii) Tranche B
Term Loans which are Alternate Base Rate Loans shall be the percentage set forth
under the column "Alternate Base Rate Margin for Tranche B Term Loans", (iv)
Tranche B Term Loans which are LIBOR Rate Loans shall be the percentage set
forth under the column "LIBOR Rate Margin for Tranche B Term Loans", (v) the
Letter of Credit Fee shall be the percentage set forth under the column "LIBOR
Rate Margin for Revolving Loans, Tranche A Term Loans and Letter of Credit Fee",
and (vi) the Commitment Fee shall be the percentage set forth under the column
"Commitment Fee":
Alternate LIBOR Rate
Base Rate Margin for
Margin for Revolving
Revolving Loans, Tranche Alternate Base LIBOR Rate
Loans and A Term Loans Rate Margin Margin for
Leverage Tranche A and Letter of for Tranche B Tranche B Commitment
Level Ratio Term Loans Credit Fee Term Loans Term Loans Fee
-------------------------------------------------------------------------------------------------------------------
I greater than or equal to
4.50 to 1.0 2.50% 3.50% 3.00% 4.00% 0.500%
-------------------------------------------------------------------------------------------------------------------
II greater than or equal to
4.00 to 1.0 but
less than 4.50 to 1.0 2.25% 3.25% 2.75% 3.75% 0.500%
-------------------------------------------------------------------------------------------------------------------
III greater than or equal to
3.50 to 1.0 but
less than 4.00 to 1.0 2.00% 3.00% 2.75% 3.75% 0.500%
-------------------------------------------------------------------------------------------------------------------
IV greater than or equal to
3.00 to 1.0 but
less than 3.50 to 1.0 1.75% 2.75% 2.75% 3.75% 0.500%
-------------------------------------------------------------------------------------------------------------------
V less than 3.00 to 1.0 1.50% 2.50% 2.75% 3.75% 0.500%
-------------------------------------------------------------------------------------------------------------------
The Applicable Percentage shall, in each case, be determined and
adjusted quarterly on the date five (5) Business Days after the date on which
the Administrative Agent has received from the Borrower the quarterly financial
information and certifications required to be delivered
3
to the Administrative Agent and the Lenders in accordance with the provisions of
Sections 5.1(b) and 5.2(b) (each an "INTEREST DETERMINATION DATE"). Such
Applicable Percentage shall be effective from such Interest Determination Date
until the next such Interest Determination Date. The initial Applicable
Percentages shall be no lower than those set forth in Level II until the first
Interest Determination Date occurring after March 31, 2001. After the Closing
Date, if the Borrower shall fail to provide the quarterly financial information
and certifications in accordance with the provisions of Sections 5.1(b) and
5.2(b), the Applicable Percentage from such Interest Determination Date shall,
on the date five (5) Business Days after the date by which the Borrower was so
required to provide such financial information and certifications to the
Administrative Agent and the Lenders, be based on Level I until such time as
such information and certifications are provided, whereupon the Level shall be
determined by the then current Leverage Ratio.
"ASSET DISPOSITION" shall mean the disposition of any or all of the
assets (including, without limitation, the Capital Stock of a Subsidiary or any
ownership interest in a joint venture) of any Credit Party or any Subsidiary
whether by sale, lease, transfer or otherwise. The term "Asset Disposition"
shall not include (i) Specified Sales, (ii) the sale, lease or transfer of
assets permitted by Section 6.5(a)(iii) or (iv) hereof, or (iii) any Equity
Issuance.
"BANKRUPTCY CODE" shall mean the Bankruptcy Code in Title 11 of the
United States Code, as amended, modified, succeeded or replaced from time to
time.
"BORROWER" shall have the meaning set forth in the first paragraph of
this Agreement.
"BORROWING BASE" shall mean the sum of (i) 85% of Eligible Receivables
PLUS (ii) 50% of Eligible Unbilled Receivables PLUS (iii) 40% of Eligible
Inventory.
"BORROWING DATE" shall mean, in respect of any Loan, the date such Loan
is made.
"BUSINESS" shall have the meaning set forth in Section 3.10.
"BUSINESS DAY" shall mean a day other than a Saturday, Sunday or other
day on which commercial banks in Charlotte, North Carolina or New York, New York
are authorized or required by law to close; PROVIDED, HOWEVER, that when used in
connection with a rate determination, borrowing or payment in respect of a LIBOR
Rate Loan, the term "Business Day" shall also exclude any day on which banks in
London, England are not open for dealings in Dollar deposits in the London
interbank market.
"CAPITAL LEASE" shall mean any lease of property, real or personal, the
obligations with respect to which are required to be capitalized on a balance
sheet of the lessee in accordance with GAAP.
"CAPITAL LEASE OBLIGATIONS" shall mean the capitalized lease
obligations relating to a Capital Lease determined in accordance with GAAP.
4
"CAPITAL STOCK" shall mean (i) in the case of a corporation, capital
stock, (ii) in the case of an association or business entity, any and all
shares, interests, participations, rights or other equivalents (however
designated) of capital stock, (iii) in the case of a partnership, partnership
interests (whether general or limited), (iv) in the case of a limited liability
company, membership interests and (v) any other interest or participation that
confers on a Person the right to receive a share of the profits and losses of,
or distributions of assets of, the issuing Person.
"CASH EQUIVALENTS" shall mean (i) securities issued or directly and
fully guaranteed or insured by the United States of America or any agency or
instrumentality thereof (provided that the full faith and credit of the United
States of America is pledged in support thereof) having maturities of not more
than twelve months from the date of acquisition ("GOVERNMENT OBLIGATIONS"), (ii)
U.S. dollar denominated (or foreign currency fully hedged) time deposits,
certificates of deposit, Eurodollar time deposits and Eurodollar certificates of
deposit of (y) any domestic commercial bank of recognized standing having
capital and surplus in excess of $250,000,000 or (z) any bank whose short-term
commercial paper rating from S&P is at least A-1 or the equivalent thereof or
from Xxxxx'x is at least P-1 or the equivalent thereof (any such bank being an
"APPROVED BANK"), in each case with maturities of not more than 364 days from
the date of acquisition, (iii) commercial paper and variable or fixed rate notes
issued by any Approved Bank (or by the parent company thereof) or any variable
rate notes issued by, or guaranteed by any domestic corporation rated A-1 (or
the equivalent thereof) or better by S&P or P-1 (or the equivalent thereof) or
better by Moody's and maturing within six months of the date of acquisition,
(iv) repurchase agreements with a bank or trust company (including a Lender) or
a recognized securities dealer having capital and surplus in excess of
$500,000,000 for direct obligations issued by or fully guaranteed by the United
States of America, (v) obligations of any state of the United States or any
political subdivision thereof for the payment of the principal and redemption
price of and interest on which there shall have been irrevocably deposited
Government Obligations maturing as to principal and interest at times and in
amounts sufficient to provide such payment, and (vi) auction preferred stock
rated in the highest short-term credit rating category by S&P or Moody's.
"CHANGE OF CONTROL" shall mean the occurrence of any of the following
events: (a) the failure of the Sponsor or one or more of its Affiliates that are
majority controlled by the Sponsor to maintain beneficial ownership, directly or
indirectly, of Voting Stock of the Parent representing at least 70% of the
combined voting power of all Voting Stock of the Parent (other than the Voting
Stock of the Parent owned by institutional investors that own Voting Stock of
the Parent on the Closing Date and their Affiliates), (b) any Person or two or
more Persons acting in concert (other than the Sponsor, the holders of the
Subordinated Notes on the Closing Date and any other individual or institutional
investors that own Voting Stock of the Parent on the Closing Date and their
Affiliates) shall have acquired beneficial ownership, directly or indirectly, or
shall have acquired by contract or otherwise, or shall have entered into a
contract or arrangement that, upon consummation, will result in its or their
acquisition of control over, Voting Stock of the Parent (or other securities
convertible into such Voting Stock) representing 20% or more of the combined
voting power of all Voting Stock of the Parent, (c) the failure of the Parent to
own, directly or indirectly, 100% of the combined voting power of all Voting
Stock of the Borrower (other than the Voting Stock of the Borrower owned by the
holders of the Subordinated Notes), (d) Continuing Directors or other directors
designated by the Sponsor shall cease for any reason
5
to constitute a majority of the members of the board of directors of the Parent
or the Borrower then in office or (e) the occurrence of a "Change of Control" as
defined in the Subordinated Notes. As used herein, "beneficial ownership" shall
have the meaning provided in Rule 13d-3 of the Securities and Exchange
Commission promulgated under the Securities Exchange Act of 1934."
"CLOSING DATE" shall mean the date of this Agreement.
"CODE" shall mean the Internal Revenue Code of 1986, as amended from
time to time.
"COLLATERAL" shall mean a collective reference to the Collateral which
is identified in, and at any time will be covered by, the Security Documents.
"COMMITMENT" shall mean the Revolving Commitment, the LOC Commitment,
the Swingline Commitment, the Tranche A Term Loan Commitment and the Tranche B
Term Loan Commitment, individually or collectively, as appropriate.
"COMMITMENT FEE" shall have the meaning set forth in Section 2.6(a).
"COMMITMENT PERCENTAGE" shall mean the Revolving Commitment Percentage,
the LOC Commitment Percentage, the Tranche A Term Loan Commitment Percentage
and/or the Tranche B Term Loan Commitment Percentage, as appropriate.
"COMMITMENT PERIOD" shall mean the period from and including the
Closing Date to but not including the Revolving Commitment Termination Date.
"COMMITMENT TRANSFER SUPPLEMENT" shall mean a Commitment Transfer
Supplement, substantially in the form of SCHEDULE 9.6(c).
"COMMONLY CONTROLLED ENTITY" shall mean an entity, whether or not
incorporated, which is under common control with the Borrower within the meaning
of Section 4001 of ERISA or is part of a group which includes the Borrower and
which is treated as a single employer under Section 414 of the Code.
"CONSOLIDATED CAPITAL EXPENDITURES" shall mean, for any period, all
capital expenditures of the Borrower and its Subsidiaries on a consolidated
basis for such period, as determined in accordance with GAAP. The term
"Consolidated Capital Expenditures" shall not include capital expenditures in
respect of the reinvestment of proceeds derived from Recovery Events received by
the Borrower and its Subsidiaries to the extent that such reinvestment is
permitted under the Credit Documents.
"CONSOLIDATED EBITDA" shall mean, for any period, the sum of (i)
Consolidated Net Income for such period, plus (ii) an amount which, in the
determination of Consolidated Net Income for such period, has been deducted for
(A) Consolidated Interest Expense, (B) total federal, state, local and foreign
income, value added and similar taxes, (C) losses (or MINUS gains) on the sale
or disposition of assets outside the ordinary course of business and (D)
6
depreciation, amortization expense and other non-cash, non-recurring
extraordinary charges, all as determined in accordance with GAAP, plus (iii)
management fees to the extent paid as permitted by Section 6.17, plus (iv) on a
one-time basis, costs and expenses incurred by the Credit Parties in connection
with the Acquisition, plus (v) for the first four (4) fiscal quarters following
the Closing Date only, $750,000. Except as otherwise provided herein,
determinations shall be made for the immediately preceding four (4) fiscal
quarters.
"CONSOLIDATED INTEREST EXPENSE" shall mean, for any period, all cash
interest expense of the Borrower and its Subsidiaries (including, without
limitation, the interest component under Capital Leases), as determined in
accordance with GAAP. For purposes hereof, Consolidated Interest Expense for the
first three complete fiscal quarters to occur after the Closing Date shall be
determined by annualizing Consolidated Interest Expense such that for the first
complete fiscal quarter to occur after the Closing Date such components would be
multiplied by four (4), the first two complete fiscal quarters would be
multiplied by two (2) and the first three fiscal quarters would be multiplied by
one and one-third (1 1/3).
"CONSOLIDATED NET INCOME" shall mean, for any period, net income
(excluding extraordinary items) after taxes for such period of the Borrower and
its Subsidiaries on a consolidated basis, as determined in accordance with GAAP.
"CONSOLIDATED NET WORTH" shall mean, as at any date of determination,
the consolidated stockholders' equity of the Borrower and its Subsidiaries, as
determined on a consolidated basis in accordance with GAAP.
"CONTINUING DIRECTORS" shall mean either during any period of up to 24
consecutive months commencing after the Closing Date, individuals who at the
beginning of such 24 month period were directors of the Borrower (together with
any new director whose election by the Borrower's board of directors or whose
nomination for election by the Borrower's shareholders was approved by a vote of
at least two-thirds of the directors then still in office who either were
directors at the beginning of such period or whose election or nomination for
election was previously so approved).
"CONTRACTUAL OBLIGATION" shall mean, as to any Person, any provision of
any security issued by such Person or of any agreement, instrument or
undertaking to which such Person is a party or by which it or any of its
property is bound.
"COPYRIGHT LICENSES" shall mean any written agreement, naming any
Obligor as licensor, granting any right under any Copyright including, without
limitation, any thereof referred to in SCHEDULE 3.16.
"COPYRIGHTS" shall mean (a) all registered United States copyrights in
all Works, now existing or hereafter created or acquired, all registrations and
recordings thereof, and all applications in connection therewith, including,
without limitation, registrations, recordings and applications in the United
States Copyright office including, without limitation, any thereof referred to
in SCHEDULE 3.16, and (b) all renewals thereof including, without limitation,
any thereof referred to in SCHEDULE 3.16.
7
"CREDIT DOCUMENTS" shall mean this Agreement, each of the Notes, any
Joinder Agreement, the Keepwell Agreement, the Lockbox Agreement, the Letters of
Credit, LOC Documents and the Security Documents.
"CREDIT PARTY" shall mean any of the Borrower or the Guarantors.
"CREDIT PARTY OBLIGATIONS" shall mean, without duplication, (i) all of
the obligations of the Credit Parties to the Lenders (including the Issuing
Lender) and the Administrative Agent, whenever arising, under this Agreement,
the Notes or any of the other Credit Documents (including, without limitation,
the due and punctual payment of the principal of and premium, if any, and
interest (including interest accruing during the pendency of any bankruptcy,
insolvency, receivership or similar proceeding and regardless of whether such
interest is an allowed claim under the Bankruptcy Code) on the Loans, each
payment required to be paid by the Borrower in respect of any Letter of Credit,
including payments in respect of reimbursement of disbursements, interest
thereon and obligations to provide cash collateral and all other monetary
obligations, including fees, costs, expenses and indemnities) and (ii) all
liabilities and obligations, whenever arising, owing from the Borrower or any of
its Subsidiaries to any Lender, or any Affiliate of a Lender, arising under any
Hedging Agreement.
"DEBT ISSUANCE" shall mean the issuance of any Indebtedness for
borrowed money by any Credit Party or any of its Subsidiaries (excluding, for
purposes hereof, any Equity Issuance or any Indebtedness of the Borrower and its
Subsidiaries permitted to be incurred pursuant to Section 6.1 hereof).
"DEFAULT" shall mean any of the events specified in Section 7.1,
whether or not any requirement for the giving of notice or the lapse of time, or
both, or any other condition, has been satisfied.
"DEFAULTING LENDER" shall mean, at any time, any Lender that, at such
time (a) has failed to make a Loan required pursuant to the term of this Credit
Agreement, including the funding of a Participation Interest in accordance with
the terms hereof, (b) has failed to pay to the Administrative Agent or any
Lender an amount owed by such Lender pursuant to the terms of this Credit
Agreement, or (c) has been deemed insolvent or has become subject to a
bankruptcy or insolvency proceeding or to a receiver, trustee or similar
official.
"DEFINED BENEFIT PLAN" shall mean a defined benefit plan within the
meaning of Section 3(35) of ERISA or Section 414(j) of the Code, whether funded
or unfunded, qualified or non-qualified (whether or not subject to ERISA or the
Code).
"DOLLARS" and "$" shall mean dollars in lawful currency of the United
States of America.
"DOMESTIC LENDING OFFICE" shall mean, initially, the office of each
Lender designated as such Lender's Domestic Lending Office shown on SCHEDULE
9.2; and thereafter, such other office of such Lender as such Lender may from
time to time specify to the Administrative Agent and
8
the Borrower as the office of such Lender at which Alternate Base Rate Loans of
such Lender are to be made.
"DOMESTIC SUBSIDIARY" shall mean any Subsidiary that is organized and
existing under the laws of the United States or any state or commonwealth
thereof or under the laws of the District of Columbia.
"ELIGIBLE RECEIVABLES" shall mean as of any date of determination and
without duplication, the aggregate book value of all accounts receivable,
receivables, and obligations for payment created or arising from the sale of
inventory or the rendering of services in the ordinary course of business
(collectively, the "RECEIVABLES"), owned by or owing to the Borrower and its
Subsidiaries, net of allowances and reserves for doubtful or uncollectible
accounts and sales adjustments consistent with the Borrower's internal policies
and in any event in accordance with GAAP, net of accrued incentive amounts
(until such time as the Administrative Agent has determined to its satisfaction
that such incentive could not be used as an offset to the applicable
Receivable), but excluding in any event (i) Receivables subject to any Lien,
other than any Permitted Lien, (ii) Receivables upon which the Administrative
Agent does not have a perfected security interest, (iii) Receivables which are
more than 120 days from the date of invoice (net of reserves for bad debts in
connection with any such Receivables but before giving effect to any applicable
credit), (iv) any Receivable not otherwise excluded by clause (iii) above but
owing from an account debtor which is the account debtor on existing Receivables
more than 50% of which are then excluded by such clause (iii), unless the
exclusion by such clause (iii) is a result of a legitimate dispute by the
account debtor and the applicable Receivables are no more than 120 days from the
date of invoice, (v) Receivables evidenced by notes, chattel paper or other
instruments, unless such notes, chattel paper or instruments (a) have been
delivered to and are in the possession of the Administrative Agent or (b) the
aggregate amount of the Receivables evidenced thereby is not greater than
$50,000, (vi) Receivables owing by an account debtor which is subject to any
bankruptcy or insolvency proceeding of any kind, (vii) Receivables owing by an
account debtor located outside of the United States or Canada (unless payment
for the goods shipped is either (a) covered by credit insurance in form and
substance acceptable to the Administrative Agent or (b) secured by an
irrevocable letter of credit in a form and from an institution acceptable to the
Administrative Agent), (viii) Receivables which are contingent or subject to
offset, deduction, counterclaim, credit, dispute or other defense to payment, in
each case to the extent of such offset, deduction, counterclaim, dispute or
other defense, (ix) Receivables for which any direct or indirect Subsidiary of
the Borrower or any Affiliate of the Borrower is the account debtor, (x)
Receivables representing a sale to the government of the United States of
America or any subdivision thereof unless the Borrower or its Subsidiaries, as
applicable have complied (to the satisfaction of the Administrative Agent), with
respect to the granting of a security interest in such Receivable, with the
Federal Assignment of Claims Act or other similar applicable law, (xi)
Receivables (if any) created in connection with any sale where payment is due on
delivery of inventory sold and (xii) Receivables which fail to meet such other
specifications and requirements as may from time to time be established by the
Administrative Agent in its reasonable discretion.
"ELIGIBLE INVENTORY" shall mean, as of the date of determination, the
gross dollar value (valued at the lower of cost (on a FIFO basis) or fair market
value) of all finished goods and raw
9
materials inventory of the Borrower and its Subsidiaries LESS appropriate
reserves determined in accordance with GAAP applied on a consistent basis, BUT
EXCLUDING in any event (i) inventory subject to a Lien other than a Permitted
Lien, (ii) inventory upon which the Administrative Agent does not have a
perfected security interest, (iii) inventory which fails to meet standards for
sale or use imposed by Governmental Authorities having regulatory authority over
such inventory or its use or sale, (iv) inventory which is not useable or
saleable at prices approximating their cost (after taking into account, without
duplication, the amount of any reserves for obsolescence, unsaleability or
decline in value), (v) inventory which is leased or on consignment and (vi)
packaging materials, supplies and work in process.
"ELIGIBLE UNBILLED RECEIVABLES" shall mean Receivables from Government
Contracts or a prime contractor on a Government Contract which would otherwise
be Eligible Receivables and with respect to which the sale of inventory has
occurred or the rendering of services has been performed and the payment
obligations therefore are due and owing but which have not yet been invoiced in
the ordinary course of business.
"ENVIRONMENTAL LAWS" shall mean any and all applicable foreign,
Federal, state, local or municipal laws, rules, orders, regulations, statutes,
ordinances, codes, decrees, requirements of any Governmental Authority or other
Requirement of Law (including common law) regulating, relating to or imposing
liability or standards of conduct concerning protection of human health or the
environment, as now or may at any time be in effect during the term of this
Agreement.
"EQUITY ISSUANCE" shall mean any issuance by any Credit Party or any
Subsidiary to any Person which is not a Credit Party of (a) shares of its
Capital Stock, (b) any shares of its Capital Stock pursuant to the exercise of
options or warrants or (c) any shares of its Capital Stock pursuant to the
conversion of any debt securities to equity other than in connection with the
Acquisition. The term "Equity Issuance" shall not include any Asset Disposition
or any Debt Issuance.
"ERISA" shall mean the Employee Retirement Income Security Act of 1974,
as amended from time to time.
"EURODOLLAR RESERVE PERCENTAGE" shall mean for any day, the percentage
(expressed as a decimal and rounded upwards, if necessary, to the next higher
1/100th of 1%) which is in effect for such day as prescribed by the Federal
Reserve Board (or any successor) for determining the maximum reserve requirement
(including without limitation any basic, supplemental or emergency reserves) in
respect of Eurocurrency liabilities, as defined in Regulation D of such Board as
in effect from time to time, or any similar category of liabilities for a member
bank of the Federal Reserve System in New York City.
"EVENT OF DEFAULT" shall mean any of the events specified in Section
7.1; PROVIDED, HOWEVER, that any requirement for the giving of notice or the
lapse of time, or both, or any other condition, has been satisfied.
"EXCESS CASH FLOW" shall mean, with respect to any fiscal year period
of the Borrower and its Subsidiaries on a consolidated basis, an amount equal to
(a) Consolidated EBITDA for
10
such period MINUS (b) Consolidated Capital Expenditures for such period MINUS
(c) Scheduled Funded Debt Payments made during such period MINUS (d)
Consolidated Interest Expense for such period MINUS (e) amounts paid in respect
of federal, state, local and foreign income, value added and similar taxes with
respect to such period MINUS (f) increases (or plus decreases) in working
capital as of the end of such fiscal year when compared with working capital as
of the end of the prior fiscal year MINUS (g) any management fees for such
period to the extent paid as permitted by Section 6.17.
"EXTENSION OF CREDIT" shall mean, as to any Lender, the making of a
Loan by such Lender or the issuance of, or participation in, a Letter of Credit
by such Lender.
"FEDERAL FUNDS EFFECTIVE RATE" shall have the meaning set forth in the
definition of "Alternate Base Rate".
"FEE LETTER" shall mean the letter agreement dated July 31, 2000
addressed to the Borrower from the Administrative Agent, First Union Securities,
Inc., CIBC, Inc. and CIBC World Markets Corp., as amended, modified or otherwise
supplemented.
"FIRST UNION" shall mean First Union National Bank, a national banking
association.
"FIXED CHARGE COVERAGE RATIO" shall mean, as of the end of each fiscal
quarter of the Borrower, for the Borrower and its Subsidiaries on a consolidated
basis for the four consecutive quarters ending on such date, the ratio of (i)
Consolidated EBITDA for the applicable period MINUS Consolidated Capital
Expenditures for the applicable period to (ii) the sum of Consolidated Interest
Expense for the applicable period PLUS Scheduled Funded Debt Payments for the
applicable period PLUS cash taxes paid during the applicable period.
Notwithstanding the foregoing, for purposes of calculating the Fixed Charge
Coverage Ratio for the first three complete fiscal quarters to occur after the
Closing Date, the Fixed Charge Coverage Ratio shall be determined by annualizing
the components thereof such that for the first complete fiscal quarter to occur
after the Closing Date such components would be multiplied by four (4), the
first two complete fiscal quarters would be multiplied by two (2) and the first
three complete fiscal quarters would be multiplied by one and one-third
(1); provided however that with respect to the Consolidated Capital
Expenditures component only, for the first three complete fiscal quarters to
occur after the Closing Date, Consolidated Capital Expenditures shall be deemed
to be equal to the lesser of (x) the number obtained as a result of the product
of the actual amount of Consolidated Capital Expenditures for such period times
the applicable multiplier described in the immediately preceding clause or (y)
$6,200,000.
"FOREIGN SUBSIDIARY" shall mean any Subsidiary that is not a Domestic
Subsidiary.
"FUNDED DEBT" shall mean, with respect to any Person, without
duplication, (a) all Indebtedness of such Person other than Indebtedness of the
types referred to in clause (e), (f) and (i) of the definition of "Indebtedness"
set forth in this Section 1.1, and excluding for the purposes of clause (j) of
such definition of Indebtedness, any performance letters of credit (i.e.,
letters of credit which can be drawn upon only if the Borrower or any of its
Subsidiaries fails to comply with or perform under any material provision of any
contract) issued for the account of such Person, (b) all
11
Funded Debt of others of the type referred to in clause (a) above secured by (or
for which the holder of such Funded Debt has an existing right, contingent or
otherwise, to be secured by) any Lien on, or payable out of the proceeds of
production from, property owned or acquired by such Person, whether or not the
obligations secured thereby have been assumed, (c) all Guaranty Obligations of
such Person with respect to Funded Debt of the type referred to in clause (a)
above of another Person and (d) Funded Debt of the type referred to in clause
(a) above of any partnership or unincorporated joint venture in which such
Person is legally obligated or has a reasonable expectation of being liable with
respect thereto.
"GAAP" shall mean generally accepted accounting principles in effect in
the United States of America applied on a consistent basis, SUBJECT, HOWEVER, in
the case of determination of compliance with the financial covenants set out in
Section 5.9 to the provisions of Section 1.3.
"GOVERNMENT ACTS" shall have the meaning set forth in Section 2.20.
"GOVERNMENT CONTRACT" shall mean any contract entered into between the
Borrower or any of its Subsidiaries and the government of the United States of
America, or any department, agency, public corporation, or other instrumentality
thereof.
"GOVERNMENTAL AUTHORITY" shall mean any nation or government, any state
or other political subdivision thereof and any entity exercising executive,
legislative, judicial, regulatory or administrative functions of or pertaining
to government, and any corporation or other entity owned or controlled, through
stock or capital ownership or otherwise, by any of the foregoing.
"GUARANTY OBLIGATIONS" shall mean, with respect to any Person, without
duplication, any obligations of such Person (other than endorsements in the
ordinary course of business of negotiable instruments for deposit or collection)
guaranteeing or intended to guarantee any Indebtedness of any other Person in
any manner, whether direct or indirect, and including without limitation any
obligation, whether or not contingent, (i) to purchase any such Indebtedness or
any property constituting security therefor, (ii) to advance or provide funds or
other support for the payment or purchase of any such Indebtedness or to
maintain working capital, solvency or other balance sheet condition of such
other Person (including without limitation keep well agreements, maintenance
agreements, comfort letters or similar agreements or arrangements) for the
benefit of any holder of Indebtedness of such other Person, (iii) to lease or
purchase Property, securities or services primarily for the purpose of assuring
the holder of such Indebtedness, or (iv) to otherwise assure or hold harmless
the holder of such Indebtedness against loss in respect thereof. The amount of
any Guaranty Obligation hereunder shall (subject to any limitations set forth
therein) be deemed to be an amount equal to the outstanding principal amount (or
maximum principal amount, if larger) of the Indebtedness in respect of which
such Guaranty Obligation is made.
"GUARANTOR" shall mean the Parent and any of the Domestic Subsidiaries
identified as a "Guarantor" on the signature pages hereto and the Additional
Credit Parties which execute a Joinder Agreement, together with their successors
and permitted assigns.
"GUARANTY" shall mean the guaranty of the Guarantors set forth in
Article X.
12
"HEDGING AGREEMENTS" shall mean, with respect to any Person, any
agreement entered into to protect such Person against fluctuations in interest
rates, or currency or raw materials values, including, without limitation, any
interest rate swap, cap or collar agreement or similar arrangement between such
Person and one or more counterparties, any foreign currency exchange agreement,
currency protection agreements, commodity purchase or option agreements or other
interest or exchange rate or commodity price hedging agreements.
"INDEBTEDNESS" shall mean, with respect to any Person, without
duplication, (a) all obligations of such Person for borrowed money, (b) all
obligations of such Person evidenced by bonds, debentures, notes or similar
instruments, or upon which interest payments are customarily made without regard
to any original issue discount relating thereto, (c) all obligations of such
Person under conditional sale or other title retention agreements relating to
property purchased by such Person (other than customary reservations or
retentions of title under agreements with suppliers entered into in the ordinary
course of business), (d) all obligations of such Person issued or assumed as the
deferred purchase price of property or services purchased by such Person (other
than trade debt incurred in the ordinary course of business and due within six
months of the incurrence thereof) which would appear as liabilities on a balance
sheet of such Person, (e) all obligations of such Person under take-or-pay or
similar arrangements or under commodities agreements, (f) all Indebtedness of
others secured by (or for which the holder of such Indebtedness has an existing
right, contingent or otherwise, to be secured by) any Lien on, or payable out of
the proceeds of production from, property owned or acquired by such Person,
whether or not the obligations secured thereby have been assumed, (g) all
Guaranty Obligations of such Person with respect to Indebtedness of another
Person, (h) the principal portion of all obligations of such Person under
Capital Leases, (i) all obligations of such Person under Hedging Agreements, (j)
the maximum amount of all letters of credit issued or bankers' acceptances
facilities created for the account of such Person and, without duplication, all
drafts drawn thereunder (to the extent unreimbursed), (k) all preferred Capital
Stock issued by such Person and which by the terms thereof could be (at the
request of the holders thereof or otherwise) subject to mandatory sinking fund
payments, redemption or other acceleration, (l) the principal balance
outstanding under any synthetic lease, tax retention operating lease,
off-balance sheet loan or similar off-balance sheet financing product, and (m)
the Indebtedness of any partnership or unincorporated joint venture in which
such Person is a general partner or a joint venturer.
"INSOLVENCY" shall mean, with respect to any Multiemployer Plan, the
condition that such Plan is insolvent within the meaning of such term as used in
Section 4245 of ERISA.
"INSOLVENT" shall mean being in a condition of Insolvency.
"INSTRUMENTS OF ASSIGNMENT" shall have the meaning set forth in Section
5.17(c).
"INTELLECTUAL PROPERTY" shall mean all Copyrights, Copyright Licenses,
Patents, Patent Licenses, Trademarks and Trademark Licenses
"INTEREST COVERAGE RATIO" shall mean, with respect to the Borrower and
its Subsidiaries on a consolidated basis for the twelve month period ending on
the last day of any fiscal quarter of the
13
Borrower and its Subsidiaries, the ratio of (a) Consolidated EBITDA for such
period to (b) Consolidated Interest Expense for such period.
"INTEREST DETERMINATION DATE" shall have the meaning assigned thereto
in the definition of "Applicable Percentage".
"INTEREST PAYMENT DATE" shall mean (a) as to any Alternate Base Rate
Loan or Swingline Loan, the fifteenth (15th) day of each March, June, September
and December and on the applicable Maturity Date, (b) as to any LIBOR Rate Loan
having an Interest Period of three months or less, the last day of such Interest
Period, and (c) as to any LIBOR Rate Loan having an Interest Period longer than
three months, each day which is three months after the first day of such
Interest Period and the last day of such Interest Period.
"INTEREST PERIOD" shall mean, with respect to any LIBOR Rate Loan,
(i) initially, the period commencing on the Borrowing Date or
conversion date, as the case may be, with respect to such LIBOR Rate
Loan and ending one, two, three or six months thereafter, as selected
by the Borrower in the notice of borrowing or notice of conversion
given with respect thereto; and
(ii) thereafter, each period commencing on the last day of the
immediately preceding Interest Period applicable to such LIBOR Rate
Loan and ending one, two, three or six months thereafter, as selected
by the Borrower by irrevocable notice to the Administrative Agent not
less than three Business Days prior to the last day of the then current
Interest Period with respect thereto;
PROVIDED that the foregoing provisions are subject to the
following:
(A) if any Interest Period pertaining to a LIBOR Rate
Loan would otherwise end on a day that is not a Business Day,
such Interest Period shall be extended to the next succeeding
Business Day unless the result of such extension would be to
carry such Interest Period into another calendar month in which
event such Interest Period shall end on the immediately
preceding Business Day;
(B) any Interest Period pertaining to a LIBOR Rate
Loan that begins on the last Business Day of a calendar month
(or on a day for which there is no numerically corresponding day
in the calendar month at the end of such Interest Period) shall
end on the last Business Day of the relevant calendar month;
(C) if the Borrower shall fail to give notice as
provided above, the Borrower shall be deemed to have selected an
Alternate Base Rate Loan to replace the affected LIBOR Rate
Loan;
(D) any Interest Period in respect of any Loan that
would otherwise extend beyond the applicable Maturity Date and,
further with regard to
14
the Tranche A Term Loans and the Tranche B Term Loans, no
Interest Period shall extend beyond any principal amortization
payment date unless the portion of such Tranche A Term Loan or
Tranche B Term Loan consisting of Alternate Base Rate Loans
together with the portion of such Tranche A Term Loan and
Tranche B Term Loan consisting of LIBOR Rate Loans with Interest
Periods expiring prior to or concurrently with the date such
principal amortization payment date is due, is at least equal to
the amount of such principal amortization payment due on such
date; and
(E) no more than eight (8) LIBOR Rate Loans may be in
effect at any time. For purposes hereof, LIBOR Rate Loans with
different Interest Periods shall be considered as separate LIBOR
Rate Loans, even if they shall begin on the same date and have
the same duration, although borrowings, extensions and
conversions may, in accordance with the provisions hereof, be
combined at the end of existing Interest Periods to constitute a
new LIBOR Rate Loan with a single Interest Period.
"ISSUING LENDER" shall mean First Union or any other Lender designated
by the Administrative Agent and agreed to by the Borrower.
"ISSUING LENDER FEES" shall have the meaning set forth in Section
2.6(c).
"JOINDER AGREEMENT" shall mean a Joinder Agreement substantially in the
form of SCHEDULE 5.10, executed and delivered by an Additional Credit Party in
accordance with the provisions of Section 5.10.
"KEEPWELL AGREEMENT" shall mean that certain Keepwell Agreement dated
as of the date hereof among the Borrower, the Sponsor and the Agents.
"LENDER" shall have the meaning set forth in the first paragraph of
this Agreement.
"LETTERS OF CREDIT" shall mean any letter of credit issued by the
Issuing Lender pursuant to the terms hereof, as such Letters of Credit may be
amended, modified, extended, renewed or replaced from time to time.
"LETTER OF CREDIT FEE" shall have the meaning set forth in Section
2.6(b).
"LEVERAGE RATIO" shall mean, with respect to the Borrower and its
Subsidiaries on a consolidated basis for the twelve month period ending on the
last day of any fiscal quarter, the ratio of (a) Funded Debt of the Borrower and
its Subsidiaries on a consolidated basis on the last day of such period to (b)
Consolidated EBITDA for such twelve month period.
"LIBOR" shall mean, for any LIBOR Rate Loan for any Interest Period
therefor, the rate per annum (rounded upwards, if necessary, to the nearest
1/100 of 1%) appearing on Telerate Page 3750 (or any successor page) as the
London interbank offered rate for deposits in Dollars at approximately 11:00
a.m. (London time) two Business Days prior to the first day of such Interest
15
Period for a term comparable to such Interest Period. If for any reason such
rate is not available, the term "LIBOR" shall mean, for any LIBOR Rate Loan for
any Interest Period therefor, the rate per annum (rounded upwards, if necessary,
to the nearest 1/100 of 1%) appearing on Reuters Screen LIBO Page as the London
interbank offered rate for deposits in Dollars at approximately 11:00 a.m.
(London time) two Business Days prior to the first day of such Interest Period
for a term comparable to such Interest Period; PROVIDED, HOWEVER, if more than
one rate is specified on Reuters Screen LIBO Page, the applicable rate shall be
the arithmetic mean of all such rates (rounded upwards, if necessary, to the
nearest 1/100 of 1%). If, for any reason, neither of such rates is available,
then "LIBOR" shall mean the rate per annum at which, as determined by the
Administrative Agent, Dollars in an amount comparable to the Loans then
requested are being offered to leading banks at approximately 11:00 A.M. London
time, two (2) Business Days prior to the commencement of the applicable Interest
Period for settlement in immediately available funds by leading banks in the
London interbank market for a period equal to the Interest Period selected.
"LIBOR LENDING OFFICE" shall mean, initially, the office of each Lender
designated as such Lender's LIBOR Lending Office shown on SCHEDULE 9.2; and
thereafter, such other office of such Lender as such Lender may from time to
time specify to the Administrative Agent and the Borrower as the office of such
Lender at which the LIBOR Rate Loans of such Lender are to be made.
"LIBOR RATE" shall mean a rate per annum (rounded upwards, if
necessary, to the next higher 1/100th of 1%) determined by the Administrative
Agent pursuant to the following formula:
LIBOR
LIBOR Rate = ------------------------------------
1.00 - Eurodollar Reserve Percentage
"LIBOR RATE LOAN" shall mean Loans the rate of interest applicable to
which is based on the LIBOR Rate.
"LIEN" shall mean any mortgage, pledge, hypothecation, assignment,
deposit arrangement, encumbrance, lien (statutory or other), charge or other
security interest or any preference, priority or other security agreement or
preferential arrangement of any kind or nature whatsoever (including, without
limitation, any conditional sale or other title retention agreement and any
Capital Lease having substantially the same economic effect as any of the
foregoing).
"LOAN" shall mean a Revolving Loan, a Swingline Loan, the Tranche A
Term Loan and/or the Tranche B Term Loan as appropriate.
"LOCKBOX AGREEMENT" shall mean the Lockbox Agreement dated as of the
Closing Date to be executed in favor of the Administrative Agent by the Borrower
and each other Credit Party, as amended, modified, restated or supplemented from
time to time.
"LOC COMMITMENT" shall mean the commitment of the Issuing Lender to
issue Letters of Credit and with respect to each Lender, the commitment of such
Lender to purchase participation
16
interests in the Letters of Credit up to such Lender's LOC Committed Amount as
specified in SCHEDULE 2.1(a), as such amount may be reduced from time to time in
accordance with the provisions hereof.
"LOC COMMITMENT PERCENTAGE" shall mean, for each Lender, the percentage
identified as its LOC Commitment Percentage on SCHEDULE 2.1(a), as such
percentage may be modified in connection with any assignment made in accordance
with the provisions of Section 9.6(c).
"LOC COMMITTED AMOUNT" shall mean, collectively, the aggregate amount
of all of the LOC Commitments of the Lenders to issue and participate in Letters
of Credit as referenced in Section 2.4 and, individually, the amount of each
Lender's LOC Commitment as specified in SCHEDULE 2.1(a).
"LOC DOCUMENTS" shall mean, with respect to any Letter of Credit, such
Letter of Credit, any amendments thereto, any documents delivered in connection
therewith, any application therefor, and any agreements, instruments, guarantees
or other documents (whether general in application or applicable only to such
Letter of Credit) governing or providing for (i) the rights and obligations of
the parties concerned or (ii) any collateral security for such obligations.
"LOC OBLIGATIONS" shall mean, at any time, the sum of (i) the maximum
amount which is, or at any time thereafter may become, available to be drawn
under Letters of Credit then outstanding, assuming compliance with all
requirements for drawings referred to in such Letters of Credit PLUS (ii) the
aggregate amount of all drawings under Letters of Credit honored by the Issuing
Lender but not theretofore reimbursed.
"MANDATORY BORROWING" shall have the meaning set forth in Section
2.5(b)(ii) or Section 2.4(e), as the context may require.
"MATERIAL ADVERSE EFFECT" shall mean a material adverse effect on (a)
the business, operations, property, condition (financial or otherwise) or
prospects of the Borrower and its Subsidiaries taken as a whole, (b) the ability
of the Borrower or any Guarantor to perform its obligations, when such
obligations are required to be performed, under this Agreement, any of the Notes
or any other Credit Document or (c) the validity or enforceability of this
Agreement, any of the Notes or any of the other Credit Documents or the rights
or remedies of the Administrative Agent or the Lenders hereunder or thereunder.
"MATERIAL CONTRACT" shall mean any contract or other arrangement,
whether written or oral, to which the Borrower or any of its Subsidiaries is a
party having a remaining value in excess of $1,000,000 in annual revenue.
"MATERIALS OF ENVIRONMENTAL CONCERN" shall mean any gasoline or
petroleum (including crude oil or any fraction thereof) or petroleum products or
any hazardous or toxic substances, materials or wastes, defined or regulated as
such in or under any Environmental Law, including, without limitation, asbestos,
polychlorinated biphenyls and urea-formaldehyde insulation.
17
"MATURITY DATE" shall mean (i) with respect to the Tranche A Term Loan,
the last scheduled quarterly payment date for the Tranche A Term Loan set forth
in Section 2.2(b), (ii) with respect to the Tranche B Term Loan, the last
scheduled quarterly payment date for the Tranche B Term Loan set forth in
Section 2.3(b) and (iii) with respect to the Revolving Loans, the Revolving
Commitment Termination Date.
"MOODY'S" shall mean Xxxxx'x Investors Service, Inc.
"MORTGAGE INSTRUMENTS" shall have the meaning set forth in Section
4.1(f)(i).
"MORTGAGE POLICIES" shall have the meaning set forth in Section
4.1(f)(iii).
"MORTGAGED PROPERTIES" shall have the meaning set forth in Section
4.1(f)(i).
"MULTIEMPLOYER PLAN" shall mean a Plan which is a multiemployer plan as
defined in Section 4001(a)(3) of ERISA.
"NET CASH PROCEEDS" shall mean the aggregate cash proceeds received by
any Credit Party or any Subsidiary in respect of any Asset Disposition, Equity
Issuance or Debt Issuance, net of (a) direct costs (including, without
limitation, legal, accounting and investment banking fees, and sales
commissions) and (b) taxes paid or payable as a result thereof; it being
understood that "Net Cash Proceeds" shall include, without limitation, any cash
received upon the sale or other disposition of any non-cash consideration
received by any Credit Party or any Subsidiary in any Asset Disposition, Equity
Issuance or Debt Issuance.
"NOTE" or "NOTES" shall mean the Revolving Notes, the Swingline Note,
the Tranche A Term Notes and/or the Tranche B Term Notes, collectively,
separately or individually, as appropriate.
"NOTICE OF ASSIGNMENT" shall have the meaning set forth in Section
5.17(c).
"NOTICE OF BORROWING" shall mean the written notice of borrowing as
referenced and defined in Section 2.1(b)(i) or 2.5(b)(i), as appropriate.
"NOTICE OF CONVERSION" shall mean the written notice of extension or
conversion as referenced and defined in Section 2.11.
"OBLIGATIONS" shall mean, collectively, Loans and LOC Obligations.
"OBLIGOR" or "OBLIGORS" shall mean the Borrower and the Guarantors.
"OPERATING LEASE" shall mean, as applied to any Person, any lease
(including, without limitation, leases which may be terminated by the lessee at
any time) of any Property (whether real, personal or mixed) which is not a
Capital Lease other than any such lease in which that Person is the lessor.
18
"PARENT" shall mean IDT Holding, L.L.C., a Delaware limited liability
company.
"PARTICIPANT" shall have the meaning set forth in Section 9.6(b).
"PARTICIPATION INTEREST" shall mean the purchase by a Lender of a
participation interest in Letters of Credit as provided in Section 2.4 and in
Swingline Loans as provided in Section 2.5.
"PATENT LICENSE" shall mean all agreements, whether written or oral,
providing for the grant by or to an Obligor of any right to manufacture, use or
sell any invention covered by a Patent, including, without limitation, any
thereof referred to in SCHEDULE 3.16.
"PATENTS" shall mean (a) all letters patent of the United States or any
other country and all reissues and extensions thereof, including, without
limitation, any thereof referred to in SCHEDULE 3.16, and (b) all applications
for letters patent of the United States or any other country and all divisions,
continuations and continuations-in-part thereof, including, without limitation,
any thereof referred to in SCHEDULE 3.16.
"PBGC" shall mean the Pension Benefit Guaranty Corporation established
pursuant to Subtitle A of Title IV of ERISA.
"PERMITTED INVESTMENTS" shall mean:
(i) cash and Cash Equivalents;
(ii) receivables owing to the Borrower or any of its
Subsidiaries or any receivables and advances to suppliers, in each case
if created, acquired or made in the ordinary course of business and
payable or dischargeable in accordance with customary trade terms;
(iii) investments in and loans to any Credit Parties;
(iv) loans and advances to officers, directors, employees and
Affiliates in an aggregate amount not to exceed $100,000 at any time
outstanding;
(v) investments (including debt obligations) received in
connection with the bankruptcy or reorganization of suppliers and
customers and in settlement of delinquent obligations of, and other
disputes with, customers and suppliers arising in the ordinary course
of business;
(vi) investments, acquisitions or transactions permitted under
Section 6.5(b); and
(vii) additional loan advances and/or investments of a nature
not contemplated by the foregoing clauses hereof, PROVIDED that such
loans, advances and/or investments made pursuant to this clause (vii)
shall not exceed an aggregate amount of $100,000.
19
As used herein, "INVESTMENT" shall mean all investments, in cash or by
delivery of property made, directly or indirectly in, to or from any Person,
whether by acquisition of shares of Capital Stock, property, assets,
indebtedness or other obligations or securities or by loan advance, capital
contribution or otherwise.
"PERMITTED LIENS" shall mean:
(i) Liens created by or otherwise existing, under or in
connection with this Agreement or the other Credit Documents in favor
of the Lenders;
(ii) Liens in favor of a Lender hereunder in connection with
Hedging Agreements, but only (A) to the extent such Liens secure
obligations under Hedging Agreements with any Lender, or any Affiliate
of a Lender, (B) to the extent such Liens are on the same Collateral as
to which the Administrative Agent on behalf of the Lenders also has a
Lien and (C) if such provider and the Lenders shall share PARI PASSU in
the Collateral subject to such Liens;
(iii) purchase money Liens securing purchase money indebtedness
(and refinancings thereof) to the extent permitted under Section
6.1(c);
(iv) Liens for taxes, assessments, charges or other governmental
levies not yet due and payable or which are being contested in good
faith by appropriate proceedings, PROVIDED that adequate reserves with
respect thereto are maintained on the books of the Borrower or its
Subsidiaries, as the case may be, in conformity with GAAP (or, in the
case of Subsidiaries with significant operations outside of the United
States of America, generally accepted accounting principles in effect
from time to time in their respective jurisdictions of incorporation);
(v) carriers', warehousemen's, mechanics', materialmen's,
repairmen's or other like Liens arising in the ordinary course of
business (a) which are not overdue for a period of more than 60 days or
(b) which are being contested in good faith by appropriate proceedings;
provided that, unless such Liens are bonded, a reserve or other
appropriate provision shall have been made therefor and maintained on
the books of the Borrower or its Subsidiaries, as the case may be, in
conformity with GAAP (or, in the case of Subsidiaries with significant
operations outside of the United States of America, generally accepted
accounting principles in effect from time to time in their respective
jurisdictions of incorporation) and the aggregate amount of such Liens
is less than $75,000;
(vi) pledges or deposits in an aggregate amount not to exceed
$75,000 made in connection with workers' compensation, unemployment
insurance and other social security legislation and deposits securing
liability to insurance carriers under insurance or self-insurance
arrangements;
(vii) deposits to secure the performance of bids, trade
contracts, (other than for borrowed money), leases, statutory
obligations, surety and appeal bonds, performance
20
bonds and other obligations of a like nature incurred in the ordinary
course of business in an aggregate amount not to exceed $75,000;
(viii) any extension, renewal or replacement (or successive
extensions, renewals or replacements), in whole or in part, of any
Lien referred to in the foregoing clauses; PROVIDED that such
extension, renewal or replacement Lien shall be limited to all or a
part of the property which secured the Lien so extended, renewed or
replaced (plus improvements on such property);
(ix) Liens existing on the Closing Date and set forth on
SCHEDULE 1.1(c); provided that (a) no such Lien shall at any time be
extended to cover property or assets other than the property or assets
subject thereto on the Closing Date and (b) the principal amount of the
Indebtedness secured by such Liens shall not be extended, renewed,
refunded or refinanced;
(x) Liens arising in connection with Capitalized Leases or
purchase money indebtedness to the extent permitted under Section
6.1(c); PROVIDED that any such Lien attaches to such asset concurrently
with or within 10 days after acquisition thereof;
(xi) Liens arising from judgments, decrees or attachments in
circumstances not constituting an Event of Default under Section
7.1(f); and
(xii) (a) easements (including, without limitation, reciprocal
easement agreements and utility agreements), rights-of-way, covenants,
consents, reservations, minor defects or irregularities, encroachments,
variations and other restrictions, charges or encumbrances (whether or
not recorded) affecting the use of property, which do not materially
detract from the value of such property or impair the use thereof for
its intended purpose and (b) any other Lien or exception to coverage
described in mortgagee policies of title insurance or surveys issued in
favor of and accepted by the Administrative Agent with respect to any
real property owned or leased by a Credit Party.
"PERSON" shall mean an individual, partnership, corporation, limited
liability company, business trust, joint stock company, trust, unincorporated
association, joint venture, Governmental Authority or other entity of whatever
nature.
"PLAN" shall mean, at any particular time, any employee benefit plan
which is covered by Title IV of ERISA and in respect of which the Borrower or a
Commonly Controlled Entity is (or, if such plan were terminated at such time,
would under Section 4069 of ERISA be deemed to be) an "employer" as defined in
Section 3(5) of ERISA.
"PLEDGE AGREEMENT" shall mean the Pledge Agreement dated as of the
Closing Date to be executed in favor of the Administrative Agent by the Borrower
and each of the other Credit Parties, as amended, modified, restated or
supplemented from time to time.
"PRIME RATE" shall have the meaning set forth in the definition of
Alternate Base Rate.
21
"PROPERTIES" shall have the meaning set forth in Section 3.10(a).
"PURCHASING LENDERS" shall have the meaning set forth in Section
9.6(c).
"RECOVERY EVENT" shall mean the receipt by the Borrower or any of its
Subsidiaries of any cash insurance proceeds (whether on account of or
characterized as property insurance, business interruption insurance, liability
insurance or otherwise) or condemnation award payable by reason of theft, loss,
physical destruction or damage, taking or similar event with respect to any of
their respective property or assets.
"REGISTER" shall have the meaning set forth in Section 9.6(d).
"RELATED FUND" shall mean, with respect to any Lender or other Person
who invests in commercial bank loans in the ordinary course of business, any
other fund or trust or entity that invests in commercial bank loans in the
ordinary course of business and is advised or managed by such Lender or other
Persons or the same investment advisor as such Lender or by an Affiliate of such
Lender or investment advisor.
"REORGANIZATION" shall mean, with respect to any Multiemployer Plan,
the condition that such Plan is in reorganization within the meaning of such
term as used in Section 4241 of ERISA.
"REPORTABLE EVENT" shall mean any of the events set forth in Section
4043(c) of ERISA, other than those events as to which the thirty-day notice
period is waived under PBGC Reg. Section 4043.
"REQUIRED LENDERS" shall mean Lenders holding in the aggregate greater
than 50% of (i) the Commitments (and Participation Interests therein) or (ii) if
the Commitments have been terminated, the outstanding Loans and Participation
Interests (including the Participation Interests of the Issuing Lender in any
Letters of Credit and of the Swingline Lender in Swingline Loans) PROVIDED,
HOWEVER, that if any Lender shall be a Defaulting Lender at such time, then
there shall be excluded from the determination of Required Lenders, Obligations
(including Participation Interests) owing to such Defaulting Lender and such
Defaulting Lender's Commitments, or after termination of the Commitments, the
principal balance of the Obligations owing to such Defaulting Lender.
"REQUIREMENT OF LAW" shall mean, as to any Person, the Certificate of
Incorporation and By-laws or other organizational or governing documents of such
Person, and each law, treaty, rule or regulation or determination of an
arbitrator or a court or other Governmental Authority, in each case applicable
to or binding upon such Person or any of its property or to which such Person or
any of its property is subject.
"RESPONSIBLE OFFICER" shall mean, as to (a) the Borrower, the Chairman,
the President and the Chief Executive Officer or the Chief Financial Officer or
(b) any other Credit Party, any duly authorized officer thereof.
22
"RESTRICTED PAYMENT" shall mean (a) any dividend or other distribution,
direct or indirect, on account of any shares of any class of Capital Stock of
the Borrower or any of its Subsidiaries, now or hereafter outstanding, (b) any
redemption, retirement, sinking fund or similar payment, purchase or other
acquisition for value, direct or indirect, of any shares of any class of Capital
Stock or outstanding warrants, options or other rights related thereto of the
Borrower or any of its Subsidiaries, now or hereafter outstanding, (c) any
payment made to retire, or to obtain the surrender of, any outstanding warrants,
options or other rights to acquire shares of any class of Capital Stock of the
Borrower or any of its Subsidiaries, now or hereafter outstanding, (d) any
payment or prepayment of principal of, premium, if any, or interest on,
redemption, purchase, retirement, defeasance, sinking fund or similar payment
with respect to, any Subordinated Debt or (e) any payment under any noncompete
agreement not specifically excluded under the Subordinated Note Documents.
"REVOLVING COMMITMENT" shall mean, with respect to each Lender, the
commitment of such Lender to make Revolving Loans in an aggregate principal
amount at any time outstanding up to such Lender's Revolving Committed Amount.
"REVOLVING COMMITMENT PERCENTAGE" shall mean, for each Lender, the
percentage identified as its Revolving Commitment Percentage on SCHEDULE 2.1(a),
as such percentage may be modified in connection with any assignment made in
accordance with the provisions of Section 9.6(c).
"REVOLVING COMMITMENT TERMINATION DATE" shall mean September 29, 2005.
"REVOLVING COMMITTED AMOUNT" shall mean the amount of each Lender's
Revolving Commitment as specified on SCHEDULE 2.1(a), as such amount may be
reduced from time to time in accordance with the provisions hereof.
"REVOLVING LOANS" shall have the meaning set forth in Section 2.1.
"REVOLVING NOTE" or "REVOLVING NOTES" shall mean the promissory notes
of the Borrower in favor of each of the Lenders evidencing the Revolving Loans
provided pursuant to Section 2.1(e), individually or collectively, as
appropriate, as such promissory notes may be amended, modified, supplemented,
extended, renewed or replaced from time to time.
"S&P" shall mean Standard & Poor's Ratings Group, a division of McGraw
Hill, Inc.
"SCHEDULED FUNDED DEBT PAYMENTS" shall mean, as of any date of
determination for the Borrower and its Subsidiaries, the sum of all scheduled
payments of principal on Funded Debt for the applicable period ending on the
date of determination (including the principal component of payments due on
Capital Leases during the applicable period ending on the date of
determination).
"SECURITY AGREEMENT" shall mean the Security Agreement dated as of the
Closing Date given by the Borrower and the other Credit Parties to the
Administrative Agent, as amended, modified or supplemented from time to time in
accordance with its terms.
23
"SECURITY DOCUMENTS" shall mean the Security Agreement, the Pledge
Agreement, the Mortgage Instruments and such other documents executed and
delivered in connection with the attachment and perfection of the Administrative
Agent's security interests and liens arising thereunder, including, without
limitation, UCC financing statements.
"SINGLE EMPLOYER PLAN" shall mean any Plan which is not a Multiemployer
Plan.
"SPECIFIED SALES" shall mean (a) the sale, transfer, lease or other
disposition of inventory and materials in the ordinary course of business, (b)
the sale, transfer or other disposition of Permitted Investments described in
clause (i) of the definition thereof and (c) the liquidation of (i) TELEFUNKEN
Sendertechnik GmbH and (ii) Continental Electronics Corporation-Chile S.A.
"SPONSOR" shall mean The Veritas Capital Fund, L.P.
"SUBORDINATED DEBT" shall mean (a) the Subordinated Notes and (b) any
other Indebtedness incurred by any Credit Party which by its terms is
specifically subordinated in right of payment to the prior payment of the Credit
Party Obligations.
"SUBORDINATED NOTE DOCUMENTS" shall mean that certain Securities
Purchase Agreement dated as of September 29, 2000 by and among Borrower, X. X.
Xxxxxxx Mezzanine Fund, L.P., X. X. Xxxxxxx Market Value Fund, L.P., Xxxxxxxxx
Capital, L.P., First Union Investors, Inc. and BNY Capital Partners, L.P. and
any other documents executed in connection therewith.
"SUBORDINATED NOTES" shall mean those certain Senior Subordinated
Promissory Notes dated September 29, 2000 from Borrower to X. X. Xxxxxxx
Mezzanine Fund, L.P., X. X. Xxxxxxx Market Value Fund, L.P., Xxxxxxxxx Capital,
L.P., First Union Investors, Inc. and BNY Capital Partners, L.P.
"SUBSIDIARY" shall mean, as to any Person, a corporation, partnership,
limited liability company or other entity of which shares of stock or other
ownership interests having ordinary voting power (other than stock or such other
ownership interests having such power only by reason of the happening of a
contingency) to elect a majority of the board of directors or other managers of
such corporation, partnership or other entity are at the time owned, or the
management of which is otherwise controlled, directly or indirectly through one
or more intermediaries, or both, by such Person. Unless otherwise qualified, all
references to a "Subsidiary" or to "Subsidiaries" in this Agreement shall refer
to a Subsidiary or Subsidiaries of the Borrower.
"SWINGLINE COMMITMENT" shall mean the commitment of the Swingline
Lender to make Swingline Loans in an aggregate principal amount at any time
outstanding up to the Swingline Committed Amount, and the commitment of the
Lenders to purchase participation interests in the Swingline Loans as provided
in Section 2.5(b)(ii), as such amounts may be reduced from time to time in
accordance with the provisions hereof.
24
"SWINGLINE COMMITTED AMOUNT" shall mean the amount of the Swingline
Lender's Swingline Commitment as specified in Section 2.5(a).
"SWINGLINE LENDER" shall mean First Union.
"SWINGLINE LOAN" or "SWINGLINE LOANS" shall have the meaning set forth
in Section 2.5(a).
"SWINGLINE NOTE" shall mean the promissory note of the Borrower in
favor of the Swingline Lender evidencing the Swingline Loans provided pursuant
to Section 2.5(d), as such promissory note may be amended, modified,
supplemented, extended, renewed or replaced from time to time.
"SYNDICATION AGENT" shall mean CIBC World Markets Corp.
"TAXES" shall have the meaning set forth in Section 2.19.
"TRADEMARK LICENSE" shall means any agreement, written or oral,
providing for the grant by or to an Obligor of any right to use any Trademark,
including, without limitation, any thereof referred to in SCHEDULE 3.16.
"TRADEMARKS" shall mean (a) all trademarks, trade names, corporate
names, company names, business names, fictitious business names, trade dress and
service marks, logos and other source or business identifiers, and the goodwill
associated therewith, now existing or hereafter adopted or acquired, all
registrations and recordings thereof, and all applications in connection
therewith, whether in the United States Patent and Trademark Office or in any
similar office or agency of the United States, any State thereof or any other
country or any political subdivision thereof, or otherwise, including, without
limitation, any thereof referred to in SCHEDULE 3.16, and (b) all renewals
thereof, including, without limitation, any thereof referred to in SCHEDULE
3.16.
"TRANCHE A TERM LOAN" shall have the meaning set forth in Section
2.2(a).
"TRANCHE A TERM LOAN COMMITMENT" shall mean, with respect to each
Lender, the commitment of such Lender to make its portion of the Tranche A Term
Loan in a maximum aggregate principal amount equal to such Lender's Tranche A
Term Loan Commitment Percentage of the Tranche A Term Loan Committed Amount (and
for purposes of making determinations of Required Lenders hereunder after the
Closing Date, the principal amount outstanding on the Tranche A Term Loan).
"TRANCHE A TERM LOAN COMMITMENT PERCENTAGE" shall mean, for any Lender,
the percentage identified as its Tranche A Term Loan Commitment Percentage on
SCHEDULE 2.1(a), as such percentage may be modified in connection with any
assignment made in accordance with the provisions of Section 9.6.
"TRANCHE A TERM LOAN COMMITTED AMOUNT" shall have the meaning set forth
in Section 2.2(a).
25
"TRANCHE A TERM NOTE" or "TRANCHE A TERM NOTES" shall mean the
promissory notes of the Borrower in favor of each of the Lenders evidencing the
portion of the Tranche A Term Loan provided pursuant to Section 2.2(d),
individually or collectively, as appropriate, as such promissory notes may be
amended, modified, restated, supplemented, extended, renewed or replaced from
time to time.
"TRANCHE B TERM LOAN" shall have the meaning set forth in Section
2.3(a).
"TRANCHE B TERM LOAN COMMITMENT" shall mean, with respect to each
Lender, the commitment of such Lender to make its portion of the Tranche B Term
Loan in a maximum aggregate principal amount equal to such Lender's Tranche B
Term Loan Commitment Percentage of the Tranche B Term Loan Committed Amount (and
for purposes of making determinations of Required Lenders hereunder after the
Closing Date, the principal amount outstanding on the Tranche B Term Loan).
"TRANCHE B TERM LOAN COMMITMENT PERCENTAGE" shall mean, for any Lender,
the percentage identified as its Tranche B Term Loan Commitment Percentage on
SCHEDULE 2.1(a), as such percentage may be modified in connection with any
assignment made in accordance with the provisions of Section 9.6.
"TRANCHE B TERM LOAN COMMITTED AMOUNT" shall have the meaning set forth
in Section 2.3(a).
"TRANCHE B TERM NOTE" or "TRANCHE B TERM NOTES" shall mean the
promissory notes of the Borrower in favor of each of the Lenders evidencing the
portion of the Tranche B Term Loan provided pursuant to Section 2.3(d),
individually or collectively, as appropriate, as such promissory notes may be
amended, modified, restated, supplemented, extended, renewed or replaced from
time to time.
"TRANCHE" shall mean the collective reference to LIBOR Rate Loans whose
Interest Periods begin and end on the same day. A Tranche may sometimes be
referred to as a "LIBOR Tranche".
"TRANSFER EFFECTIVE DATE" shall have the meaning set forth in each
Commitment Transfer Supplement.
"2.19 CERTIFICATE" shall have the meaning set forth in Section 2.19.
"TYPE" shall mean, as to any Loan, its nature as an Alternate Base Rate
Loan or LIBOR Rate Loan, as the case may be.
"VOTING STOCK" shall mean, with respect to any Person, Capital Stock
issued by such Person the holders of which are ordinarily, in the absence of
contingencies, entitled to vote for the election of directors (or persons
performing similar functions) of such Person, even though the right so to vote
has been suspended by the happening of such a contingency.
26
"WORK" shall mean any work which is subject to copyright protection
pursuant to Title 17 of the United States Code.
Section 1.2 OTHER DEFINITIONAL PROVISIONS.
(a) Unless otherwise specified therein, all terms defined in
this Agreement shall have the defined meanings when used in the Notes
or other Credit Documents or any certificate or other document made or
delivered pursuant hereto.
(b) The words "hereof", "herein" and "hereunder" and words of
similar import when used in this Agreement shall refer to this
Agreement as a whole and not to any particular provision of this
Agreement, and Section, subsection, Schedule and Exhibit references are
to this Agreement unless otherwise specified.
(c) The meanings given to terms defined herein shall be equally
applicable to both the singular and plural forms of such terms.
Section 1.3 ACCOUNTING TERMS.
Unless otherwise specified herein, all accounting terms used herein
shall be interpreted, all accounting determinations hereunder shall be made, and
all financial statements required to be delivered hereunder shall be prepared in
accordance with GAAP applied on a basis consistent with the most recent audited
consolidated financial statements of the Borrower delivered to the Lenders;
PROVIDED that, if the Borrower notifies the Administrative Agent that it wishes
to amend any covenant in Section 5.9 to eliminate the effect of any change in
GAAP on the operation of such covenant (or if the Administrative Agent notifies
the Borrower that the Required Lenders wish to amend Section 5.9 for such
purpose), then the Borrower's compliance with such covenant shall be determined
on the basis of GAAP in effect immediately before the relevant change in GAAP
became effective, until either such notice is withdrawn or such covenant is
amended in a manner satisfactory to the Borrower and the Required Lenders.
The Borrower shall deliver to the Administrative Agent and each Lender
at the same time as the delivery of any annual or quarterly financial statements
given in accordance with the provisions of Section 5.1, (i) a description in
reasonable detail of any material change in the application of accounting
principles employed in the preparation of such financial statements from those
applied in the most recently preceding quarterly or annual financial statements
as to which no objection shall have been made in accordance with the provisions
above and (ii) a reasonable estimate of the effect on the financial statements
on account of such changes in application.
Notwithstanding the above, the parties hereto acknowledge and agree
that, for purposes of all calculations made in determining compliance for any
applicable period with the financial covenants set forth in Section 5.9
(including without limitation for purposes of the definitions of "Applicable
Percentage" and "Consolidated EBITDA" set forth in Section 1.1), (A) any
Indebtedness of a Person which is retired in connection with the Acquisition or
any other
27
acquisition permitted pursuant to Section 6.5(b) shall be excluded from such
calculations and deemed to have been retired as of the first day of such
applicable period, and (B) income statement items and other balance sheet items
(whether positive or negative) attributable to such Person acquired in such
transaction shall be included in such calculations to the extent relating to
such applicable period, subject to adjustments acceptable to the Administrative
Agent.
ARTICLE II
THE LOANS; AMOUNT AND TERMS
Section 2.1 REVOLVING LOANS.
(a) REVOLVING COMMITMENT. During the Commitment Period, subject to the
terms and conditions hereof, each Lender severally agrees to make, in an amount
up to its applicable Revolving Committed Amount, revolving credit loans
("REVOLVING LOANS") to the Borrower from time to time in an aggregate principal
amount of up to FORTY-FIVE MILLION DOLLARS ($45,000,000) (as such aggregate
maximum amount may be reduced from time to time as provided in Section 2.6, the
"AGGREGATE REVOLVING COMMITTED AMOUNT") for the purposes hereinafter set forth;
PROVIDED, HOWEVER, that (i) with regard to each Lender individually, the sum of
such Lender's share of outstanding Revolving Loans PLUS such Lender's Revolving
Commitment Percentage of outstanding Swingline Loans plus such Lender's LOC
Commitment Percentage of LOC Obligations shall not exceed such Lender's
Revolving Committed Amount, and (ii) with regard to the Lenders collectively,
the sum of the outstanding Revolving Loans PLUS outstanding Swingline Loans PLUS
LOC Obligations shall not exceed the lesser of (A) the Aggregate Revolving
Committed Amount and (B) the Borrowing Base. Notwithstanding the foregoing, the
Borrower may obtain an initial Revolving Loan in the amount of $30,000,000 on
the Closing Date provided that cash proceeds in that same amount from Tech-Sym
Corporation shall be received by the Borrower immediately following the Closing
Date and applied to repay such initial Revolving Loan and no additional
borrowings shall be available hereunder until, after giving effect to any such
borrowing, the Borrower will be in compliance with the Borrowing Base. Revolving
Loans may consist of Alternate Base Rate Loans or LIBOR Rate Loans, or a
combination thereof, as the Borrower may request, and may be repaid and
reborrowed in accordance with the provisions hereof. LIBOR Rate Loans shall be
made by each Lender at its LIBOR Lending Office and Alternate Base Rate Loans at
its Domestic Lending Office.
(b) REVOLVING LOAN BORROWINGS.
(i) NOTICE OF BORROWING. The Borrower shall request a Revolving
Loan borrowing by written notice (or telephone notice promptly
confirmed in writing which confirmation may be by fax) to the
Administrative Agent not later than 11:00 A.M. (Charlotte, North
Carolina time) on the Business Day prior to the date of requested
borrowing in the case of Alternate Base Rate Loans, and on the third
Business Day prior to the date of the requested borrowing in the case
of LIBOR Rate Loans. Each such request for borrowing shall be
irrevocable and shall specify (A) that a Revolving Loan is
28
requested, (B) the date of the requested borrowing (which shall be a
Business Day), (C) the aggregate principal amount to be borrowed, (D)
whether the borrowing shall be comprised of Alternate Base Rate Loans,
LIBOR Rate Loans or a combination thereof, and if LIBOR Rate Loans are
requested, the Interest Period(s) therefor. A form of Notice of
Borrowing (a "NOTICE OF BORROWING") is attached as SCHEDULE 2.1(b)(I).
If the Borrower shall fail to specify in any such Notice of Borrowing
(I) an applicable Interest Period in the case of a LIBOR Rate Loan,
then such notice shall be deemed to be a request for an Interest Period
of one month, or (II) the type of Revolving Loan requested, then such
notice shall be deemed to be a request for an Alternate Base Rate Loan
hereunder. The Administrative Agent shall give notice to each Lender
promptly upon receipt of each Notice of Borrowing, the contents thereof
and each such Lender's share thereof. All Revolving Loans made on the
Closing Date shall bear interest at the Alternate Base Rate until the
earlier of (i) the completion of the primary syndication of the
Commitments to financial institutions which shall become Lenders
hereunder or (ii) thirty days from the Closing Date.
(ii) MINIMUM AMOUNTS. Each Revolving Loan which is an Alternate
Base Rate Loan shall be in a minimum aggregate amount of $1,000,000 and
in integral multiples of $100,000 in excess thereof (or the remaining
amount of the Aggregate Revolving Committed Amount, if less). Each
Revolving Loan which is an LIBOR Rate Loan shall be in a minimum
aggregate amount of $2,000,000 and in integral multiples of $100,000 in
excess thereof.
(iii) ADVANCES. Each Lender will make its Revolving Commitment
Percentage of each Revolving Loan borrowing available to the
Administrative Agent for the account of the Borrower at the office of
the Administrative Agent specified in SCHEDULE 9.2, or at such other
office as the Administrative Agent may designate in writing, by 1:00
P.M. (Charlotte, North Carolina time) on the date specified in the
applicable Notice of Borrowing in Dollars and in funds immediately
available to the Administrative Agent. Such borrowing will then be made
available to the Borrower by the Administrative Agent by crediting the
account of the Borrower on the books of such office with the aggregate
of the amounts made available to the Administrative Agent by the
Lenders and in like funds as received by the Administrative Agent.
(c) REPAYMENT. The principal amount of all Revolving Loans shall be due
and payable in full on the Revolving Commitment Termination Date.
(d) INTEREST. Subject to the provisions of Section 2.10, Revolving
Loans shall bear interest as follows:
(i) ALTERNATE BASE RATE LOANS. During such periods as Revolving
Loans shall be comprised of Alternate Base Rate Loans, each such
Alternate Base Rate Loan shall bear interest at a per annum rate equal
to the sum of the Alternate Base Rate PLUS the Applicable Percentage;
and
29
(ii) LIBOR RATE LOANS. During such periods as Revolving Loans shall
be comprised of LIBOR Rate Loans, each such LIBOR Rate Loan shall bear
interest at a per annum rate equal to the sum of the LIBOR Rate PLUS
the Applicable Percentage.
Interest on Revolving Loans shall be payable in arrears on each
Interest Payment Date.
(e) REVOLVING NOTES. Each Lender's Revolving Committed Amount shall be
evidenced by a duly executed promissory note of the Borrower to such Lender in
substantially the form of SCHEDULE 2.1(e).
Section 2.2 TRANCHE A TERM LOAN FACILITY.
(a) TRANCHE A TERM LOAN. Subject to the terms and conditions hereof and
in reliance upon the representations and warranties set forth herein, each
Lender severally agrees to make available to the Borrower on the Closing Date
such Lender's Tranche A Term Loan Commitment Percentage of a term loan in
Dollars (the "TRANCHE A TERM LOAN") in the aggregate principal amount of FIFTY
MILLION DOLLARS ($50,000,000) (the "TRANCHE A TERM LOAN COMMITTED AMOUNT") for
the purposes hereinafter set forth. The Tranche A Term Loan may consist of
Alternate Base Rate Loans or LIBOR Rate Loans, or a combination thereof, as the
Borrower may request; provided that the Tranche A Term Loan made on the Closing
Date shall bear interest at the Alternate Base Rate. The Borrower shall request
the initial Tranche A Term Loan borrowing by written notice (or telephone notice
promptly confirmed in writing which confirmation may be by fax) to the
Administrative Agent not later than 11:00 A.M. (Charlotte, North Carolina time)
on the Business Day prior to the date of requested borrowing. LIBOR Rate Loans
shall be made by each Lender at its LIBOR Lending Office and Alternate Base Rate
Loans at its Domestic Lending Office. Amounts repaid on the Tranche A Term Loan
may not be reborrowed.
(b) REPAYMENT OF TRANCHE A TERM LOAN. The principal amount of the
Tranche A Term Loan shall be repaid in nineteen (19) consecutive quarterly
installments as follows, unless accelerated sooner pursuant to Section 7.2:
================================ ===============================================
Principal Amortization Tranche A Term Loan
Payment Date Principal Amortization Payment
--------------------------------------------------------------------------------
March 15, 2001 $1,666,667
--------------------------------------------------------------------------------
June 15, 2001 $1,666,667
--------------------------------------------------------------------------------
September 15, 2001 $1,666,667
--------------------------------------------------------------------------------
December 15, 2001 $1,875,000
--------------------------------------------------------------------------------
March 15, 2002 $1,875,000
--------------------------------------------------------------------------------
June 15, 2002 $1,875,000
--------------------------------------------------------------------------------
September 15, 2002 $1,875,000
--------------------------------------------------------------------------------
30
================================ ===============================================
Principal Amortization Tranche A Term Loan
Payment Date Principal Amortization Payment
--------------------------------------------------------------------------------
December 15, 2002 $2,750,000
--------------------------------------------------------------------------------
March 15, 2003 $2,750,000
--------------------------------------------------------------------------------
June 15, 2003 $2,750,000
--------------------------------------------------------------------------------
September 15, 2003 $2,750,000
--------------------------------------------------------------------------------
December 15, 2003 $3,000,000
--------------------------------------------------------------------------------
March 15, 2004 $3,000,000
--------------------------------------------------------------------------------
June 15, 2004 $3,000,000
--------------------------------------------------------------------------------
September 15, 2004 $3,000,000
--------------------------------------------------------------------------------
December 15, 2004 $3,625,000
--------------------------------------------------------------------------------
March 15, 2005 $3,625,000
--------------------------------------------------------------------------------
June 15, 2005 $3,625,000
--------------------------------------------------------------------------------
September 15, 2005 $3,625,000
================================ ===============================================
(c) INTEREST ON THE TRANCHE A TERM LOAN. Subject to the provisions of
Section 2.10, the Tranche A Term Loan shall bear interest as follows:
(i) ALTERNATE BASE RATE LOANS. During such periods as the Tranche A
Term Loan shall be comprised of Alternate Base Rate Loans, each such
Alternate Base Rate Loan shall bear interest at a per annum rate equal
to the sum of the Alternate Base Rate PLUS the Applicable Percentage;
and
(ii) LIBOR RATE LOANS. During such periods as the Tranche A Term
Loan shall be comprised of LIBOR Rate Loans, each such LIBOR Rate Loan
shall bear interest at a per annum rate equal to the sum of the LIBOR
Rate PLUS the Applicable Percentage.
Interest on the Tranche A Term Loan shall be payable in arrears on each
Interest Payment Date.
(d) TRANCHE A TERM NOTES. Each Lender's Tranche A Term Loan Commitment
Percentage of the Tranche A Term Loan Committed Amount shall be evidenced by a
duly executed promissory note of the Borrower to such Lender in substantially
the form of SCHEDULE 2.2(D).
Section 2.3 TRANCHE B TERM LOAN FACILITY.
(a) TRANCHE B TERM LOAN. Subject to the terms and conditions hereof and
in reliance upon the representations and warranties set forth herein, each
Lender severally agrees to make available to the Borrower on the Closing Date
such Lender's Tranche B Term Loan Commitment Percentage of a term loan in
Dollars (the "TRANCHE B TERM LOAN") in the aggregate principal
31
amount of SEVENTY-FIVE MILLION DOLLARS ($75,000,000) (the "TRANCHE B TERM LOAN
COMMITTED AMOUNT") for the purposes hereinafter set forth. The Tranche B Term
Loan may consist of Alternate Base Rate Loans or LIBOR Rate Loans, or a
combination thereof, as the Borrower may request; provided that the Tranche B
Term Loan made on the Closing Date shall bear interest at the Alternate Base
Rate. The Borrower shall request the Tranche B Term Loan borrowing by written
notice (or telephone notice promptly confirmed in writing which confirmation may
be by fax) to the Administrative Agent not later than 11:00 A.M. (Charlotte,
North Carolina time) on the Business Day prior to the date of requested
borrowing. LIBOR Rate Loans shall be made by each Lender at its LIBOR Lending
Office and Alternate Base Rate Loans at its Domestic Lending Office. Amounts
repaid on the Tranche B Term Loan may not be reborrowed.
(b) REPAYMENT OF TRANCHE B TERM LOAN. The principal amount of the
Tranche B Term Loan shall be repaid in twenty-three (23) consecutive quarterly
installments as follows:
=============================================================================
Principal Amortization Tranche B Term Loan
Payment Date Principal Amortization Payment
-----------------------------------------------------------------------------
March 15, 2001 $197,368
-----------------------------------------------------------------------------
June 15, 2001 $197,368
-----------------------------------------------------------------------------
September 15, 2001 $197,368
-----------------------------------------------------------------------------
December 15, 2001 $197,368
-----------------------------------------------------------------------------
March 15, 2002 $197,368
-----------------------------------------------------------------------------
June 15, 2002 $197,368
-----------------------------------------------------------------------------
September 15, 2002 $197,368
-----------------------------------------------------------------------------
December 15, 2002 $197,368
-----------------------------------------------------------------------------
March 15, 2003 $197,368
-----------------------------------------------------------------------------
June 15, 2003 $197,368
-----------------------------------------------------------------------------
September 15, 2003 $197,368
-----------------------------------------------------------------------------
December 15, 2003 $197,368
-----------------------------------------------------------------------------
March 15, 2004 $197,368
-----------------------------------------------------------------------------
June 15, 2004 $197,368
-----------------------------------------------------------------------------
September 15, 2004 $197,368
-----------------------------------------------------------------------------
December 15, 2004 $197,368
-----------------------------------------------------------------------------
March 15, 2005 $197,368
-----------------------------------------------------------------------------
June 15, 2005 $197,368
-----------------------------------------------------------------------------
32
=============================================================================
Principal Amortization Tranche B Term Loan
Payment Date Principal Amortization Payment
-----------------------------------------------------------------------------
September 15, 2005 $197,368
-----------------------------------------------------------------------------
December 15, 2005 $17,812,500
-----------------------------------------------------------------------------
March 15, 2006 $17,812,500
-----------------------------------------------------------------------------
June 15, 2006 $17,812,500
-----------------------------------------------------------------------------
September 15, 2006 $17,812,508
-----------------------------------------------------------------------------
(c) INTEREST ON THE TRANCHE B TERM LOAN. Subject to the provisions of
Section 2.10, the Tranche B Term Loan shall bear interest as follows:
(i) ALTERNATE BASE RATE LOANS. During such periods as the Tranche B
Term Loan shall be comprised of Alternate Base Rate Loans, each such
Alternate Base Rate Loan shall bear interest at a per annum rate equal
to the sum of the Alternate Base Rate PLUS the Applicable Percentage;
and
(ii) LIBOR RATE LOANS. During such periods as the Tranche B Term
Loan shall be comprised of LIBOR Rate Loans, each such LIBOR Rate Loan
shall bear interest at a per annum rate equal to the sum of the LIBOR
Rate PLUS the Applicable Percentage.
Interest on the Tranche B Term Loan shall be payable in arrears on each
Interest Payment Date.
(d) TRANCHE B TERM NOTES. Each Lender's Tranche B Term Loan Commitment
Percentage of the Tranche B Term Loan Committed Amount shall be evidenced by a
duly executed promissory note of the Borrower to such Lender in substantially
the form of SCHEDULE 2.3(D).
Section 2.4 LETTER OF CREDIT SUBFACILITY.
(a) ISSUANCE. Subject to the terms and conditions hereof and of the LOC
Documents, if any, and any other terms and conditions which the Issuing Lender
may reasonably require, during the Commitment Period the Issuing Lender shall
issue, and the Lenders shall participate in, Letters of Credit for the account
of the Borrower from time to time upon request in a form acceptable to the
Issuing Lender; PROVIDED, HOWEVER, that (i) the aggregate amount of LOC
Obligations shall not at any time exceed TWENTY FIVE MILLION DOLLARS
($25,000,000) (the "LOC COMMITTED AMOUNT"), (ii) the sum of outstanding
Revolving Loans PLUS outstanding Swingline Loans PLUS LOC Obligations shall not
at any time exceed the lesser of (A) the Aggregate Revolving Committed Amount
and (B) the Borrowing Base, (iii) all Letters of Credit shall be denominated in
U.S. Dollars and (iv) Letters of Credit shall be issued for lawful corporate
purposes and may be issued as standby letters of credit, including in connection
with workers' compensation and other insurance programs, and trade letters of
credit. Except as set forth on SCHEDULE 2.4(a) or as otherwise expressly agreed
upon by all the Lenders, no Letter of Credit shall have an original expiry date
more than twelve (12) months from the date of issuance; PROVIDED, HOWEVER, so
long as no Default or Event of Default has occurred and is continuing and
subject to the other terms and conditions to the issuance of Letters of Credit
33
hereunder, the expiry dates of Letters of Credit may be extended annually or
periodically from time to time on the request of the Borrower or by operation of
the terms of the applicable Letter of Credit to a date not more than twelve (12)
months from the date of extension; PROVIDED, FURTHER, that no Letter of Credit,
as originally issued or as extended, shall have an expiry date extending beyond
the Revolving Commitment Termination Date. Each Letter of Credit shall comply
with the related LOC Documents. The issuance and expiry date of each Letter of
Credit shall be a Business Day. Any Letters of Credit issued hereunder shall be
in a minimum original face amount of $100,000; PROVIDED, HOWEVER, that Letters
of Credit in a minimum original face amount of less than $100,000 but greater
than $10,000 may be issued so long as there are no more than 15 such Letters of
Credit outstanding at any given time; PROVIDED, FURTHER, that from time to time
the Issuing Lender in its sole discretion may require cash security for any such
Letters of Credit issued in a minimum original face amount of less than
$100,000. First Union shall be the Issuing Lender on all Letters of Credit
issued after the Closing Date.
(b) NOTICE AND REPORTS. The request for the issuance of a Letter of
Credit shall be submitted to the Issuing Lender at least five (5) Business Days
prior to the requested date of issuance. The Issuing Lender will promptly upon
request provide to the Administrative Agent for dissemination to the Lenders a
detailed report specifying the Letters of Credit which are then issued and
outstanding and any activity with respect thereto which may have occurred since
the date of any prior report, and including therein, among other things, the
account party, the beneficiary, the face amount, expiry date as well as any
payments or expirations which may have occurred. The Issuing Lender will further
provide to the Administrative Agent promptly upon request copies of the Letters
of Credit. The Issuing Lender will provide to the Administrative Agent promptly
upon request a summary report of the nature and extent of LOC Obligations then
outstanding.
(c) PARTICIPATIONS. Each Lender then having an LOC Commitment
Percentage upon issuance of a Letter of Credit shall be deemed to have purchased
without recourse a participation from the Issuing Lender in such Letter of
Credit and the obligations arising thereunder and any Collateral relating
thereto, in each case in an amount equal to its LOC Commitment Percentage of the
obligations under such Letter of Credit and shall absolutely, unconditionally
and irrevocably assume, as primary obligor and not as surety, and be obligated
to pay to the Issuing Lender therefor and discharge when due, its LOC Commitment
Percentage of the obligations arising under such Letter of Credit. Without
limiting the scope and nature of each such Lender's participation in any Letter
of Credit, to the extent that the Issuing Lender has not been reimbursed as
required hereunder or under any LOC Document, each such Lender shall pay to the
Issuing Lender its LOC Commitment Percentage of such unreimbursed drawing in
same day funds on the day of notification by the Issuing Lender of an
unreimbursed drawing pursuant to the provisions of subsection (d) hereof. The
obligation of each Lender to so reimburse the Issuing Lender shall be absolute
and unconditional and shall not be affected by the occurrence of a Default, an
Event of Default or any other occurrence or event. Any such reimbursement shall
not relieve or otherwise impair the obligation of the Borrower to reimburse the
Issuing Lender under any Letter of Credit, together with interest as hereinafter
provided.
(d) REIMBURSEMENT. In the event of any drawing under any Letter of
Credit, the Issuing Lender will promptly notify the Borrower and the
Administrative Agent. The Borrower
34
shall reimburse the Issuing Lender on the day of drawing under any Letter of
Credit (with the proceeds of a Revolving Loan obtained hereunder or otherwise)
in same day funds as provided herein or in the LOC Documents. If the Borrower
shall fail to reimburse the Issuing Lender as provided herein, the unreimbursed
amount of such drawing shall bear interest at a per annum rate equal to the
Alternate Base Rate plus two percent (2%) above the Applicable Percentage then
applicable to Revolving Credit Loans. Unless the Borrower shall immediately
notify the Issuing Lender and the Administrative Agent of its intent to
otherwise reimburse the Issuing Lender, the Borrower shall be deemed to have
requested a Revolving Loan in the amount of the drawing as provided in
subsection (e) hereof, the proceeds of which will be used to satisfy the
reimbursement obligations. The Borrower's reimbursement obligations hereunder
shall be absolute and unconditional under all circumstances irrespective of any
rights of set-off, counterclaim or defense to payment the Borrower may claim or
have against the Issuing Lender, the Administrative Agent, the Lenders, the
beneficiary of the Letter of Credit drawn upon or any other Person, including
without limitation any defense based on any failure of the Borrower to receive
consideration or the legality, validity, regularity or unenforceability of the
Letter of Credit, this Agreement or any other Credit Document. The Issuing
Lender will promptly notify the other Lenders having an LOC Commitment of the
amount of any unreimbursed drawing and each Lender shall promptly pay to the
Administrative Agent for the account of the Issuing Lender in Dollars and in
immediately available funds, the amount of such Lender's LOC Commitment
Percentage of such unreimbursed drawing. Such payment shall be made on the day
such notice is received by such Lender from the Issuing Lender if such notice is
received at or before 2:00 P.M. (Charlotte, North Carolina time), otherwise such
payment shall be made at or before 12:00 Noon (Charlotte, North Carolina time)
on the Business Day next succeeding the day such notice is received. If such
Lender does not pay such amount to the Issuing Lender in full upon such request,
such Lender shall, on demand, pay to the Administrative Agent for the account of
the Issuing Lender interest on the unpaid amount during the period from the date
of such drawing until such Lender pays such amount to the Issuing Lender in full
at a rate per annum equal to, if paid within two (2) Business Days of the date
of drawing, the Federal Funds Effective Rate and thereafter at a rate equal to
the Alternate Base Rate. Each such Lender's obligation to make such payment to
the Issuing Lender, and the right of the Issuing Lender to receive the same,
shall be absolute and unconditional, shall not be affected by any circumstance
whatsoever and without regard to the termination of this Agreement or the
Commitments hereunder, the existence of a Default or Event of Default or the
acceleration of the Credit Party Obligations hereunder and shall be made without
any offset, abatement, withholding or reduction whatsoever.
(e) REPAYMENT WITH REVOLVING LOANS. On any day on which the Borrower
shall have requested, or been deemed to have requested, a Revolving Loan to
reimburse a drawing under a Letter of Credit, the Administrative Agent shall
give notice to the Lenders that a Revolving Loan has been requested or deemed
requested in connection with a drawing under a Letter of Credit, in which case a
Revolving Loan borrowing comprised entirely of Alternate Base Rate Loans (each
such borrowing, a "MANDATORY BORROWING") shall be immediately made (without
giving effect to any termination of the Commitments pursuant to Section 7.2) PRO
RATA based on each Lender's respective Revolving Commitment Percentage
(determined before giving effect to any termination of the Commitments pursuant
to Section 7.2) and in the case of both clauses (i) and (ii) the proceeds
thereof shall be paid directly to the Issuing Lender for application to the
35
respective LOC Obligations. Each Lender having a Revolving Credit Commitment
hereby irrevocably agrees to make such Revolving Loans immediately upon any such
request or deemed request on account of each Mandatory Borrowing in the amount
and in the manner specified in the preceding sentence and on the same such date
NOTWITHSTANDING (i) the amount of Mandatory Borrowing may not comply with the
minimum amount for borrowings of Revolving Loans otherwise required hereunder,
(ii) whether any conditions specified in Section 4.2 are then satisfied, (iii)
whether a Default or an Event of Default then exists, (iv) failure for any such
request or deemed request for Revolving Loan to be made by the time otherwise
required in Section 2.1(b), (v) the date of such Mandatory Borrowing, or (vi)
any reduction in the Aggregate Revolving Committed Amount after any such Letter
of Credit may have been drawn upon; PROVIDED, HOWEVER, that in the event any
such Mandatory Borrowing should be less than the minimum amount for borrowings
of Revolving Loans otherwise provided in Section 2.1(b)(ii), the Borrower shall
pay to the Administrative Agent for its own account an administrative fee of
$500. In the event that any Mandatory Borrowing cannot for any reason be made on
the date otherwise required above (including, without limitation, as a result of
the commencement of a proceeding under the Bankruptcy Code), then each such
Lender hereby agrees that it shall forthwith fund (as of the date the Mandatory
Borrowing would otherwise have occurred, but adjusted for any payments received
from the Borrower on or after such date and prior to such purchase) its
Participation Interests in the outstanding LOC Obligations; PROVIDED, FURTHER,
that in the event any Lender shall fail to fund its Participation Interest on
the day the Mandatory Borrowing would otherwise have occurred, then the amount
of such Lender's unfunded Participation Interest therein shall bear interest
payable by such Lender to the Issuing Lender upon demand, at the rate equal to,
if paid within two (2) Business Days of such date, the Federal Funds Effective
Rate, and thereafter at a rate equal to the Alternate Base Rate.
(f) MODIFICATION, EXTENSION. The issuance of any supplement,
modification, amendment, renewal, or extension to any Letter of Credit shall,
for purposes hereof, be treated in all respects the same as the issuance of a
new Letter of Credit hereunder.
(g) UNIFORM CUSTOMS AND PRACTICES. To the extent not inconsistent with
the laws of the State of North Carolina, the Issuing Lender shall have the
Letters of Credit be subject to The Uniform Customs and Practice for Documentary
Credits, as published as of the date of issue by the International Chamber of
Commerce (the "UCP"), in which case the UCP may be incorporated therein and
deemed in all respects to be a part thereof.
Section 2.5 SWINGLINE LOAN SUBFACILITY.
(a) SWINGLINE COMMITMENT. During the Commitment Period, subject to the
terms and conditions hereof, the Swingline Lender, in its individual capacity,
agrees to make certain revolving credit loans to the Borrower (each a "SWINGLINE
LOAN" and, collectively, the "SWINGLINE LOANS") for the purposes hereinafter set
forth; PROVIDED, HOWEVER, (i) the aggregate amount of Swingline Loans
outstanding at any time shall not exceed SEVEN MILLION FIVE HUNDRED THOUSAND
DOLLARS ($7,500,000) (the "SWINGLINE COMMITTED AMOUNT"), and (ii) the sum of the
outstanding Revolving Loans PLUS outstanding Swingline Loans PLUS LOC
Obligations shall not exceed the lesser of (A) the Aggregate Revolving Committed
Amount and
36
(B) the Borrowing Base. Swingline Loans hereunder may be repaid and reborrowed
in accordance with the provisions hereof.
(b) SWINGLINE LOAN BORROWINGS.
(i) NOTICE OF BORROWING AND DISBURSEMENT. The Swingline Lender will
make Swingline Loans available to the Borrower on any Business Day upon request
made by the Borrower not later than 2:00 P.M. (Charlotte, North Carolina time)
on such Business Day. A notice of request for Swingline Loan borrowing shall be
made in the form of SCHEDULE 2.1(B)(I) with appropriate modifications. Swingline
Loan borrowings hereunder shall be made in minimum amounts of $50,000 and in
integral amounts of $50,000 in excess thereof.
(ii) REPAYMENT OF SWINGLINE LOANS. Each Swingline Loan borrowing shall
be due and payable on the Revolving Commitment Termination Date. The Swingline
Lender may, at any time, in its sole discretion, by written notice to the
Borrower and the Administrative Agent, demand repayment of its Swingline Loans
by way of a Revolving Loan borrowing, in which case the Borrower shall be deemed
to have requested a Revolving Loan borrowing comprised entirely of Alternate
Base Rate Loans in the amount of such Swingline Loans; PROVIDED, HOWEVER, that
such a demand shall also be deemed to have been given one Business Day prior to
each of (i) the Revolving Commitment Termination Date, (ii) the occurrence of
any Event of Default described in Section 7.1(e), (iii) the acceleration of the
Credit Party Obligations hereunder, whether on account of an Event of Default
described in Section 7.1(e) or any other Event of Default, and (iv) the exercise
of remedies in accordance with the provisions of Section 7.2 hereof (each such
Revolving Loan borrowing made on account of any such deemed request therefor as
provided herein shall also be hereinafter referred to as "MANDATORY BORROWING").
Each Lender hereby irrevocably agrees to make such Revolving Loans promptly upon
any such request or deemed request on account of each Mandatory Borrowing in the
amount and in the manner specified in the preceding sentence and on the same
such date NOTWITHSTANDING (I) the amount of Mandatory Borrowing may not comply
with the minimum amount for borrowings of Revolving Loans otherwise required
hereunder, (II) whether any conditions specified in Section 4.2 are then
satisfied, (III) whether a Default or an Event of Default then exists, (IV)
failure of any such request or deemed request for Revolving Loans to be made by
the time otherwise required in Section 2.1(b)(i), (V) the date of such Mandatory
Borrowing, or (VI) any reduction in the Revolving Committed Amount or
termination of the Revolving Commitments immediately prior to such Mandatory
Borrowing or Contemporaneously therewith. In the event that any Mandatory
Borrowing cannot for any reason be made on the date otherwise required above
(including, without limitation, as a result of the commencement of a proceeding
under the Bankruptcy Code), then each Lender having a Revolving Credit
Commitment hereby agrees that it shall forthwith purchase (as of the date the
Mandatory Borrowing would otherwise have occurred, but adjusted for any payments
received from the Borrower on or after such date and prior to such purchase)
from the Swingline Lender such participations in the outstanding Swingline Loans
as shall be necessary to cause each such Lender to share in such Swingline Loans
ratably based upon its respective Revolving Commitment Percentage (determined
before giving effect to any termination of the Commitments pursuant to Section
7.2). PROVIDED that (A) all interest payable on the Swingline Loans shall be for
the account of the Swingline Lender until the date as of which the respective
participation is purchased, and (B) at the time any purchase of
37
participations pursuant to this sentence is actually made, the purchasing Lender
shall be required to pay to the Swingline Lender interest on the principal
amount of such participation purchased for each day from and including the day
upon which the Mandatory Borrowing would otherwise have occurred to but
excluding the date of payment for such participation, at the rate equal to, if
paid within two (2) Business Days of the date of the Mandatory Borrowing, the
Federal Funds Effective Rate, and thereafter at a rate equal to the Alternate
Base Rate.
(c) INTEREST ON SWINGLINE LOANS. Subject to the provisions of Section
2.10, Swingline Loans shall bear interest at a per annum rate equal to the
Alternate Base Rate PLUS the applicable Percentage for Revolving Loans that are
Alternate Base Rate Loans. Interest on Swingline Loans shall be payable in
arrears on each Interest Payment Date.
(d) SWINGLINE NOTE. The Swingline Loans shall be evidenced by a duly
executed promissory note of the Borrower to the Swingline Lender in the original
amount of the Swingline Committed Amount and substantially in the form of
Schedule 2.5(d).
Section 2.6 FEES.
(a) COMMITMENT FEE. In consideration of the Revolving Commitment, the
Borrower agrees to pay to the Administrative Agent for the ratable benefit of
the Lenders holding Revolving Commitments a commitment fee (the "COMMITMENT
FEE") in an amount equal to the Applicable Percentage per annum on the average
daily unused amount of the Aggregate Revolving Committed Amount. For purposes of
computation of the Commitment Fee, LOC Obligations shall be considered usage of
the Aggregate Revolving Committed Amount but Swingline Loans shall not be
considered usage of the Aggregate Revolving Committed Amount. The Commitment Fee
shall be payable quarterly in arrears on the 15th day following the last day of
each calendar quarter for the prior calendar quarter.
(b) LETTER OF CREDIT FEES. In consideration of the LOC Commitments, the
Borrower agrees to pay to the Issuing Lender for the ratable benefit of the
Lenders having an LOC Commitment Percentage a fee (the "LETTER OF CREDIT FEE")
equal to the Applicable Percentage per annum on the average daily maximum amount
available to be drawn under each Letter of Credit from the date of issuance to
the date of expiration. In addition to such Letter of Credit Fee, the Issuing
Lender shall charge, and retain for its own account without sharing by the other
Lenders, an additional facing fee of one-fourth of one percent (1/4%) per annum
on the average daily maximum amount available to be drawn under each such Letter
of Credit issued by it. The Issuing Lender shall promptly pay over to the
Administrative Agent for the ratable benefit of the Lenders (including the
Issuing Lender) the Letter of Credit Fee. The Letter of Credit Fee shall be
payable quarterly in arrears on the 15th day following the last day of each
calendar quarter for the prior calendar quarter.
(c) ISSUING LENDER FEES. In addition to the Letter of Credit Fees
payable pursuant to subsection (b) hereof, the Borrower shall pay to the Issuing
Lender for its own account without sharing by the other Lenders the reasonable
and customary charges from time to time of the Issuing Lender with respect to
the amendment, transfer, administration, cancellation and
38
conversion of, and drawings under, such Letters of Credit (collectively, the
"ISSUING LENDER FEES").
(d) ADMINISTRATIVE FEE. The Borrower agrees to pay to the
Administrative Agent the annual administrative fee as described in the Fee
Letter.
Section 2.7 COMMITMENT REDUCTIONS.
(a) VOLUNTARY REDUCTIONS. The Borrower shall have the right to
terminate or permanently reduce the unused portion of the Aggregate Revolving
Committed Amount at any time or from time to time upon not less than five
Business Days' prior notice to the Administrative Agent (which shall notify the
Lenders thereof as soon as practicable) of each such termination or reduction,
which notice shall specify the effective date thereof and the amount of any such
reduction which shall be in a minimum amount of $1,000,000 or a whole multiple
of $100,000 in excess thereof and shall be irrevocable and effective upon
receipt by the Administrative Agent, PROVIDED that no such reduction or
termination shall be permitted if after giving effect thereto, and to any
prepayments of the Loans made on the effective date thereof, the sum of the
outstanding Revolving Loans PLUS outstanding Swingline Loans PLUS LOC
Obligations would exceed the lesser of (A) the Aggregate Revolving Committed
Amount and (B) the Borrowing Base.
(b) MANDATORY REDUCTIONS. On any date that the Revolving Loans are
required to be prepaid pursuant to the terms of Section 2.8(b) (ii), (iii) and
(iv), the Aggregate Revolving Committed Amount shall be automatically
permanently reduced by the amount of such required prepayment and/or reduction.
(c) REVOLVING COMMITMENT TERMINATION DATE. The Revolving Commitment,
the Swingline Commitment and the LOC Commitment shall automatically terminate on
the Revolving Commitment Termination Date.
Section 2.8 PREPAYMENTS.
(a) OPTIONAL PREPAYMENTS. The Borrower shall have the right to prepay
Loans in whole or in part from time to time; PROVIDED, HOWEVER, that each
partial prepayment of a Revolving Loan, the Tranche A Term Loan and the Tranche
B Term Loan shall be in a minimum principal amount of $1,000,000 and integral
multiples of $100,000 in excess thereof, and each partial prepayment of a
Swingline Loan shall be in a minimum principal amount of $50,000 and integral
multiples of $50,000 in excess thereof. The Borrower shall give three Business
Days' irrevocable notice in the case of LIBOR Rate Loans and one Business Day's
irrevocable notice in the case of Alternate Base Rate Loans, to the
Administrative Agent (which shall notify the Lenders thereof as soon as
practicable). Amounts prepaid under this Section 2.8(a) shall be applied first
pro rata to the Tranche A Term Loan (ratably to the remaining principal
installments thereof) and the Tranche B Term Loan (ratably to the remaining
principal installments thereof) (provided, however, promptly upon notification
thereof, one or more holders of the Tranche B Term Loan may decline to accept
such payment to the extent there are sufficient amounts under the Tranche A Term
Loan outstanding to be paid with such prepayment, in which case, such
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declined payments shall be allocated pro rata among the Tranche A Term Loan and
the Tranche B Term Loan held by Lenders accepting such payments) and then (after
the Tranche A Term Loan and Tranche B Term Loan have been paid in full) to the
Revolving Loans, in each case first to Alternate Base Rate Loans and then to
LIBOR Rate Loans in direct order of Interest Period maturities. All prepayments
under this Section 2.8(a) shall be subject to Section 2.18, but otherwise
without premium or penalty. Interest on the principal amount prepaid shall be
payable on the next occurring Interest Payment Date that would have occurred had
such loan not been prepaid or, at the request of the Administrative Agent,
interest on the principal amount prepaid shall be payable on any date that a
prepayment is made hereunder through the date of prepayment. Amounts prepaid on
the Revolving Loans and the Swingline Loans may be reborrowed in accordance with
the terms hereof. Amounts prepaid on the Tranche A Term Loan and the Tranche B
Term Loan may not be reborrowed.
(b) MANDATORY PREPAYMENTS.
(i) AGGREGATE REVOLVING COMMITTED AMOUNT. If at any time after the
Closing Date, the sum of the outstanding Revolving Loans PLUS
outstanding Swingline Loans PLUS LOC Obligations shall exceed the
lesser of (A) the Aggregate Revolving Committed Amount and (B) the
Borrowing Base, the Borrower immediately shall prepay the Loans in an
amount sufficient to eliminate such excess (such prepayment to be
applied as set forth in clause (vii) below).
(ii) ASSET DISPOSITIONS. Promptly following any Asset Disposition
in excess of $1,000,000 in the aggregate for all such Asset
Dispositions in any fiscal year, the Borrower shall prepay the Loans in
an aggregate amount equal to the Net Cash Proceeds derived from such
Asset Disposition (such prepayment to be applied as set forth in clause
(vii) below); provided, however, that such Net Cash Proceeds shall not
be required to be so applied to the extent the Borrower delivers to the
Administrative Agent a certificate stating that it intends to use such
Net Cash Proceeds to acquire fixed or capital assets in replacement of
the disposed assets within 180 days of the receipt of such Net Cash
Proceeds, it being expressly agreed that (A) any Net Cash Proceeds not
so reinvested shall be applied to repay the Loans immediately
thereafter and (B) pending any such reinvestment such Net Cash Proceeds
shall be held in a cash collateral account pledged to the
Administrative Agent for the ratable benefit of the Lenders.
(iii) ISSUANCES. Immediately upon receipt by any Credit Party of
proceeds from (A) any Debt Issuance, the Borrower shall prepay the
Loans in an aggregate amount equal to one hundred percent (100%) of the
Net Cash Proceeds of such Debt Issuance to the Lenders (such prepayment
to be applied as set forth in clause (vi) below) or (B) any Equity
Issuance (other than, provided that no Default or Event of Default
shall have occurred or be continuing at such time, an Equity Issuance
raised for and applied solely to an acquisition permitted under Section
6.5(b)), the Borrower shall prepay the Loans in an aggregate amount
equal to one hundred percent (100%) of the Net Cash Proceeds of such
Equity Issuance (such prepayment to be applied as set forth in clause
(vii) below).
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(iv) RECOVERY EVENT. To the extent of cash proceeds received in
connection with a Recovery Event which are in excess of $500,000 in the
aggregate and which are not applied in accordance with Section
6.5(a)(ii), immediately following the 180th day occurring after the
receipt by a Credit Party of such cash proceeds, the Borrower shall
prepay the Loans in an aggregate amount equal to one-hundred percent
(100%) of such cash proceeds to the Lenders (such prepayment to be
applied as set forth in clause (vii) below). Pending any such
prepayment of the Loans such cash proceeds from a Recovery Event shall
be held in a cash collateral account pledged to the Administrative
Agent for the ratable benefit of the Lenders.
(v) EXCESS CASH FLOW. Within 90 days after the end of each fiscal
year (commencing with the fiscal year ending December 31, 2001), the
Borrower shall prepay the Loans in an amount equal to (x) 75% of the
Excess Cash Flow earned during such prior fiscal year less (y) the
amount of any voluntary prepayments of the Tranche A Term Loan, the
Tranche B Term Loan and (to the extent accompanied by a reduction in
the Aggregate Revolving Committed Amount) the Revolving Loans during
such prior fiscal year.
(vi) ISSUANCE OF EQUITY. Immediately upon receipt of cash in the
amount of $5,000,000 contributed, directly or indirectly, by the
Sponsor pursuant to the Keepwell Agreement, the Borrower shall prepay
the Loans in an amount equal to 100% of such cash amount (such
prepayment to be applied as set forth in clause (vii) below).
(vii) APPLICATION OF MANDATORY PREPAYMENTS. All amounts required to
be paid pursuant to this Section 2.8(b) shall be applied as follows:
(A) with respect to all amounts prepaid pursuant to Section 2.8(b)(i),
to the Revolving Loans and then (after all Revolving Loans have been
repaid) to a cash collateral account in respect of LOC Obligations, (B)
with respect to all amounts prepaid pursuant to Sections 2.8(b)(ii)
through (vi), (1) first, pro rata to the Tranche A Term Loan and the
Tranche B Term Loan (ratably to the remaining principal installments
thereof); PROVIDED, HOWEVER, promptly upon notification thereof, one or
more holders of the Tranche B Term Loan may decline to accept a
mandatory prepayment under Section 2.8(b)(ii) through (vi) to the
extent there are sufficient amounts under the Tranche A Term Loan
outstanding to be paid with such prepayment, in which case, such
declined payments shall be allocated pro rata among the Tranche A Term
Loan and the Tranche B Term Loan held by Lenders accepting such
prepayments, and (2) second, to the Revolving Loans and (after all
Revolving Loans have been repaid) to a cash collateral account in
respect of LOC Obligations. Within the parameters of the applications
set forth above, prepayments shall be applied first to Alternate Base
Rate Loans and then to LIBOR Rate Loans in direct order of Interest
Period maturities. All prepayments under this Section 2.8(b) shall be
subject to Section 2.18 and be accompanied by interest on the principal
amount prepaid through the date of prepayment and any other amounts
accrued and unpaid.
Section 2.9 MINIMUM PRINCIPAL AMOUNT OF TRANCHES.
All borrowings, payments and prepayments in respect of Revolving Loans,
the Tranche A Term Loan and the Tranche B Term Loan shall be in such amounts and
be made pursuant to such
41
elections so that after giving effect thereto the aggregate principal amount of
the Revolving Loans, the Tranche A Term Loan and the Tranche B Term Loan
comprising any Tranche shall be (a) with respect to Alternate Base Rate Loans,
$1,000,000 or a whole multiple of $100,000 in excess thereof, and (ii) with
respect to LIBOR Rate Loans, $2,000,000 or a whole multiple of $100,000 in
excess thereof.
Section 2.10 DEFAULT RATE AND PAYMENT DATES.
Upon the occurrence, and during the continuance, of an Event of
Default, the principal of and, to the extent permitted by law, interest on the
Loans and any other amounts owing hereunder or under the other Credit Documents
shall bear interest, payable on demand, at a per annum rate 2% greater than the
rate which would otherwise be applicable (or if no rate is applicable, whether
in respect of interest, fees or other amounts, then the Alternate Base Rate plus
the highest Applicable Percentage provided in the definition of "Applicable
Percentage" for Alternate Base Rate Loans PLUS 2%).
Section 2.11 CONVERSION OPTIONS.
(a) The Borrower may, in the case of Revolving Loans, the Tranche A
Term Loan and the Tranche B Term Loan, elect from time to time to convert
Alternate Base Rate Loans to LIBOR Rate Loans, by giving the Administrative
Agent at least three Business Days' prior irrevocable written notice of such
election. A form of Notice of Conversion/ Extension is attached as SCHEDULE
2.11. If the date upon which an Alternate Base Rate Loan is to be converted to a
LIBOR Rate Loan is not a Business Day, then such conversion shall be made on the
next succeeding Business Day and during the period from such last day of an
Interest Period to such succeeding Business Day such Loan shall bear interest as
if it were an Alternate Base Rate Loan. All or any part of outstanding Alternate
Base Rate Loans may be converted as provided herein, PROVIDED that (i) no Loan
may be converted into a LIBOR Rate Loan when any Default or Event of Default has
occurred and is continuing and (ii) partial conversions shall be in an aggregate
principal amount of $2,000,000 or a whole multiple of $100,000 in excess
thereof.
(b) Any LIBOR Rate Loans may be continued as such upon the expiration
of an Interest Period with respect thereto by compliance by the Borrower with
the notice provisions contained in Section 2.11(a); PROVIDED, that no LIBOR Rate
Loan may be continued as such when any Default or Event of Default has occurred
and is continuing, in which case such Loan shall be automatically converted to
an Alternate Base Rate Loan at the end of the applicable Interest Period with
respect thereto. If the Borrower shall fail to give timely notice of an election
to continue a LIBOR Rate Loan, or the continuation of LIBOR Rate Loans is not
permitted hereunder, such LIBOR Rate Loans shall be automatically converted to
Alternate Base Rate Loans at the end of the applicable Interest Period with
respect thereto.
Section 2.12 COMPUTATION OF INTEREST AND FEES.
(a) Interest payable hereunder with respect to Alternate Base Rate
Loans shall be calculated on the basis of a year of 365 days (or 366 days, as
applicable) for the actual days elapsed. All other fees, interest and all other
amounts payable hereunder shall be calculated on
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the basis of a 360 day year for the actual days elapsed. The Administrative
Agent shall as soon as practicable notify the Borrower and the Lenders of each
determination of a LIBOR Rate on the Business Day of the determination thereof.
Any change in the interest rate on a Loan resulting from a change in the
Alternate Base Rate shall become effective as of the opening of business on the
day on which such change in the Alternate Base Rate shall become effective. The
Administrative Agent shall as soon as practicable notify the Borrower and the
Lenders of the effective date and the amount of each such change.
(b) Each determination of an interest rate by the Administrative Agent
pursuant to any provision of this Agreement shall be conclusive and binding on
the Borrower and the Lenders in the absence of manifest error. The
Administrative Agent shall, at the request of the Borrower, deliver to the
Borrower a statement showing the computations used by the Administrative Agent
in determining any interest rate.
Section 2.13 PRO RATA TREATMENT AND PAYMENTS.
(a) Each borrowing of Revolving Loans and any reduction of the
Revolving Commitments shall be made PRO RATA according to the respective
Revolving Commitment Percentages of the Lenders. Each payment under this
Agreement or any Note shall be applied, first, to any fees then due and owing by
the Borrower pursuant to Section 2.6, second, to interest then due and owing in
respect of the Notes of the Borrower and, third, to principal then due and owing
hereunder and under the Notes of the Borrower. Each payment on account of any
fees pursuant to Section 2.6 shall be made PRO RATA in accordance with the
respective amounts due and owing (except as to the portion of the Letter of
Credit retained by the Issuing Lender and the Issuing Lender Fees). Each payment
(other than prepayments) by the Borrower on account of principal of and interest
on the Revolving Loans, the Tranche A Term Loan and on the Tranche B Term Loan
shall be made PRO RATA according to the respective amounts due and owing in
accordance with Section 2.8 hereof. Prepayments made pursuant to Section 2.16
shall be applied in accordance with such section. Each mandatory prepayment on
account of principal of the Loans shall be applied in accordance with Section
2.8(b). All payments (including prepayments) to be made by the Borrower on
account of principal, interest and fees shall be made without defense, set-off
or counterclaim (except as provided in Section 2.19(b)) and shall be made to the
Administrative Agent for the account of the Lenders at the Administrative
Agent's office specified on SCHEDULE 9.2 in Dollars and in immediately available
funds not later than 1:00 P.M. (Charlotte, North Carolina time) on the date when
due. The Administrative Agent shall distribute such payments to the Lenders
entitled thereto promptly upon receipt in like funds as received. If any payment
hereunder (other than payments on the LIBOR Rate Loans) becomes due and payable
on a day other than a Business Day, such payment shall be extended to the next
succeeding Business Day, and, with respect to payments of principal, interest
thereon shall be payable at the then applicable rate during such extension. If
any payment on a LIBOR Rate Loan becomes due and payable on a day other than a
Business Day, the maturity thereof shall be extended to the next succeeding
Business Day unless the result of such extension would be to extend such payment
into another calendar month, in which event such payment shall be made on the
immediately preceding Business Day.
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(b) ALLOCATION OF PAYMENTS AFTER EVENT OF DEFAULT. Notwithstanding any
other provisions of this Credit Agreement to the contrary, after the occurrence
and during the continuance of an Event of Default, all amounts collected or
received by the Administrative Agent or any Lender on account of the Credit
Party Obligations or any other amounts outstanding under any of the Credit
Documents or in respect of the Collateral shall be paid over or delivered as
follows:
FIRST, to the payment of all reasonable out-of-pocket costs and
expenses (including without limitation reasonable attorneys' fees) of
the Administrative Agent in connection with enforcing the rights of the
Lenders under the Credit Documents and any protective advances made by
the Administrative Agent with respect to the Collateral under or
pursuant to the terms of the Collateral Documents;
SECOND, to payment of any fees owed to the Administrative Agent;
THIRD, to the payment of all reasonable out-of-pocket costs and
expenses (including without limitation, reasonable attorneys' fees) of
each of the Lenders in connection with enforcing its rights under the
Credit Documents or otherwise with respect to the Credit Party
Obligations owing to such Lender;
FOURTH, to the payment of all of the Credit Party Obligations
consisting of accrued fees and interest;
FIFTH, to the payment of the outstanding principal amount of the
Credit Party Obligations (including the payment or cash
collateralization of the outstanding LOC Obligations);
SIXTH, to all other Credit Party Obligations and other obligations
which shall have become due and payable under the Credit Documents or
otherwise and not repaid pursuant to clauses "FIRST" through "FIFTH"
above; and
SEVENTH, to the payment of the surplus, if any, to whoever may be
lawfully entitled to receive such surplus.
In carrying out the foregoing, (i) amounts received shall be applied in
the numerical order provided until exhausted prior to application to
the next succeeding category; (ii) each of the Lenders shall receive an
amount equal to its pro rata share (based on the proportion that the
then outstanding Loans and LOC Obligations held by such Lender bears to
the aggregate then outstanding Loans and LOC Obligations) of amounts
available to be applied pursuant to clauses "THIRD", "FOURTH", "FIFTH"
and "SIXTH" above; and (iii) to the extent that any amounts available
for distribution pursuant to clause "FIFTH" above are attributable to
the issued but undrawn amount of outstanding Letters of Credit, such
amounts shall be held by the Administrative Agent in a cash collateral
account and applied (A) first, to reimburse the Issuing Lender from
time to time for any drawings under such Letters of Credit and (B)
then, following the expiration of all Letters of
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Credit, to all other obligations of the types described in clauses
"FIFTH" and "SIXTH" above in the manner provided in this Section
2.13(b).
Section 2.14 NON-RECEIPT OF FUNDS BY THE ADMINISTRATIVE AGENT.
(a) Unless the Administrative Agent shall have been notified in writing
by a Lender prior to the date a Loan is to be made by such Lender (which notice
shall be effective upon receipt) that such Lender does not intend to make the
proceeds of such Loan available to the Administrative Agent, the Administrative
Agent may assume that such Lender has made such proceeds available to the
Administrative Agent on such date, and the Administrative Agent may in reliance
upon such assumption (but shall not be required to) make available to the
Borrower a corresponding amount. If such corresponding amount is not in fact
made available to the Administrative Agent, the Administrative Agent shall be
able to recover such corresponding amount from such Lender. If such Lender does
not pay such corresponding amount forthwith upon the Administrative Agent's
demand therefor, the Administrative Agent will promptly notify the Borrower, and
the Borrower shall immediately pay such corresponding amount to the
Administrative Agent. The Administrative Agent shall also be entitled to recover
from the Lender or the Borrower, as the case may be, interest on such
corresponding amount in respect of each day from the date such corresponding
amount was made available by the Administrative Agent to the Borrower to the
date such corresponding amount is recovered by the Administrative Agent at a per
annum rate equal to (i) from the Borrower at the applicable rate for the
applicable borrowing pursuant to the Notice of Borrowing and (ii) from a Lender
at the Federal Funds Effective Rate.
(b) Unless the Administrative Agent shall have been notified in writing
by the Borrower, prior to the date on which any payment is due from it hereunder
(which notice shall be effective upon receipt) that the Borrower does not intend
to make such payment, the Administrative Agent may assume that such Borrower has
made such payment when due, and the Administrative Agent may in reliance upon
such assumption (but shall not be required to) make available to each Lender on
such payment date an amount equal to the portion of such assumed payment to
which such Lender is entitled hereunder, and if the Borrower has not in fact
made such payment to the Administrative Agent, such Lender shall, on demand,
repay to the Administrative Agent the amount made available to such Lender. If
such amount is repaid to the Administrative Agent on a date after the date such
amount was made available to such Lender, such Lender shall pay to the
Administrative Agent on demand interest on such amount in respect of each day
from the date such amount was made available by the Administrative Agent to such
Lender to the date such amount is recovered by the Administrative Agent at a per
annum rate equal to the Federal Funds Effective Rate.
(c) A certificate of the Administrative Agent submitted to the Borrower
or any Lender with respect to any amount owing under this Section 2.14 shall be
conclusive in the absence of manifest error.
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Section 2.15 INABILITY TO DETERMINE INTEREST RATE.
Notwithstanding any other provision of this Agreement, if (i) the
Administrative Agent shall reasonably determine (which determination shall be
conclusive and binding absent manifest error) that, by reason of circumstances
affecting the relevant market, reasonable and adequate means do not exist for
ascertaining LIBOR for such Interest Period, or (ii) the Required Lenders shall
reasonably determine (which determination shall be conclusive and binding absent
manifest error) that the LIBOR Rate does not adequately and fairly reflect the
cost to such Lenders of funding LIBOR Rate Loans that the Borrower has requested
be outstanding as a LIBOR Tranche during such Interest Period, the
Administrative Agent shall forthwith give telephone notice of such
determination, confirmed in writing, to the Borrower, and the Lenders at least
two Business Days prior to the first day of such Interest Period. Unless the
Borrower shall have notified the Administrative Agent upon receipt of such
telephone notice that it wishes to rescind or modify its request regarding such
LIBOR Rate Loans, any Loans that were requested to be made as LIBOR Rate Loans
shall be made as Alternate Base Rate Loans and any Loans that were requested to
be converted into or continued as LIBOR Rate Loans shall remain as or be
converted into Alternate Base Rate Loans. Until any such notice has been
withdrawn by the Administrative Agent, no further Loans shall be made as,
continued as, or converted into, LIBOR Rate Loans for the Interest Periods so
affected.
Section 2.16 ILLEGALITY.
Notwithstanding any other provision of this Agreement, if the adoption
of or any change in any Requirement of Law or in the interpretation or
application thereof by the relevant Governmental Authority to any Lender shall
make it unlawful for such Lender or its LIBOR Lending Office to make or maintain
LIBOR Rate Loans as contemplated by this Agreement or to obtain in the interbank
eurodollar market through its LIBOR Lending Office the funds with which to make
such Loans, (a) such Lender shall promptly notify the Administrative Agent and
the Borrower thereof, (b) the commitment of such Lender hereunder to make LIBOR
Rate Loans or continue LIBOR Rate Loans as such shall forthwith be suspended
until the Administrative Agent shall give notice that the condition or situation
which gave rise to the suspension shall no longer exist, and (c) such Lender's
Loans then outstanding as LIBOR Rate Loans, if any, shall be converted on the
last day of the Interest Period for such Loans or within such earlier period as
required by law as Alternate Base Rate Loans. The Borrower hereby agrees
promptly to pay any Lender, upon its demand, any additional amounts necessary to
compensate such Lender for actual and direct costs (but not including
anticipated profits) reasonably incurred by such Lender in making any repayment
in accordance with this Section including, but not limited to, any interest or
fees payable by such Lender to lenders of funds obtained by it in order to make
or maintain its LIBOR Rate Loans hereunder. A certificate as to any additional
amounts payable pursuant to this Section submitted by such Lender, through the
Administrative Agent, to the Borrower shall be conclusive in the absence of
manifest error. Each Lender agrees to use reasonable efforts (including
reasonable efforts to change its LIBOR Lending Office) to avoid or to minimize
any amounts which may otherwise be payable pursuant to this Section; PROVIDED,
HOWEVER, that such efforts shall not cause the imposition on such Lender of any
additional costs or legal or regulatory burdens deemed by such Lender in its
sole discretion to be material.
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Section 2.17 REQUIREMENTS OF LAW.
(a) If the adoption of or any change in any Requirement of Law or in
the interpretation or application thereof or compliance by any Lender with any
request or directive (whether or not having the force of law) from any central
bank or other Governmental Authority made subsequent to the date hereof:
(i) shall subject such Lender to any tax of any kind whatsoever
with respect to any Letter of Credit or any application relating
thereto, any LIBOR Rate Loan made by it, or change the basis of
taxation of payments to such Lender in respect thereof (except for
changes in the rate of tax on the overall net income of such Lender);
(ii) shall impose, modify or hold applicable any reserve, special
deposit, compulsory loan or similar requirement against assets held by,
deposits or other liabilities in or for the account of, advances, loans
or other extensions of credit by, or any other acquisition of funds by,
any office of such Lender which is not otherwise included in the
determination of the LIBOR Rate hereunder; or
(iii) shall impose on such Lender any other condition;
and the result of any of the foregoing is to increase the cost to such
Lender of making or maintaining LIBOR Rate Loans or the Letters of Credit or to
reduce any amount receivable hereunder or under any Note, then, in any such
case, the Borrower shall promptly pay such Lender, upon its demand, any
additional amounts necessary to compensate such Lender for such additional cost
or reduced amount receivable which such Lender reasonably deems to be material
as determined by such Lender with respect to its LIBOR Rate Loans or Letters of
Credit. A certificate as to any additional amounts payable pursuant to this
Section submitted by such Lender, through the Administrative Agent, to the
Borrower shall be conclusive in the absence of manifest error. Each Lender
agrees to use reasonable efforts (including reasonable efforts to change its
Domestic Lending Office or LIBOR Lending Office, as the case may be) to avoid or
to minimize any amounts which might otherwise be payable pursuant to this
paragraph of this Section; PROVIDED, HOWEVER, that such efforts shall not cause
the imposition on such Lender of any additional costs or legal or regulatory
burdens deemed by such Lender to be material.
(b) If any Lender shall have reasonably determined that the adoption of
or any change in any Requirement of Law regarding capital adequacy or in the
interpretation or application thereof or compliance by such Lender or any
corporation controlling such Lender with any request or directive regarding
capital adequacy (whether or not having the force of law) from any central bank
or Governmental Authority made subsequent to the date hereof does or shall have
the effect of reducing the rate of return on such Lender's or such corporation's
capital as a consequence of its obligations hereunder to a level below that
which such Lender or such corporation could have achieved but for such adoption,
change or compliance (taking into consideration such Lender's or such
corporation's policies with respect to capital adequacy) by an amount reasonably
deemed by such Lender to be material, then from time to time, within fifteen
(15) days after demand by such Lender, the Borrower shall pay to such Lender
such additional amount as shall be certified by such Lender as being required to
compensate it for such
47
reduction. Such a certificate as to any additional amounts payable under this
Section submitted by a Lender (which certificate shall include a description of
the basis for the computation), through the Administrative Agent, to the
Borrower shall be conclusive absent manifest error.
(c) The agreements in this Section 2.17 shall survive the termination
of this Agreement and payment of the Notes and all other amounts payable
hereunder.
Section 2.18 INDEMNITY.
The Borrower hereby agrees to indemnify each Lender and to hold such
Lender harmless from any funding loss or expense which such Lender may sustain
or incur as a consequence of (a) default by the Borrower in payment of the
principal amount of or interest on any Loan by such Lender in accordance with
the terms hereof, (b) default by the Borrower in accepting a borrowing after the
Borrower has given a notice in accordance with the terms hereof, (c) default by
the Borrower in making any prepayment after the Borrower has given a notice in
accordance with the terms hereof, and/or (d) the making by the Borrower of a
prepayment of a Loan, or the conversion thereof, on a day which is not the last
day of the Interest Period with respect thereto, in each case including, but not
limited to, any such loss or expense arising from interest or fees payable by
such Lender to lenders of funds obtained by it in order to maintain its Loans
hereunder. A certificate as to any additional amounts payable pursuant to this
Section submitted by any Lender, through the Administrative Agent, to the
Borrower (which certificate must be delivered to the Administrative Agent within
thirty days following such default, prepayment or conversion) shall be
conclusive in the absence of manifest error. The agreements in this Section
shall survive termination of this Agreement and payment of the Notes and all
other amounts payable hereunder.
Section 2.19 TAXES.
(a) All payments made by the Borrower hereunder or under any Note will
be, except as provided in Section 2.19(b), made free and clear of, and without
deduction or withholding for, any present or future taxes, levies, imposts,
duties, fees, assessments or other charges of whatever nature now or hereafter
imposed by any Governmental Authority or by any political subdivision or taxing
authority thereof or therein with respect to such payments (but excluding any
tax imposed on or measured by the net income or profits of a Lender pursuant to
the laws of the jurisdiction in which it is organized or the jurisdiction in
which the principal office or applicable lending office of such Lender is
located or any subdivision thereof or therein) and all interest, penalties or
similar liabilities with respect thereto (all such non-excluded taxes, levies,
imposts, duties, fees, assessments or other charges being referred to
collectively as "TAXES"). If any Taxes are so levied or imposed, the Borrower
agrees to pay the full amount of such Taxes, and such additional amounts as may
be necessary so that every payment of all amounts due under this Agreement or
under any Note, after withholding or deduction for or on account of any Taxes,
will not be less than the amount provided for herein or in such Note. The
Borrower will furnish to the Administrative Agent as soon as practicable after
the date the payment of any Taxes is due pursuant to applicable law certified
copies (to the extent reasonably available and required by law) of tax receipts
evidencing such payment by the Borrower. The Borrower agrees
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to indemnify and hold harmless each Lender, and reimburse such Lender upon its
written request, for the amount of any Taxes so levied or imposed and paid by
such Lender.
(b) Each Lender that is not a United States person (as such term is
defined in Section 7701(a)(30) of the Code) agrees to deliver to the Borrower
and the Administrative Agent on or prior to the Closing Date, or in the case of
a Lender that is an assignee or transferee of an interest under this Agreement
pursuant to Section 9.6(d) (unless the respective Lender was already a Lender
hereunder immediately prior to such assignment or transfer), on the date of such
assignment or transfer to such Lender, (i) if the Lender is a "bank" within the
meaning of Section 881(c)(3)(A) of the Code, two accurate and complete original
signed copies of Internal Revenue Service Form W-8BEN or W-8ECI (or successor
forms) certifying such Lender's entitlement to a complete exemption from United
States withholding tax with respect to payments to be made under this Agreement
and under any Note, or (ii) if the Lender is not a "bank" within the meaning of
Section 881(c)(3)(A) of the Code, either Internal Revenue Service Form W-8BEN or
W-8ECI as set forth in clause (i) above, or (x) a certificate substantially in
the form of SCHEDULE 2.19 (any such certificate, a "2.19 CERTIFICATE") and (y)
two accurate and complete original signed copies of Internal Revenue Service
Form W-8 (or successor form) certifying such Lender's entitlement to an
exemption from United States withholding tax with respect to payments of
interest to be made under this Agreement and under any Note. In addition, each
Lender agrees that it will deliver upon the Borrower's request updated versions
of the foregoing, as applicable, whenever the previous certification has become
obsolete or inaccurate in any material respect, together with such other forms
as may be required in order to confirm or establish the entitlement of such
Lender to a continued exemption from or reduction in United States withholding
tax with respect to payments under this Agreement and any Note. Notwithstanding
anything to the contrary contained in Section 2.19(a), but subject to the
immediately succeeding sentence, (x) each Borrower shall be entitled, to the
extent it is required to do so by law, to deduct or withhold Taxes imposed by
the United States (or any political subdivision or taxing authority thereof or
therein) from interest, fees or other amounts payable hereunder for the account
of any Lender which is not a United States person (as such term is defined in
Section 7701(a)(30) of the Code) for U.S. Federal income tax purposes to the
extent that such Lender has not provided to the Borrower U.S. Internal Revenue
Service Forms that establish a complete exemption from such deduction or
withholding and (y) the Borrower shall not be obligated pursuant to Section
2.19(a) hereof to gross-up payments to be made to a Lender in respect of Taxes
imposed by the United States if (I) such Lender has not provided to the Borrower
the Internal Revenue Service Forms required to be provided to the Borrower
pursuant to this Section 2.19(b) or (II) in the case of a payment, other than
interest, to a Lender described in clause (ii) above, to the extent that such
Forms do not establish a complete or partial exemption from withholding of such
Taxes. Notwithstanding anything to the contrary contained in the preceding
sentence or elsewhere in this Section 2.19, the Borrower agrees to pay
additional amounts and to indemnify each Lender in the manner set forth in
Section 2.19(a) (without regard to the identity of the jurisdiction requiring
the deduction or withholding) in respect of any amounts deducted or withheld by
it as described in the immediately preceding sentence as a result of any changes
after the Closing Date in any applicable law, treaty, governmental rule,
regulation, guideline or order, or in the interpretation thereof, relating to
the deducting or withholding of Taxes.
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(c) Each Lender agrees to use reasonable efforts (including reasonable
efforts to change its Domestic Lending Office or LIBOR Lending Office, as the
case may be) to avoid or to minimize any amounts which might otherwise be
payable pursuant to this Section; PROVIDED, HOWEVER, that such efforts shall not
cause the imposition on such Lender of any additional costs or legal or
regulatory burdens deemed by such Lender in its sole discretion to be material.
(d) If the Borrower pays any additional amount pursuant to this Section
2.19 with respect to a Lender, such Lender shall use reasonable efforts to
obtain a refund of tax or credit against its tax liabilities on account of such
payment; PROVIDED that such Lender shall have no obligation to use such
reasonable efforts if either (i) it is in an excess foreign tax credit position
or (ii) it believes in good faith, in its sole discretion, that claiming a
refund or credit would cause adverse tax consequences to it. In the event that
such Lender receives such a refund or credit, such Lender shall pay to the
Borrower an amount that such Lender reasonably determines is equal to the net
tax benefit obtained by such Lender as a result of such payment by the Borrower.
In the event that no refund or credit is obtained with respect to the Borrower's
payments to such Lender pursuant to this Section 2.19, then such Lender shall
upon request provide a certification that such Lender has not received a refund
or credit for such payments. Nothing contained in this Section 2.19 shall
require a Lender to disclose or detail the basis of its calculation of the
amount of any tax benefit or any other amount or the basis of its determination
referred to in the proviso to the first sentence of this Section 2.19 to the
Borrower or any other party.
(e) The agreements in this Section 2.19 shall survive the termination
of this Agreement and the payment of the Notes and all other amounts payable
hereunder.
Section 2.20 INDEMNIFICATION; NATURE OF ISSUING LENDER'S DUTIES.
(a) In addition to its other obligations under Section 2.4, the
Borrower hereby agrees to protect, indemnify, pay and save each Issuing Lender
harmless from and against any and all claims, demands, liabilities, damages,
losses, costs, charges and expenses (including reasonable attorneys' fees) that
the Issuing Lender may incur or be subject to as a consequence, direct or
indirect, of (i) the issuance of any Letter of Credit or (ii) the failure of the
Issuing Lender to honor a drawing under a Letter of Credit as a result of any
act or omission, whether rightful or wrongful, of any present or future de jure
or de facto government or governmental authority (all such acts or omissions,
herein called "GOVERNMENT ACTS").
(b) As between the Borrower and the Issuing Lender, the Borrower shall
assume all risks of the acts, omissions or misuse of any Letter of Credit by the
beneficiary thereof. The Issuing Lender shall not be responsible: (i) for the
form, validity, sufficiency, accuracy, genuineness or legal effect of any
document submitted by any party in connection with the application for and
issuance of any Letter of Credit, even if it should in fact prove to be in any
or all respects invalid, insufficient, inaccurate, fraudulent or forged; (ii)
for the validity or sufficiency of any instrument transferring or assigning or
purporting to transfer or assign any Letter of Credit or the rights or benefits
thereunder or proceeds thereof, in whole or in part, that may prove to be
invalid or ineffective for any reason; (iii) for failure of the beneficiary of a
Letter of Credit to comply fully with conditions required in order to draw upon
a Letter of Credit; (iv) for errors, omissions, interruptions or delays in
transmission or delivery of any
50
messages, by mail, cable, telegraph, telex or otherwise, whether or not they be
in cipher; (v) for errors in interpretation of technical terms; (vi) for any
loss or delay in the transmission or otherwise of any document required in order
to make a drawing under a Letter of Credit or of the proceeds thereof; and (vii)
for any consequences arising from causes beyond the control of the Issuing
Lender, including, without limitation, any Government Acts. None of the above
shall affect, impair, or prevent the vesting of the Issuing Lender's rights or
powers hereunder.
(c) In furtherance and extension and not in limitation of the specific
provisions hereinabove set forth, any action taken or omitted by the Issuing
Lender, under or in connection with any Letter of Credit or the related
certificates, if taken or omitted in good faith, shall not put such Issuing
Lender under any resulting liability to the Borrower. It is the intention of the
parties that this Agreement shall be construed and applied to protect and
indemnify the Issuing Lender against any and all risks involved in the issuance
of the Letters of Credit, all of which risks are hereby assumed by the Borrower,
including, without limitation, any and all risks of the acts or omissions,
whether rightful or wrongful, of any Government Authority. The Issuing Lender
shall not, in any way, be liable for any failure by the Issuing Lender or anyone
else to pay any drawing under any Letter of Credit as a result of any Government
Acts or any other cause beyond the control of the Issuing Lender.
(d) Nothing in this Section 2.20 is intended to limit the reimbursement
obligation of the Borrower contained in Section 2.4(d) hereof. The obligations
of the Borrower under this Section 2.20 shall survive the termination of this
Agreement. No act or omissions of any current or prior beneficiary of a Letter
of Credit shall in any way affect or impair the rights of the Issuing Lender to
enforce any right, power or benefit under this Agreement.
(e) Notwithstanding anything to the contrary contained in this Section
2.20, the Borrower shall have no obligation to indemnify any Issuing Lender in
respect of any liability incurred by such Issuing Lender arising out of the
gross negligence or willful misconduct of the Issuing Lender (including action
not taken by an Issuing Lender), as determined by a court of competent
jurisdiction.
ARTICLE III
REPRESENTATIONS AND WARRANTIES
To induce the Lenders to enter into this Agreement and to make the
Extensions of Credit herein provided for, the Credit Parties hereby represents
and warrants to the Administrative Agent and to each Lender that:
Section 3.1 FINANCIAL CONDITION.
The balance sheets and the related statements of income and of cash
flows of the Borrower and/or its predecessors and Tech-Sym Corporation for
fiscal years 1997, 1998 and 1999 audited by Deloitte & Touche L.P. and
PriceWaterhouseCoopers LLC, respectively, are complete and correct and present
fairly the financial condition of the Borrower and Acquired
51
Companies and their subsidiaries as of such dates. Additionally, monthly working
capital detail for the trailing twelve months, the company-prepared pro forma
balance sheets of the Borrower as of July 31, 2000 and the six-year projections
have been prepared in good faith based upon reasonable assumptions. All such
financial statements, including the related schedules and notes thereto, have
been prepared in accordance with GAAP applied consistently throughout the
periods involved (except as disclosed therein).
Section 3.2 NO CHANGE.
Since December 31, 1999 (and after delivery of annual audited financial
statements in accordance Section 5.1(a), from the date of the most recently
delivered annual audited financial statements) there has been no development or
event which has had or could reasonably be expected to have a Material Adverse
Effect.
Section 3.3 CORPORATE EXISTENCE; COMPLIANCE WITH LAW.
Each of the Borrower and the other Credit Parties (a) is duly
organized, validly existing and in good standing under the laws of the
jurisdiction of its organization, (b) has the requisite power and authority and
the legal right to own and operate all its material property, to lease the
material property it operates as lessee and to conduct the business in which it
is currently engaged, (c) is duly qualified to conduct business and in good
standing under the laws of each jurisdiction where its ownership, lease or
operation of property or the conduct of its business requires such qualification
except to the extent that the failure to so qualify or be in good standing could
not, in the aggregate, reasonably be expected to have a Material Adverse Effect
and (d) is in compliance with all Requirements of Law except to the extent that
the failure to comply therewith could not, in the aggregate, reasonably be
expected to have a Material Adverse Effect.
Section 3.4 CORPORATE POWER; AUTHORIZATION; ENFORCEABLE OBLIGATIONS.
Each of the Borrower and the other Credit Parties has full power and
authority and the legal right to make, deliver and perform the Credit Documents
to which it is party and has taken all necessary limited liability company or
corporate action to authorize the execution, delivery and performance by it of
the Credit Documents to which it is party. No consent or authorization of,
filing with, notice to or other act by or in respect of, any Governmental
Authority or any other Person is required in connection with the borrowings
hereunder or with the execution, delivery or performance of any Credit Document
by the Borrower or the other Credit Parties (other than those which have been
obtained and are in full force and effect) or with the validity or
enforceability of any Credit Document against the Borrower or the other Credit
Parties (except such filings as are necessary in connection with the perfection
of the Liens created by such Credit Documents). Each Credit Document to which it
is a party has been duly executed and delivered on behalf of the Borrower or the
other Credit Parties, as the case may be. Each Credit Document to which it is a
party constitutes a legal, valid and binding obligation of the Borrower or the
other Credit Parties, as the case may be, enforceable against the Borrower or
such other Credit Party, as the case may be, in accordance with its terms,
except as enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or similar laws
52
affecting the enforcement of creditors' rights generally and by general
equitable principles (whether enforcement is sought by proceedings in equity or
at law).
Section 3.5 NO LEGAL BAR; NO DEFAULT.
The execution, delivery and performance of the Credit Documents, the
borrowings thereunder and the use of the proceeds of the Loans will not violate
any Requirement of Law or any Contractual Obligation of the Borrower or any
other Credit Party (except those as to which waivers or consents have been
obtained and are in full force and effect), and will not result in, or require,
the creation or imposition of any Lien on any of its or their respective
properties or revenues pursuant to any Requirement of Law or Contractual
Obligation other than the Liens arising under or contemplated in connection with
the Credit Documents. Neither the Borrower nor any other Credit Party is in
default under or with respect to any of its Contractual Obligations in any
respect which could reasonably be expected to have a Material Adverse Effect. No
Default or Event of Default has occurred and is continuing.
Section 3.6 NO MATERIAL LITIGATION.
Except as set forth in SCHEDULE 3.6, no litigation, investigation or
proceeding of or before any arbitrator or Governmental Authority is pending or,
to the best knowledge of the Borrower, threatened by or against any Credit Party
or any of its Subsidiaries or against any of its or their respective properties
or revenues (a) with respect to the Credit Documents or any Loan or any of the
transactions contemplated hereby, or (b) which, if adversely determined, could
reasonably be expected to have a Material Adverse Effect.
Section 3.7 INVESTMENT COMPANY ACT.
Neither the Borrower nor any Credit Party is an "investment company",
or a company "controlled" by an "investment company", within the meaning of the
Investment Company Act of 1940, as amended.
Section 3.8 MARGIN REGULATIONS.
No part of the proceeds of any Loan hereunder will be used directly or
indirectly for any purpose which violates, or which would be inconsistent with,
the provisions of Regulation T, U or X of the Board of Governors of the Federal
Reserve System as now and from time to time hereafter in effect. The Borrower
and its Subsidiaries taken as a group do not own "margin stock" except as
identified in the financial statements referred to in Section 3.1 and the
aggregate value of all "margin stock" owned by the Borrower and its Subsidiaries
taken as a group does not exceed 25% of the value of their assets.
Section 3.9 ERISA.
Except as set forth in SCHEDULE 3.9, neither a Reportable Event nor an
"accumulated funding deficiency" (within the meaning of Section 412 of the Code
or Section 302 of ERISA) has occurred during the five-year period prior to the
date on which this representation is made or
53
deemed made with respect to any Plan, and each Plan has complied in all material
respects with the applicable provisions of ERISA and the Code, except to the
extent that any such occurrence or failure to comply would not reasonably be
expected to have a Material Adverse Effect. No termination of a Single Employer
Plan has occurred resulting in any liability that has remained underfunded, and
no Lien in favor of the PBGC or a Plan has arisen, during such five-year period
which could reasonably be expected to have a Material Adverse Effect. The
present value of all accrued benefits under each Single Employer Plan (based on
those assumptions used to fund such Plans) did not, as of the last annual
valuation date prior to the date on which this representation is made or deemed
made, exceed the value of the assets of such Plan allocable to such accrued
benefits by an amount which, as determined in accordance with GAAP, could
reasonably be expected to have a Material Adverse Effect. Neither the Borrower
nor any Commonly Controlled Entity is currently subject to any liability for a
complete or partial withdrawal from a Multiemployer Plan which could reasonably
be expected to have a Material Adverse Effect.
Section 3.10 ENVIRONMENTAL MATTERS.
(a) Except as set forth on SCHEDULE 3.10:
(i) To the best knowledge of the Borrower and the other Credit
Parties, the facilities and properties owned, leased or operated by the
Borrower and the other Credit Parties or any of their Subsidiaries (the
"PROPERTIES") do not contain any Materials of Environmental Concern in
amounts or concentrations which (A) constitute a violation of, or (B)
could require investigation or clean up under, any Environmental Law.
(ii) To the best knowledge of the Borrower and the other Credit
Parties, the Properties and all operations of the Borrower and the
other Credit Parties and/or their Subsidiaries at the Properties are in
compliance, and have in the last five years been in compliance, in all
material respects with all applicable Environmental Laws, and there is
no contamination at, under or about the Properties or violation of any
Environmental Law with respect to the Properties or the business
operated by the Borrower and the other Credit Parties or any of their
Subsidiaries (the "BUSINESS").
(iii) Neither the Borrower nor any of the other Credit Parties has
received, with regard to any of the Properties or the Business, any
written or actual notice of violation, alleged violation,
non-compliance, liability or potential liability regarding
environmental matters or compliance with Environmental Laws, nor does
the Borrower or any of the other Credit Parties nor any of their
Subsidiaries have knowledge or reason to believe that any such notice
will be received or is being threatened.
(iv) To the best knowledge of the Borrower and the other Credit
Parties, Materials of Environmental Concern have not been transported
or disposed of from the Properties in violation of, or in a manner or
to a location which could give rise to liability under any
Environmental Law, nor have any Materials of Environmental Concern been
generated, treated, stored or disposed of at, on or under any of the
Properties in violation
54
of, or in a manner requiring investigation or clean up under, any
applicable Environmental Law.
(v) No judicial proceeding or governmental or administrative action
is pending or, to the knowledge of the Borrower and the other Credit
Parties, threatened, under any Environmental Law to which the Borrower
or any other Credit Party or any Subsidiary is or will be named as a
party with respect to the Properties or the Business, nor are there any
consent decrees or other decrees, consent orders, administrative orders
or other orders, or other administrative or judicial requirements
outstanding under any Environmental Law with respect to the Properties
or the Business.
(vi) To the best knowledge of the Borrower and the other Credit
Parties, there has been no release or threat of release of Materials of
Environmental Concern at or from the Properties, or arising from or
related to the operations of the Borrower or any other Credit Party or
any Subsidiary in connection with the Properties or otherwise in
connection with the Business, in violation of or in amounts or in a
manner requiring investigation or clean up under Environmental Laws.
(b) To the best knowledge of the Credit Parties, the matters disclosed
on SCHEDULE 3.10 could not reasonably be expected to result in a Material
Adverse Effect, either individually or in the aggregate.
Section 3.11 PURPOSE OF LOANS.
The proceeds of the Extensions of Credit shall be used solely by the
Borrower as follows:
(a) with respect to the Revolving Loans, the Tranche A Term Loan
and the Tranche B Term Loan, to (i) finance a portion of the purchase
price of the Acquisition and to pay certain fees and expenses related
thereto, (ii) refinance certain existing indebtedness of the Borrower
and the Acquired Companies, and (iii) pay fees and expenses owing to
the Lenders and the Administrative Agent in connection with this
Agreement and any other transaction fees and expenses (including up to
$13,000,000 of incentive costs as previously disclosed by the Borrower
to the Agents), and (iv) provide for working capital, capital
expenditures, acquisitions and other general corporate purposes; and
(b) the Letters of Credit shall be used only for or in connection
with appeal bonds, reimbursement obligations arising in connection with
surety and reclamation bonds, reinsurance, domestic or international
trade transactions and obligations not otherwise aforementioned
relating to transactions entered into by the applicable account party
in the ordinary course of business.
Section 3.12 SUBSIDIARIES.
Set forth on SCHEDULE 3.12 is a complete and accurate list of all
Subsidiaries of the Credit Parties. Information on the attached Schedule
includes state of incorporation; the number of
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shares of each class of Capital Stock or other equity interests outstanding; the
number and percentage of outstanding shares of each class of stock; and the
number and effect, if exercised, of all outstanding options, warrants, rights of
conversion or purchase and similar rights. The outstanding Capital Stock and
other equity interests of all such Subsidiaries is validly issued, fully paid
and non-assessable and is owned, free and clear of all Liens (other than those
arising under or contemplated in connection with the Credit Documents).
Section 3.13 OWNERSHIP.
Each Credit Party and its Subsidiaries is the owner of, and has good
and marketable title to, all of its respective assets, except as may be
permitted pursuant Section 6.13 hereof, and none of such assets is subject to
any Lien other than Permitted Liens.
Section 3.14 INDEBTEDNESS.
Except as otherwise permitted under Section 6.1, the Borrower and its
Subsidiaries have no Indebtedness.
Section 3.15 TAXES.
Each of the Borrower and its Subsidiaries has filed, or caused to be
filed, all tax returns (federal, state, local and foreign) required to be filed
and paid (a) all amounts of taxes shown thereon to be due (including interest
and penalties) and (b) all other taxes, fees, assessments and other governmental
charges (including mortgage recording taxes, documentary stamp taxes and
intangibles taxes) owing by it, except for such taxes (i) which are not yet
delinquent or (ii) that are being contested in good faith and by proper
proceedings, and against which adequate reserves are being maintained in
accordance with GAAP. Neither the Borrower nor any of its Subsidiaries is aware
as of the Closing Date of any proposed tax assessments against it or any of its
Subsidiaries which could reasonably be expected to have a Material Adverse
Effect.
Section 3.16 INTELLECTUAL PROPERTY.
Each of the Borrower and its Subsidiaries owns, or has the legal right
to use, all trademarks, tradenames, copyrights, technology, know-how and
processes necessary for each of them to conduct its business as currently
conducted. Set forth on SCHEDULE 3.16 is a list of all Intellectual Property
owned by each of the Borrower and its Subsidiaries or that the Borrower or any
of its Subsidiaries has the right to use. Except as provided on SCHEDULE 3.16,
no claim has been asserted and is pending by any Person challenging or
questioning the use of any such Intellectual Property or the validity or
effectiveness of any such Intellectual Property, nor does the Borrower or any of
its Subsidiaries know of any such claim, and, to the knowledge of the Borrower
or any of its Subsidiaries, the use of such Intellectual Property by the
Borrower or any of its Subsidiaries does not infringe on the rights of any
Person, except for such claims and infringements that in the aggregate, could
not reasonably be expected to have a Material Adverse Effect. SCHEDULE 3.16 may
be updated from time to time by the Borrower to include new Intellectual
Property by giving written notice thereof to the Administrative Agent.
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Section 3.17 SOLVENCY.
The fair saleable value of the Credit Parties' assets, on a
consolidated basis, measured on a going concern basis, exceeds all probable
liabilities, including those to be incurred pursuant to this Credit Agreement.
None of the Credit Parties, on a consolidated basis, (a) has unreasonably small
capital in relation to the business in which it is or proposes to be engaged or
(b) has incurred, or believes that it will incur after giving effect to the
transactions contemplated by this Credit Agreement, debts beyond its ability to
pay such debts as they become due.
Section 3.18 INVESTMENTS.
All Investments of each of the Borrower and its Subsidiaries are
Permitted Investments.
Section 3.19 LOCATION OF COLLATERAL.
Set forth on SCHEDULE 3.19(a) is a list of the Properties of the
Borrower and its Subsidiaries with street address, county and state where
located. Set forth on SCHEDULE 3.19(b) is a list of all locations where any
tangible personal property of the Borrower and its Subsidiaries is located,
including county and state where located. Set forth on SCHEDULE 3.19(c) is the
chief executive office and principal place of business of each of the Borrower
and its Subsidiaries. SCHEDULE 3.19(a), 3.19(b) and 3.19(c) may be updated from
time to time by the Borrower to include new properties or locations by giving
written notice thereof to the Administrative Agent.
Section 3.20 NO BURDENSOME RESTRICTIONS.
None of the Borrower or any of its Subsidiaries is a party to any
agreement or instrument or subject to any other obligation or any charter or
corporate restriction or any provision of any applicable law, rule or regulation
which, individually or in the aggregate, could reasonably be expected to have a
Material Adverse Effect.
Section 3.21 BROKERS' FEES.
None of the Borrower or any of its Subsidiaries has any obligation to
any Person in respect of any finder's, broker's, investment banking or other
similar fee in connection with any of the transactions contemplated under the
Credit Documents other than the closing and other fees payable pursuant to this
Credit Agreement.
Section 3.22 LABOR MATTERS.
There are no collective bargaining agreements or Multiemployer Plans
covering the employees of the Borrower or any of its Subsidiaries as of the
Closing Date, other than as set forth in SCHEDULE 3.22 hereto, and none of the
Borrower or any of its Subsidiaries (i) has suffered any strikes, walkouts, work
stoppages or other material labor difficulty within the last five years, other
than as set forth in SCHEDULE 3.22 hereto or (ii) has knowledge of any potential
or pending strike, walkout or work stoppage.
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Section 3.23 SECURITY DOCUMENTS.
The Security Documents create valid security interests in, and Liens
on, the Collateral purported to be covered thereby, which security interests and
Liens are currently (or will be, upon the filing of appropriate financing
statements and the recordation of the applicable Mortgage Instruments in each
case in favor of First Union, as Collateral Agent for the Lenders) perfected
security interests and Liens, prior to all other Liens other than Permitted
Liens.
Section 3.24 ACCURACY AND COMPLETENESS OF INFORMATION.
All factual information heretofore, contemporaneously or hereafter
furnished by or on behalf of any Credit Party or any of its Subsidiaries to the
Administrative Agent or any Lender for purposes of or in connection with this
Agreement or any other Credit Document, or any transaction contemplated hereby
or thereby, is or will be true and accurate in all material respects and not
incomplete by omitting to state any material fact necessary to make such
information not misleading. There is no fact now known to the Borrower, any
other Credit Party or any of their Subsidiaries which has, or could reasonably
be expected to have, a Material Adverse Effect which fact has not been set forth
herein, in the financial statements of the Borrower and its Subsidiaries
furnished to the Administrative Agent and/or the Lenders, or in any certificate,
opinion or other written statement made or furnished by any Credit Party to the
Administrative Agent and/or the Lenders.
Section 3.25 CONSUMMATION OF ACQUISITION; REPRESENTATIONS AND
WARRANTIES FROM OTHER DOCUMENTS.
The Acquisition and related transactions and the issuance of the
Subordinated Notes have been consummated substantially in accordance with the
terms of the Acquisition Documents and the Subordinated Note Documents. As of
the Closing Date, the Acquisition Documents have not been altered, amended or
otherwise modified or supplemented or any condition thereof waived without the
prior written consent of the Administrative Agent and the Required Lenders. Each
of the representations and warranties made in the Acquisition Documents by each
of the parties thereto is true and correct in all material respects, except for
representations or warranties therein that relate to a particular date and, with
regard to such representations and warranties, the same were true and correct as
of such date. On the Closing Date, each of the representations and warranties
made in the Subordinated Note Documents by the Borrower is true and correct in
all material respects except for representations and warranties that relate to a
particular date and, with regard to such representations and warranties, the
same were true and correct as of such date.
Section 3.26 GOVERNMENT CONTRACTS.
No notice of suspension, debarment, cure notice, show cause notice or
notice of termination for default with respect to any Material Contract has been
issued by the U.S. Government to the Borrower or any Acquired Company, and
neither the Borrower nor any Acquired Company is a party to any pending, or to
the Borrower's or any Acquired Company's knowledge threatened, suspension,
debarment, termination for default issued by the U.S.
58
Government or other adverse U.S. Government action or proceeding in connection
with any Material Contract.
ARTICLE IV
CONDITIONS PRECEDENT
Section 4.1 CONDITIONS TO CLOSING DATE AND INITIAL REVOLVING LOANS,
TRANCHE A TERM LOANS AND TRANCHE B TERM LOANS.
This Agreement shall become effective upon, and the obligation of each
Lender to make the initial Revolving Loans, the Swingline Loans, the Tranche A
Term Loan and the Tranche B Term Loan on the Closing Date is subject to, the
satisfaction of the following conditions precedent:
(a) EXECUTION OF AGREEMENT. The Administrative Agent shall have
received (i) counterparts of this Agreement, (ii) for the account of
each Lender, Revolving Notes, the Tranche A Term Notes and the Tranche
B Term Notes, (iii) for the account of the Swingline Lender, the
Swingline Note, and (iv) counterparts of the Security Agreement and the
Pledge Agreement, in each case conforming to the requirements of this
Agreement and executed by a duly authorized officer of each party
thereto
(b) AUTHORITY DOCUMENTS. The Administrative Agent shall have
received the following:
(i) ARTICLES OF INCORPORATION. Copies of the articles of
incorporation or other charter documents, as applicable, of each
Credit Party certified to be true and complete as of a recent date
by the appropriate governmental authority of the state of its
incorporation.
(ii) RESOLUTIONS. Copies of resolutions of the board of
directors of each Credit Party approving and adopting the Credit
Documents, the transactions contemplated therein and authorizing
execution and delivery thereof, certified by an officer of such
Credit Party as of the Closing Date to be true and correct and in
force and effect as of such date.
(iii) BYLAWS. A copy of the bylaws of each Credit Party
certified by an officer of such Credit Party as of the Closing Date
to be true and correct and in force and effect as of such date.
(iv) GOOD STANDING. Copies of (i) certificates of good
standing, existence or its equivalent with respect to the each
Credit Party certified as of a recent date by the appropriate
governmental authorities of the state of incorporation and each
other state in which the failure to so qualify and be in good
standing could reasonably be expected to have a Material Adverse
Effect on
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the business or operations of the Borrower and its Subsidiaries in
such state and (ii) a certificate indicating payment of all
corporate franchise taxes certified as of a recent date by the
appropriate governmental taxing authorities.
(v) INCUMBENCY. An incumbency certificate of each Credit Party
certified by a secretary or assistant secretary to be true and
correct as of the Closing Date.
(c) LEGAL OPINIONS OF COUNSEL. The Administrative Agent shall have
received an opinion of legal counsel for the Credit Parties, dated the
Closing Date and addressed to the Administrative Agent and the Lenders,
which opinion shall provide, among other things, that the Borrower, the
Acquired Companies and their Subsidiaries are in compliance with all
corporate instruments and material agreements, including without
limitation, the Existing Subordinated Note Indenture, on the Closing
Date after giving effect to the Acquisition and shall otherwise be in
form and substance acceptable to the Agents.
(d) RELIANCE. The Administrative Agent shall have received a copy
of each Acquisition Document certified as true and correct by a
Responsible Officer of the Borrower, each in form and substance
reasonably satisfactory to the Agents.
(e) PERSONAL PROPERTY COLLATERAL. The Administrative Agent shall
have received, in form and substance satisfactory to the Agents:
(i) searches of Uniform Commercial Code filings in the
jurisdiction of the chief executive office of each Credit Party and
each jurisdiction where any Collateral is located or where a filing
would need to be made in order to perfect the Administrative
Agent's security interest in the Collateral, copies of the
financing statements on file in such jurisdictions and evidence
that no Liens exist other than Permitted Liens;
(ii) duly executed UCC financing statements for each
appropriate jurisdiction as is necessary, in the Administrative
Agent's sole discretion, to perfect the Administrative Agent's
security interest in the Collateral;
(iii) duly executed consents as are necessary, in the
Administrative Agent's sole discretion, to perfect the Lenders'
security interest in the Collateral; and
(iv) in the case of any personal property Collateral located at
premises leased by a Credit Party, such estoppel letters, consents
and waivers from the landlords on such real property as may be
required by the Administrative Agent.
(f) REAL PROPERTY COLLATERAL. The Administrative Agent shall have
received, in form and substance satisfactory to the Agents:
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(i) fully executed and notarized mortgages, deeds of trust or
deeds to secure debt (each, as the same may be amended, modified,
restated or supplemented from time to time, a "MORTGAGE INSTRUMENT"
and collectively the "MORTGAGE INSTRUMENTS") encumbering the fee
interest in the properties listed in SCHEDULE 3.19(a) as properties
owned by the Credit Parties (each a "MORTGAGED PROPERTY" and
collectively the "MORTGAGED PROPERTIES");
(ii) a title report obtained by the Credit Parties in respect
of each of the Mortgaged Properties;
(iii) with respect to each Mortgaged Property, an ALTA
mortgagee title insurance policies issued by First American Title
Insurance Company (the "MORTGAGE POLICIES"), in amounts not less
than the respective amounts designated in SCHEDULE 3.19(a) with
respect to any particular Mortgaged Property, assuring the
Administrative Agent that each of the Mortgage Instruments creates
a valid and enforceable first priority mortgage lien on the
applicable Mortgaged Property, free and clear of all defects and
encumbrances except Permitted Liens, which Mortgage Policies shall
be in form and substance reasonably satisfactory to the
Administrative Agent and shall provide for affirmative insurance
and such reinsurance as the Administrative Agent may reasonably
request, all of the foregoing in form and substance reasonably
satisfactory to the Administrative Agent;
(iv) evidence as to (A) whether any Mortgaged Property is in an
area designated by the Federal Emergency Management Agency as
having special flood or mud slide hazards (a "FLOOD HAZARD
PROPERTY") and (B) if any Mortgaged Property is a Flood Hazard
Property, (1) whether the community in which such Mortgaged
Property is located is participating in the National Flood
Insurance Program, (2) the applicable Credit Party's written
acknowledgment of receipt of written notification from the
Administrative Agent (a) as to the fact that such Mortgaged
Property is a Flood Hazard Property and (b) as to whether the
community in which each such Flood Hazard Property is located is
participating in the National Flood Insurance Program and (3)
copies of insurance policies or certificates of insurance of the
Borrower and its Subsidiaries evidencing flood insurance reasonably
satisfactory to the Administrative Agent and naming the
Administrative Agent as sole loss payee on behalf of the Lenders;
and
(v) maps or plats of an as-built survey of the sites of the
Mortgaged Properties certified to the Administrative Agent and the
Title Insurance Company in a manner reasonably satisfactory to
them, dated a date satisfactory to each of the Administrative Agent
and the Title Insurance Company by an independent professional
licensed land surveyor reasonably satisfactory to each of the
Administrative Agent and the Title Insurance Company, which maps or
plats and the surveys on which they are based shall be sufficient
to delete any standard printed survey exception contained in the
applicable title policy and be made in accordance with the Minimum
Standard Detail Requirements for Land Title
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Surveys jointly established and adopted by the American Land Title
Association and the American Congress on Surveying and Mapping in
1992, and, without limiting the generality of the foregoing, there
shall be surveyed and shown on such maps, plats or surveys the
following: (A) the locations on such sites of all the buildings,
structures and other improvements and the established building
setback lines; (B) the lines of streets abutting the sites and
width thereof; (C) all access and other easements appurtenant to
the sites necessary to use the sites; (D) all roadways, paths,
driveways, easements, encroachments and overhanging projections and
similar encumbrances affecting the site, whether recorded, apparent
from a physical inspection of the sites or otherwise known to the
surveyor; (E) any encroachments on any adjoining property by the
building structures and improvements on the sites; and (F) if the
site is described as being on a filed map, a legend relating the
survey to said map.
(g) LIABILITY AND CASUALTY INSURANCE. The Administrative Agent
shall have received copies of insurance policies or certificates of
insurance evidencing liability and casualty insurance meeting the
requirements set forth herein or in the Security Documents. The
Administrative Agent shall be named as loss payee and additional
insured on all such insurance policies for the benefit of the Lenders.
(h) FEES. The Agents, on behalf of themselves and the Lenders, as
applicable, shall have received all fees, if any, owing pursuant to the
Fee Letter and Section 2.6.
(i) LITIGATION. There shall not exist any pending litigation or
investigation affecting or relating to the Borrower, the Acquired
Companies or any of their respective Subsidiaries, this Agreement and
the other Credit Documents that in the reasonable judgment of the
Agents and the Required Lenders could materially adversely affect the
Borrower, the Acquired Companies or any of their respective
Subsidiaries, this Agreement and the other Credit Documents, that has
not been settled, dismissed, vacated, discharged or terminated prior to
the Closing Date.
(j) SOLVENCY CERTIFICATE. The Administrative Agent shall have
received an officer's certificate for each Credit Party prepared by the
chief financial officer of each such Credit Party as to the financial
condition, solvency and related matters of each such Credit Party, in
each case after giving effect to the Acquisition and the initial
borrowings under the Credit Documents, in substantially the form of
SCHEDULE 4.1(j) hereto.
(k) OFFICER'S CERTIFICATE. The Administrative Agent shall have
received an officer's certificate for the Borrower prepared by the
chief financial officer of the Borrower certifying that, after giving
effect to the Acquisition and the initial Extensions of Credit to be
made on the Closing Date, the Borrower is in compliance with each of
the financial covenants set forth in Section 5.9 on a pro forma basis.
(l) ACCOUNT DESIGNATION LETTER. The Administrative Agent shall have
received the executed Account Designation Letter in the form of
SCHEDULE 1.1(a) hereto.
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(m) CORPORATE STRUCTURE. The corporate capital and ownership
structure of the Borrower and its Subsidiaries (after giving effect to
the Acquisition) shall be as described in SCHEDULE 3.12. The Agents
shall be satisfied with management structure, legal structure, voting
control, liquidity, total leverage and total capitalization of the
Borrower as of the Closing Date.
(n) ACQUISITION DOCUMENTS. The Agents shall have reviewed and
approved in its sole discretion all of the Acquisition Documents and
there shall not have been any material modification, amendment,
supplement or waiver to the Acquisition Documents without the prior
written consent of the Administrative Agent, including, but not limited
to, any modification, amendment, supplement or waiver relating to the
amount or type of consideration to be paid in connection with the
Acquisition and the contents of all disclosure schedules and exhibits,
and the Acquisition shall have been consummated in accordance with the
terms of the Acquisition Documents (without waiver of any conditions
precedent to the obligations of the buyer thereunder) for a purchase
price (including fees and expenses) not to exceed $210,000,000. The
Administrative Agent shall have received a copy, certified by an
officer of the Borrower as true and complete, of each Acquisition
Document as originally executed and delivered, together with all
exhibits and schedules thereto.
(o) EQUITY. The Borrower shall have received cash equity proceeds
from the Sponsor, the limited partners of the Sponsor and the
management of the Borrower in an amount not less than $20,500,000, of
which not less than $17,000,000 shall have been provided by the
Sponsor, on terms and conditions acceptable to the Agents.
(p) SUBORDINATED DEBT. The Borrower and the lenders applicable
thereto shall have entered into documentation with respect to the
issuance of the Subordinated Notes in form and substance reasonably
satisfactory to the Agents and the Required Lenders. The Administrative
Agent shall have received a copy, certified by an officer of the
Borrower as true and complete, of each Subordinated Note Document as
originally executed and delivered, together with all exhibits and
schedules thereto. There shall not have been any material modification,
amendment, supplement or waiver to the Subordinated Note Documents
without the prior written consent of the Agents. The Borrower shall
have received proceeds from the issuance of the Subordinated Notes in
an amount not less than $30,000,000.
(q) SPIN-OFF. The Borrower and/or Tech-Sym Corporation shall have
received, or shall receive contemporaneously with or immediately
following the closing, not less than $50,500,000 in net proceeds
(including the assumption of debt) from the spin-off of TRAK
Communications, Inc. and CrossLink, Inc. to affiliates of the Sponsor
(the "Spin-off").
(r) CONSENTS. The Agents shall have received evidence that all
governmental, shareholder and material third party consents and
approvals necessary in connection with the financings and other
transactions contemplated hereby (including the Acquisition) have been
obtained and all applicable waiting periods have expired without any
action
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being taken by any authority that could restrain, prevent or impose any
material adverse conditions on such transactions or that could seek or
threaten any of such transactions.
(s) DUE DILIGENCE.
(i) The Agents shall have received a financial and operating
due diligence report of the Borrower, the Acquired Companies and
their respective Subsidiaries prepared by CSP Associates and
PriceWaterhouseCoopers LLC with the scope and results of such
report acceptable to the Agents in their sole discretion.
(ii) The Agents shall have completed their business, legal and
environmental due diligence of the Borrower, the Acquired Companies
and their respective Subsidiaries (including due diligence relating
to management strategy, material customers and contracts) with the
scope and results of such due diligence acceptable to the Agents in
their sole discretion.
(iii) The Agents shall have received the results of a field
examination conducted by the Administrative Agent (or its
representatives) on the working capital of the Borrower, the
Acquired Companies and their respective Subsidiaries with the scope
and results of such field examination acceptable to the Agents in
their sole discretion.
(t) COMPLIANCE WITH LAWS. The financings and other transactions
contemplated hereby shall be in compliance with all applicable laws and
regulations (including all applicable securities and banking laws,
rules and regulations).
(u) BANKRUPTCY. There shall be no bankruptcy or insolvency
proceedings with respect to the Borrower, the Acquired Companies or any
of their respective Subsidiaries.
(v) MATERIAL ADVERSE EFFECT. No material adverse change shall have
occurred since December 31, 1999 in the business, properties,
operations or conditions (financial or otherwise) of the Borrower, the
Acquired Companies and their Subsidiaries taken as a whole.
(w) FUNDED DEBT. After giving effect to the Acquisition and the
closing of this Agreement and the spin-off of TRAK Communications, Inc.
and CrossLink, Inc. to Affiliates of the Sponsor, there shall be no
more than $206,000,000 in Funded Debt of the Borrower, the Acquired
Companies and their Subsidiaries (net of cash on the balance sheet of
Tech-Sym Corporation) on a consolidated basis (of which $51,250,000
shall be Funded Debt under the Subordinated Notes).
(x) MINIMUM EBITDA. The Administrative Agent shall have received
evidence satisfactory to the Agents provided by the Borrower that
Consolidated EBITDA of (i) the Borrower, (ii) the Acquired Companies,
and (iii) Continental Electronics Corporation (less its discontinued
operations) and the net amount of cost savings less
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corporate overhead as approved by the Administrative Agent (in an
aggregate amount not to exceed $750,000) for the immediately preceding
twelve month period ending August 31, 2000 on a pro forma adjusted
basis taking into account the Acquisition, the financings thereof and
the other transactions contemplated hereby as if such transactions had
occurred on the first day of such 12-month period was not less than
$39,000,000.
(y) FINANCIAL STATEMENTS. The Administrative Agent shall have
received copies of the financial statements referred to in Section 3.1
hereof, each in form and substance satisfactory to it.
(z) ENVIRONMENTAL REPORTS. The Administrative Agent shall have
received satisfactory environmental reviews of all real property owned
by the Borrower and its Subsidiaries.
(aa) TERMINATION OF EXISTING INDEBTEDNESS. All existing
Indebtedness for borrowed money of the Borrower, the Acquired Companies
and their respective Subsidiaries (other than the Indebtedness listed
on SCHEDULE 6.1(B)) shall have been repaid in full and terminated and
all Liens relating thereto shall have been terminated.
(bb) TECH-SYM CORPORATION. As of the time immediately preceding the
Closing Date and immediately following the completion of the Spin-off,
Tech-Sym Corporation shall have on deposit cash and cash equivalents in
an aggregate principal amount of $28,000,000.
(cc) ADDITIONAL MATTERS. All other documents and legal matters in
connection with the transactions contemplated by this Agreement shall
be reasonably satisfactory in form and substance to the Administrative
Agent and its counsel.
Section 4.2 CONDITIONS TO ALL EXTENSIONS OF CREDIT.
The obligation of each Lender to make any Extension of Credit hereunder
is subject to the satisfaction of the following conditions precedent on the date
of making such Extension of Credit:
(a) REPRESENTATIONS AND WARRANTIES. The representations and
warranties made by the Credit Parties herein, in the Security Documents
or which are contained in any certificate furnished at any time under
or in connection herewith shall be true and correct in all material
respects on and as of the date of such Extension of Credit as if made
on and as of such date.
(b) NO DEFAULT OR EVENT OF DEFAULT. No Default or Event of Default
shall have occurred and be continuing on such date or after giving
effect to the Extension of Credit to be made on such date unless such
Default or Event of Default shall have been waived in accordance with
this Agreement.
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(c) COMPLIANCE WITH COMMITMENTS. Immediately after giving effect to
the making of any such Extension of Credit (and the application of the
proceeds thereof), (i) the sum of outstanding Revolving Loans PLUS
outstanding Swingline Loans PLUS LOC Obligations shall not exceed the
Aggregate Revolving Committed Amount, (ii) the LOC Obligations shall
not exceed the LOC Committed Amount and (iii) the Swingline Loans shall
not exceed the Swingline Committed Amount; PROVIDED, in the case of
each, (i), (ii) and (iii) shall not exceed the Borrowing Base.
(d) ADDITIONAL CONDITIONS TO REVOLVING LOANS. If a Revolving Loan
is requested, all conditions set forth in Section 2.1 shall have been
satisfied.
(e) ADDITIONAL CONDITIONS TO SWINGLINE LOANS. If a Swingline Loan
is requested, all conditions set forth in Section 2.5 shall have been
satisfied.
(f) ADDITIONAL CONDITIONS TO TRANCHE A TERM LOAN. If the Tranche A
Term Loan is requested, all conditions set forth in Section 2.2 shall
have been satisfied.
(g) ADDITIONAL CONDITIONS TO TRANCHE B TERM LOAN. If the Tranche B
Term Loan is requested, all conditions set forth in Section 2.3 shall
have been satisfied.
(h) ADDITIONAL CONDITIONS TO LETTERS OF CREDIT. If the issuance of
a Letter of Credit is requested, all conditions set fort in Section 2.4
shall have been satisfied.
Each request for an Extension of Credit and each acceptance by the
Borrower of any such Extension of Credit shall be deemed to constitute a
representation and warranty by the Borrower as of the date of such Extension of
Credit that the applicable conditions in paragraphs (a) through (h) of this
Section have been satisfied.
ARTICLE V
AFFIRMATIVE COVENANTS
The Credit Parties hereby covenant and agree that on the Closing Date,
and thereafter for so long as this Agreement is in effect and until the
Commitments have terminated, no Note, Loan or Letter of Credit remains
outstanding and unpaid and the Credit Party Obligations, together with interest,
Commitment Fee and all other amounts owing to the Administrative Agent or any
Lender hereunder, are paid in full, the Borrower shall, and shall cause each of
its Subsidiaries (other than in the case of Sections 5.1, 5.2 or 5.7 hereof),
to:
Section 5.1 FINANCIAL STATEMENTS.
Furnish to the Administrative Agent and each of the Lenders:
(a) ANNUAL FINANCIAL STATEMENTS. As soon as available, but in any
event within ninety (90) days after the end of each fiscal year of the
Borrower, a copy of the
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consolidated and consolidating balance sheet of the Borrower and its
consolidated Subsidiaries as at the end of such fiscal year and the
related consolidated and consolidating statements of income and
retained earnings and of cash flows of the Borrower and its
consolidated Subsidiaries for such year, audited by a firm of
independent certified public accountants of nationally recognized
standing reasonably acceptable to the Required Lenders, setting forth
in each case in comparative form the figures for the previous year,
reported on without a "going concern" or like qualification or
exception, or qualification indicating that the scope of the audit was
inadequate to permit such independent certified public accountants to
certify such financial statements without such qualification;
(b) QUARTERLY FINANCIAL STATEMENTS. As soon as available and in any
event within forty-five (45) days after the end of each of the first
three fiscal quarters of the Borrower, a company-prepared consolidated
and consolidating balance sheet of the Borrower and its consolidated
Subsidiaries as at the end of such period and related company-prepared
statements of income and retained earnings and of cash flows for the
Borrower and its consolidated Subsidiaries for such quarterly period
and for the portion of the fiscal year ending with such period, in each
case setting forth in comparative form consolidated and consolidating
figures for the corresponding period or periods of the preceding fiscal
year (subject to normal recurring year-end audit adjustments);
(c) MONTHLY FINANCIAL STATEMENTS. As soon as available and in any
event within thirty (30) days after the end of each month of the
Borrower (other than at the end of a fiscal quarter, in which case 45
days after the end thereof), a company-prepared consolidated and
consolidating balance sheet of the Borrower and its consolidated
Subsidiaries as at the end of such period and related company-prepared
statements of income and retained earnings and of cash flows for the
Borrower and its consolidated Subsidiaries for such monthly period and
for the portion of the fiscal year ending with such period, in each
case setting forth in comparative form consolidated and consolidating
figures for the corresponding period or periods of the preceding fiscal
year (subject to normal recurring year-end audit adjustments); and
(d) ANNUAL BUDGET PLAN AND QUARTERLY CASH FLOW PROJECTION. As soon
as available, but in any event within fifteen (15) days prior to the
end of each fiscal year, a copy of (i) the detailed annual budget and
plan of the Borrower for the next fiscal year on a month-by-month basis
and (ii) the cash flow projections of the Borrower on a quarterly
basis, in form and detail reasonably acceptable to the Administrative
Agent and the Required Lenders, together with a summary of the material
assumptions made in the preparation of such annual budget, plan or
projections;
all such financial statements to be complete and correct in all material
respects (subject, in the case of interim statements, to normal recurring
year-end audit adjustments) and to be prepared in reasonable detail and, in the
case of the annual and quarterly financial statements provided in accordance
with subsections (a) and (b) above, in accordance with GAAP applied consistently
throughout the periods reflected therein and further accompanied by a
description of, and an estimation of the effect on the financial statements on
account of, a change, if any, in the
67
application of accounting principles as provided in Section 1.3. At the time of
delivery of the financial statements required in subsections (a), (b) and (c)
above, the Borrower shall include a management discussion and analysis of each
such financial statement, certified by its chief financial officer.
Section 5.2 CERTIFICATES; OTHER INFORMATION.
Furnish to the Administrative Agent and each of the Lenders:
(a) concurrently with the delivery of the financial statements
referred to in Section 5.1(a) above, a certificate of the independent
certified public accountants reporting on such financial statements
stating that in making the examination necessary therefor no knowledge
was obtained of any Default or Event of Default, except as specified in
such certificate;
(b) concurrently with the delivery of the financial statements
referred to in Sections 5.1(a) and 5.1(b) above, a certificate of a
Responsible Officer stating that, to the best of such Responsible
Officer's knowledge, each of the Credit Parties during such period
observed or performed in all material respects all of its covenants and
other agreements, and satisfied in all material respects every
condition, contained in this Agreement to be observed, performed or
satisfied by it, and that such Responsible Officer has obtained no
knowledge of any Default or Event of Default except as specified in
such certificate and such certificate shall include the calculations in
reasonable detail required to indicate compliance with Section 5.9 as
of the last day of such period; provided, however, that in addition to
the concurrent certificate to be delivered with respect to the
financial statements referred to in Section 5.1(a), the Borrower shall,
within forty-five (45) days after the end of each fiscal year, deliver
to the Administrative Agent a certificate of a Responsible Officer
using pro forma information based on monthly information then available
setting forth the information required above;
(c) within thirty (30) days after the same are sent, copies of all
reports (other than those otherwise provided pursuant to Section 5.1
and those which are of a promotional nature) and other financial
information which the Borrower sends to its shareholders, and within
thirty days after the same are filed, copies of all financial
statements and non-confidential reports which the Borrower may make to,
or file with the Securities and Exchange Commission or any successor or
analogous Governmental Authority;
(d) within ninety (90) days after the end of each fiscal year of
the Borrower, a certificate containing information regarding the amount
of all Asset Dispositions, Debt Issuances, and Equity Issuances that
were made during the prior fiscal year and amounts received in
connection with any Recovery Event during the prior fiscal year;
(e) promptly upon receipt thereof, a copy of any other report or
"management letter" submitted by independent accountants to the
Borrower or any of its Subsidiaries in connection with any annual,
interim or special audit of the books of such Person;
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(f) within fifteen (15) days after the end of each fiscal month, a
Borrowing Base Certificate as of the end of the immediately preceding
fixed month, substantially in the form of SCHEDULE 5.2(F) and certified
by the Chief Financial Officer of the Borrower to be true and correct
as of the date hereof; and
(g) promptly, such additional financial and other information as
the Administrative Agent, on behalf of any Lender, may from time to
time reasonably request.
Section 5.3 PAYMENT OF OBLIGATIONS.
Pay, discharge or otherwise satisfy at or before maturity or before
they become delinquent, as the case may be, in accordance with industry practice
(subject, where applicable, to specified grace periods) all its material
obligations of whatever nature and any additional costs that are imposed as a
result of any failure to so pay, discharge or otherwise satisfy such
obligations, except when the amount or validity of such obligations and costs is
currently being contested in good faith by appropriate proceedings and reserves,
if applicable, in conformity with GAAP with respect thereto have been provided
on the books of the Borrower or its Subsidiaries, as the case may be.
Section 5.4 CONDUCT OF BUSINESS AND MAINTENANCE OF EXISTENCE.
Continue to engage in business of the same general type as now
conducted by it on the Closing Date and preserve, renew and keep in full force
and effect its corporate existence and take all reasonable action to maintain
all rights, privileges and franchises necessary or desirable in the normal
conduct of its business; comply with all Contractual Obligations and
Requirements of Law applicable to it except to the extent that failure to comply
therewith could not, in the aggregate, reasonably be expected to have a Material
Adverse Effect.
Section 5.5 MAINTENANCE OF PROPERTY; INSURANCE.
(a) Keep all material property useful and necessary in its business
in good working order and condition (ordinary wear and tear and
obsolescence excepted);
(b) Maintain with financially sound and reputable insurance
companies insurance on all its material property (including without
limitation its material tangible Collateral) in at least such amounts
and against at least such risks as are usually insured against in the
same general area by companies engaged in the same or a similar
business; and furnish to the Administrative Agent, upon written
request, full information as to the insurance carried; PROVIDED,
HOWEVER, that the Borrower and its Subsidiaries may maintain self
insurance plans to the extent companies of similar size and in similar
businesses do so. The Administrative Agent shall be named as loss payee
or mortgagee, as its interest may appear, and/or additional insured
with respect to any such insurance providing coverage in respect of any
Collateral, and each provider of any such insurance shall agree, by
endorsement upon the policy or policies issued by it or by independent
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instruments furnished to the Administrative Agent, that it will give
the Administrative Agent thirty (30) days prior written notice before
any such policy or policies shall be altered or canceled, and that no
act or default of the Borrower or any of its Subsidiaries or any other
Person shall affect the rights of the Administrative Agent or the
Lenders under such policy or policies. The present insurance coverage
of the Borrower and its Subsidiaries is outlined as to carrier, policy
number, expiration date, type and amount on SCHEDULE 5.5(b); and
(c) In case of any material loss, damage to or destruction of the
Collateral of any Credit Party or any part thereof, such Credit Party
shall promptly give written notice thereof to the Administrative Agent
generally describing the nature and extent of such damage or
destruction. In case of any loss, damage to or destruction of the
Collateral of any Credit Party or any part thereof, such Credit Party,
whether or not the insurance proceeds, if any, received on account of
such damage or destruction shall be sufficient for that purpose, at
such Credit Party's cost and expense, will promptly repair or replace
the Collateral of such Credit Party so lost, damaged or destroyed. The
Administrative Agent shall promptly disburse any insurance proceeds
received to the applicable Credit Party application to the costs of
such repair or replacement of the Collateral.
Section 5.6 INSPECTION OF PROPERTY; BOOKS AND RECORDS; DISCUSSIONS.
Keep proper books of records and account in which full, true and
correct entries in conformity with GAAP and all Requirements of Law shall be
made of all dealings and transactions in relation to its businesses and
activities; and permit, during regular business hours and upon reasonable notice
by the Administrative Agent or any Lender, the Administrative Agent or any
Lender to visit and inspect any of its properties and examine and make abstracts
from any of its books and records (other than materials protected by the
attorney-client privilege and materials which the Borrower may not disclose
without violation of a confidentiality obligation binding upon it) at any
reasonable time and as often as may reasonably be desired, and to discuss the
business, operations, properties and financial and other condition of the
Borrower and its Subsidiaries with officers and employees of the Borrower and
its Subsidiaries and with its independent certified public accountants.
Section 5.7 NOTICES.
Give notice in writing to the Administrative Agent (which shall
promptly transmit such notice to each Lender) of:
(a) promptly, but in any event within two (2) Business Days after
the Borrower knows or has reason to know thereof, the occurrence of any
Default or Event of Default;
(b) promptly, any default or event of default under any Contractual
Obligation of the Borrower or any of its Subsidiaries which could
reasonably be expected to have a Material Adverse Effect;
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(c) promptly, any litigation, or any investigation or proceeding
known to the Borrower, affecting the Borrower or any of its
Subsidiaries which, if adversely determined, could reasonably be
expected to have a Material Adverse Effect;
(d) as soon as possible and in any event within thirty (30) days
after the Borrower knows or has reason to know thereof: (i) the
occurrence or expected occurrence of any Reportable Event with respect
to any Plan, a failure to make any required contribution to a Plan, the
creation of any Lien in favor of the PBGC (other than a Permitted Lien)
or a Plan or any withdrawal from, or the termination, Reorganization or
Insolvency of, any Multiemployer Plan or (ii) the institution of
proceedings or the taking of any other action by the PBGC or the
Borrower or any Commonly Controlled Entity or any Multiemployer Plan
with respect to the withdrawal from, or the terminating, Reorganization
or Insolvency of, any Plan;
(e) promptly, any other development or event which could reasonably
be expected to have a Material Adverse Effect; and
(f) immediately after the Borrower or any other Credit Party knows
or has reason to know thereof, any investigation or inquiry by any
Governmental Authority with respect to any Government Contract or any
Credit Party.
Each notice pursuant to this Section shall be accompanied by a statement of a
Responsible Officer setting forth details of the occurrence referred to therein
and stating what action the Borrower proposes to take with respect thereto. In
the case of any notice of a Default or Event of Default, the Borrower shall
specify that such notice is a Default or Event of Default notice on the face
thereof.
Section 5.8 ENVIRONMENTAL LAWS.
(a) Comply in all material respects with, and ensure compliance in
all material respects by all tenants and subtenants, if any, with, all
applicable Environmental Laws and obtain and comply in all material
respects with and maintain, and ensure that all tenants and subtenants
obtain and comply in all material respects with and maintain, any and
all licenses, approvals, notifications, registrations or permits
required by applicable Environmental Laws except to the extent that
failure to do so could not reasonably be expected to have a Material
Adverse Effect;
(b) Conduct and complete all investigations, studies, sampling and
testing, and all remedial, removal and other actions required under
Environmental Laws and promptly comply in all material respects with
all lawful orders and directives of all Governmental Authorities
regarding Environmental Laws except to the extent that the same are
being contested in good faith by appropriate proceedings and the
pendency of such proceedings could not reasonably be expected to have a
Material Adverse Effect; and
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(c) Defend, indemnify and hold harmless the Administrative Agent
and the Lenders, and their respective employees, agents, officers and
directors, from and against any and all claims, demands, penalties,
fines, liabilities, settlements, damages, costs and expenses of
whatever kind or nature known or unknown, contingent or otherwise,
arising out of, or in any way relating to the violation of,
noncompliance with or liability under, any Environmental Law applicable
to the operations of the Borrower any of its Subsidiaries or the
Properties, or any orders, requirements or demands of Governmental
Authorities related thereto, including, without limitation, reasonable
attorney's and consultant's fees, investigation and laboratory fees,
response costs, court costs and litigation expenses, except to the
extent that any of the foregoing arise out of the gross negligence or
willful misconduct of the party seeking indemnification therefor. The
agreements in this paragraph shall survive repayment of the Notes and
all other amounts payable hereunder and under the Credit Documents.
Section 5.9 FINANCIAL COVENANTS.
Commencing on the day immediately following the Closing Date, the
Borrower shall, and shall cause each of its Subsidiaries to, comply with the
following financial covenants:
(a) LEVERAGE RATIO. The Leverage Ratio, as of the last day of each
fiscal quarter of the Borrower and its Subsidiaries occurring during
the periods indicated below, shall be less than or equal to the
following:
PERIOD RATIO
------ -----
October 1, 2000 through and including December 31, 2000 4.65 to 1.0
January 1, 2001 through and including June 30, 2001 4.50 to 1.0
July 1, 2001 through and including September 30, 2001 4.25 to 1.0
October 1, 2001 through and including December 31, 2001 4.10 to 1.0
January 1, 2002 through and including March 31, 2002 4.00 to 1.0
April 1, 2002 through and including June 30, 2002 3.85 to 1.0
July 1, 2002 through and including September 30, 2002 3.75 to 1.0
October 1, 2002 through and including March 31, 2003 3.50 to 1.0
April 1, 2003 through and including March 31, 2005 3.25 to 1.0
April 1, 2005 and thereafter 3.00 to 1.0
(b) SENIOR LEVERAGE RATIO. The Senior Leverage Ratio, as of the
last day of each fiscal quarter of the Borrower and its Subsidiaries
occurring during the periods indicated below, shall be less than or
equal to the following:
PERIOD RATIO
------ -----
October 1, 2000 through and including December 31, 2000 3.50 to 1.0
January 1, 2001 through and including September 30, 2001 3.25 to 1.0
October 1, 2001 through and including March 31, 2002 3.00 to 1.0
April 1, 2002 through and including September 30, 2002 2.75 to 1.0
October 1, 2002 through and including March 31, 2003 2.50 to 1.0
April 1, 2003 through and including March 31, 2005 2.25 to 1.0
April 1, 2005 and thereafter 2.00 to 1.0
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(c) FIXED CHARGE COVERAGE RATIO. The Fixed Charge Coverage
Ratio, as of the last day of each fiscal quarter of the Borrower and
its Subsidiaries occurring during the periods indicated below, shall be
greater than or equal to the following:
PERIOD RATIO
------ -----
October 1, 2000 through and including March 31, 2002 1.05 to 1.0
April 1, 2002 through and including September 30, 2002 1.10 to 1.0
October 1, 2002 through and including March 31, 2005 1.15 to 1.0
April 1, 2005 through and including December 31, 2005 1.00 to 1.0
January 1, 2006 and thereafter .80 to 1.0
(d) INTEREST COVERAGE RATIO. The Interest Coverage Ratio, as of the
last day of each fiscal quarter of the Borrower and its Subsidiaries
occurring during the periods indicated below, shall be greater than or
equal to the following:
PERIOD RATIO
------ -----
October 1, 2000 through and including September 30, 2001 2.00 to 1.0
October 1, 2001 through and including December 31, 2001 2.10 to 1.0
January 1, 2002 through and including March 31, 2002 2.15 to 1.0
April 1, 2002 through and including March 31, 2003 2.25 to 1.0
April 1, 2003 through and including March 31, 2005 2.50 to 1.0
April 1, 2005 and thereafter 3.00 to 1.0
(e) CONSOLIDATED EBITDA. As of the last day of each fiscal quarter
of the Borrower indicated below, Consolidated EBITDA for the twelve
month period ending on such date shall be greater than or equal to the
amount indicated below:
FISCAL QUARTER ENDING AMOUNT
--------------------- ------
December 31, 2000 $40,000,000
March 31, 2001 $40,000,000
June 30, 2001 $40,000,000
September 30, 2001 $40,000,000
December 31, 2001 $40,000,000
March 31, 2002 $41,000,000
June 30, 2002 $43,000,000
September 30, 2002 $44,000,000
December 31, 2002 $46,000,000
March 31, 2003 $47,000,000
June 30, 2003 $48,000,000
September 30, 2003 $49,000,000
December 31, 2003 $50,000,000
March 31, 2004 $51,000,000
June 30, 2004 $53,000,000
September 30, 2004 $54,000,000
December 31, 2004 $56,000,000
March 31, 2005 $57,000,000
June 30, 2005 $59,000,000
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FISCAL QUARTER ENDING AMOUNT
--------------------- ------
September 30, 2005 $61,000,000
December 31, 2005 $63,000,000
March 31, 2006 $65,000,000
June 30, 2006 $67,000,000
September 30, 2006 $69,000,000
(f) CONSOLIDATED CAPITAL EXPENDITURES. Consolidated Capital
Expenditures as of the end of each fiscal year of the Borrower
indicated below shall be less than or equal to the following:
FISCAL YEAR AMOUNT
----------- ------
Fiscal Year 2000 $8,100,000
Fiscal Year 2001 $6,200,000
Fiscal Year 2002 $5,200,000
Fiscal Year 2003 $5,100,000
Fiscal Year 2004 $5,200,000
Fiscal Year 2005 $5,400,000
Fiscal Year 2006 $5,600,000
PLUS the unused amount available for Consolidated Capital Expenditures
under this Section 5.9 for the immediately preceding fiscal year
(excluding any carry forward available from any prior fiscal year),
PROVIDED, that with respect to any fiscal year, Capital Expenditures
made during any such fiscal year shall be deemed to be made first with
respect to the applicable limitation for such year and then with
respect to any carry forward amount to the extent applicable.
(g) CONSOLIDATED NET WORTH. Consolidated Net Worth with respect to
the Borrower and its Subsidiaries, as of the last day of each fiscal
quarter of the Borrower shall be greater than or equal to the sum of
(i) $41,888,000 plus (ii) 75% of positive Consolidated Net Income since
the Closing Date plus (iii) 100% of any Equity Issuances.
Section 5.10 ADDITIONAL SUBSIDIARY GUARANTORS.
The Credit Parties will cause each of their Domestic Subsidiaries,
whether newly formed, after acquired or otherwise existing, to promptly become a
Guarantor hereunder by way of execution of a Joinder Agreement. The guaranty
obligations of any such Additional Credit Party shall be secured by, among other
things, the Collateral of the Additional Credit Party.
Section 5.11 COMPLIANCE WITH LAW.
Each Credit Party will, and will cause each of its Subsidiaries to,
comply with all laws, rules, regulations and orders, and all applicable
restrictions imposed by all Governmental Authorities, applicable to it and its
Property if noncompliance with any such law, rule, regulation, order or
restriction could reasonably be expected to have a Material Adverse Effect.
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Section 5.12 PLEDGED ASSETS.
Each Credit Party will, and will cause each of its Subsidiaries to be
subject at all times to a first priority, perfected Lien with respect to all of
each such Credit Party's and such Subsidiary's Collateral (subject in each case
to Permitted Liens) in favor of the Administrative Agent pursuant to the terms
and conditions of the Security Documents or such other security documents as the
Administrative Agent shall reasonably request. Each Credit Party shall, and
shall cause each of its Subsidiaries to, adhere to the covenants regarding the
location of personal property as set forth in the Security Documents. Each
Credit Party shall, and shall cause each of its Subsidiaries, promptly, and in
any event within thirty (30) days after such Person shall have entered into any
Government Contract, to (a) notify the Administrative Agent thereof, (b) execute
an Instrument of Assignment together with a Notice of Assignment with respect to
such Government Contract to the applicable contracting officer and the
disbursing officer (with copies thereof delivered simultaneously to the
Administrative Agent) and (c) provide an updated SCHEDULE A to the Lockbox
Agreement to reflect the addition of such Government Contract to the Collateral
subject to the terms thereof. Upon any Credit Party's receipt of any
modification from the applicable Governmental Authority, the applicable Credit
Party shall immediately forward such modification to the Administrative Agent.
Section 5.13 BANK GROUP MEETING.
Each Credit Party will, and will cause each of its Subsidiaries to,
upon the request by the Required Lenders, be available for and participate in
periodic meetings with the Lenders hereunder to discuss issues related to the
management and operations of the Credit Parties' business and such other matters
as may be necessary or desirable; provided, however that so long as no Default
or Event of Default shall have occurred and be continuing, such meetings shall
not be required more frequently than once per fiscal year of the Borrower.
Section 5.14 EMPLOYEE BENEFIT PLANS.
The Borrower shall not, and shall not permit any of its Subsidiaries or
any ERISA Affiliate, without the prior approval of the Agents, (a) to establish
or contribute to any Defined Benefit Plan or other employee benefit arrangement
which provides post-retirement welfare benefits or "parachute payments" (within
the meaning of Section 280G(b) of the Code); or (b) to amend any Plan if the
effect of such amendment would cause such Plan to be a plan or arrangement
described in clause (a) hereof.
Section 5.15 INTEREST RATE PROTECTION.
The Borrower shall, within 90 days of the Closing Date, enter into
interest rate protection agreements protecting against fluctuations in interest
rates as to which the material terms are satisfactory to the Administrative
Agent, which agreements shall provide coverage in an amount not less than
$62,500,000 and for a duration of not less than three years.
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Section 5.16 ENVIRONMENTAL COMPLIANCE.
Within 60 days after the Closing Date, the Borrower shall provide
evidence satisfactory to the Agents that procedures have been implemented to
evaluate and bring into compliance as required under applicable Environmental
Laws the ongoing compliance recommendations set forth on Schedule 5.16 as
identified in those certain Phase I Environmental Site Assessments prepared by
SCS Engineers with respect to the Properties located at 000 Xxxxxxx Xxxxxx, Xxxx
Xxxxxx Xxxxx, Xxxxxxx; 000 Xxxx Xxxxxxx, X.X., Xxxx Xxxxxx Xxxxx, Xxxxxxx; 000
Xxxxx Xxxxxxxxxx Xxxxxxxxx, Xxxxxxxxxx, Xxxxxxx; and 0000 Xxxxx Xxxxxxx
Xxxxxxxxx, Xxxxxx, Xxxxx.
Section 5.17 FURTHER ASSURANCES.
(a) As soon as practicable, but in any event within 60 days after the
Closing Date, in the event Continental Electronics Corporation and each of its
Subsidiaries have not been liquidated, the Borrower shall provide evidence
satisfactory to the Agents that the stock pledge given by Continental
Electronics Corporation is a valid stock pledge, which evidence may include,
among other things, an amendment to the bylaws of Continental Electronics
Corporation eliminating the restrictive legend required thereby or delivery of
new stock certificates. In addition, if such liquidation does not occur within
such 60 day period, each of the Subsidiaries of Continental Electronics
Corporation shall enter into the Pledge Agreement and comply with all applicable
requirements thereunder.
(b) The Borrower shall liquidate and dissolve Anarad, Inc. as soon as
practicable following the satisfaction of a judgment against Anarad, Inc. in
that certain matter of ANARAD, INC. V. MILNUCORP.
(c) As soon as practicable, but in any event within 30 days after the
Closing Date, the Borrower shall deliver to the Agents copies of fully executed
and sealed instruments of assignment ("INSTRUMENTS OF ASSIGNMENT") in the form
supplied by the Agents to the Borrower, with all blanks properly completed, and
copies of the corresponding notices of assignment ("NOTICES OF ASSIGNMENT"),
with all blanks properly completed, for the Government Contracts identified by
Agents on Schedule 5.17(c). The Borrower shall deliver each Notice of Assignment
with the corresponding Instrument of Assignment attached thereto for each of
such Government Contracts to the applicable contracting officer and the
disbursing officer for each such Government Contract (with copies thereof
delivered simultaneously to the Administrative Agent). Upon the Borrower's
receipt of any modification of such Government Contracts from the applicable
Governmental Authority, the Borrower shall immediately forward such modification
to the Administrative Agent.
(d) As soon as practicable, but in any event within 60 days after the
Closing Date, the Borrower shall furnish evidence satisfactory to the Agents
that the Borrower, or one of its Subsidiaries, has full title and ownership of a
substantial portion of the patents and trademarks identified on Schedule 3.16,
and in any event within 180 days after the Closing Date, any remaining portion
of such patents and trademarks, free and clear of any liens and otherwise
conforming to the representations and warranties set forth in Section 3.16, and
shall execute and deliver to the Agents instruments, in a form suitable for
filing with the United States Patent and
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Trademark Office, that evidence the transfers of such patents and trademarks
from LTV Aerospace and Defense, through any intermediate owners, to SierraTech,
Inc.
(e) As soon as practicable, but in any event within 30 days after the
Closing Date, the Borrower shall deliver all of the real property collateral
identified in Section 4.1(f) in form and substance satisfactory to the Agents.
(f) As soon as practicable, but in any event within 60 days after the
Closing Date, the Borrower shall provide (i) evidence satisfactory to the Agents
that Coastal Lumber, S.A. has been liquidated and dissolved or (ii) a pledge of
the stock of Coastal Lumber, S.A. in accordance with the provisions of the
Pledge Agreement.
Section 5.18 SPIN-OFF.
The Spin-Off shall occur contemporaneously with the closing of the
Acquisition or immediately thereafter on the Closing Date and Tech-Sym
Corporation shall have made a contribution to the Borrower as required pursuant
to the terms of Section 2.1(a) and such amounts shall have been applied in
accordance with provisions thereof.
ARTICLE VI
NEGATIVE COVENANTS
The Credit Parties hereby covenant and agree that on the Closing Date,
and thereafter for so long as this Agreement is in effect and until the
Commitments have terminated, no Note remains outstanding and unpaid and the
Credit Party Obligations, together with interest, Commitment Fee and all other
amounts owing to the Administrative Agent or any Lender hereunder, are paid in
full that:
Section 6.1 INDEBTEDNESS.
The Borrower will not, nor will it permit any Subsidiary to, contract,
create, incur, assume or permit to exist any Indebtedness, except:
(a) Indebtedness arising or existing under this Agreement and the
other Credit Documents;
(b) Indebtedness of the Borrower and its Subsidiaries existing as
of the Closing Date as referenced in the financial statements
referenced in Section 3.1 (and set out more specifically in SCHEDULE
6.1(b)) hereto and renewals, refinancings or extensions thereof in a
principal amount not in excess of that outstanding as of the date of
such renewal, refinancing or extension;
(c) Indebtedness of the Borrower and its Subsidiaries incurred
after the Closing Date consisting of Capital Leases or Indebtedness
incurred to provide
77
all or a portion of the purchase price or cost of construction of an
asset provided that (i) such Indebtedness when incurred shall not
exceed the purchase price or cost of construction of such asset; (ii)
no such Indebtedness shall be refinanced for a principal amount in
excess of the principal balance outstanding thereon at the time of such
refinancing; and (iii) the total amount of all such Indebtedness shall
not exceed $1,000,000 at any time outstanding;
(d) Unsecured intercompany Indebtedness among the Borrower and its
Subsidiaries, PROVIDED that any such Indebtedness shall be (i) fully
subordinated to the Credit Party Obligations hereunder on terms
reasonably satisfactory to the Administrative Agent and (ii) to the
extent the principal amount of such Indebtedness in the aggregate is
equal to or greater than $250,000, evidenced by promissory notes which
shall be pledged to the Administrative Agent as Collateral for the
Credit Party Obligations;
(e) Indebtedness and obligations owing under Hedging Agreements
relating to the Loans hereunder and other Hedging Agreements entered
into in order to manage existing or anticipated interest rate, exchange
rate or commodity price risks and not for speculative purposes;
(f) Indebtedness and obligations of Credit Parties owing under
documentary letters of credit for the purchase of goods or other
merchandise (but not under standby, direct pay or other letters of
credit except for the Letters of Credit hereunder) generally;
(g) Indebtedness in respect of Guaranty Obligations (other than
Guaranty Obligations permitted pursuant to Sections 6.1(a) and 6.3) in
an aggregate amount not to exceed $500,000 at any time outstanding;
(h) Indebtedness owing under the Subordinated Notes; and
(i) other Indebtedness of the Borrower and its Subsidiaries which
does not exceed $500,000 in the aggregate at any time outstanding.
Section 6.2 LIENS.
The Borrower will not, nor will it permit any Subsidiary to, contract,
create, incur, assume or permit to exist any Lien with respect to any of its
property or assets of any kind (whether real or personal, tangible or
intangible), whether now owned or hereafter acquired, except for Permitted
Liens.
Section 6.3 GUARANTY OBLIGATIONS.
The Borrower will not, nor will it permit any other Credit Party to,
enter into or otherwise become or be liable in respect of any Guaranty
Obligations (excluding specifically therefrom endorsements in the ordinary
course of business of negotiable instruments for deposit or collection) other
than (i) those in favor of the Lenders in connection herewith, (ii) Guaranty
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Obligations by the Borrower or its Subsidiaries of Indebtedness permitted under
Section 6.1(g) (except, as regards Indebtedness under Section 6.1(b) thereof,
only if and to the extent such Indebtedness was guaranteed on the Closing Date)
and (iii) Guaranty Obligations in respect of the Subordinated Notes.
Section 6.4 NATURE OF BUSINESS.
The Borrower will not, nor will it permit any other Credit Party to,
alter the character of its business in any material respect from that conducted
as of the Closing Date.
Section 6.5 CONSOLIDATION, MERGER, SALE OR PURCHASE OF ASSETS, ETC.
The Borrower will not, nor will it permit any Subsidiary to,
(a) dissolve, liquidate or wind up its affairs, sell, transfer,
lease or otherwise dispose of its property or assets or agree to do so
at a future time except the following, without duplication, shall be
expressly permitted:
(i) Specified Sales;
(ii) the sale, transfer, lease or other disposition of property
or assets (A) to an unrelated party not in the ordinary course of
business (other than Specified Sales), where and to the extent that
they are the result of a Recovery Event or (B) the sale, lease,
transfer or other disposition of machinery, parts and equipment no
longer used or useful in the conduct of the business of the
Borrower or any of its Subsidiaries, as appropriate, in its
reasonable discretion, so long as and the net proceeds therefrom
are used to repair or replace damaged property or to purchase or
otherwise acquire new assets or property, PROVIDED that such
purchase or acquisition is committed to within 180 days of receipt
of the net proceeds and such purchase or acquisition is consummated
within 270 days of receipt of such proceeds, PROVIDED, FURTHER,
that pending any such purchase or acquisition, such proceeds shall
be held in a cash collateral account pledged to the Administrative
Agent for the ratable benefit of the Lenders;
(iii) the sale, lease or transfer of property or assets (at
fair value) between the Borrower and any Guarantor;
(iv) the sale, lease or transfer of property or assets from a
Credit Party other than the Borrower to another Credit Party;
(v) the sale, lease or transfer of property or assets not to
exceed $1,000,000 in the aggregate in any fiscal year; and
(vi) the sale, transfer or other disposition of the Mortgaged
Property located at 000 Xxxx Xxxxxxx, Xxxx Xxxxxx Xxxxx, Xxxxxxx so
long as the net proceeds therefrom in an amount not to exceed
$3,500,000 are used to (i)
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purchase a new parcel of real property in the same general vicinity
as said Mortgaged Property and (ii) construct a new facility
thereon, provided that such construction shall commence within 180
days of Borrower's receipt of the net proceeds from such sale,
transfer or other disposition;
PROVIDED, that in each case at least 75% of the consideration received
therefor by the Borrower or any such Subsidiary is in the form of cash
or Cash Equivalents; PROVIDED, FURTHER, that with respect to sales of
assets permitted hereunder only, the Administrative Agent shall be
entitled, without the consent of the Required Lenders, to release its
Liens relating to the particular assets sold, and in the event the
requirements set forth in Section 6.5(a)(vi) above are satisfied, the
Administrative Agent shall release its lien with respect to such
Mortgaged Property; or
(b) (i) purchase, lease or otherwise acquire (in a single
transaction or a series of related transactions) the property or assets
of any Person (other than purchases or other acquisitions of inventory,
leases, materials, property and equipment in the ordinary course of
business, except as otherwise limited or prohibited herein) provided
that so long as no Default or Event of Default shall have occurred and
be continuing or would result therefrom, the Borrower may acquire all
or a majority of the Capital Stock or other ownership interest in any
Person (in a similar or related line of business and which has earnings
before interest, taxes, depreciation and amortization for the prior
four fiscal quarters in an amount greater than $0) or all or a
substantial portion of the assets, property and/or operations of a
Person (in a similar or related line of business and which had earnings
before interest, taxes, depreciation and amortization for the prior
four fiscal quarters in an amount greater than $0) in an aggregate
amount not to exceed $2,500,000 for any individual acquisition and
$5,000,000 in the aggregate for all such acquisitions in any fiscal
year; provided, however that after giving effect to any such
acquisition otherwise permitted hereunder, there shall be not less than
$5,000,000 of availability under Section 2.1 or (ii) enter into any
transaction of merger or consolidation, except for (A) investments or
acquisitions permitted pursuant to Section 6.6, and (B) the merger or
consolidation of a Credit Party with and into another Credit Party,
PROVIDED that if the Borrower is a party thereto, the Borrower will be
the surviving corporation.
Section 6.6 ADVANCES, INVESTMENTS AND LOANS.
The Borrower will not, nor will it permit any Subsidiary to, lend money
or extend credit or make advances to any Person, or purchase or acquire any
stock, obligations or securities of, or any other interest in, or make any
capital contribution to, any Person except for Permitted Investments.
Section 6.7 TRANSACTIONS WITH AFFILIATES.
Except as permitted in subsection (iv) of the definition of Permitted
Investments and Section 6.17, the Borrower will not, nor will it permit any
Subsidiary to, (a) enter into any transaction or series of transactions, whether
or not in the ordinary course of business, with any officer, director,
shareholder or Affiliate other than on terms and conditions substantially as
80
favorable as would be obtainable in a comparable arm's-length transaction with a
Person other than an officer, director, shareholder or Affiliate, (b) amend or
terminate any existing agreement with any Affiliate, (c) purchase from or
provide to an Affiliate any selling, general, management or administrative
services, (d) directly or indirectly make any sales to or purchases from an
Affiliate or (e) increase the compensation being paid to an Affiliate.
Section 6.8 OWNERSHIP OF SUBSIDIARIES; RESTRICTIONS.
The Borrower will not, nor will it permit any Subsidiary to, create,
form or acquire any Subsidiaries, except for Domestic Subsidiaries which are
joined as Additional Credit Parties in accordance with the terms hereof. The
Borrower will not sell, transfer, pledge or otherwise dispose of any Capital
Stock or other equity interests in any of its Subsidiaries, nor will it permit
any of its Subsidiaries to issue, sell, transfer, pledge or otherwise dispose of
any of their Capital Stock or other equity interests, except in a transaction
permitted by Section 6.5.
Section 6.9 FISCAL YEAR; ORGANIZATIONAL DOCUMENTS; MATERIAL CONTRACTS.
The Borrower will not, nor will it permit any of its Subsidiaries to,
change its fiscal year. The Borrower will not, nor will it permit any Subsidiary
to, amend, modify or change its articles of incorporation (or corporate charter
or other similar organizational document) or bylaws (or other similar document)
without the prior written consent of the Required Lenders. The Borrower will
not, nor will it permit any of its Subsidiaries to, without the prior written
consent of the Administrative Agent, amend, modify, cancel or terminate or fail
to renew or extend or permit the amendment, modification, cancellation or
termination of any of the Material Contracts, except in the event that such
amendments, modifications, cancellations or terminations could not reasonably be
expected to have a Material Adverse Effect.
Section 6.10 LIMITATION ON RESTRICTED ACTIONS.
Except with respect to the Subordinated Notes as in effect on the
Closing Date, the Borrower will not, nor will it permit any Subsidiary to,
directly or indirectly, create or otherwise cause or suffer to exist or become
effective any encumbrance or restriction on the ability of any such Person to
(a) pay dividends or make any other distributions to any Credit Party on its
Capital Stock or with respect to any other interest or participation in, or
measured by, its profits, (b) pay any Indebtedness or other obligation owed to
any Credit Party, (c) make loans or advances to any Credit Party, (d) sell,
lease or transfer any of its properties or assets to any Credit Party, or (e)
act as a Guarantor and pledge its assets pursuant to the Credit Documents or any
renewals, refinancings, exchanges, refundings or extension thereof, except (in
respect of any of the matters referred to in clauses (a)-(d) above) for such
encumbrances or restrictions existing under or by reason of (i) this Agreement
and the other Credit Documents, (ii) applicable law, (iii) any document or
instrument governing Indebtedness incurred pursuant to Section 6.1(c), PROVIDED
that any such restriction contained therein relates only to the asset or assets
constructed or acquired in connection therewith or (iv) any Permitted Lien or
any document or instrument governing any Permitted Lien, PROVIDED that any such
restriction contained therein relates only to the asset or assets subject to
such Permitted Lien.
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Section 6.11 RESTRICTED PAYMENTS.
The Borrower will not, nor will it permit any Subsidiary to, directly
or indirectly, declare, order, make or set apart any sum for or pay any
Restricted Payment, except (a) to make dividends payable solely in the same
class of Capital Stock of such Person, (b) to make dividends or other
distributions payable to any Credit Party (other than the Parent) (directly or
indirectly through Subsidiaries) and (c) provided that no Default or Event of
Default has occurred and is continuing at such time or would be directly or
indirectly caused as a result thereof, the Borrower may pay cash distributions
in respect of cash interest owing on the Subordinated Notes in an aggregate
amount not to exceed $6,150,000 annually plus, to the extent applicable, any
amounts then due and owing under the Subordinated Notes with respect to (i)
deferred interest, (ii) default interest and (iii) obligations in respect of
fees.
Section 6.12 PREPAYMENTS OF INDEBTEDNESS, ETC.
The Borrower will not, nor will it permit any Subsidiary to, after the
issuance thereof, amend or modify (or permit the amendment or modification of)
any of the terms of any Indebtedness (including, without limitation, the
Subordinated Notes or Subordinated Note Documents related thereto) if such
amendment or modification would add or change any terms in a manner adverse to
the issuer of such Indebtedness or the Lenders hereunder, or shorten the final
maturity or average life to maturity or require any payment to be made sooner
than originally scheduled or increase the interest rate applicable thereto or
change any subordination provision thereof.
Section 6.13 SALE LEASEBACKS.
The Borrower will not, nor will it permit any Subsidiary to, directly
or indirectly, become or remain liable as lessee or as guarantor or other surety
with respect to any lease, whether an operating lease or a Capital Lease, of any
property (whether real, personal or mixed), whether now owned or hereafter
acquired in excess of $500,000 in the aggregate on an annual basis, (a) which
the Borrower or any Subsidiary has sold or transferred or is to sell or transfer
to a Person which is not the Borrower or any Subsidiary or (b) which the
Borrower or any Subsidiary intends to use for substantially the same purpose as
any other property which has been sold or is to be sold or transferred by the
Borrower or any Subsidiary to another Person which is not the Borrower or any
Subsidiary in connection with such lease.
Section 6.14 NO FURTHER NEGATIVE PLEDGES.
The Borrower will not, nor will it permit any Subsidiary to, enter
into, assume or become subject to any agreement prohibiting or otherwise
restricting the creation or assumption of any Lien upon its properties or
assets, whether now owned or hereafter acquired, or requiring the grant of any
security for such obligation if security is given for some other obligation,
except (a) pursuant to this Agreement and the other Credit Documents, (b)
pursuant to any document or instrument governing Indebtedness incurred pursuant
to Section 6.1(c), PROVIDED that any such restriction contained therein relates
only to the asset or assets constructed or acquired in connection therewith and
(c) in connection with any Permitted Lien or any document or
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instrument governing any Permitted Lien, PROVIDED that any such restriction
contained therein relates only to the asset or assets subject to such Permitted
Lien.
Section 6.15 PARENT HOLDING COMPANY.
The Parent shall not engage in any operations, business or activity
other than holding all or substantially all of the Capital Stock of the
Borrower.
Section 6.16 LEASE OBLIGATIONS.
The Credit Parties will not, nor will they permit any Subsidiaries, to
enter into, assume or permit to exist any obligations with respect to Capital
Leases or for the payment of rent under Operating Leases which in the aggregate
for all such Persons in any fiscal year would be in excess of $6,500,000.
Notwithstanding the foregoing, Borrower shall be permitted to become liable as a
lessee with respect to an operating lease for the replacement facility for the
Mortgaged Property located at 000 Xxxx Xxxxxxx, Xxxx Xxxxxx Xxxxx, Xxxxxxx in an
amount not to exceed $250,000 annually.
Section 6.17 MANAGEMENT FEE.
So long as no Default or Event of Default shall have occurred and be
continuing or would result therefrom, the Borrower may accrue and pay management
fees to the Sponsor and/or its Affiliates in an aggregate annual amount not to
exceed $900,000.
ARTICLE VII
EVENTS OF DEFAULT
Section 7.1 EVENTS OF DEFAULT.
An Event of Default shall exist upon the occurrence of any of the
following specified events (each an "EVENT OF DEFAULT"):
(a) The Borrower shall fail to pay any principal on any Note when
due in accordance with the terms thereof or hereof; or the Borrower
shall fail to reimburse the Issuing Lender for any LOC Obligations when
due in accordance with the terms hereof; or the Borrower shall fail to
pay any interest on any Note or any fee or other amount payable
hereunder when due in accordance with the terms thereof or hereof and
such failure shall continue unremedied for three (3) Business Days (or
any Guarantor shall fail to pay on the Guaranty in respect of any of
the foregoing or in respect of any other Guaranty Obligations
thereunder); or
(b) Any representation or warranty made or deemed made herein, in
the Security Documents or in any of the other Credit Documents or which
is contained in any certificate, document or financial or other
statement furnished at any time under or in
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connection with this Agreement shall prove to have been incorrect,
false or misleading in any material respect on or as of the date made
or deemed made; or
(c) (i) Any Credit Party shall fail to perform, comply with or
observe any term, covenant or agreement applicable to it contained in
Section 5.4, Section 5.7, Section 5.9, Section 5.17, Section 5.18 or
Article VI hereof ; or (ii) any Credit Party shall fail to comply with
any other covenant, contained in this Credit Agreement or the other
Credit Documents or any other agreement, document or instrument among
any Credit Party, the Administrative Agent and the Lenders or executed
by any Credit Party in favor of the Administrative Agent or the Lenders
(other than as described in Sections 7.1(a) or 7.1(c)(i) above), and in
the event such breach or failure to comply is capable of cure, is not
cured within thirty (30) days after the earlier of (A) notification
from the Administrative Agent to the Borrower of the occurrence of such
breach or failure to comply or (B) a Responsible Officer of the
Borrower becoming aware of such breach or failure to comply; or
(d) The Borrower or any of its Subsidiaries shall (i) default in
any payment of principal of or interest on any Indebtedness (other than
the Notes) in a principal amount outstanding of at least $250,000 in
the aggregate for the Borrower and any of its Subsidiaries beyond the
period of grace (not to exceed 30 days), if any, provided in the
instrument or agreement under which such Indebtedness was created; or
(ii) default in the observance or performance of any other agreement or
condition relating to any Indebtedness in a principal amount
outstanding of at least $250,000 in the aggregate for the Borrower and
its Subsidiaries or contained in any instrument or agreement
evidencing, securing or relating thereto, or any other event shall
occur or condition exist, the effect of which default or other event or
condition is to cause, or to permit the holder or holders of such
Indebtedness or beneficiary or beneficiaries of such Indebtedness (or a
trustee or agent on behalf of such holder or holders or beneficiary or
beneficiaries) to cause, with the giving of notice if required, such
Indebtedness to become due prior to its stated maturity; or
(e) (i) The Parent, the Borrower or any of its Subsidiaries shall
commence any case, proceeding or other action (A) under any existing or
future law of any jurisdiction, domestic or foreign, relating to
bankruptcy, insolvency, reorganization or relief of debtors, seeking to
have an order for relief entered with respect to it, or seeking to
adjudicate it a bankrupt or insolvent, or seeking reorganization,
arrangement, adjustment, winding-up, liquidation, dissolution,
composition or other relief with respect to it or its debts, or (B)
seeking appointment of a receiver, trustee, custodian, conservator or
other similar official for it or for all or any substantial part of its
assets, or the Parent, the Borrower or any Subsidiary shall make a
general assignment for the benefit of its creditors; or (ii) there
shall be commenced against the Parent, the Borrower or any Subsidiary
any case, proceeding or other action of a nature referred to in clause
(i) above which (A) results in the entry of an order for relief or any
such adjudication or appointment or (B) remains undismissed,
undischarged or unbonded for a period of 60 days; or (iii) there shall
be commenced against the Parent, the Borrower or any Subsidiary any
case, proceeding or other action seeking issuance of a warrant of
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attachment, execution, distraint or similar process against all or any
substantial part of its assets which results in the entry of an order
for any such relief which shall not have been vacated, discharged, or
stayed or bonded pending appeal within 60 days from the entry thereof;
or (iv) the Parent, the Borrower or any Subsidiary shall take any
action in furtherance of, or indicating its consent to, approval of, or
acquiescence in, any of the acts set forth in clause (i), (ii), or
(iii) above; or (v) the Parent, the Borrower or any Subsidiary shall
generally not, or shall be unable to, or shall admit in writing its
inability to, pay its debts as they become due; or (vi) any uninsured
damage to or loses, theft or destruction of any assets of the Parent,
the Borrower or any of its Subsidiaries shall occur that is in excess
of $750,000; or
(f) One or more judgments or decrees shall be entered against the
Borrower or any of its Subsidiaries involving in the aggregate a
liability (to the extent not paid when due or covered by insurance) of
$250,000 or more and all such judgments or decrees shall not have been
paid and satisfied, vacated, discharged, stayed or bonded pending
appeal within 30 days from the entry thereof; or
(g) (i) Any Person shall engage in any "prohibited transaction" (as
defined in Section 406 of ERISA or Section 4975 of the Code) involving
any Plan, (ii) any "accumulated funding deficiency" (as defined in
Section 302 of ERISA), whether or not waived, shall exist with respect
to any Plan or any Lien in favor of the PBGC or a Plan (other than a
Permitted Lien) shall arise on the assets of the Borrower or any
Commonly Controlled Entity, (iii) a Reportable Event shall occur with
respect to, or proceedings shall commence to have a trustee appointed,
or a trustee shall be appointed, to administer or to terminate, any
Single Employer Plan, which Reportable Event or commencement of
proceedings or appointment of a Trustee is, in the reasonable opinion
of the Required Lenders, likely to result in the termination of such
Plan for purposes of Title IV of ERISA, (iv) any Single Employer Plan
shall terminate for purposes of Title IV of ERISA, (v) the Borrower,
any of its Subsidiaries or any Commonly Controlled Entity shall, or in
the reasonable opinion of the Required Lenders is likely to, incur any
liability in connection with a withdrawal from, or the Insolvency or
Reorganization of, any Multiemployer Plan or (vi) any other similar
event or condition shall occur or exist with respect to a Plan; and in
each case in clauses (i) through (vi) above, such event or condition,
together with all other such events or conditions, if any, could have a
Material Adverse Effect; or
(h) There shall occur a Change of Control; or
(i) The Guaranty or any provision thereof shall cease to be in full
force and effect or any Guarantor or any Person acting by or on behalf
of any Guarantor shall deny or disaffirm any Guarantor's obligations
under the Guaranty; or
(j) Any other Credit Document shall fail to be in full force and
effect or to give the Administrative Agent and/or the Lenders the
security interests, liens, rights, powers and privileges purported to
be created thereby (except as such documents may be
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terminated or no longer in force and effect in accordance with the
terms thereof, other than those indemnities and provisions which by
their terms shall survive); or
(k) Any default shall occur under any of the Subordinated Notes; or
(l) (i) There shall be a material default under any Government
Contract or other Material Contract; (ii) a notice of termination shall
have been issued under any material Government Contract or other
Material Contract; or (iii) a cure notice issued under any material
Government Contract or other Material Contract shall remain uncured
beyond (x) the expiration of the time period available to the Borrower
or other Credit Party, as applicable, pursuant to such material
Government Contract or other Material Contract and/or such cure notice
(as the case may be), to cure the noticed default, or (y) the date on
which the other contracting party is entitled to exercise its rights
and remedies under the material Government Contract or other Material
Contract as a consequence of such default; or
(m) (i) Any Credit Party is debarred or suspended from contracting
with any Governmental Authority; (ii) a notice of debarment or
suspension has been issued to or received by any Credit Party; or (iii)
an investigation or inquiry by any Governmental Authority relating to
any Credit Party and involving fraud, deception or willful misconduct
shall have been commenced in connection with any material Government
Contract or other Material Contract or any Credit Party's activities
which, if adversely determined, could reasonably be expected to result
in the termination of such material Government Contract or other
Material Contract or, with respect to any Credit Party's activities,
could reasonably be expected to have a Material Adverse Effect.
(n) Any payment required pursuant to the terms of the Keepwell
Agreement to be made on the Keepwell Payment Date (as such term is
defined therein) shall not have been made as provided therein.
Section 7.2 ACCELERATION; REMEDIES.
Upon the occurrence of an Event of Default, then, and in any such
event, (a) if such event is an Event of Default specified in Section 7.1(e)
above, automatically the Commitments shall immediately terminate and the Loans
(with accrued interest thereon), and all other amounts under the Credit
Documents (including without limitation the maximum amount of all contingent
liabilities under Letters of Credit) shall automatically and immediately become
due and payable without notice or demand, and (b) if such event is any other
Event of Default, either or both of the following actions may be taken: (i) with
the written consent of the Required Lenders, the Administrative Agent may, or
upon the written request of the Required Lenders, the Administrative Agent
shall, by notice to the Borrower declare the Commitments to be terminated
forthwith, whereupon the Commitments shall immediately terminate; and (ii) the
Administrative Agent may, or upon the written request of the Required Lenders,
the Administrative Agent shall, by notice of default to the Borrower, declare
the Loans (with accrued interest thereon) and all other amounts owing under this
Agreement and the Notes to be due and payable forthwith and direct the Borrower
to pay to the Administrative Agent cash collateral as security for the LOC
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Obligations for subsequent drawings under then outstanding Letters of Credit an
amount equal to the maximum amount of which may be drawn under Letters of Credit
then outstanding, whereupon the same shall immediately become due and payable.
ARTICLE VIII
THE AGENT
Section 8.1 APPOINTMENT.
Each Lender hereby irrevocably designates and appoints First Union
National Bank as the Administrative Agent of such Lender under this Agreement,
and each such Lender irrevocably authorizes First Union National Bank, as the
Administrative Agent for such Lender, to take such action on its behalf under
the provisions of this Agreement and to exercise such powers and perform such
duties as are expressly delegated to the Administrative Agent by the terms of
this Agreement, together with such other powers as are reasonably incidental
thereto. Notwithstanding any provision to the contrary elsewhere in this
Agreement, the Administrative Agent shall not have any duties or
responsibilities, except those expressly set forth herein, or any fiduciary
relationship with any Lender, and no implied covenants, functions,
responsibilities, duties, obligations or liabilities shall be read into this
Agreement or otherwise exist against the Administrative Agent.
Section 8.2 DELEGATION OF DUTIES.
The Administrative Agent may execute any of its duties under this
Agreement by or through agents or attorneys-in-fact and shall be entitled to
advice of counsel concerning all matters pertaining to such duties. The
Administrative Agent shall not be responsible for the negligence or misconduct
of any agents or attorneys-in-fact selected by it with reasonable care. Without
limiting the foregoing, the Administrative Agent may appoint one of its
affiliates as its agent to perform the functions of the Administrative Agent
hereunder relating to the advancing of funds to the Borrower and distribution of
funds to the Lenders and to perform such other related functions of the
Administrative Agent hereunder as are reasonably incidental to such functions.
Section 8.3 EXCULPATORY PROVISIONS.
Neither the Administrative Agent nor any of its officers, directors,
employees, agents, attorneys-in-fact or affiliates shall be (i) liable for any
action lawfully taken or omitted to be taken by it or such Person under or in
connection with this Agreement (except for its or such Person's own gross
negligence or willful misconduct) or (ii) responsible in any manner to any of
the Lenders for any recitals, statements, representations or warranties made by
the Borrower or any officer thereof contained in this Agreement or in any
certificate, report, statement or other document referred to or provided for in,
or received by the Administrative Agent under or in connection with, this
Agreement or for the value, validity, effectiveness, genuineness, enforceability
or sufficiency of any of the Credit Documents or for any failure of the Borrower
to
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perform its obligations hereunder or thereunder. The Administrative Agent shall
not be under any obligation to any Lender to ascertain or to inquire as to the
observance or performance by the Borrower of any of the agreements contained in,
or conditions of, this Agreement, or to inspect the properties, books or records
of the Borrower.
Section 8.4 RELIANCE BY ADMINISTRATIVE AGENT.
The Administrative Agent shall be entitled to rely, and shall be fully
protected in relying, upon any Note, writing, resolution, notice, consent,
certificate, affidavit, letter, cablegram, telegram, telecopy, telex or teletype
message, statement, order or other document or conversation believed by it in
good faith to be genuine and correct and to have been signed, sent or made by
the proper Person or Persons and upon advice and statements of legal counsel
(including, without limitation, counsel to the Borrower), independent
accountants and other experts selected by the Administrative Agent. The
Administrative Agent may deem and treat the payee of any Note as the owner
thereof for all purposes unless (a) a written notice of assignment, negotiation
or transfer thereof shall have been filed with the Administrative Agent and (b)
the Administrative Agent shall have received the written agreement of such
assignee to be bound hereby as fully and to the same extent as if such assignee
were an original Lender party hereto, in each case in form satisfactory to the
Administrative Agent. The Administrative Agent shall be fully justified in
failing or refusing to take any action under this Agreement unless it shall
first receive such advice or concurrence of the Required Lenders as it deems
appropriate or it shall first be indemnified to its satisfaction by the Lenders
against any and all liability and expense which may be incurred by it by reason
of taking or continuing to take any such action. The Administrative Agent shall
in all cases be fully protected in acting, or in refraining from acting, under
any of the Credit Documents in accordance with a request of the Required Lenders
or all of the Lenders, as may be required under this Agreement, and such request
and any action taken or failure to act pursuant thereto shall be binding upon
all the Lenders and all future holders of the Notes.
Section 8.5 NOTICE OF DEFAULT.
The Administrative Agent shall not be deemed to have knowledge or
notice of the occurrence of any Default or Event of Default hereunder unless the
Administrative Agent has received notice from a Lender or the Borrower referring
to this Agreement, describing such Default or Event of Default and stating that
such notice is a "notice of default". In the event that the Administrative Agent
receives such a notice, the Administrative Agent shall give prompt notice
thereof to the Lenders. The Administrative Agent shall take such action with
respect to such Default or Event of Default as shall be reasonably directed by
the Required Lenders; PROVIDED, HOWEVER, that unless and until the
Administrative Agent shall have received such directions, the Administrative
Agent may (but shall not be obligated to) take such action, or refrain from
taking such action, with respect to such Default or Event of Default as it shall
deem advisable in the best interests of the Lenders except to the extent that
this Credit Agreement expressly requires that such action be taken, or not
taken, only with the consent or upon the authorization of the Required Lenders,
or all of the Lenders, as the case may be.
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Section 8.6 NON-RELIANCE ON ADMINISTRATIVE AGENT AND OTHER LENDERS.
Each Lender expressly acknowledges that neither the Administrative
Agent nor any of its officers, directors, employees, agents, attorneys-in-fact
or affiliates has made any representation or warranty to it and that no act by
the Administrative Agent hereinafter taken, including any review of the affairs
of the Borrower, shall be deemed to constitute any representation or warranty by
the Administrative Agent to any Lender. Each Lender represents to the
Administrative Agent that it has, independently and without reliance upon the
Administrative Agent or any other Lender, and based on such documents and
information as it has deemed appropriate, made its own appraisal of and
investigation into the business, operations, property, financial and other
condition and creditworthiness of the Borrower and made its own decision to make
its Loans hereunder and enter into this Agreement. Each Lender also represents
that it will, independently and without reliance upon the Administrative Agent
or any other Lender, and based on such documents and information as it shall
deem appropriate at the time, continue to make its own credit analysis,
appraisals and decisions in taking or not taking action under this Agreement,
and to make such investigation as it deems necessary to inform itself as to the
business, operations, property, financial and other condition and
creditworthiness of the Borrower. Except for notices, reports and other
documents expressly required to be furnished to the Lenders by the
Administrative Agent hereunder, the Administrative Agent shall not have any duty
or responsibility to provide any Lender with any credit or other information
concerning the business, operations, property, condition (financial or
otherwise), prospects or creditworthiness of the Borrower which may come into
the possession of the Administrative Agent or any of its officers, directors,
employees, agents, attorneys-in-fact or affiliates.
Section 8.7 INDEMNIFICATION.
The Lenders agree to indemnify the Administrative Agent in its capacity
hereunder (to the extent not reimbursed by the Borrower and without limiting the
obligation of the Borrower to do so), ratably according to their respective
Commitment Percentages in effect on the date on which indemnification is sought
under this Section, from and against any and all liabilities, obligations,
losses, damages, penalties, actions, judgments, suits, costs, expenses or
disbursements of any kind whatsoever which may at any time (including, without
limitation, at any time following the payment of the Notes) be imposed on,
incurred by or asserted against the Administrative Agent in any way relating to
or arising out of any Credit Document or any documents contemplated by or
referred to herein or therein or the transactions contemplated hereby or thereby
or any action taken or omitted by the Administrative Agent under or in
connection with any of the foregoing; PROVIDED, HOWEVER, that no Lender shall be
liable for the payment of any portion of such liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, costs, expenses or disbursements
to the extent resulting from the Agent's gross negligence or willful misconduct,
as determined by a court of competent jurisdiction. The agreements in this
Section 8.7 shall survive the termination of this Agreement and payment of the
Notes and all other amounts payable hereunder.
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Section 8.8 ADMINISTRATIVE AGENT IN ITS INDIVIDUAL CAPACITY.
The Administrative Agent and its affiliates may make loans to, accept
deposits from and generally engage in any kind of business with the Borrower as
though the Administrative Agent were not the Administrative Agent hereunder.
With respect to its Loans made or renewed by it and any Note issued to it, the
Administrative Agent shall have the same rights and powers under this Agreement
as any Lender and may exercise the same as though it were not the Administrative
Agent, and the terms "Lender" and "Lenders" shall include the Administrative
Agent in its individual capacity.
Section 8.9 SUCCESSOR ADMINISTRATIVE AGENT.
The Administrative Agent may resign as Administrative Agent upon 30
days' prior notice to the Borrower and the Lenders. If the Administrative Agent
shall resign as Administrative Agent under this Agreement and the Notes, then
the Required Lenders shall appoint from among the Lenders a successor agent for
the Lenders, which successor agent shall be approved by the Borrower, whereupon
such successor agent shall succeed to the rights, powers and duties of the
Administrative Agent, and the term "Administrative Agent" shall mean such
successor agent effective upon such appointment and approval, and the former
Agent's rights, powers and duties as Administrative Agent shall be terminated,
without any other or further act or deed on the part of such former
Administrative Agent or any of the parties to this Agreement or any holders of
the Notes. After any retiring Agent's resignation as Administrative Agent, the
provisions of this Section 8.9 shall inure to its benefit as to any actions
taken or omitted to be taken by it while it was Administrative Agent under this
Agreement.
ARTICLE IX
MISCELLANEOUS
Section 9.1 AMENDMENTS, WAIVERS AND RELEASE OF COLLATERAL.
Neither this Agreement, nor any of the Notes, nor any of the other
Credit Documents, nor any terms hereof or thereof may be amended, supplemented,
waived or modified except in accordance with the provisions of this Section nor
may be released except as specifically provided herein or in the Security
Documents or in accordance with the provisions of this Section 9.1. The Required
Lenders may, or, with the written consent of the Required Lenders, the
Administrative Agent may, from time to time, (a) enter into with the Borrower
written amendments, supplements or modifications hereto and to the other Credit
Documents for the purpose of adding any provisions to this Agreement or the
other Credit Documents or changing in any manner the rights of the Lenders or of
the Borrower hereunder or thereunder or (b) waive, on such terms and conditions
as the Required Lenders may specify in such instrument, any of the requirements
of this Agreement or the other Credit Documents or any Default or Event of
Default and its consequences; PROVIDED, HOWEVER, that no such waiver and no such
amendment, waiver, supplement, modification or release shall:
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(i) reduce the amount or extend the scheduled date of maturity of
any Loan or Note or any installment thereon, or reduce the stated rate
of any interest or fee payable hereunder (other than interest at the
increased post-default rate) or extend the scheduled date of any
payment thereof or increase the amount or extend the expiration date of
any Lender's Commitment, in each case without the written consent of
each Lender directly affected thereby, or
(ii) amend, modify or waive any provision of this Section 9.1 or
reduce the percentage specified in the definition of Required Lenders,
without the written consent of all the Lenders, or
(iii) amend, modify or waive any provision of Article VIII without
the written consent of the then Administrative Agent, or
(iv) release any of the Guarantors from their obligations under the
Guaranty, without the written consent of all of the Lenders, or
(v) release all or substantially all of the Collateral, without the
written consent of all of the Lenders, or
(vi) without the consent of Lenders holding in the aggregate more
than 50% of the outstanding Tranche A Term Loans and 50% of the
outstanding Tranche B Term Loans, extend the time for or the amount or
the manner of application of proceeds of any mandatory prepayment
required by Section 2.8(b)(ii), (iii), (iv) or (v) hereof, or
(vii) without the consent of Lenders holding in the aggregate more
than 50% of the outstanding Tranche B Term Loans, amend any provision
that changes the allocation of any mandatory and/or optional payments
between the term loan facilities, or
(viii) amend, modify or waive any provision of the Credit Documents
requiring consent, approval or request of the Required Lenders or all
Lenders, without the written consent of all of the Required Lenders or
Lenders as appropriate and, PROVIDED, FURTHER, that no amendment,
waiver or consent affecting the rights or duties of the Administrative
Agent or the Issuing Lender under any Credit Document shall in any
event be effective, unless in writing and signed by the Administrative
Agent and/or the Issuing Lender, as applicable, in addition to the
Lenders required hereinabove to take such action, or
(ix) except as provided herein, permit additional Indebtedness to
be secured by the Collateral, or
(x) amend, modify or waive any provision of Section 5.17 without
the written consent of the Required Lenders, the Agents and the
Documentation Agent.
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Any such waiver, any such amendment, supplement or modification and any
such release shall apply equally to each of the Lenders and shall be binding
upon the Borrower, the other Credit Parties, the Lenders, the Administrative
Agent and all future holders of the Notes. In the case of any waiver that
specifically so provides, the Borrower, the other Credit Parties, the Lenders
and the Administrative Agent shall be restored to their former position and
rights hereunder and under the outstanding Loans and Notes and other Credit
Documents, and any Default or Event of Default waived shall be deemed to be
cured and not continuing; but no such waiver shall extend to any subsequent or
other Default or Event of Default, or impair any right consequent thereon.
Notwithstanding any of the foregoing to the contrary, the consent of
the Borrower shall not be required for any amendment, modification or waiver of
the provisions of Article VIII (other than the provisions of Section 8.9);
PROVIDED, HOWEVER, that the Administrative Agent will provide written notice to
the Borrower of any such amendment, modification or waiver. In addition, the
Borrower and the Lenders hereby authorize the Administrative Agent to modify
this Credit Agreement by unilaterally amending or supplementing SCHEDULE 2.1(a)
from time to time in the manner requested by the Borrower, the Administrative
Agent or any Lender in order to reflect any assignments or transfers of the
Loans as provided for hereunder; PROVIDED, HOWEVER, that the Administrative
Agent shall promptly deliver a copy of any such modification to the Borrower and
each Lender.
Notwithstanding the fact that the consent of all the Lenders is
required in certain circumstances as set forth above, (x) each Lender is
entitled to vote as such Lender sees fit on any bankruptcy reorganization plan
that affects the Loans, and each Lender acknowledges that the provisions of
Section 1126(c) of the Bankruptcy Code supersedes the unanimous consent
provisions set forth herein and (y) the Required Lenders may consent to allow a
Credit Party to use cash collateral in the context of a bankruptcy or insolvency
proceeding.
Section 9.2 NOTICES.
Except as otherwise provided in Article II, all notices, requests and
demands to or upon the respective parties hereto to be effective shall be in
writing (including by telecopy), and, unless otherwise expressly provided
herein, shall be deemed to have been duly given or made (a) when delivered by
hand, (b) when transmitted via telecopy (or other facsimile device) to the
number set out herein, (c) the day following the day on which the same has been
delivered prepaid to a reputable national overnight air courier service, or (d)
the third Business Day following the day on which the same is sent by certified
or registered mail, postage prepaid, in each case, addressed as follows in the
case of the Borrower, the other Credit Parties and the Administrative Agent, and
as set forth on SCHEDULE 9.2 in the case of the Lenders, or to such other
address as may be hereafter notified by the respective parties hereto and any
future holders of the Notes:
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The Borrower Integrated Defense Technologies, Inc.
and the other c/o The Veritas Capital Fund, L.P.
Credit Parties: 000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xx. Xxxxxx X. XxXxxx
Telecopier: (000) 000-0000
Telephone: (000) 000-0000
with a copy to:
Winston & Xxxxxx
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxxxx X. Xxxx, Esq.
Telecopier: (000) 000-0000
Telephone: (000) 000-0000
The Administrative First Union National Bank, as Administrative Agent
Agent: Charlotte Plaza
000 Xxxxx Xxxxxxx Xxxxxx, XX-00
Xxxxxxxxx, Xxxxx Xxxxxxxx 00000-0000
Attention: Syndication Agency Services
Telecopier: (000) 000-0000
Telephone: (000) 000-0000
with a copy to:
First Union National Bank
Xxx Xxxxx Xxxxx Xxxxxx, XX-0
Xxxxxxxxx, Xxxxx Xxxxxxxx 00000-0000
Attention: Xxxxx Santa Xxxx
Telecopier: (000) 000-0000
Telephone: (000) 000-0000
The Syndication CIBC World Markets Corp., as Syndication Agent
Agent: 000 Xxxxx Xxxxx Xxxxxx, Xxxxx 0000
Xxx Xxxxxxx, Xxxxxxxxxx 00000
Attention: Xxxx X. Xxxxxx
Telecopier: (000) 000-0000
Telephone: (000) 000-0000
Section 9.3 NO WAIVER; CUMULATIVE REMEDIES.
No failure to exercise and no delay in exercising, on the part of the
Administrative Agent or any Lender, any right, remedy, power or privilege
hereunder shall operate as a waiver thereof;
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nor shall any single or partial exercise of any right, remedy, power or
privilege hereunder preclude any other or further exercise thereof or the
exercise of any other right, remedy, power or privilege. The rights, remedies,
powers and privileges herein provided are cumulative and not exclusive of any
rights, remedies, powers and privileges provided by law.
Section 9.4 SURVIVAL OF REPRESENTATIONS AND WARRANTIES.
All representations and warranties made hereunder and in any document,
certificate or statement delivered pursuant hereto or in connection herewith
shall survive the execution and delivery of this Agreement and the Notes and the
making of the Loans, PROVIDED that all such representations and warranties shall
terminate on the date upon which the Commitments have been terminated and all
amounts owing hereunder and under any Notes have been paid in full.
Section 9.5 PAYMENT OF EXPENSES AND TAXES.
The Borrower agrees (a) to pay or reimburse the Administrative Agent
for all its reasonable out-of-pocket costs and expenses incurred in connection
with the development, preparation, negotiation, printing and execution of, and
any amendment, supplement or modification to, this Agreement and the other
Credit Documents and any other documents prepared in connection herewith or
therewith, and the consummation and administration of the transactions
contemplated hereby and thereby, together with the reasonable fees and
disbursements of counsel to the Administrative Agent, (b) to pay or reimburse
each Lender and the Administrative Agent for all its costs and expenses incurred
in connection with the enforcement or preservation of any rights under this
Agreement, the Notes and any such other documents, including, without
limitation, the reasonable fees and disbursements of counsel to the
Administrative Agent and to the Lenders (including reasonable allocated costs of
in-house legal counsel), and (c) on demand, to pay, indemnify, and hold each
Lender and the Administrative Agent harmless from, any and all recording and
filing fees and any and all liabilities with respect to, or resulting from any
delay in paying, stamp, excise and other similar taxes, if any, which may be
payable or determined to be payable in connection with the execution and
delivery of, or consummation or administration of any of the transactions
contemplated by, or any amendment, supplement or modification of, or any waiver
or consent under or in respect of, the Credit Documents and any such other
documents, and (d) to pay, indemnify, and hold each Lender and the
Administrative Agent and their Affiliates harmless from and against, any and all
other liabilities, obligations, losses, damages, penalties, actions, judgments,
suits, costs, expenses or disbursements of any kind or nature whatsoever with
respect to the execution, delivery, enforcement, performance and administration
of the Credit Documents and any such other documents and the use, or proposed
use, of proceeds of the Loans (all of the foregoing, collectively, the
"INDEMNIFIED LIABILITIES"); PROVIDED, HOWEVER, that the Borrower shall not have
any obligation hereunder to the Administrative Agent or any Lender with respect
to indemnified liabilities arising from the gross negligence or willful
misconduct of the Administrative Agent or any such Lender, as determined by a
court of competent jurisdiction. The agreements in this Section 9.5 shall
survive repayment of the Loans, Notes and all other amounts payable hereunder.
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Section 9.6 SUCCESSORS AND ASSIGNS; PARTICIPATIONS; PURCHASING LENDERS.
(a) This Agreement shall be binding upon and inure to the benefit
of the Borrower, the Lenders, the Administrative Agent, all future
holders of the Notes and their respective successors and assigns,
except that the Borrower may not assign or transfer any of its rights
or obligations under this Agreement or the other Credit Documents
without the prior written consent of each Lender.
(b) Any Lender may, in the ordinary course of its commercial
banking business and in accordance with applicable law, at any time
sell to one or more banks or other entities ("PARTICIPANTS")
participating interests in any Loan owing to such Lender, any Note held
by such Lender, any Commitment of such Lender, or any other interest of
such Lender hereunder. In the event of any such sale by a Lender of
participating interests to a Participant, such Lender's obligations
under this Agreement to the other parties to this Agreement shall
remain unchanged, such Lender shall remain solely responsible for the
performance thereof, such Lender shall remain the holder of any such
Note for all purposes under this Agreement, and the Borrower 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. No Lender shall transfer or grant any
participation under which the Participant shall have rights to approve
any amendment to or waiver of this Agreement or any other Credit
Document except to the extent such amendment or waiver would (i) extend
the scheduled maturity of any Loan or Note or any installment thereon
in which such Participant is participating, or reduce the stated rate
or extend the time of payment of interest or fees thereon (except in
connection with a waiver of interest at the increased post-default
rate) or reduce the principal amount thereof, or increase the amount of
the Participant's participation over the amount thereof then in effect
(it being understood that a waiver of any Default or Event of Default
shall not constitute a change in the terms of such participation, and
that an increase in any Commitment or Loan shall be permitted without
consent of any participant if the Participant's participation is not
increased as a result thereof), (ii) release any of the Guarantors from
their obligations under the Guaranty, (iii) release all or
substantially all of the Collateral, or (iv) consent to the assignment
or transfer by the Borrower of any of its rights and obligations under
this Agreement. In the case of any such participation, the Participant
shall not have any rights under this Agreement or any of the other
Credit Documents (the Participant's rights against such Lender in
respect of such participation to be those set forth in the agreement
executed by such Lender in favor of the Participant relating thereto)
and all amounts payable by the Borrower hereunder shall be determined
as if such Lender had not sold such participation, PROVIDED that each
Participant shall be entitled to the benefits of Sections 2.16, 2.17,
2.18 and 9.5 with respect to its participation in the Commitments and
the Loans outstanding from time to time; PROVIDED, that no Participant
shall be entitled to receive any greater amount pursuant to such
Sections than the transferor Lender would have been entitled to receive
in respect of the amount of the participation transferred by such
transferor Lender to such Participant had no such transfer occurred.
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(c) Any Lender may, in the ordinary course of its commercial
banking business and in accordance with applicable law, at any time,
sell or assign to any Lender or any affiliate or Related Fund thereof
and with the consent of the Administrative Agent and, so long as no
Event of Default has occurred and is continuing, the Borrower (in each
case, which consent shall not be unreasonably withheld), to one or more
additional banks or financial institutions or entities ("PURCHASING
LENDERS"), all or any part of its rights and obligations under this
Agreement and the Notes in minimum amounts of $1,000,000 with respect
to its Revolving Commitment, its Revolving Loans, its Tranche A Term
Loans, its Tranche B Term Loans or its LOC Commitment (or, if less, the
entire amount of such Lender's obligations), pursuant to a Commitment
Transfer Supplement, executed by such Purchasing Lender and such
transferor Lender (and, in the case of a Purchasing Lender that is not
then a Lender or an affiliate or Related Fund thereof, the
Administrative Agent and, so long as no Event of Default has occurred
and is continuing, the Borrower), and delivered to the Administrative
Agent for its acceptance and recording in the Register; PROVIDED,
HOWEVER, that any sale or assignment to an existing Lender, or
Affiliate or Related Fund thereof, shall not require the consent of the
Administrative Agent or the Borrower nor shall any such sale or
assignment be subject to the minimum assignment amounts specified
herein. Upon such execution, delivery, acceptance and recording, from
and after the Transfer Effective Date specified in such Commitment
Transfer Supplement, (x) the Purchasing Lender thereunder shall be a
party hereto and, to the extent provided in such Commitment Transfer
Supplement, have the rights and obligations of a Lender hereunder with
a Commitment as set forth therein, and (y) the transferor Lender
thereunder shall, to the extent provided in such Commitment Transfer
Supplement, be released from its obligations under this Agreement (and,
in the case of a Commitment Transfer Supplement covering all or the
remaining portion of a transferor Lender's rights and obligations under
this Agreement, such transferor Lender shall cease to be a party
hereto). Such Commitment Transfer Supplement shall be deemed to amend
this Agreement to the extent, and only to the extent, necessary to
reflect the addition of such Purchasing Lender and the resulting
adjustment of Commitment Percentages arising from the purchase by such
Purchasing Lender of all or a portion of the rights and obligations of
such transferor Lender under this Agreement and the Notes. On or prior
to the Transfer Effective Date specified in such Commitment Transfer
Supplement, the Borrower, at its own expense, shall execute and deliver
to the Administrative Agent in exchange for the Notes delivered to the
Administrative Agent pursuant to such Commitment Transfer Supplement
new Notes to the order of such Purchasing Lender in an amount equal to
the Commitment assumed by it pursuant to such Commitment Transfer
Supplement and, unless the transferor Lender has not retained a
Commitment hereunder, new Notes to the order of the transferor Lender
in an amount equal to the Commitment retained by it hereunder. Such new
Notes shall be dated the Closing Date and shall otherwise be in the
form of the Notes replaced thereby. The Notes surrendered by the
transferor Lender shall be returned by the Administrative Agent to the
Borrower marked "canceled".
(d) The Administrative Agent shall maintain at its address referred
to in Section 9.2 a copy of each Commitment Transfer Supplement
delivered to it and a register (the "REGISTER") for the recordation of
the names and addresses of the Lenders
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and the Commitment of, and principal amount of the Loans owing to, each
Lender from time to time. The entries in the Register shall be
conclusive, in the absence of manifest error, and the Borrower, the
Administrative Agent and the Lenders may treat each Person whose name
is recorded in the Register as the owner of the Loan recorded therein
for all purposes of this Agreement. The Register shall be available for
inspection by the Borrower or any Lender at any reasonable time and
from time to time upon reasonable prior notice. The Administrative
Agent shall, upon request of the Syndication Agent and/or the Borrower,
promptly provide the Syndication Agent or the Borrower, as applicable,
with any updated list of Lenders their Commitments.
(e) Upon its receipt of a duly executed Commitment Transfer
Supplement, together with payment to the Administrative Agent by the
transferor Lender or the Purchasing Lender, as agreed between them, of
a registration and processing fee of $2,500.00 for each Purchasing
Lender listed in such Commitment Transfer Supplement and the Notes
subject to such Commitment Transfer Supplement, the Administrative
Agent shall (i) accept such Commitment Transfer Supplement, (ii) record
the information contained therein in the Register and (iii) give prompt
notice of such acceptance and recordation to the Lenders and the
Borrower.
(f) The Borrower authorizes each Lender to disclose to any
Participant or Purchasing Lender (each, a "TRANSFEREE") and any
prospective Transferee any and all financial information in such
Lender's possession concerning the Borrower and its Affiliates which
has been delivered to such Lender by or on behalf of the Borrower
pursuant to this Agreement or which has been delivered to such Lender
by or on behalf of the Borrower in connection with such Lender's credit
evaluation of the Borrower and its Affiliates prior to becoming a party
to this Agreement, in each case subject to Section 9.15.
(g) At the time of each assignment pursuant to this Section 9.6 to
a Person which is not already a Lender hereunder and which is not a
United States person (as such term is defined in Section 7701(a)(30) of
the Code) for Federal income tax purposes, the respective assignee
Lender shall provide to the Borrower and the Administrative Agent the
appropriate Internal Revenue Service Forms (and, if applicable, a 2.18
Certificate) described in Section 2.18.
(h) Any Lender may at any time pledge all or any portion of its
rights under this Agreement, including to any Federal Reserve Bank, to
secure extensions of credit to such Lender; provided that no such
assignment shall release a Lender from any of its obligations hereunder
or substitute any such assignee for such Lender as a party hereto.
Section 9.7 ADJUSTMENTS; SET-OFF.
(a) Each Lender agrees that if any Lender (a "BENEFITED LENDER")
shall at any time receive any payment of all or part of its Loans, or
interest thereon, or receive any Collateral in respect thereof (whether
voluntarily or involuntarily, by set-off, pursuant to events or
proceedings of the nature referred to in Section 7.1(e), or otherwise)
in a greater
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proportion than any such payment to or Collateral received by any other
Lender, if any, in respect of such other Lender's Loans, or interest
thereon, such benefited Lender shall purchase for cash from the other
Lenders a participating interest in such portion of each such other
Lender's Loan, or shall provide such other Lenders with the benefits of
any such Collateral, or the proceeds thereof, as shall be necessary to
cause such benefited Lender to share the excess payment or benefits of
such Collateral or proceeds ratably with each of the Lenders; PROVIDED,
HOWEVER, that if all or any portion of such excess payment or benefits
is thereafter recovered from such benefited Lender, such purchase shall
be rescinded, and the purchase price and benefits returned, to the
extent of such recovery, but without interest. The Borrower agrees that
each Lender so purchasing a portion of another Lender's Loans may
exercise all rights of payment (including, without limitation, rights
of set-off) with respect to such portion as fully as if such Lender
were the direct holder of such portion.
(b) In addition to any rights and remedies of the Lenders provided
by law (including, without limitation, other rights of set-off), each
Lender shall have the right, without prior notice to the Borrower or
any Guarantor, any such notice being expressly waived by the Borrower
and the Guarantors to the extent permitted by applicable law, upon the
occurrence of any Event of Default, to setoff and appropriate and apply
any and all deposits (general or special, time or demand, provisional
or final), in any currency, and any other credits, indebtedness or
claims, in any currency, in each case whether direct or indirect,
absolute or contingent, matured or unmatured, at any time held or owing
by such Lender or any branch or agency thereof to or for the credit or
the account of the Borrower or any Guarantor, or any part thereof in
such amounts as such Lender may elect, against and on account of the
obligations and liabilities of the Borrower or any Guarantor to such
Lender hereunder and claims of every nature and description of such
Lender against the Borrower or any Guarantor, in any currency, whether
arising hereunder, under the Notes or under any documents contemplated
by or referred to herein or therein, as such Lender may elect, whether
or not such Lender has made any demand for payment and although such
obligations, liabilities and claims may be contingent or unmatured. The
aforesaid right of set-off may be exercised by such Lender against the
Borrower or any Guarantor or against any trustee in bankruptcy, debtor
in possession, assignee for the benefit of creditors, receiver or
execution, judgment or attachment creditor of the Borrower or any
Guarantor, or against anyone else claiming through or against the
Borrower or any such trustee in bankruptcy, debtor in possession,
assignee for the benefit of creditors, receiver, or execution, judgment
or attachment creditor, notwithstanding the fact that such right of
set-off shall not have been exercised by such Lender prior to the
occurrence of any Event of Default. Each Lender agrees promptly to
notify the Borrower and the Guarantors and the Administrative Agent
after any such set-off and application made by such Lender; PROVIDED,
HOWEVER, that the failure to give such notice shall not affect the
validity of such set-off and application.
Section 9.8 TABLE OF CONTENTS AND SECTION HEADINGS.
The table of contents and the Section and subsection headings herein
are intended for convenience only and shall be ignored in construing this
Agreement.
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Section 9.9 COUNTERPARTS.
This Agreement may be executed by one or more of the parties to this
Agreement on any number of separate counterparts, and all of said counterparts
taken together shall be deemed to constitute one and the same instrument. A set
of the copies of this Agreement signed by all the parties shall be lodged with
the Borrower and the Administrative Agent.
Section 9.10 EFFECTIVENESS.
This Credit Agreement shall become effective on the date on which all
of the parties have signed a copy hereof (whether the same or different copies)
and shall have delivered the same to the Administrative Agent pursuant to
SECTION 9.2 or, in the case of the Lenders, shall have given to the
Administrative Agent written, telecopied or telex notice (actually received) at
such office that the same has been signed and mailed to it.
Section 9.11 SEVERABILITY.
Any provision of this Agreement which is prohibited or unenforceable in
any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of
such prohibition or unenforceability without invalidating the remaining
provisions hereof, and any such prohibition or unenforceability in any
jurisdiction shall not invalidate or render unenforceable such provision in any
other jurisdiction.
Section 9.12 INTEGRATION.
This Agreement and the Notes represent the agreement of the Borrower,
the Administrative Agent and the Lenders with respect to the subject matter
hereof, and there are no promises, undertakings, representations or warranties
by the Administrative Agent, the Borrower or any Lender relative to the subject
matter hereof not expressly set forth or referred to herein or in the Notes.
Section 9.13 GOVERNING LAW.
This Agreement and the Notes and the rights and obligations of the
parties under this Agreement and the Notes shall be governed by, and construed
and interpreted in accordance with, the law of the State of New York.
Section 9.14 CONSENT TO JURISDICTION AND SERVICE OF PROCESS.
All judicial proceedings brought against the Borrower and/or any other
Credit Party with respect to this Agreement, any Note or any of the other Credit
Documents may be brought in any state or federal court of competent jurisdiction
in the State of New York or the State of North Carolina, and, by execution and
delivery of this Agreement, each of the Borrower and the other Credit Parties
accepts, for itself and in connection with its properties, generally and
unconditionally, the non-exclusive jurisdiction of the aforesaid courts and
irrevocably agrees to
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be bound by any final judgment rendered thereby in connection with this
Agreement from which no appeal has been taken or is available. Each of the
Borrower and the other Credit Parties irrevocably agrees that all service of
process in any such proceedings in any such court may be effected by mailing a
copy thereof by registered or certified mail (or any substantially similar form
of mail), postage prepaid, to it at its address set forth in Section 9.2 or at
such other address of which the Administrative Agent shall have been notified
pursuant thereto, such service being hereby acknowledged by the each of the
Borrower and the other Credit Parties to be effective and binding service in
every respect. Each of the Borrower, the other Credit Parties, the
Administrative Agent and the Lenders irrevocably waives any objection,
including, without limitation, any objection to the laying of venue or based on
the grounds of forum non conveniens which it may now or hereafter have to the
bringing of any such action or proceeding in any such jurisdiction. Nothing
herein shall affect the right to serve process in any other manner permitted by
law or shall limit the right of any Lender to bring proceedings against the
Borrower or the other Credit Parties in the court of any other jurisdiction.
Section 9.15 [RESERVED].
Section 9.16 CONFIDENTIALITY.
The Administrative Agent and each of the Lenders agrees that it will
use its best efforts not to disclose without the prior consent of the Borrower
(other than to its officers, directors, employees, affiliates, agents, auditors
or counsel or to another Lender) any information with respect to the Borrower
and its Subsidiaries which is furnished pursuant to this Agreement, any other
Credit Document or any documents contemplated by or referred to herein or
therein and which is designated by the Borrower to the Lenders in writing as
confidential or as to which it is otherwise reasonably clear such information is
not public, except that any Lender may disclose any such information (a) as has
become generally available to the public other than by a breach of this Section
9.16 by such Lender, (b) as may be required or appropriate in any report,
statement or testimony submitted to any municipal, state or federal regulatory
body having or claiming to have jurisdiction over such Lender or to the Federal
Reserve Board or the Federal Deposit Insurance Corporation or the OCC or the
NAIC or similar organizations (whether in the United States or elsewhere) or
their successors, (c) as may be required or appropriate in response to any
summons or subpoena or any law, order, regulation or ruling applicable to such
Lender, (d) to any prospective Participant or assignee in connection with any
contemplated transfer pursuant to Section 9.6, PROVIDED that such prospective
transferee shall have been made aware of this Section 9.16 and shall have agreed
to be bound by its provisions as if it were a party to this Agreement or (e) to
rating agencies, GOLD SHEETS and other similar bank trade publications; such
information to consist of deal terms and other information regarding the credit
facilities evidenced by this Credit Agreement customarily found in such
publications.
Section 9.17 ACKNOWLEDGMENTS.
The Borrower and the other Credit Parties each hereby acknowledges
that:
(a) it has been advised by counsel in the negotiation, execution
and delivery of each Credit Document;
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(b) neither the Administrative Agent nor any Lender has any
fiduciary relationship with or duty to the Borrower or any other Credit
Party arising out of or in connection with this Agreement and the
relationship between Administrative Agent and Lenders, on one hand, and
the Borrower and the other Credit Parties, on the other hand, in
connection herewith is solely that of debtor and creditor; and
(c) no joint venture exists among the Lenders or among the Borrower
or the other Credit Parties and the Lenders.
Section 9.18 WAIVERS OF JURY TRIAL.
THE BORROWER, THE OTHER CREDIT PARTIES, THE AGENT AND THE LENDERS
HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVE, TO THE EXTENT PERMITTED BY
APPLICABLE LAW, TRIAL BY JURY IN ANY LEGAL ACTION OR PROCEEDING RELATING TO THIS
AGREEMENT OR ANY OTHER CREDIT DOCUMENT AND FOR ANY COUNTERCLAIM THEREIN.
ARTICLE X
GUARANTY
Section 10.1 THE GUARANTY.
In order to induce the Lenders to enter into this Agreement and to
extend credit hereunder and in recognition of the direct benefits to be received
by the Guarantors from the Extensions of Credit hereunder, each of the
Guarantors hereby agrees with the Administrative Agent and the Lenders as
follows: the Guarantor hereby unconditionally, absolutely and irrevocably
jointly and severally guarantees as primary obligor and not merely as surety (i)
the full and prompt payment when due, whether upon maturity, by acceleration or
otherwise, of any and all Credit Party Obligations and (ii) the due and punctual
performance of all covenants, agreements, obligations and liabilities of the
Credit Parties under or pursuant to the Credit Agreement and the other Credit
Documents. If any or all of the Credit Party Obligations becomes due and payable
hereunder, each Guarantor unconditionally promises to pay such indebtedness to
the Administrative Agent and the Lenders, on order, or demand, together with any
and all reasonable expenses (including costs and expenses of legal counsel)
which may be incurred by the Administrative Agent or the Lenders in collecting
any of the Credit Party Obligations.
Notwithstanding any provision to the contrary contained herein or in
any other of the Credit Documents, to the extent the obligations of a Guarantor
shall be adjudicated to be invalid or unenforceable for any reason (including,
without limitation, because of any applicable state or federal law relating to
fraudulent conveyances or transfers) then the obligations of each such Guarantor
hereunder shall be limited to the maximum amount that is permissible under
applicable law (whether federal or state and including, without limitation, the
Bankruptcy Code).
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Section 10.2 BANKRUPTCY.
Additionally, each of the Guarantors unconditionally, absolutely and
irrevocably guarantees jointly and severally as primary obligors and not merely
as sureties the payment of any and all indebtedness of the Borrower to the
Lenders whether or not due or payable by the Borrower upon the occurrence of any
of the events specified in Section 7.1(e), by acceleration or otherwise, and
irrevocably and unconditionally promises to pay such Credit Party Obligations to
the Administrative Agent for the account of the Lenders, or order, on demand, in
lawful money of the United States. Each of the Guarantors further agrees that to
the extent that the Borrower or a Guarantor shall make a payment or a transfer
of an interest in any property to the Administrative Agent or any Lender, which
payment or transfer or any part thereof is subsequently invalidated, declared to
be fraudulent or preferential, or otherwise is avoided, and/or required to be
repaid to the Borrower or a Guarantor, the estate of the Borrower or a
Guarantor, a trustee, receiver or any other party under any bankruptcy law,
state or federal law, common law or equitable cause, then to the extent of such
avoidance or repayment, the obligation or part thereof intended to be satisfied
shall be revived and continued in full force and effect as if said payment had
not been made.
Section 10.3 NATURE OF LIABILITY.
The liability of each Guarantor hereunder is exclusive and independent
of any security for or other guaranty of the indebtedness of the Borrower
whether executed by any such Guarantor, any other guarantor or by any other
party, and no Guarantor's liability hereunder shall be affected or impaired by
(a) any direction as to application of payment by the Borrower or by any other
party, or (b) any other continuing or other guaranty, undertaking or maximum
liability of a guarantor or of any other party as to the indebtedness of the
Borrower, or (c) any payment on or in reduction of any such other guaranty or
undertaking, or (d) any dissolution, termination or increase, decrease or change
in personnel by the Borrower, or (e) any payment made to the Administrative
Agent or the Lenders on the indebtedness which the Administrative Agent or such
Lenders repay the Borrower pursuant to court order in any bankruptcy,
reorganization, arrangement, moratorium or other debtor relief proceeding, and
each of the Guarantors waives any right to the deferral or modification of its
obligations hereunder by reason of any such proceeding.
Section 10.4 INDEPENDENT OBLIGATION.
The obligations of each Guarantor hereunder are independent of the
obligations of any other guarantor or the Borrower, and a separate action or
actions may be brought and prosecuted against each Guarantor whether or not
action is brought against any other guarantor or the Borrower and whether or not
any other Guarantor or the Borrower is joined in any such action or actions.
Section 10.5 AUTHORIZATION.
Each of the Guarantors authorizes the Administrative Agent and each
Lender without notice or demand (except as shall be required by applicable
statute and cannot be waived), and
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without affecting or impairing its liability hereunder, from time to time to (a)
renew, compromise, extend, increase, accelerate or otherwise change the time for
payment of, or otherwise change the terms of the indebtedness or any part
thereof in accordance with this Agreement, including any increase or decrease of
the rate of interest thereon, (b) take and hold security from any guarantor or
any other party for the payment of this Guaranty or the indebtedness and
exchange, enforce waive and release any such security, (c) apply such security
and direct the order or manner of sale thereof as the Administrative Agent and
the Lenders in their discretion may determine and (d) release or substitute any
one or more endorsers, guarantors, the Borrower or other obligors.
Section 10.6 RELIANCE.
It is not necessary for the Administrative Agent or the Lenders to
inquire into the capacity or powers of the Borrower or the officers, directors,
members, partners or agents acting or purporting to act on its behalf, and any
indebtedness made or created in reliance upon the professed exercise of such
powers shall be guaranteed hereunder.
Section 10.7 WAIVER; NO DISCHARGE OR DIMINISHMENT OF GUARANTEE.
(a) This is a guaranty of payment and performance and not of
collection. Each of the Guarantors waives any right (except as shall be
required by applicable statute and cannot be waived) to require the
Administrative Agent or any Lender to (i) proceed against the Borrower,
any other guarantor or any other party, (ii) proceed against or exhaust
any security held from the Borrower, any other guarantor or any other
party, or (iii) pursue any other remedy in the Administrative Agent's
or any Lender's power whatsoever. Each of the Guarantors (i) waives any
defense based on or arising out of any defense of the Borrower, any
other guarantor or any other party other than final and indefeasible
payment in full of the indebtedness, including without limitation any
defense based on or arising out of the disability of the Borrower, any
other guarantor or any other party, or the illegality, invalidity or
unenforceability of this Agreement, any Credit Document or the
indebtedness or any part thereof from any cause, or the cessation from
any cause of the liability of the Borrower other than payment in full
of the indebtedness and (ii) consents to each act, omission and other
thing that would or might but for such consent affect or impair in any
way the liability of any Guarantor hereunder except to the extent the
indebtedness has been paid. The Administrative Agent or any of the
Lenders may, at their election, foreclose on any security held by the
Administrative Agent or a Lender by one or more judicial or nonjudicial
sales, whether or not every aspect of any such sale is commercially
reasonable (to the extent such sale is permitted by applicable law), or
exercise any other right or remedy the Administrative Agent and any
Lender may have against the Borrower or any other party, or any
security, without affecting or impairing in any way the liability of
any Guarantor hereunder except to the extent the indebtedness has been
paid. Each of the Guarantors waives any defense arising out of any such
election by the Administrative Agent and each of the Lenders, even
though such election operates to impair or extinguish any right of
reimbursement or subrogation or other right or remedy of the Guarantors
against the Borrower or any other party or any security.
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(b) The obligations of each Guarantor hereunder shall not be
subject to any reduction, limitation, impairment or termination for any
reason (other than the indefeasible payment in full in cash of the
Credit Party Obligations), including any claim of waiver, release,
surrender, alteration or compromise of any of the Credit Party
Obligations, and shall not be subject to any defense or setoff,
counterclaim, recoupment or termination whatsoever by reason of the
invalidity, illegality or unenforceability of the Credit Party
Obligations or otherwise. Without limiting the generality of the
foregoing, the obligations of each Guarantor hereunder shall not be
discharged or impaired or otherwise affected by the failure of the
Documentation Agent or any other Secured Party to assert any claim or
demand or to enforce any remedy under the Credit Agreement, any other
Credit Document or any other agreement, by any waiver or modification
of any provision of any thereof, by any default, failure or delay,
willful or otherwise in the performance of the Credit Party
Obligations, or the failure to perfect any security interest in, or the
release of, any of the security held by or on behalf of the
Documentation Agent or any other Secured Party, or by any other act or
omission that may or might in any manner or to any extent vary the risk
of any Guarantor or that would otherwise operate as a discharge of each
Guarantor as a matter of law or equity (other than the indefeasible
payment in full in cash of all the Credit Party Obligations).
(c) Each of the Guarantors waives all presentments, demands for
performance, protests and notices, including without limitation notices
of nonperformance, notice of protest, notices of dishonor, notices of
acceptance of this Guaranty, and notices of the existence, creation or
incurring of new or additional indebtedness. Each Guarantor assumes all
responsibility for being and keeping itself informed of the Borrower's
financial condition and assets, and of all other circumstances bearing
upon the risk of nonpayment of the indebtedness and the nature, scope
and extent of the risks which such Guarantor assumes and incurs
hereunder, and agrees that neither the Administrative Agent nor any
Lender shall have any duty to advise such Guarantor of information
known to it regarding such circumstances or risks.
(d) Each of the Guarantors hereby agrees it will not exercise any
rights of subrogation which it may at any time otherwise have as a
result of this Guaranty (whether contractual, under Section 509 of the
U.S. Bankruptcy Code, or otherwise) to the claims of the Lenders
against the Borrower or any other guarantor of the indebtedness of the
Borrower owing to the Lenders (collectively, the "OTHER PARTIES") and
all contractual, statutory or common law rights of reimbursement,
contribution or indemnity from any Other Party which it may at any time
otherwise have as a result of this Guaranty until such time as the
Loans hereunder shall have been paid and the Commitments have been
terminated. Each of the Guarantors hereby further agrees not to
exercise any right to enforce any other remedy which the Administrative
Agent and the Lenders now have or may hereafter have against any Other
Party, any endorser or any other guarantor of all or any part of the
indebtedness of the Borrower and any benefit of, and any right to
participate in, any security or Collateral given to or for the benefit
of the Lenders to secure payment of the indebtedness of the Borrower
until such time as the Loans hereunder shall have been paid and the
Commitments have been terminated.
000
Xxxxxxx 00.0 XXXXXXXXXX XX ENFORCEMENT.
The Lenders agree that this Guaranty may be enforced only by the action
of the Administrative Agent acting upon the instructions of the Required Lenders
and that no Lender shall have any right individually to seek to enforce or to
enforce this Guaranty, it being understood and agreed that such rights and
remedies may be exercised by the Administrative Agent for the benefit of the
Lenders under the terms of this Agreement. The Lenders further agree that this
Guaranty may not be enforced against any director, officer, employee or
stockholder of the Guarantors.
Section 10.9 CONFIRMATION OF PAYMENT.
The Administrative Agent and the Lenders will, upon request after
payment of the indebtedness and obligations which are the subject of this
Guaranty and termination of the Commitments relating thereto, confirm to the
Borrower, the Guarantors or any other Person that the such indebtedness and
obligations have been paid and the Commitments relating thereto terminated,
subject to the provisions of Section 10.2.
Section 10.10 TERMINATION.
The guarantees made hereunder (a) shall terminate when all the Credit
Party Obligations have been indefeasibly paid in full and the Lenders have no
further commitment to lend under the Credit Agreement and (b) shall continue to
be effective or be reinstated, as the case may be, if at any time payment, or
any part thereof, of any Credit Party Obligation is rescinded or must otherwise
be restored by any Secured Party or any Guarantor upon the bankruptcy or
reorganization of the Borrower, any Guarantor or otherwise.
105
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed and delivered in Charlotte, North Carolina by its proper and duly
authorized officers as of the day and year first above written.
BORROWER: INTEGRATED DEFENSE TECHNOLOGIES, INC.,
-------- a Delaware corporation
By: /S/ XXXXXX X. XXXXXX
-------------------------------------
Name: Xxxxxx X. XxXxxx
Title: President
GUARANTORS: IDT HOLDING, L.L.C.,
----------- a Delaware limited liability company
By: /S/ XXXXXX X. XXXXXX
--------------------------------------
Name: Xxxxxx X. XxXxxx
Title: Managing Member
TECH-SYM CORPORATION,
a Nevada corporation
By: /S/ XXXXXX X. XXXXXX
---------------------------------------
Name: Xxxxxx X. XxXxxx
Title: Chairman
METRIC SYSTEMS CORPORATION,
a Florida corporation
By: /S/ XXXXXX X. XXXXXX
---------------------------------------
Name: Xxxxxx X. XxXxxx
Title: Chairman
ENTERPRISE ELECTRONICS CORPORATION,
an Alabama corporation
By: /S/ XXXXXX X. XXXXXX
--------------------------------------
Name: Xxxxxx X. XxXxxx
Title: Chairman
106
PEI ELECTRONICS, INC.,
a Delaware corporation
By: /S/ XXXXXX X. XXXXXX
--------------------------------------
Name: Xxxxxx X. XxXxxx
Title: Chairman
SIERRATECH, INC.,
a Delaware corporation
By: /S/ XXXXXX X. XXXXXX
--------------------------------------
Name: Xxxxxx X. XxXxxx
Title: Chairman
PARATECH CORPORATION,
a Delaware corporation
By: /S/ XXXXXX X. XXXXXX
--------------------------------------
Name: Xxxxxx X. XxXxxx
Title: President
CONTINENTAL ELECTRONICS CORPORATION,
a Nevada corporation
By: S/ XXXXXX X. XXXXXX
---------------------------------------
Name: Xxxxxx X. XxXxxx
Title: Chairman
T-S HOLDING CORPORATION,
a Texas corporation
By: /S/ XXXXXX X. XXXXXX
-------------------------------------
Name: Xxxxxx X. XxXxxx
Title: President
TECH-SYM MANAGEMENT CORPORATION,
By: /S/ XXXXXX X. XXXXXX
--------------------------------------
Name: Xxxxxx X. XxXxxx
Title: Chairman
107
AGENT AND LENDERS: FIRST UNION NATIONAL BANK,
------------------ as Administrative Agent and as a Lender
By: /S/
--------------------------------------
Name:
Title:
CIBC WORLD MARKETS CORP.,
as Syndication Agent
By: /S/ XXXX X. XXXXXXX
--------------------------------------
Name: Xxxx X. Xxxxxxx
Title: Managing Director
CIBC INC.,
as a Lender
By: /S/ XXXX X. XXXXXXX
---------------------------------------
Name: Xxxx X. Xxxxxxx
Title: Managing Director,
CIBC World Markets Corp., AS AGENT
[signature pages continue]
108
CREDIT LYONNAIS NEW YORK BRANCH
By: /S/ XXXXXXX XXXXX
-------------------------------------
Name: Xxxxxxx Xxxxx
-------------------------------------
Title: Vice President
-------------------------------------
[signature pages continue]
109
ANTARES CAPITAL CORPORATION
By: /S/
--------------------------------------
Name:
-------------------------------------
Title: Director
------------------------------------
[signature pages continue]
110
MANUFACTURERS & TRADERS TRUST COMPANY
By: /S/ XXXXX X. XXXXXX
--------------------------------------
Name: Xxxxx X. Xxxxxx
-------------------------------------
Title: Vice President
--------------------------------------
[signature pages continue]
111
NATIONAL CITY BANK
By: /S/ XXXX XXXXXX
--------------------------------------
Name: Xxxx Xxxxxx
-------------------------------------
Title: Account Officer
------------------------------------
[signature pages continue]
112
CHASE MANHATTAN BANK, as Trustee of the
Antares Funding Trust created under the
Trust Agreement dated as of November 30, 1999
By: /S/ XXXXXX XXXXXXXX
---------------------------------------
Name: Xxxxxx Xxxxxxxx
-------------------------------------
Title: VP
------------------------------------
[signature pages continue]
113
IBM CREDIT CORPORATION
By: /S/ XXXXXX X. CURAIC
---------------------------------------
Name: Xxxxxx X. Curaic
-------------------------------------
Title: Manager of Credit
-------------------------------------
[end of signature pages]
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