EXHIBIT 10.21
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CREDIT AGREEMENT
Dated as of November 26, 2002
among
DIGITALNET, INC.,
as the Borrower,
DIGITALNET HOLDINGS, INC.,
as a Guarantor,
BANK OF AMERICA, N.A.,
as Administrative Agent, Swing Line Lender
and L/C Issuer,
MADISON CAPITAL FUNDING LLC,
as Syndication Agent,
and
▇▇▇▇▇▇▇ ▇▇▇▇▇ CAPITAL, A DIVISION OF ▇▇▇▇▇▇▇ ▇▇▇▇▇
BUSINESS FINANCIAL SERVICES INC.
as Documentation Agent
and
The Other Lenders Party Hereto
BANC OF AMERICA SECURITIES LLC,
as Sole Lead Arranger and Sole Book Manager
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TABLE OF CONTENTS
Section Page
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ARTICLE I. DEFINITIONS AND ACCOUNTING TERMS............................................................1
1.01 Defined Terms...............................................................................1
1.02 Other Interpretive Provisions..............................................................28
1.03 Accounting Terms...........................................................................29
1.04 Rounding...................................................................................29
1.05 References to Agreements and Laws..........................................................30
1.06 Times of Day...............................................................................30
1.07 Letter of Credit Amounts...................................................................30
1.08 Borrowing Base.............................................................................30
ARTICLE II. THE COMMITMENTS AND CREDIT EXTENSIONS......................................................31
2.01 Revolving Credit Loans.....................................................................31
2.02 Term Loan..................................................................................32
2.03 Conversions and Continuations of Revolving Credit Loans and Term Loan......................33
2.04 Letters of Credit..........................................................................35
2.05 Swing Line Loans...........................................................................42
2.06 Prepayments................................................................................44
2.07 Termination or Reduction of Revolving Credit Commitments...................................48
2.08 Repayment of Loans.........................................................................49
ARTICLE III. GENERAL LOAN PROVISIONS....................................................................50
3.01 Interest...................................................................................50
3.02 Fees.......................................................................................50
3.03 Computation of Interest and Fees...........................................................51
3.04 Evidence of Debt...........................................................................51
3.05 Payments Generally.........................................................................52
3.06 Sharing of Payments........................................................................53
3.07 Security...................................................................................54
ARTICLE IV. TAXES, YIELD PROTECTION AND ILLEGALITY.....................................................54
4.01 Taxes......................................................................................54
4.02 Illegality.................................................................................55
4.03 Inability to Determine Rates...............................................................56
4.04 Increased Cost and Reduced Return; Capital Adequacy........................................56
4.05 Funding Losses.............................................................................56
4.06 Matters Applicable to all Requests for Compensation........................................57
4.07 Survival...................................................................................57
ARTICLE V. CONDITIONS PRECEDENT TO CREDIT EXTENSIONS..................................................58
5.01 Conditions of Initial Credit Extension.....................................................58
5.02 Conditions to all Credit Extensions........................................................64
ARTICLE VI. REPRESENTATIONS AND WARRANTIES.............................................................65
6.01 Existence, Qualification and Power; Compliance with Laws...................................65
6.02 Authorization; No Contravention............................................................65
6.03 Governmental Authorization; Other Consents.................................................65
6.04 Binding Effect.............................................................................66
6.05 Financial Statements; No Material Adverse Effect...........................................66
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6.06 Litigation.................................................................................67
6.07 No Default.................................................................................67
6.08 Ownership of Property; Liens...............................................................67
6.09 Environmental Compliance...................................................................68
6.10 Insurance..................................................................................69
6.11 Taxes......................................................................................69
6.12 ERISA Compliance...........................................................................69
6.13 Subsidiaries...............................................................................70
6.14 Margin Regulations; Investment Company Act; Public Utility Holding Company Act.............71
6.15 Disclosure.................................................................................71
6.16 Compliance with Laws.......................................................................71
6.17 Intellectual Property; Licenses, Etc.......................................................72
6.18 Employee Relations.........................................................................72
6.19 Material Government Contracts..............................................................72
6.20 Burdensome Provisions......................................................................72
6.21 Survival of Representations and Warranties, Etc............................................73
ARTICLE VII. AFFIRMATIVE COVENANTS......................................................................73
7.01 Financial Statements.......................................................................73
7.02 Certificates; Other Information............................................................75
7.03 Notices....................................................................................76
7.04 Payment of Obligations.....................................................................77
7.05 Preservation of Existence, Etc.............................................................77
7.06 Maintenance of Properties..................................................................77
7.07 Maintenance of Insurance...................................................................77
7.08 Compliance with Laws.......................................................................78
7.09 Environmental Laws.........................................................................78
7.10 Compliance with ERISA......................................................................79
7.11 Compliance With Agreements.................................................................79
7.12 Books and Records..........................................................................79
7.13 Inspection Rights..........................................................................79
7.14 Use of Proceeds............................................................................80
7.15 Additional Subsidiaries....................................................................80
7.16 Swap Contracts.............................................................................80
7.17 Proceeds of Equity or Indebtedness; Escrow and Indemnification Payments....................81
7.18 Further Assurances.........................................................................81
ARTICLE VIII. NEGATIVE COVENANTS.........................................................................81
8.01 Liens......................................................................................81
8.02 Investments................................................................................83
8.03 Indebtedness...............................................................................86
8.04 Fundamental Changes........................................................................88
8.05 Dispositions...............................................................................89
8.06 Restricted Payments........................................................................90
8.07 Limitations on Exchange and Issuance of Capital Stock......................................91
8.08 Change in Nature of Business...............................................................91
8.09 Accounting Changes; Organizational Documents...............................................91
8.10 Transactions with Affiliates...............................................................91
8.11 Burdensome Agreements......................................................................92
8.12 Use of Proceeds............................................................................92
8.13 Impairment of Security Interests...........................................................93
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8.14 Amendments, Payments and Prepayments of Subordinated Indebtedness..........................93
8.15 Acquisition Documents......................................................................94
8.16 Equity Purchase Agreement..................................................................94
8.17 Financial Covenants........................................................................94
8.18 Capital Expenditures.......................................................................96
ARTICLE IX. GUARANTY OF HOLDINGS.......................................................................96
9.01 Guaranty of Obligations....................................................................96
9.02 Nature of Guaranty.........................................................................96
9.03 Waivers....................................................................................97
9.04 Modification of Loan Documents, Etc........................................................98
9.05 Demand by Administrative Agent.............................................................99
9.06 Remedies...................................................................................99
9.07 Reinstatement.............................................................................100
9.08 Payments..................................................................................100
9.09 No Subrogation............................................................................101
ARTICLE X. EVENTS OF DEFAULT AND REMEDIES............................................................101
10.01 Events of Default.........................................................................101
10.02 Remedies Upon Event of Default............................................................104
10.03 Application of Funds......................................................................104
ARTICLE XI. ADMINISTRATIVE AGENT......................................................................105
11.01 Appointment and Authorization of Administrative Agent.....................................105
11.02 Delegation of Duties......................................................................106
11.03 Liability of Administrative Agent.........................................................107
11.04 Reliance by Administrative Agent..........................................................107
11.05 Notice of Default.........................................................................108
11.06 Credit Decision; Disclosure of Information by Administrative Agent........................108
11.07 Indemnification of Administrative Agent...................................................108
11.08 Administrative Agent in its Individual Capacity...........................................109
11.09 Successor Administrative Agent............................................................109
11.10 Administrative Agent May File Proofs of Claim.............................................110
11.11 Collateral and Guaranty Matters...........................................................111
11.12 Other Agents; Arrangers and Managers......................................................111
ARTICLE XII. MISCELLANEOUS.............................................................................112
12.01 Amendments, Etc...........................................................................112
12.02 Notices and Other Communications; Facsimile Copies........................................113
12.03 No Waiver; Cumulative Remedies............................................................114
12.04 Attorney Costs, Expenses and Taxes........................................................115
12.05 Indemnification...........................................................................115
12.06 Payments Set Aside........................................................................116
12.07 Successors and Assigns....................................................................116
12.08 Confidentiality...........................................................................120
12.09 Set-off...................................................................................120
12.10 Interest Rate Limitation..................................................................121
12.11 Counterparts..............................................................................121
12.12 Integration...............................................................................121
12.13 Survival of Representations and Warranties................................................121
12.14 Severability..............................................................................122
12.15 Tax Forms.................................................................................122
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12.16 Replacement of Lenders....................................................................124
12.17 Governing Law.............................................................................124
12.18 Waiver of Right to Trial by Jury..........................................................125
12.19 Entire Agreement..........................................................................125
SIGNATURES...........................................................................................S-1
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EXHIBITS AND SCHEDULES
SCHEDULES
2.01 Commitments and Commitment Percentages
6.01 Jurisdictions of Organization and Qualification
6.05 Material Indebtedness
6.12(a) ERISA Matters
6.12(d) Transactions Subject to ERISA Sections 4069 and 4212(c)
6.13 Subsidiaries and Other Equity Investments
6.17 Intellectual Property Matters
6.18 Employee Relations
6.19 Material Government Contracts
8.01 Existing Liens
8.03 Existing Indebtedness
12.02 Administrative Agent's Office, Certain Addresses for Notices
EXHIBITS
FORM OF:
A Loan Notice
B Swing Line Loan Notice
C Note
D Compliance Certificate
E Borrowing Base Certificate
F Assignment and Assumption
G Subsidiary Guaranty Agreement
H Collateral Agreement
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EXECUTION COPY
CREDIT AGREEMENT
This
CREDIT AGREEMENT ("AGREEMENT") is entered into as of November 26,
2002, among DIGITALNET, INC., a Delaware corporation (the "BORROWER"),
DIGITALNET HOLDINGS, INC., a Delaware corporation ("HOLDINGS"), each lender from
time to time party hereto (collectively, the "LENDERS" and individually, a
"LENDER"), BANK OF AMERICA, N.A., as Administrative Agent, Swing Line Lender and
L/C Issuer, MADISON CAPITAL FUNDING LLC, as Syndication Agent and ▇▇▇▇▇▇▇ ▇▇▇▇▇
CAPITAL, a division of ▇▇▇▇▇▇▇ ▇▇▇▇▇ Business Financial Services Inc., as
Documentation Agent.
Holdings and the Borrower has requested that the Lenders provide a
revolving credit facility and a term loan facility, and the Lenders are willing
to do so on the terms and conditions set forth herein.
In consideration of the mutual covenants and agreements herein contained,
the parties hereto covenant and agree as follows:
ARTICLE I.
DEFINITIONS AND ACCOUNTING TERMS
1.01 DEFINED TERMS.
As used in this Agreement, the following terms shall have the meanings set
forth below:
"ACCOUNT DEBTOR" means any Person who is or who may become obligated to the
Borrower or any of its Subsidiaries under or on account of an Account.
"ACCOUNTS" means all "accounts" (as defined in the UCC) of the Borrower or
any of its Subsidiaries, including without limitation all present or future
accounts receivable, all rights to payment for goods sold or leased or to be
sold or leased or for services rendered or to be rendered, whether or not earned
by performance, all rights in any merchandise or goods which any of the same may
represent, all notes receivable, book debts, notes, bills, drafts, acceptances,
choses in action, contract rights, instruments and documents and all sums of
money due or to become due thereon and all proceeds thereof and all rights,
title, security interests and guarantees with respect to each of the foregoing.
"ACQUISITION" means the acquisition of one hundred percent (100%) of the
issued and outstanding membership interest of the Target by the Borrower and the
other transactions contemplated by the Acquisition Agreement and the other
Acquisition Documents.
"ACQUISITION AGREEMENT" means the Purchase Agreement dated as of September
27, 2002, by and among Holdings, the Borrower, GetronicsWang Co. L.L.C., and the
Target, as amended, restated, supplemented or otherwise modified pursuant to the
terms and conditions set forth in this Agreement; PROVIDED that the
Administrative Agent shall have approved any material amendment, supplement or
other modification thereto (including, without limitation, the waiver of any
material condition to closing).
"ACQUISITION DOCUMENTS" means the Acquisition Agreement and all exhibits
and schedules thereto and each other document, instrument, certificate and
agreement executed or delivered by Holdings, the Borrower or any Subsidiary
thereof in connection with the Acquisition Agreement or otherwise referred to
therein or contemplated thereby (other than the Loan Documents and the Senior
Subordinated Loan Documents), all as amended, restated, supplemented or
otherwise modified pursuant to the terms and conditions set forth in this
Agreement.
"ADMINISTRATIVE AGENT" means Bank of America in its capacity as
administrative agent under any of the Loan Documents, or any successor
administrative agent appointed in accordance with the provisions contained
herein.
"ADMINISTRATIVE AGENT'S OFFICE" means the Administrative Agent's address
and, as appropriate, account as set forth on SCHEDULE 12.02, or such other
address or account as the Administrative Agent may from time to time notify the
Borrower and the Lenders.
"ADMINISTRATIVE QUESTIONNAIRE" means an Administrative Questionnaire in a
form supplied by the Administrative Agent.
"AFFILIATE" means, with respect to any Person, another Person that
directly, or indirectly through one or more intermediaries, Controls or is
Controlled by or is under common Control with the Person specified. "CONTROL"
means the possession, directly or indirectly, of the power to direct or cause
the direction of the management or policies of a Person, whether through the
ability to exercise voting power, by contract or otherwise. "CONTROLLING" and
"CONTROLLED" have meanings correlative thereto. Without limiting the generality
of the foregoing, a Person shall be deemed to be Controlled by another Person if
such other Person possesses, directly or indirectly, power to vote 10% or more
of the securities having ordinary voting power for the election of directors,
managing general partners or the equivalent.
"AGENT-RELATED PERSONS" means the Administrative Agent, together with its
Affiliates (including, in the case of Bank of America in its capacity as the
Administrative Agent, the Arranger), and the officers, directors, employees,
agents and attorneys-in-fact of such Persons and Affiliates.
"AGGREGATE COMMITMENTS" means the Commitments of all the Lenders.
"AGREEMENT" means this
Credit Agreement, as amended, restated, supplemented
or otherwise modified from time to time.
"APPLICABLE RATE" means the following percentages per annum, based upon the
Consolidated Total Leverage Ratio as set forth in the most recent Compliance
Certificate received by the Administrative Agent pursuant to SECTION 7.02(b):
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APPLICABLE RATE
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EURODOLLAR RATE LOANS BASE RATE LOANS
---------------------- -------------------
REVOLVING
CREDIT LOANS REVOLVING
PRICING CONSOLIDATED TOTAL COMMITMENT AND LETTER OF TERM CREDIT TERM
LEVEL LEVERAGE RATIO FEE CREDIT FEE LOAN LOANS LOAN
------- ------------------------ ---------- ------------- ------ --------- -------
4 Greater than or equal to 0.625% 4.00% 4.50% 3.00% 3.50%
3.5:1.0
3 Less than 3.5:1.0, but 0.500% 3.75% 4.50% 2.75% 3.50%
greater than or equal to
3.0:1.0
2 Less than 3.0:1.0, but 0.500% 3.50% 4.50% 2.50% 3.50%
greater than or equal to
2.5:1.0
1 Less than 2.5:1.0 0.500% 3.25% 4.50% 2.25% 3.50%
Any increase or decrease in the Applicable Rate resulting from a change in
the Consolidated Total Leverage Ratio shall become effective as of the first
Business Day immediately following the date a Compliance Certificate is
delivered pursuant to SECTION 7.02(b); PROVIDED, that if a Compliance
Certificate is not delivered when due in accordance with such SECTION 7.02(b),
then Pricing Level 4 shall apply as of the first Business Day after the date on
which such Compliance Certificate was required to have been delivered until such
time as such Compliance Certificate is delivered. For the period from the
Closing Date to the first Business Day immediately following the date of
delivery of a Compliance Certificate for the Fiscal Year ended December 31,
2002, the Applicable Rate shall remain at Pricing Level 3.
"ARRANGER" means Banc of America Securities LLC, in its capacity as sole
lead arranger and sole book manager.
"ASSIGNMENT AGREEMENT" has the meaning set forth in the Collateral
Agreement.
"ASSIGNMENT AND ASSUMPTION" means an Assignment and Assumption
substantially in the form of EXHIBIT F.
"ASSIGNMENT OF CLAIMS ACT" means Assignment of Claims Act of 1940 (41
U.S.C. Section 15, 31 U.S.C. Section 3737, and 31 U.S.C. Section 3727),
including all amendments thereto and regulations promulgated thereunder.
"ATTORNEY COSTS" means and includes all reasonable fees, out of pocket
expenses and disbursements of any law firm or other external counsel.
"ATTRIBUTABLE INDEBTEDNESS" means, on any date, in respect of any capital
lease of any Person, the capitalized amount thereof that would appear on a
balance sheet of such Person prepared as of such date in accordance with GAAP.
"AUDITED FINANCIAL STATEMENTS" has the meaning set forth in SECTION
5.01(c)(i).
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"AVAILABILITY PERIOD" means the period from and including the Closing Date
to the earliest of (a) the Revolving Credit Maturity Date, (b) the date of
termination of all Revolving Credit Commitments pursuant to SECTION 2.07, and
(c) the date of termination of the commitment of each Lender to make Revolving
Credit Loans and of the obligation of the of the L/C Issuer to make L/C Credit
Extensions pursuant to SECTION 10.02.
"BANK OF AMERICA" means Bank of America, N.A., a national banking
association, and its successors.
"BASE RATE" means for any day a fluctuating rate per annum equal to the
higher of (a) the Federal Funds Rate plus 1/2 of 1% and (b) the rate of interest
in effect for such day as publicly announced from time to time by Bank of
America as its "prime rate." The "prime rate" is a rate set by Bank of America
based upon various factors including Bank of America's costs and desired return,
general economic conditions and other factors, and is used as a reference point
for pricing some loans, which may be priced at, above, or below such announced
rate. Any change in such rate announced by Bank of America shall take effect at
the opening of business on the day specified in the public announcement of such
change.
"BASE RATE LOAN" means a Loan that bears interest based on the Base Rate.
"BORROWER" has the meaning set forth in the introductory paragraph hereto.
"BORROWING" means a Revolving Credit Borrowing, a Swing Line Borrowing or a
Term Loan Borrowing, as the context may require.
"BORROWING BASE" means, as of any date of determination and subject to
SECTION 1.08 and the following sentence, the sum of:
(a) 90% of Eligible Federal Government Prime Billed Accounts,
(b) 85% of Eligible Federal Government Subcontracted Billed Accounts,
(c) the lesser of:
(i) the sum of (A) 50% of Eligible Federal Government Prime
Unbilled Accounts and (B) 50% of Eligible Federal Government Subcontracted
Unbilled Accounts, and
(ii) $7,500,000, and
(d) 80% of Eligible Commercial Billed Accounts.
"BORROWING BASE CERTIFICATE" means a certificate in substantially the form
of EXHIBIT E, properly completed and signed by a Responsible Officer of the
Borrower, and accompanied by a reasonably detailed summary with listings and
agings of all Collateral, all in form and detail satisfactory to Administrative
Agent.
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"BORROWING LIMIT" means, as of any date of determination, the lesser of (a)
the Revolving Credit Commitments and (b) the Borrowing Base.
"BUSINESS DAY" means any day other than a Saturday, Sunday or other day on
which commercial banks are authorized to close under the Laws of, or are in fact
closed in, the state where the Administrative Agent's Office is located and, if
such day relates to any Eurodollar Rate Loan, means any such day on which
dealings in Dollar deposits are conducted by and between banks in the London
interbank eurodollar market.
"CAPITAL ASSET" means, with respect to Holdings and its Subsidiaries, any
asset that should, in accordance with GAAP, be classified and accounted for as a
capital asset on a consolidated balance sheet of Holdings and its Subsidiaries.
"CAPITAL EXPENDITURES" means with respect to Holdings and its Subsidiaries
for any period, the aggregate cost of all Capital Assets acquired by Holdings
and its Subsidiaries during such period, as determined in accordance with GAAP
MINUS, to the extent included in the foregoing, expenditures made by Holdings
and its Subsidiaries during such period (i) with the proceeds of insurance or a
condemnation claim to restore or replace property or assets to the condition of
such property or assets immediately prior to any damage, loss, destruction or
condemnation of the same, (ii) pursuant to Section 8.02(f), (iii) with the
proceeds of indemnification with respect to a loss of Capital Assets, (iv) as a
tenant in the nature of leasehold improvements, to the extent reimbursed by the
landlord or (v) in connection with the trade-in of property or assets pursuant
to Section 8.05(c).
"CASH COLLATERALIZE" has the meaning set forth in SECTION 2.03(g).
"CHANGE OF CONTROL" means, an event or series of events by which:
(a) at any time, Holdings shall fail to own one hundred percent (100%)
of the equity securities of the Borrower entitled to vote in the election of
members of the board of directors of the Borrower; or
(b) at any time, the Borrower or one or more of its Subsidiaries shall
fail to own one hundred percent (100%) of the capital stock or other ownership
interests of each of the Borrower's Subsidiaries, except to the extent permitted
pursuant to Section 8.04; or
(c) prior to the consummation of any IPO, GTCR Fund VII and GTCR
Co-Invest shall fail to collectively own fifty and one tenth percent (50.1%) or
more of the capital stock of Holdings; or
(d) following the consummation of any IPO, any "person" or "group" (as
such terms are used in Sections 13(d) and 14(d) of the Securities Exchange Act
of 1934, but excluding any employee benefit plan of such person or its
subsidiaries, and any person or entity acting in its capacity as trustee, agent
or other fiduciary or administrator of any such plan), other than GTCR Fund VII
or GTCR Co-Invest, becomes the "beneficial owner" (as defined in Rules 13d-3 and
13d-5 under the Securities Exchange Act of 1934, except that a person or group
shall be deemed to have "beneficial ownership" of all securities that such
person or group has the right to acquire (such right, an "OPTION RIGHT"),
whether such right is exercisable immediately or only after the
5
passage of time), directly or indirectly, of 25% or more of the equity
securities of such Person entitled to vote for members of the board of directors
or equivalent governing body of such Person on a fully-diluted basis (and taking
into account all such securities that such person or group has the right to
acquire pursuant to any option right).
"CLOSING DATE" means the first date all the conditions precedent in SECTION
5.01 are satisfied or waived in accordance with SECTION 5.01 (or, in the case of
SECTION 5.01(c), waived by the Person entitled to receive the applicable
payment).
"CODE" means the Internal Revenue Code of 1986, as amended.
"COLLATERAL" means the collateral security for all or a portion of the
Obligations pledged or granted pursuant to the Security Documents.
"COLLATERAL AGREEMENT" means that certain Collateral Agreement dated as of
the date hereof, executed by each of the Loan Parties in favor of the
Administrative Agent on behalf of the Lenders, substantially in the form of
EXHIBIT F.
"COMMITMENT" means, as to each Lender, the sum of such Lender's Revolving
Credit Commitment and Term Loan Commitment, in an aggregate principal amount at
any one time outstanding not to exceed the amounts set forth opposite such
Lender's name on SCHEDULE 2.01 or in the Assignment and Assumption pursuant to
which such Lender becomes a party hereto, as applicable, as such amount may be
adjusted from time to time in accordance with this Agreement.
"COMPENSATION PERIOD" has the meaning set forth in SECTION 3.05(c).
"COMPLIANCE CERTIFICATE" means a certificate substantially in the form of
EXHIBIT D.
"CONSOLIDATED CASH INTEREST CHARGES" means, for any period, for Holdings
and its Subsidiaries on a consolidated basis, the sum of (a) the cash interest
paid during such period, as determined in accordance with GAAP for purposes of
the cash flow statement (excluding, to the extent included in cash interest paid
for such period, without duplication, (i) prepayment penalties, (ii) fees paid
in connection with the Senior Subordinated Notes, (iii) underwriting, commitment
and arranging fees and (iv) legal fees and expenses and other charges in
connection with Indebtedness) and (b) the portion of rent expense with respect
to such period under capital leases that is treated as interest in accordance
with GAAP.
"CONSOLIDATED EBITDA" means, for any period, for Holdings and its
Subsidiaries on a consolidated basis, without duplication, an amount equal to
Consolidated Net Income for such period PLUS (a) the following to the extent
deducted in calculating such Consolidated Net Income: (i) Consolidated Interest
Charges for such period, (ii) the provision for federal, state, local and
foreign income taxes (and any franchise, single business, unitary or withholding
taxes imposed in lieu of income taxes) payable by Holdings and its Subsidiaries
for such period, (iii) the amount of depreciation and amortization expense for
such period, (iv) placement fees payable pursuant to Paragraph 4 of the
Professional Services Agreement (but excluding management fees payable pursuant
to Paragraph 5 of the Professional Services Agreement) to the extent permitted
to be paid under Section 8.10, (v) each of the items described in the following
clauses (A), (B)
6
and (C), to the extent approved by the Administrative Agent (and, with respect
to clause (B), the Required Lenders), such approval not to be unreasonably
withheld: (A) non-capitalized fees, expenses and payments made or incurred
pursuant to the Loan Documents, the Senior Subordinated Note Documents, the
Acquisition Documents, any Permitted Acquisition (whether or not consummated),
and any other financing event or transaction permitted under the Loan Documents
(whether or not consummated), (B) purchase accounting adjustments, cost savings
incurred, and severance or relocation expenses, in each case, in connection with
the Acquisition or any Permitted Acquisition, and (C) expenditures with respect
to which an indemnification right exists, to the extent such expenditures are
reasonably likely to be reimbursed by third parties, as reasonably determined by
the Borrower and (vi) other expenses of Holdings and its Subsidiaries reducing
such Consolidated Net Income which do not represent a cash item in such period
or any future period and MINUS (b) all non-cash items increasing Consolidated
Net Income for such period; PROVIDED that Holdings, the Borrower, the Lenders
and the Administrative Agent hereby acknowledge and agree that (A) with respect
to the Fiscal Quarter ending December 31, 2001, Consolidated EBITDA shall be
deemed to equal $8,874,000 for such Fiscal Quarter, (B) with respect to the
Fiscal Quarter ending March 31, 2002, Consolidated EBITDA shall be deemed to
equal $7,660,000 for such Fiscal Quarter, (C) with respect to the Fiscal Quarter
ending June 30, 2002, Consolidated EBITDA shall be deemed to equal $11,979,000
for such Fiscal Quarter and (D) with respect to the Fiscal Quarter ending
September 30, 2002, Consolidated EBITDA shall be deemed to equal $9,651,000 for
such Fiscal Quarter; PROVIDED FURTHER that for the purposes of determining
Consolidated EBITDA for any period during which the Acquisition or any Permitted
Acquisition is consummated, Consolidated EBITDA shall be adjusted to give effect
to the consummation of the Acquisition or such Permitted Acquisition, as
applicable, on a PRO FORMA basis in accordance with GAAP, as if the Acquisition
or such Permitted Acquisition, as applicable, occurred on the first day of such
period, such adjustments to be calculated in a manner reasonably satisfactory to
the Administrative Agent.
"CONSOLIDATED FIXED CHARGES" means, for any period, the sum of the
following determined on a consolidated basis, for Holdings and its Subsidiaries
in accordance with GAAP: (a) Consolidated Cash Interest Charges for such period,
(b) dividends paid in cash to the shareholders of Holdings for such period and
(c) the amount of scheduled principal payments (as reduced by mandatory
prepayments pursuant to SECTION 2.06(c) and (e)) with respect to Indebtedness
for such period; PROVIDED that solely for purposes of calculating the
Consolidated Fixed Charge Coverage Ratio for any Fiscal Quarter during Fiscal
Year 2006 and Fiscal Year 2007, scheduled principal payments with respect to
Term Loans hereunder shall be deemed to equal the lesser of (a) the actual
amount of such scheduled principal payments during any such Fiscal Quarter and
(b) $2,500,000 for each such Fiscal Quarter. None of the foregoing shall release
or otherwise limit the obligation of the Borrower to repay in full the actual
outstanding amount of the Term Loans in accordance with the terms hereof;
PROVIDED FURTHER that the rollover of the Senior Subordinated Bridge Notes into
the Senior Subordinated Rollover Notes shall not be deemed to be a scheduled
principal payment pursuant to clause (c) above.
"CONSOLIDATED FIXED CHARGE COVERAGE RATIO" means, as of any date of
determination, the ratio of (a) the sum of (i) Consolidated EBITDA for the
period of the four Fiscal Quarters most recently ended LESS (ii) Capital
Expenditures made during such period LESS (iii) cash taxes paid during such
period TO (b) Consolidated Fixed Charges for such period.
7
"CONSOLIDATED FUNDED INDEBTEDNESS" means, as of any date of determination,
for Holdings and its Subsidiaries on a consolidated basis, the sum of (a) the
accreted value of all obligations, whether current or long-term, which are for
borrowed money (including Obligations hereunder) and all obligations evidenced
by bonds, debentures, notes, loan agreements or other similar instruments, (b)
all purchase money Indebtedness, (c) all direct obligations arising under
letters of credit (including standby and commercial) in excess of $2,000,000 in
the aggregate, bankers' acceptances, bank guaranties, surety bonds and similar
instruments, (d) all obligations in respect of the deferred purchase price of
property or services (other than trade accounts payable in the ordinary course
of business), (e) Attributable Indebtedness in respect of capital leases, (f)
without duplication, all Guarantees with respect to outstanding Indebtedness of
the types specified in clauses (a) through (e) above of Persons other than
Holdings or any Subsidiary, and (g) all Indebtedness of the types referred to in
clauses (a) through (f) above of any partnership or joint venture (other than a
joint venture that is itself a corporation or limited liability company) in
which Holdings or a Subsidiary is a general partner or joint venturer, unless
such Indebtedness is expressly made non-recourse to Holdings or such Subsidiary.
"CONSOLIDATED INTEREST CHARGES" means, for any period, for Holdings and its
Subsidiaries on a consolidated basis, the sum of (a) all interest, premium
payments, debt discount, fees, charges and related expenses of Holdings and its
Subsidiaries in connection with borrowed money (including capitalized interest)
or in connection with the deferred purchase price of assets, in each case to the
extent treated as interest in accordance with GAAP, and (b) the portion of rent
expense of Holdings and its Subsidiaries with respect to such period under
capital leases that is treated as interest in accordance with GAAP.
"CONSOLIDATED NET INCOME" means, for any period, for Holdings and its
Subsidiaries on a consolidated basis, the net income of Holdings and its
Subsidiaries (excluding extraordinary gains and extraordinary losses) for that
period; PROVIDED that there shall be excluded from Consolidated Net Income (a)
the net income (or loss) of any Person (other than a Subsidiary which shall be
subject to clause (c) below), in which Holdings or any of its Subsidiaries has a
joint interest with a third party, except to the extent such net income is
actually paid to Holdings or any of its Subsidiaries by dividend or other
distribution during such period, (b) the net income (or loss) of any Person
accrued prior to the date it becomes a Subsidiary of such Person or is merged
into or consolidated with such Person or any of its Subsidiaries or that
Person's assets are acquired by such Person or any of its Subsidiaries except to
the extent included pursuant to the foregoing clause (a), and (c) the net income
(if positive) of any Subsidiary to the extent that the declaration or payment of
dividends or similar distributions by such Subsidiary to Holdings or any of its
Subsidiaries of such net income (i) is not at the time permitted by operation of
the terms of its charter or any agreement, instrument, judgment, decree, order,
statute rule or governmental regulation applicable to such Subsidiary or (ii)
would be subject to any taxes payable on such dividends or distributions.
"CONSOLIDATED SENIOR FUNDED INDEBTEDNESS" means, as of any date of
determination, (a) Consolidated Funded Indebtedness as of such date LESS (b) any
outstanding Subordinated Indebtedness, including, without limitation, the Senior
Subordinated Notes.
8
"CONSOLIDATED SENIOR LEVERAGE RATIO" means, as of any date of
determination, the ratio of (a) Consolidated Senior Funded Indebtedness as of
such date TO (b) Consolidated EBITDA for the period of the four Fiscal Quarters
most recently ended.
"CONSOLIDATED TOTAL LEVERAGE RATIO" means, as of any date of determination,
the ratio of (a) Consolidated Funded Indebtedness as of such date TO (b)
Consolidated EBITDA for the period of the four Fiscal Quarters most recently
ended.
"CONTRACTUAL OBLIGATION" means, as to any Person, any provision of any
security issued by such Person or of any agreement, instrument or other
undertaking to which such Person is a party or by which it or any of its
property is bound.
"CONTROL" has the meaning set forth in the definition of "Affiliate."
"CREDIT EXTENSION" means each of the following: (a) a Borrowing and (b) an
L/C Credit Extension.
"CSOC CONTRACT" means the NASA/CSOC Subcontract to Lockheed ▇▇▇▇▇▇ Space
Operations Company (subcontract SMS-C-8000).
"CSOC LITIGATION" means the lawsuit captioned GETRONICS GOVERNMENT
SOLUTIONS, L.L.C. v. LOCKHEED ▇▇▇▇▇▇ SPACE OPERATIONS COMPANY, Case No.
2002-05998 (▇▇▇▇▇▇ County, Texas), and all claims and counterclaims related
thereto.
"DEBTOR RELIEF LAWS" means the Bankruptcy Code of the United States, and
all other liquidation, conservatorship, bankruptcy, assignment for the benefit
of creditors, moratorium, rearrangement, receivership, insolvency,
reorganization, or similar debtor relief Laws of the United States or other
applicable jurisdictions from time to time in effect and affecting the rights of
creditors generally.
"DEFAULT" means any event or condition that constitutes an Event of Default
or that, with the giving of any notice, the passage of time, or both, would be
an Event of Default.
"DEFAULT RATE" means an interest rate equal to (a) the Base Rate or
Eurodollar Rate, as applicable, PLUS (b) the Applicable Rate PLUS (c) 2% per
annum.
"DEFAULTING LENDER" means any Lender that (a) has failed to fund any
portion of the Revolving Credit Loans, the Term Loan, participations in L/C
Obligations or participations in Swing Line Loans required to be funded by it
hereunder within one Business Day of the date required to be funded by it
hereunder, (b) has otherwise failed to pay over to the Administrative Agent or
any other Lender any other amount required to be paid by it hereunder within one
Business Day of the date when due, unless the subject of a good faith dispute,
or (c) has been deemed insolvent or become the subject of a bankruptcy or
insolvency proceeding.
"DISPOSITION" or "DISPOSE" means the sale, transfer, license, lease or
other disposition (including any sale and leaseback transaction) of any property
by any Person, including any sale, assignment, transfer or other disposal, with
or without recourse, of any notes or accounts receivable or any rights and
claims associated therewith.
9
"DISPOSITION PROCEEDS" has the meaning set forth in SECTION 2.06(e).
"DOLLAR" and "$" mean lawful money of the United States.
"DOMESTIC SUBSIDIARY" means any Subsidiary that is organized under the laws
of any political subdivision of the United States (other than Puerto Rico).
"ELIGIBLE ASSIGNEE" has the meaning set forth in SECTION 12.07(g).
"ELIGIBLE COMMERCIAL BILLED ACCOUNT" means, at any date of determination,
subject to modification by the Administrative Agent pursuant to SECTION 1.08,
the face value of each Account (other than any Account that arises out of a
Federal Governmental Contract) which is bona fide, non-contingent, existing
obligation of the named Account Debtor actually and absolutely owing to the
Borrower or any Subsidiary thereof and arising from the sale and delivery of
merchandise or the rendering of services to such Account Debtor in the ordinary
course of the Borrower's or any of its Subsidiaries' business, as presently
conducted for which the Account Debtor has been billed and which Account
satisfies and continues to satisfy the following requirements:
(a) The Account does not arise out of transactions with an
employee, officer, agent, director, stockholder or other Affiliate of the
Borrower or any Subsidiary thereof except, with respect to Affiliates, to
the extent such transaction is permitted pursuant to Section 8.10;
(b) The Account is evidenced by an invoice and has not
remained unpaid for a period exceeding ninety (90) days or more beyond the
invoice date of the invoice;
(c) The Account is not due from an Account Debtor whose debt
on Accounts that are unpaid ninety (90) days or more after the invoice date
of the respective invoices exceeds fifty percent (50%) of such Account
Debtor's total debt to the Borrower and its Subsidiaries (excluding, with
respect to Lockheed ▇▇▇▇▇▇ Space Operations Company, any Account which is
payable under, or in any way related to, the CSOC Contract);
(d) The Account is a valid, legally enforceable obligation of
the Account Debtor and no offset (including, without limitation, discounts,
advertising allowances, counterclaims or contra accounts) or other defense
on the part of such Account Debtor or any claim on the part of such Account
Debtor denying liability thereunder has been asserted; PROVIDED, HOWEVER,
that if the Account is subject to any such offset, defense or claim, or any
inventory related thereto has been returned, such account shall not be an
Eligible Commercial Billed Account only to the extent of the maximum amount
of such offset, defense, claim or return and the balance of such Account,
if it otherwise represents a valid, uncontested and legally enforceable
obligation of the Account Debtor and meets all of the other criteria for
eligibility set forth herein, shall be considered an Eligible Commercial
Billed Account;
(e) The Account Debtor is not the subject of any bankruptcy
or insolvency proceeding of any kind;
10
(f) If the Account Debtor is located outside of the United
States, the Account (x) is payable in the full amount of the face value of
the Account in United States Dollars and is supported by an irrevocable
letter of credit issued by a United States financial institution,
satisfactory to the Administrative Agent in its reasonable discretion, or
(y) is credit guaranteed in full by a Foreign Credit Insurance Association
("FCIA") insurance policy or such similar policy reasonably acceptable to
the Administrative Agent;
(g) The services have been performed or the subject
merchandise has been shipped or delivered on open Account to the named
Account Debtor on an absolute sale basis and not on a ▇▇▇▇-and-hold,
consignment, on approval or subject to any other repurchase or return
agreement and no material part of the subject goods has been returned;
(h) Other than pursuant to the Security Documents, the
Account is not subject to any Lien or security interest whatsoever;
(i) The Account is not evidenced by chattel paper or an
instrument of any kind;
(j) The Account is not due from an Account Debtor whose total
obligation to the Borrower and its Subsidiaries, on a consolidated basis,
on Accounts exceeds fifteen percent (15%) of the aggregate amount of the
Borrowing Base; PROVIDED, HOWEVER, that the Account shall not be an
Eligible Commercial Billed Account only to the extent of such excess, if it
otherwise represents a valid, uncontested and legally enforceable
obligation of the Account Debtor and meets all of the other criteria for
eligibility set forth herein; and
(k) The Account has not been turned over to any Person that
is not a Subsidiary or Affiliate of the Borrower for collection.
"ELIGIBLE FEDERAL GOVERNMENT PRIME BILLED ACCOUNT" means, at any date of
determination, subject to modification by the Administrative Agent pursuant to
SECTION 1.08, the face value of each Account arising out of a Federal
Governmental Prime Contract which is bona fide, non-contingent, existing
obligation of the named Account Debtor actually and absolutely owing to the
Borrower or any Subsidiary thereof and arising from the sale and delivery of
merchandise or the rendering of services to such Account Debtor in the ordinary
course of the Borrower's or any of its Subsidiaries' business as presently
conducted for which the Account Debtor has been billed and that (a) the Borrower
or such Subsidiary shall have satisfied the requirements of the Security
Documents with respect to the Assignment of Claims Act, as amended and (b) the
Account satisfies and continues to satisfy requirements contained in clauses
(b), (c), (d), (g), (h), (i) and (k) of the definition of Eligible Commercial
Billed Account; PROVIDED, that with regard to clauses (b) and (c) of such
definition, the ninety (90) day period shall be deemed to be one-hundred twenty
(120) days for determining Eligible Federal Government Prime Billed Accounts.
"ELIGIBLE FEDERAL GOVERNMENT PRIME UNBILLED ACCOUNT" means, at any date of
determination thereof, subject to modification by the Administrative Agent
pursuant to SECTION 1.08, the face value of each Account which would be an
Eligible Federal Government Prime Billed
11
Account, but for the fact such Account has not been invoiced as a result of
normal frequency of billing under the particular contract, or as a result of
government delays in the preparation of contract documents and which will be
invoiced within thirty (30) days of the "as of" date of the particular Borrowing
Base Certificate.
"ELIGIBLE FEDERAL GOVERNMENT SUBCONTRACTED BILLED ACCOUNT" means, at any
date of determination, subject to modification by the Administrative Agent
pursuant to SECTION 1.08, the face value of each Account arising out of a
Federal Governmental Subcontract which is bona fide, non-contingent, existing
obligation of the named Account Debtor actually and absolutely owing to the
Borrower or any Subsidiary thereof and arising from the sale and delivery of
merchandise or the rendering of services to such Account Debtor in the ordinary
course of the Borrower's or any of its Subsidiaries' business as presently
conducted for which the Account Debtor has been billed and that the Account
satisfies and continues to satisfy requirements contained in clauses (a) through
(k) (other than clause (j)) of the definition of Eligible Commercial Billed
Account; PROVIDED, that with regard to clauses (b) and (c) of such definition,
the ninety (90) day period shall be deemed to be one-hundred twenty (120) days
for determining Eligible Federal Government Subcontracted Billed Accounts;
PROVIDED FURTHER that to the extent that the Eligible Federal Government
Subcontracted Billed Accounts with respect to any single Account Debtor exceed
the lesser of (a) 20% of the Borrowing Base and (b) $10,000,000, the amount of
such excess shall be excluded from the calculation of Eligible Federal
Government Subcontracted Billed Accounts.
"ELIGIBLE FEDERAL GOVERNMENT SUBCONTRACTED UNBILLED ACCOUNT" means, at any
date of determination thereof, subject to modification by the Administrative
Agent pursuant to SECTION 1.08, the face value of each Account which would be an
Eligible Federal Government Subcontracted Billed Account, but for the fact such
Account has not been invoiced as a result of normal frequency of billing under
the particular contract, or as a result of government delays in the preparation
of contract documents and which will be invoiced within thirty (30) days of the
"as of" date of the particular Borrowing Base Certificate.
"ENVIRONMENTAL LAWS" means any and all Federal, state, local, and foreign
statutes, laws, regulations, ordinances, rules, judgments, orders, decrees,
permits, licenses or governmental restrictions relating to pollution and the
protection of the environment or the release of any materials into the
environment, including those related to hazardous substances or wastes, air
emissions and discharges to waste or public systems.
"ENVIRONMENTAL LIABILITY" means any liability, contingent or otherwise
(including any liability for damages, costs of environmental remediation, fines,
penalties or indemnities), of the Borrower, any other Loan Party or any of their
respective Subsidiaries directly or indirectly resulting from or based upon (a)
violation of any Environmental Law, (b) the generation, use, handling,
transportation, storage, treatment or disposal of any Hazardous Materials, (c)
exposure to any Hazardous Materials, (d) the release or threatened release of
any Hazardous Materials into the environment or (e) any contract, agreement or
other consensual arrangement pursuant to which liability is assumed or imposed
with respect to any of the foregoing.
"EQUITY CONTRIBUTION" has the meaning set forth in SECTION 5.01(d)(ii)(A).
12
"EQUITY PURCHASE AGREEMENT" means the Purchase Agreement, dated as of
September 7, 2001, by and among Holdings, GTCR Fund VII, GTCR Co-Invest, the J.
Sunny Bajaj Trust, the ▇▇▇▇▇▇ ▇▇▇▇▇ Trust and the Bajaj Family Limited
Partnership and the ▇▇▇▇▇▇▇▇▇▇ Family, LLC, as amended, restated, supplemented
or otherwise modified pursuant to the terms and conditions set forth in this
Agreement.
"EQUITY ROLLOVER" has the meaning set forth in SECTION 5.01(d)(ii)(B).
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended.
"ERISA AFFILIATE" means any trade or business (whether or not incorporated)
under common control with any Loan Party within the meaning of Section 414(b) or
(c) of the Code (and Sections 414(m) and (o) of the Code for purposes of
provisions relating to Section 412 of the Code).
"ERISA EVENT" means (a) a Reportable Event with respect to a Pension Plan;
(b) a withdrawal by any Loan Party or any ERISA Affiliate from a Pension Plan
subject to Section 4063 of ERISA during a plan year in which it was a
substantial employer (as defined in Section 4001(a)(2) of ERISA) or a cessation
of operations that is treated as such a withdrawal under Section 4062(e) of
ERISA; (c) a complete or partial withdrawal by any Loan Party or any ERISA
Affiliate from a Multiemployer Plan or notification that a Multiemployer Plan is
in reorganization; (d) the filing of a notice of intent to terminate, the
treatment of a Plan amendment as a termination under Sections 4041 or 4041A of
ERISA, or the commencement of proceedings by the PBGC to terminate a Pension
Plan or Multiemployer Plan; (e) an event or condition which constitutes grounds
under Section 4042 of ERISA for the termination of, or the appointment of a
trustee to administer, any Pension Plan or Multiemployer Plan; or (f) the
imposition of any liability under Title IV of ERISA, other than for PBGC
premiums due but not delinquent under Section 4007 of ERISA, upon any Loan Party
or any ERISA Affiliate.
"EURODOLLAR RATE" means for any Interest Period with respect to any
Eurodollar Rate Loan, a rate per annum determined by the Administrative Agent
pursuant to the following formula:
EURODOLLAR BASE RATE
Eurodollar Rate = ------------------------------------
1.00 - Eurodollar Reserve Percentage
Where,
"EURODOLLAR BASE RATE" means, for such Interest Period:
(a) the rate per annum equal to the rate determined by the
Administrative Agent to be the offered rate that appears on the page of the
Telerate screen (or any successor thereto) that displays an average British
Bankers Association Interest Settlement Rate for deposits in Dollars (for
delivery on the first day of such Interest Period) with a term equivalent
to such Interest Period, determined as of approximately 11:00 a.m. (London
time) two Business Days prior to the first day of such Interest Period, or
13
(b) if the rate referenced in the preceding clause (a) does
not appear on such page or service or such page or service shall not be
available, the rate per annum equal to the rate determined by the
Administrative Agent to be the offered rate on such other page or other
service that displays an average British Bankers Association Interest
Settlement Rate for deposits in Dollars (for delivery on the first day of
such Interest Period) with a term equivalent to such Interest Period,
determined as of approximately 11:00 a.m. (London time) two Business Days
prior to the first day of such Interest Period, or
(c) if the rates referenced in the preceding clauses (a) and
(b) are not available, the rate per annum determined by the Administrative
Agent as the rate of interest at which deposits in Dollars for delivery on
the first day of such Interest Period in same day funds in the approximate
amount of the Eurodollar Rate Loan being made, continued or converted by
Bank of America and with a term equivalent to such Interest Period would be
offered by Bank of America's London Branch to major banks in the London
interbank eurodollar market at their request at approximately 4:00 p.m.
(London time) two Business Days prior to the first day of such Interest
Period.
"EURODOLLAR RESERVE PERCENTAGE" means, for any day during any
Interest Period, the reserve percentage (expressed as a decimal, carried
out to five decimal places) in effect on such day, whether or not
applicable to any Lender, under regulations issued from time to time by the
FRB for determining the maximum reserve requirement (including any
emergency, supplemental or other marginal reserve requirement) with respect
to Eurocurrency funding (currently referred to as "Eurocurrency
liabilities"). The Eurodollar Rate for each outstanding Eurodollar Rate
Loan shall be adjusted automatically as of the effective date of any change
in the Eurodollar Reserve Percentage.
"EURODOLLAR RATE LOAN" means a Loan that bears interest at a rate based on
the Eurodollar Rate.
"EVENT OF DEFAULT" has the meaning set forth in SECTION 10.01.
"EXCESS CASH FLOW" means, for any period of determination, the sum of,
without duplication, (a) Consolidated EBITDA for such period, MINUS (b) income
taxes (to the extent such taxes are paid in cash) and Consolidated Interest
Charges and, in each case, deducted in the determination of Consolidated Net
Income for such period, MINUS (c) all principal payments made in respect of
Indebtedness during such period (whether scheduled payments or optional
prepayments, but excluding mandatory prepayments required to be made pursuant to
Section 2.06(e)) MINUS (d) all Capital Expenditures made during such period
(excluding Capital Expenditures made with the proceeds of Indebtedness), MINUS,
(e) cash payments funded from the earnings of the Borrower and its Subsidiaries
and made during such period in connection with the Acquisition or a Permitted
Acquisition, including, without limitation, indemnity payments, working capital
and purchase price adjustments, earn outs or other contingent payments and
transaction fees and expenses in connection therewith, MINUS (f) cash payments
funded from the earnings of the Borrower and its Subsidiaries and made during
such period to the extent permitted under Section 8.06(c) MINUS (g) cash
payments funded from the earnings of the Borrower and its Subsidiaries and made
in respect of placement fees payable pursuant to Paragraph 4 of the Professional
Services Agreement (but excluding management fees payable
14
pursuant to Paragraph 5 of the Professional Services Agreement) to the extent
permitted to be paid under Section 8.10, MINUS (h) all non-cash credits or
add-backs (including, any purchase accounting adjustments made in connection
with the Acquisition or a Permitted Acquisition), in each case, to the extent
included in the determination of Consolidated EBITDA for such period, MINUS (i)
cash payments not otherwise subject to clause (f) above and made in respect of
severance and relocation costs made in connection with the Acquisition or a
Permitted Acquisition, MINUS (j) amounts permitted to be carried forward in
accordance with Section 8.18, PLUS or MINUS, as applicable, (k) the net change
in the working capital of Holdings and its Subsidiaries during such period.
"EXISTING
CREDIT AGREEMENT" means that certain Loan Agreement dated as of
May 19, 2000 by and between SunTrust Bank and WangGovernment Services, Inc. (as
ratified and assumed by the Target pursuant to the Ratification and Assumption
Agreement dated as of October 2, 2000 by and between SunTrust Bank and the
Target).
"FEDERAL FUNDS RATE" means, for any day, the rate per annum equal to the
weighted average of the rates on overnight Federal funds transactions with
members of the Federal Reserve System arranged by Federal funds brokers on such
day, as published by the Federal Reserve Bank on the Business Day next
succeeding such day; PROVIDED that (a) if such day is not a Business Day, the
Federal Funds Rate for such day shall be such rate on such transactions on the
next preceding Business Day as so published on the next succeeding Business Day,
and (b) if no such rate is so published on such next succeeding Business Day,
the Federal Funds Rate for such day shall be the average rate (rounded upward,
if necessary, to a whole multiple of 1/100 of 1%) charged to Bank of America on
such day on such transactions as determined by the Administrative Agent.
"FEDERAL GOVERNMENTAL CONTRACT" means a Federal Governmental Prime Contract
or a Federal Governmental Subcontract.
"FEDERAL GOVERNMENTAL PRIME CONTRACT" means any written agreement,
commitment, contract, instrument or other binding arrangement between the
Borrower or any Subsidiary thereof and an agency, department or instrumentality
of the United States where the Borrower or such Subsidiary is the prime
contractor.
"FEDERAL GOVERNMENTAL SUBCONTRACT" means any written agreement, commitment,
contract, instrument or other binding arrangement between the Borrower or any
Subsidiary thereof and any Person that is the prime contractor under a related
contract with an agency, department or instrumentality of the United States
where the Borrower or such Subsidiary is a subcontractor of such prime
contractor.
"FEE LETTER" means the letter agreement, dated September 27, 2002, as
amended, restated, supplemented or otherwise modified on or prior to the date
hereof, among the Borrower, the Administrative Agent, the Arranger and the other
parties thereto.
"FISCAL YEAR" means Holdings' Fiscal Year, which is the period of twelve
consecutive calendar months ending on December 31.
15
"FISCAL QUARTER" means each of the four periods of three consecutive
calendar months which make up each Fiscal Year.
"FOREIGN LENDER" has the meaning set forth in SECTION 12.15(a)(i).
"FOREIGN SUBSIDIARY" means any Subsidiary that is not a Domestic
Subsidiary.
"FRB" means the Board of Governors of the Federal Reserve System of the
United States.
"GAAP" means generally accepted accounting principles in the United States
set forth in the opinions and pronouncements of the Accounting Principles Board
and the American Institute of Certified Public Accountants and statements and
pronouncements of the Financial Accounting Standards Board or such other
principles as may be approved by a significant segment of the accounting
profession in the United States, that are applicable to the circumstances as of
the date of determination, consistently applied.
"GOVERNMENTAL APPROVALS" means all authorizations, consents, approvals,
licenses and exemptions of, registrations and filings with, and reports to, all
Governmental Authorities.
"GOVERNMENTAL AUTHORITY" means any nation or government, any state or other
political subdivision thereof, any agency, authority, instrumentality,
regulatory body, court, administrative tribunal, central bank or other entity
exercising executive, legislative, judicial, taxing, regulatory or
administrative powers or functions of or pertaining to government.
"GTCR FUND VII" means GTCR Fund VII, L.P., a Delaware limited partnership.
"GTCR CO-INVEST" means GTCR Co-Invest, L.P., a Delaware limited
partnership.
"GUARANTEE" means, as to any Person, any (a) any obligation, contingent or
otherwise, of such Person guaranteeing or having the economic effect of
guaranteeing any Indebtedness or other obligation payable or performable by
another Person (the "primary obligor") in any manner, whether directly or
indirectly, and including any obligation of such Person, direct or indirect, (i)
to purchase or pay (or advance or supply funds for the purchase or payment of)
such Indebtedness or other obligation, (ii) to purchase or lease property,
securities or services for the purpose of assuring the obligee in respect of
such Indebtedness or other obligation of the payment or performance of such
Indebtedness or other obligation, or (iii) to maintain working capital, equity
capital or any other financial statement condition or liquidity or level of
income or cash flow of the primary obligor so as to enable the primary obligor
to pay such Indebtedness or other obligation, or (b) any Lien on any assets of
such Person securing any Indebtedness or other obligation of any other Person,
whether or not such Indebtedness or other obligation is assumed by such Person.
The amount of any Guarantee shall be deemed to be an amount equal to the stated
or determinable amount of the related primary obligation, or portion thereof, in
respect of which such Guarantee is made or, if not stated or determinable, the
maximum reasonably anticipated liability in respect thereof as determined by the
guaranteeing Person in good faith. The term "Guarantee" as a verb has a
corresponding meaning.
"GUARANTEED OBLIGATIONS" has the meaning set forth in SECTION 9.01.
16
"GUARANTORS" means the collective reference to Holdings and the Subsidiary
Guarantors.
"HAZARDOUS MATERIALS" means all explosive or radioactive substances or
wastes and all hazardous or toxic substances, wastes or other pollutants,
including petroleum or petroleum distillates, asbestos or asbestos-containing
materials, polychlorinated biphenyls, radon gas, infectious or medical wastes
and all other hazardous substances or solid wastes regulated pursuant to any
Environmental Law.
"HOLDINGS" means DigitalNet Holdings, Inc., a Delaware corporation, the
parent of the Borrower.
"INDEBTEDNESS" means, as to any Person at a particular time, without
duplication, all of the following, whether or not included as indebtedness or
liabilities in accordance with GAAP:
(a) all obligations of such Person for borrowed money and all
obligations of such Person evidenced by bonds, debentures, notes, loan
agreements or other similar instruments;
(b) all direct or contingent obligations of such Person arising under
letters of credit (including standby and commercial), bankers' acceptances, bank
guaranties, surety bonds and similar instruments;
(c) all net obligations of such Person under any Swap Contract;
(d) all obligations of such Person to pay the deferred purchase price
of property or services (other than accrued expenses and trade accounts payable
in the ordinary course of business);
(e) all indebtedness (excluding prepaid interest thereon) secured by a
Lien on property owned or being purchased by such Person (including indebtedness
arising under conditional sales or other title retention agreements), whether or
not such indebtedness shall have been assumed by such Person or is limited in
recourse;
(f) all Attributable Indebtedness with respect to capital leases;
(g) all obligations of any such Person to redeem, repurchase,
exchange, defease or otherwise make payments in respect of capital stock or
other securities or partnership interests of such Person (unless such
redemption, repurchase, exchange, defeasance or other payment is contingent
(unless such contingency has been satisfied) or is not required prior to the
date that is six (6) months after the later of the Revolving Credit Maturity
Date and the Term Loan Maturity Date); and
(h) all Guarantees of such Person in respect of any of the foregoing.
For all purposes hereof, the Indebtedness of any Person shall include the
Indebtedness of any partnership or joint venture (other than a joint venture
that is itself a corporation or limited liability company) in which such Person
is a general partner or a joint venturer, unless such Indebtedness is expressly
made non-recourse to such Person. The amount of any net obligation
17
under any Swap Contract on any date shall be deemed to be the Swap Termination
Value thereof as of such date.
"INDEMNIFIED LIABILITIES" has the meaning set forth in SECTION 12.05.
"INDEMNITEES" has the meaning set forth in SECTION 12.05.
"INS CONTRACT" means the Department of Justice INS FOS H/M Contract
(Contract OW-7-C-0013).
"INSURANCE AND CONDEMNATION PROCEEDS" has the meaning set forth in SECTION
2.06(e).
"INTEREST PAYMENT DATE" means, (a) as to any Loan other than a Base Rate
Loan, the last day of each Interest Period applicable to such Loan and the
Revolving Credit Maturity Date or the Term Loan Maturity Date, as applicable;
PROVIDED, HOWEVER, that if any Interest Period for a Eurodollar Rate Loan
exceeds three months, the respective dates that fall every three months after
the beginning of such Interest Period shall also be Interest Payment Dates; and
(b) as to any Base Rate Loan (including a Swing Line Loan), the last Business
Day of each calendar quarter and the Revolving Credit Maturity Date or the Term
Loan Maturity Date, as applicable.
"INTEREST PERIOD" means, as to each Eurodollar Rate Loan, the period
commencing on the date such Eurodollar Rate Loan is disbursed or converted to or
continued as a Eurodollar Rate Loan and ending on the date one, two, three, six,
nine (if available to all of the Lenders) or twelve (if available to all of the
Lenders) months thereafter, as selected by the Borrower in its Loan Notice;
PROVIDED that:
(a) any Interest Period that would otherwise end on a day that is not
a Business Day shall be extended to the next succeeding Business Day unless such
Business Day falls in another calendar month, in which case such Interest Period
shall end on the next preceding Business Day;
(b) any Interest Period 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 calendar month at the end of such Interest Period;
(c) no Interest Period shall extend beyond the Revolving Credit
Maturity Date or the Term Loan Maturity Date, as applicable;
(d) after giving effect to all Borrowings, all conversions of Loans
from one Type to the other, and all continuations of Loans as the same Type,
there shall not be more than eight Interest Periods in effect with respect to
Eurodollar Rate Loans; and
(e) notwithstanding the foregoing, during the 180 day period following
the Closing Date, the Borrower may select Interest Periods of 1 week for
Eurodollar Rate Loans, subject to availability by all the Lenders.
18
"INVESTMENT" means, as to any Person, any direct or indirect acquisition or
investment by such Person, whether by means of (a) the purchase or other
acquisition of capital stock or other securities of another Person, (b) a loan,
advance or capital contribution to, Guarantee or assumption of debt of, or
purchase or other acquisition of any other debt or equity participation or
interest in, another Person, including any partnership or joint venture interest
in such other Person, or (c) the purchase or other acquisition (in one
transaction or a series of transactions) of assets of another Person that
constitute a business unit. For purposes of covenant compliance, the amount of
any Investment shall be the amount actually invested, without adjustment for
subsequent increases or decreases in the value of such Investment.
"IPO" means an initial public offering of common stock of Holdings.
"IP RIGHTS" has the meaning set forth in SECTION 6.17.
"IRS" means the United States Internal Revenue Service or any successor
agency.
"JOINDER AGREEMENT" means each joinder agreement executed in favor of the
Administrative Agent, for the ratable benefit of itself and the Lenders,
pursuant to requirements of SECTION 7.15, in form and substance reasonably
acceptable to the Administrative Agent.
"LAWS" means, collectively, all international, foreign, Federal, state and
local statutes, treaties, rules, guidelines, regulations, ordinances, codes and
administrative or judicial precedents or authorities, including the
interpretation or administration thereof by any Governmental Authority charged
with the enforcement, interpretation or administration thereof, and all
applicable administrative orders, directed duties, requests, licenses,
authorizations and permits of, and agreements with, any Governmental Authority,
in each case having the force of law.
"L/C ADVANCE" means, with respect to each Lender, such Lender's funding of
its participation in any L/C Borrowing in accordance with its Revolving Credit
Commitment Percentage.
"L/C BORROWING" means an extension of credit resulting from a drawing under
any Letter of Credit which has not been reimbursed on the date when made or
refinanced as a Revolving Credit Borrowing.
"L/C CREDIT EXTENSION" means, with respect to any Letter of Credit, the
issuance thereof or extension of the expiry date thereof, or the renewal or
increase of the amount thereof.
"L/C ISSUER" means Bank of America in its capacity as issuer of Letters of
Credit hereunder, or any successor issuer of Letters of Credit hereunder.
"L/C OBLIGATIONS" means, as at any date of determination, the aggregate
undrawn amount of all outstanding Letters of Credit PLUS, without duplication,
the aggregate of all Unreimbursed Amounts, including all L/C Borrowings.
"LENDER" has the meaning set forth in the introductory paragraph hereto
and, as the context requires, includes the L/C Issuer and the Swing Line Lender.
19
"LENDING OFFICE" means, as to any Lender, the office or offices of such
Lender described as such in such Lender's Administrative Questionnaire, or such
other office or offices as a Lender may from time to time notify the Borrower
and the Administrative Agent.
"LETTER OF CREDIT" means any letter of credit issued hereunder.
"LETTER OF CREDIT APPLICATION" means an application and agreement for the
issuance or amendment of a Letter of Credit in the form from time to time in use
by the L/C Issuer.
"LETTER OF CREDIT EXPIRATION DATE" means the day that is seven days prior
to the Revolving Credit Maturity Date then in effect (or, if such day is not a
Business Day, the next preceding Business Day).
"LETTER OF CREDIT SUBLIMIT" means an amount equal to the lesser of (a)
$5,000,000 and (b) the Revolving Credit Commitments. The Letter of Credit
Sublimit is part of, and not in addition to, the Revolving Credit Commitments.
"LIEN" means any deed of trust, mortgage, pledge, hypothecation,
assignment, deposit arrangement, encumbrance, lien (statutory or other), charge,
or preference, priority or other security interest or preferential arrangement
of any kind or nature whatsoever (including any conditional sale or other title
retention agreement, and any financing lease having substantially the same
economic effect as any of the foregoing).
"LOANS" means the collective reference to the Revolving Credit Loans, the
Term Loan and the Swing Line Loans and "Loan" means any of such Loans.
"LOAN DOCUMENTS" means this Agreement, each Note, each Security Document,
the Fee Letter, the Subsidiary Guaranty Agreement and each Joinder Agreement.
"LOAN NOTICE" means a notice of (a) a Revolving Credit Borrowing, (b) a
Term Loan Borrowing, (c) a conversion of Loans from one Type to the other, or
(d) a continuation of Eurodollar Rate Loans, pursuant to SECTION 2.02(a), which,
if in writing, shall be substantially in the form of EXHIBIT A.
"LOAN PARTIES" means, collectively, the Borrower and each Guarantor.
"MATERIAL ADVERSE EFFECT" means (a) a material adverse change in, or a
material adverse effect upon, the business, assets, liabilities (actual or
contingent), operations or financial condition of Holdings and its Subsidiaries
taken as a whole; (b) a material impairment of the ability of any Loan Party to
perform its obligations under any Loan Document to which it is a party; or (c) a
material adverse effect upon the legality, validity, binding effect or
enforceability against any Loan Party of any Loan Document to which it is a
party. For the avoidance of doubt, (i) the loss by the Borrower and its
Subsidiaries of the INS Contract re-compete and (ii) the expiration of the CSOC
Contract shall not be deemed to be a Material Adverse Effect.
"MATERIAL GOVERNMENT CONTRACT" has the meaning set forth in the Collateral
Agreement.
"MONTHLY FINANCIAL STATEMENTS" has the meaning set forth in SECTION
5.01(c)(i).
20
"MULTIEMPLOYER PLAN" means any employee benefit plan of the type described
in Section 4001(a)(3) of ERISA, to which any Loan Party or any ERISA Affiliate
makes or is obligated to make contributions, or during the preceding five plan
years, has made or been obligated to make contributions.
"NET CASH PROCEEDS" means:
(a) with respect to any incurrence of any Indebtedness by any Loan
Party, the aggregate amount of all cash received by such Loan Party in respect
of such Indebtedness, net of all reasonable fees, discounts, commissions and
expenses incurred by such Loan Party in connection therewith;
(b) with respect to the sale of any asset by any Loan Party, the
excess, if any, of (i) the sum of cash and cash equivalents received in
connection with such sale (including any cash received by way of deferred
payment pursuant to, or by monetization of, a note receivable or otherwise, but
only as and when so received) over (ii) the sum of (A) the principal amount of
any Indebtedness that is secured by such asset and that is required to be repaid
in connection with the sale thereof (other than Indebtedness under the Loan
Documents), (B) the out-of-pocket fees and expenses incurred by such Loan Party
in connection with such sale, (C) income taxes reasonably estimated to be
actually payable within two years of the date of the relevant asset sale as a
result of any gain recognized in connection therewith and (D) reasonable
reserves for indemnification established in connection with such sale in
accordance with GAAP;
(c) with respect to the sale of any capital stock or other equity
interest by any Loan Party, the excess of (i) the sum of the cash and cash
equivalents received in connection with such sale over (ii) the underwriting
discounts and commissions, fees and other out-of-pocket expenses, incurred by
such Loan Party in connection with such sale; and
(d) with respect to any payment under an insurance policy or in
connection with a condemnation proceeding, the amount of cash proceeds received
by any Loan Party from an insurance company or Governmental Authority, as
applicable, net of all fees and expenses of collection.
"NOTE" means a promissory note made by the Borrower in favor of a Lender
evidencing Loans made by such Lender, substantially in the form of EXHIBIT C.
"NOTICE OF ASSIGNMENT" has the meaning set forth in the Collateral
Agreement.
"OBLIGATIONS" means (a) all advances to, and debts, liabilities, fees,
commissions, obligations, covenants and duties of, any Loan Party arising under
any Loan Document or otherwise with respect to any Loan or Letter of Credit,
whether direct or indirect (including those acquired by assumption), absolute or
contingent, due or to become due, now existing or hereafter arising and
including interest and fees that accrue after the commencement by or against any
Loan Party or any Affiliate thereof of any proceeding under any Debtor Relief
Laws naming such Person as the debtor in such proceeding, regardless of whether
such interest and fees are allowed claims in such proceeding and (b) all
existing or future payment and other obligations owing by any Loan Party under
any Swap Contract (which such Swap Contract is permitted
21
hereunder) entered into with any Person which was a Lender or its Affiliate at
the time such Swap Contract was entered into.
"ORGANIZATION DOCUMENTS" means, (a) with respect to any corporation, the
certificate or articles of incorporation and the bylaws (or equivalent or
comparable constitutive documents with respect to any non-U.S. jurisdiction);
(b) with respect to any limited liability company, the certificate or articles
of formation or organization and operating agreement; and (c) with respect to
any partnership, joint venture, trust or other form of business entity, the
partnership, joint venture or other applicable agreement of formation or
organization and any agreement, instrument, filing or notice with respect
thereto filed in connection with its formation or organization with the
applicable Governmental Authority in the jurisdiction of its formation or
organization and, if applicable, any certificate or articles of formation or
organization of such entity.
"OUTSTANDING AMOUNT" means (i) with respect to Revolving Credit Loans, the
Term Loan and Swing Line Loans on any date, the aggregate outstanding principal
amount thereof after giving effect to any borrowings and prepayments or
repayments of Revolving Credit Loans, the Term Loan and Swing Line Loans, as the
case may be, occurring on such date; and (ii) with respect to any L/C
Obligations on any date, the amount of such L/C Obligations on such date after
giving effect to any L/C Credit Extension occurring on such date and any other
changes in the aggregate amount of the L/C Obligations as of such date,
including as a result of any reimbursements of outstanding unpaid drawings under
any Letters of Credit or any reductions in the maximum amount available for
drawing under Letters of Credit taking effect on such date.
"PARENT GUARANTY" means the unconditional guaranty of the Obligations by
Holdings under Article IX.
"PARTICIPANT" has the meaning set forth in SECTION 12.07(d).
"PBGC" means the Pension Benefit Guaranty Corporation.
"PENSION PLAN" means any "employee pension benefit plan" (as such term is
defined in Section 3(2) of ERISA), other than a Multiemployer Plan, that is
subject to Title IV of ERISA and is sponsored or maintained by any Loan Party or
any ERISA Affiliate or to which any Loan Party or any ERISA Affiliate
contributes or has an obligation to contribute, or in the case of a multiple
employer or other plan described in Section 4064(a) of ERISA, has made
contributions at any time during the immediately preceding five plan years.
"PERMITTED ACQUISITION" has the meaning set forth in SECTION 8.02(f).
"PERMITTED ACQUISITION DILIGENCE INFORMATION" means with respect to any
acquisition proposed by the Borrower or any Subsidiary thereof, to the extent
applicable, all financial information, all environmental reports (including,
without limitation, any phase I and, to the extent applicable, phase II
reports), all material contracts, all customer lists, all supply agreements, and
all other material information, in each case, requested to be delivered to the
Administrative Agent in connection with such proposed acquisition (except to the
extent that any such information is (a) subject to any confidentiality
agreement, unless mutually agreeable
22
arrangements can be made to preserve such information as confidential, (b)
classified or (c) subject to any attorney-client privilege).
"PERMITTED ACQUISITION DOCUMENTS" means with respect to any acquisition
proposed by the Borrower or any Subsidiary thereof, the purchase agreement, sale
agreement, merger agreement or other agreement evidencing such acquisition,
including, without limitation, all legal opinions and each other document
executed, delivered, contemplated by or prepared in connection therewith and any
amendment, modification or supplement to any of the foregoing.
"PERMITTED LIENS" means the Liens permitted pursuant to SECTION 8.01.
"PERSON" means any natural person, corporation, limited liability company,
trust, joint venture, association, company, partnership, Governmental Authority
or other entity.
"PLAN" means any "employee benefit plan" (as such term is defined in
Section 3(3) of ERISA) established by any Loan Party or, with respect to any
such plan that is subject to Section 412 of the Code or Title IV of ERISA, any
ERISA Affiliate.
"PROFESSIONAL SERVICES AGREEMENT" means that certain Professional Services
Agreement dated September 7, 2001 by and between the Borrower and the Sponsor,
as amended, restated or otherwise modified pursuant to the terms and conditions
set forth in this Agreement.
"PRO FORMA FINANCIAL STATEMENTS" has the meaning set forth in SECTION
5.01(c)(i).
"PROXY AGREEMENT" means that certain Proxy Agreement With Respect to
Ownership Interests of Getronics Government Solutions, L.L.C. dated as of April
30, 2001.
"REGISTER" has the meaning set forth in SECTION 12.07(c).
"REPORTABLE EVENT" means any of the events set forth in Section 4043(c) of
ERISA, other than events for which the 30 day notice period has been waived.
"REQUEST FOR CREDIT EXTENSION" means (a) with respect to a Borrowing,
conversion or continuation of Revolving Credit Loans or the Term Loan, a Loan
Notice, (b) with respect to an L/C Credit Extension, a Letter of Credit
Application, and (c) with respect to a Swing Line Loan, a Swing Line Loan
Notice.
"REQUIRED LENDERS" means, as of any date of determination, Lenders holding
more than 50% of the sum of (a) the Revolving Credit Commitments (or the
Revolving Credit Outstandings if the Revolving Credit Commitments have been
terminated (with the aggregate amount of each Lender's risk participation and
funded participation in L/C Obligations and Swing Line Loans being deemed "held"
by such Lender for purposes of this definition)) and (b) the Term Loans;
PROVIDED that the Commitment of, and the portion of the Revolving Credit
Outstandings or the Term Loan, as applicable, held or deemed held by, any
Defaulting Lender shall be excluded for purposes of making a determination of
Required Lenders.
"RESPONSIBLE OFFICER" means the chief executive officer, president, chief
financial officer, treasurer or corporate controller of a Loan Party. Any
document delivered hereunder that
23
is signed by a Responsible Officer of a Loan Party shall be conclusively
presumed to have been authorized by all necessary corporate, partnership and/or
other action on the part of such Loan Party and such Responsible Officer shall
be conclusively presumed to have acted on behalf of such Loan Party.
"RESTRICTED PAYMENT" means any dividend or other distribution (whether in
cash, securities or other property) with respect to any capital stock or other
equity interest of any Person, or any payment (whether in cash, securities or
other property), including any sinking fund or similar deposit, on account of
the purchase, redemption, retirement, acquisition, cancellation or termination
of any such capital stock or other equity interest or of any option, warrant or
other right to acquire any such capital stock or other equity interest.
"REVOLVING CREDIT BORROWING" means a borrowing consisting of simultaneous
Revolving Credit Loans of the same Type and, in the case of Eurodollar Rate
Loans, having the same Interest Period made by each of the Lenders pursuant to
SECTION 2.01.
"REVOLVING CREDIT COMMITMENT" means, as to each Lender, its obligation to
(a) to make Revolving Credit Loans in accordance with the provisions of Section
2.01(a), (b) to purchase participations in L/C Obligations and (c) to purchase
participations in Swing Line Loans, in an aggregate principal amount at any one
time outstanding not to exceed the amounts set forth opposite such Lender's name
on SCHEDULE 2.01 or in the Assignment and Assumption pursuant to which such
Lender becomes a party hereto, as applicable, as such amount may be adjusted
among the Lenders from time to time in accordance with this Agreement.
"REVOLVING CREDIT COMMITMENTS" means the aggregate Revolving Credit Commitment
of all Lenders. On the Closing Date, the Revolving Credit Commitments shall be
$25,000,000.
"REVOLVING CREDIT COMMITMENT PERCENTAGE" means, as to each Lender at any
time, a fraction (expressed as a percentage, carried out to the ninth decimal
place), the numerator of which is the amount of the Revolving Credit Commitment
of such Lender at such time and the denominator of which is the amount of the
Revolving Credit Commitments at such time; PROVIDED that if the commitment of
each Lender to make Loans and the obligation of the L/C Issuer to make L/C
Credit Extensions have been terminated pursuant to SECTION 10.02, then the
Revolving Credit Commitment Percentage of each Lender shall be determined based
on the Revolving Credit Commitment Percentage of such Lender immediately prior
to such termination and after giving effect to any subsequent assignments made
pursuant to the terms hereof. The initial Revolving Credit Commitment Percentage
of each Lender is set forth opposite the name of such Lender on SCHEDULE 2.01 or
in the Assignment and Assumption pursuant to which such Lender becomes a party
hereto, as applicable.
"REVOLVING CREDIT LOAN" has the meaning set forth in SECTION 2.01(a).
"REVOLVING CREDIT MATURITY DATE" means November 26, 2006.
"REVOLVING CREDIT OUTSTANDINGS" means the aggregate Outstanding Amount of
all Revolving Credit Loans, Swing Line Loans and L/C Obligations.
"SEC" means the Securities and Exchange Commission, or any Governmental
Authority succeeding to any of its principal functions.
24
"SECURITY DOCUMENTS" means the Collateral Agreement, the Subsidiary
Guaranty Agreement and any other documents creating a Lien for the benefit of
the Administrative Agent executed by any Loan Party after the Closing Date,
including all filings, financing statements and other documents delivered in
connection therewith.
"SENIOR SUBORDINATED BRIDGE NOTES" means the collective reference to the
senior subordinated bridge notes of the Borrower issued pursuant to the Senior
Subordinated Note Agreement in the initial principal amount of $44,000,000.
"SENIOR SUBORDINATED NOTE AGREEMENT" means (a) prior to the issuance of the
Senior Subordinated Rollover Notes, the Bridge Loan Agreement dated as of even
date herewith, as amended, restated, supplemented or otherwise modified pursuant
to the terms and conditions set forth in this Agreement, and (b) on and after
the issuance of the Senior Subordinated Rollover Notes, the Investment Agreement
in the form provided to the Administrative Agent and the Lenders as of the
Closing Date, as amended, restated, supplemented or otherwise modified pursuant
to the terms and conditions set forth in this Agreement.
"SENIOR SUBORDINATED NOTE DOCUMENTS" means the Senior Subordinated Note
Agreement and all exhibits and schedules thereto and each other document,
instrument, certificate and agreement executed or delivered by Holdings, the
Borrower or any Subsidiary thereof in connection with the Senior Subordinated
Note Agreement or otherwise referred to therein or contemplated thereby, all as
amended, restated or otherwise modified pursuant to the terms and conditions set
forth in this Agreement.
"SENIOR SUBORDINATED NOTE ISSUANCE" has the meaning set forth in SECTION
5.01(d)(ii)(C).
"SENIOR SUBORDINATED NOTES" means the collective reference to (a) the
Senior Subordinated Bridge Notes and (b) the Senior Subordinated Rollover Notes.
"SENIOR SUBORDINATED ROLLOVER NOTES" means the collective reference to the
senior subordinated rollover notes of the Borrower issued pursuant to the Senior
Subordinated Note Agreement in exchange for, and to fully refinance, redeem and
replace, the Senior Subordinated Bridge Notes.
"SOLVENT" means, as to Holdings and its Subsidiaries on a particular date,
that Holdings and its Subsidiaries taken as a whole (a) have capital sufficient
to carry on their business and transactions and all business and transactions in
which they are about to engage and are able to pay their debts as they mature,
(b) own property having a value, both at fair valuation on a going concern basis
and at present fair saleable value on a going concern basis, greater than the
amount required to pay their probable liabilities (including contingencies), and
(c) do not believe that they will incur debts or liabilities beyond their
ability to pay such debts or liabilities as they mature.
"SPONSOR" means GTCR ▇▇▇▇▇▇ ▇▇▇▇▇▇, L.L.C., a Delaware limited liability
company.
"SUBORDINATED INDEBTEDNESS" means the collective reference to the Senior
Subordinated Notes and any other Indebtedness of Holdings or any Subsidiary
subordinated in right and time of payment to the Obligations and, with respect
to such other Indebtedness, containing such other
25
terms and conditions (including, without limitation, subordination terms), in
each case as are reasonably satisfactory to the Required Lenders.
"SUBSIDIARY" of a Person means a corporation, partnership, joint venture,
limited liability company or other business entity of which a majority of the
shares of securities or other interests having ordinary voting power for the
election of directors or other governing body (other than securities or
interests having such power only by reason of the happening of a contingency)
are at the time beneficially owned, or the management of which is otherwise
controlled, directly, or indirectly through one or more intermediaries, or both,
by such Person. Unless otherwise specified, all references herein to a
"Subsidiary" or to "Subsidiaries" shall refer to a Subsidiary or Subsidiaries of
Holdings and shall include, without limitation, the Borrower and its
Subsidiaries and the Target and its Subsidiaries. For the purposes of this
Agreement, ▇.▇. ▇▇▇ ▇▇▇▇ & Associates, Inc. shall not be deemed to be a
"Subsidiary".
"SUBSIDIARY GUARANTORS" means, collectively, all existing and future
Domestic Subsidiaries of the Borrower.
"SUBSIDIARY GUARANTY AGREEMENT" means the Subsidiary Guaranty made by the
Subsidiary Guarantors in favor of the Administrative Agent on behalf of the
Lenders, substantially in the form of EXHIBIT G-2.
"SWAP CONTRACT" means (a) any and all rate swap transactions, basis swaps,
credit derivative transactions, forward rate transactions, commodity swaps,
commodity options, forward commodity contracts, equity or equity index swaps or
options, bond or bond price or bond index swaps or options or forward bond or
forward bond price or forward bond index transactions, interest rate options,
forward foreign exchange transactions, cap transactions, floor transactions,
collar transactions, currency swap transactions, cross-currency rate swap
transactions, currency options, spot contracts, or any other similar
transactions or any combination of any of the foregoing (including any options
to enter into any of the foregoing), whether or not any such transaction is
governed by or subject to any master agreement, and (b) any and all transactions
of any kind, and the related confirmations, which are subject to the terms and
conditions of, or governed by, any form of master agreement published by the
International Swaps and Derivatives Association, Inc., any International Foreign
Exchange Master Agreement, or any other master agreement (any such master
agreement, together with any related schedules, a "MASTER AGREEMENT"), including
any such obligations or liabilities under any Master Agreement.
"SWAP TERMINATION VALUE" means, in respect of any one or more Swap
Contracts, after taking into account the effect of any legally enforceable
netting agreement relating to such Swap Contracts, (a) for any date on or after
the date such Swap Contracts have been closed out and termination value(s)
determined in accordance therewith, such termination value(s), and (b) for any
date prior to the date referenced in clause (a), the amount(s) determined as the
▇▇▇▇-to-market value(s) for such Swap Contracts, as determined based upon one or
more mid-market or other readily available quotations provided by any recognized
dealer in such Swap Contracts (which may include any Person that is a Lender or
an Affiliate thereof at the time such Swap Contract is executed).
26
"SWING LINE" means the revolving credit facility made available by the
Swing Line Lender pursuant to SECTION 2.05.
"SWING LINE BORROWING" means a borrowing of a Swing Line Loan pursuant to
SECTION 2.05.
"SWING LINE LENDER" means Bank of America in its capacity as provider of
Swing Line Loans, or any successor swing line lender hereunder.
"SWING LINE LOAN" has the meaning set forth in SECTION 2.05(a).
"SWING LINE LOAN NOTICE" means a notice of a Swing Line Borrowing pursuant
to SECTION 2.05(b), which, if in writing, shall be substantially in the form of
EXHIBIT B.
"SWING LINE SUBLIMIT" means an amount equal to the lesser of (a) $5,000,000
and (b) the Revolving Credit Commitments. The Swing Line Sublimit is part of,
and not in addition to, the Revolving Credit Commitments.
"TARGET" means Getronics Government Solutions, L.L.C., a Delaware limited
liability company, which entity will be renamed DigitalNet Government Solutions,
LLC on the Closing Date.
"TERM LOAN" has the meaning set forth in Section 2.02.
"TERM LOAN BORROWING" means a borrowing consisting of simultaneous Term
Loans of the same Type and, in the case of Eurodollar Rate Loans, having the
same Interest Period made by each of the Lenders pursuant to SECTION 2.02.
"TERM LOAN COMMITMENT" means, as to each Lender, its obligation to make its
portion of the Term Loan in accordance with the provisions of Section 2.02(a) in
an aggregate principal amount at any one time outstanding not to exceed the
amounts set forth opposite such Lender's name on SCHEDULE 2.01 or in the
Assignment and Assumption pursuant to which such Lender becomes a party hereto,
as applicable, as such amount may be adjusted from time to time in accordance
with this Agreement. "TERM LOAN COMMITMENTS" means the aggregate Term Loan
Commitment of all Lenders. On the Closing Date, the Term Loan Commitments shall
be $80,000,000.
"TERM LOAN MATURITY DATE" means November 26, 2007.
"TERM LOAN PERCENTAGE" means, as to each Lender (a) prior to making the
Term Loan, a fraction (expressed as a percentage, carried out to the ninth
decimal place), the numerator of which is the amount of the Term Loan Commitment
of such Lender at such time and the denominator of which is the amount of the
Term Loan Commitments at such time and (b) after the making of the Term Loan, a
fraction (expressed as a percentage, carried out to the ninth decimal place),
the numerator of which is the outstanding principal balance of the Term Loan of
such Lender and the denominator of which is the aggregate outstanding principal
balance of the Term Loan of all the Lenders. The initial Term Loan Percentage of
each Lender is set forth
27
opposite the name of such Lender on SCHEDULE 2.01 or in the Assignment and
Assumption pursuant to which such Lender becomes a party hereto, as applicable.
"THRESHOLD AMOUNT" means $2,500,000.
"TRANSACTION DOCUMENTS" means the collective reference to the Loan
Documents, the Senior Subordinated Note Documents, the Acquisition Documents and
the Equity Purchase Agreement.
"TRANSITIONAL SERVICES AGREEMENT" means the collective reference to the
Master Agreement for Transitional Services executed and delivered in connection
with the Acquisition and any sub-Agreement executed and delivered pursuant to
the terms thereof.
"TYPE" means, with respect to a Revolving Credit Loan or Term Loan, its
character as a Base Rate Loan or a Eurodollar Rate Loan.
"UCC" means, subject to SECTION 1.04, the Uniform Commercial Code in effect
in the State of
New York, as amended or modified from time to time.
"UNAUDITED QUARTERLY FINANCIAL STATEMENTS" has the meaning set forth in
SECTION 5.01(c)(i).
"UNFUNDED PENSION LIABILITY" means the excess of a Pension Plan's benefit
liabilities under Section 4001(a)(16) of ERISA, over the current value of that
Pension Plan's assets, determined in accordance with the assumptions used for
funding the Pension Plan pursuant to Section 412 of the Code for the applicable
plan year.
"UNITED STATES" and "U.S." mean the United States of America.
"UNREIMBURSED AMOUNT" has the meaning set forth in SECTION 2.04(c)(i).
1.02 OTHER INTERPRETIVE PROVISIONS.
With reference to this Agreement and each other Loan Document, unless
otherwise specified herein or in such other Loan Document:
(a) The meanings of defined terms are equally applicable to the
singular and plural forms of the defined terms.
(b) (i) The words "HEREIN," "HERETO," "HEREOF" and "HEREUNDER"
and words of similar import when used in any Loan Document shall refer to such
Loan Document as a whole and not to any particular provision thereof.
(ii) Article, Section, Exhibit and Schedule references are to
the Loan Document in which such reference appears.
(iii) The term "INCLUDING" is by way of example and not
limitation.
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(iv) The term "DOCUMENTS" includes any and all instruments,
documents, agreements, certificates, notices, reports, financial statements and
other writings, however evidenced, whether in physical or electronic form.
(v) The terms "KNOWLEDGE" or "KNOWN" when used with respect
to any Loan Party shall be deemed to be a reference to the knowledge of any
Responsible Officer.
(c) In the computation of periods of time from a specified date to a
later specified date, the word "FROM" means "FROM AND INCLUDING;" the words "TO"
and "UNTIL" each mean "TO BUT EXCLUDING;" and the word "THROUGH" means "TO AND
INCLUDING."
(d) Section headings herein and in the other Loan Documents are
included for convenience of reference only and shall not affect the
interpretation of this Agreement or any other Loan Document.
1.03 ACCOUNTING TERMS.
(a) All accounting terms not specifically or completely defined herein
shall be construed in conformity with, and all financial data (including
financial ratios and other financial calculations) required to be submitted
pursuant to this Agreement shall be prepared in conformity with, GAAP applied on
a consistent basis, as in effect from time to time, EXCEPT as otherwise
specifically prescribed herein.
(b) If at any time any change in GAAP would affect the computation of
any financial ratio or requirement set forth in any Loan Document, and either
Holdings, the Borrower or the Required Lenders shall so request, the
Administrative Agent, the Lenders, Holdings and the Borrower shall negotiate in
good faith to amend such ratio or requirement to preserve the original intent
thereof in light of such change in GAAP (subject to the approval of the Borrower
and the Required Lenders); PROVIDED THAT, until so amended, (i) such ratio or
requirement shall continue to be computed in accordance with GAAP prior to such
change therein and (ii) Holdings and the Borrower shall provide to the
Administrative Agent and the Lenders financial statements and other documents
required under this Agreement or as reasonably requested hereunder setting forth
a reconciliation between calculations of such ratio or requirement made before
and after giving effect to such change in GAAP.
1.04 ROUNDING.
Any financial ratios required to be maintained by Holdings and the Borrower
pursuant to this Agreement and any determination of the Borrowing Base shall be
calculated by dividing the appropriate component by the other component or, with
respect to the Borrowing Base, multiplying such component by the advance rate
percentage, carrying the result to one place more than the number of places by
which such ratio or percentage is expressed herein and rounding the result up or
down to the nearest number (with a rounding-up if there is no nearest number).
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1.05 REFERENCES TO AGREEMENTS AND LAWS.
Unless otherwise expressly provided herein, (a) references to Organization
Documents, agreements (including the Loan Documents) and other contractual
instruments shall be deemed to include all subsequent amendments, restatements,
extensions, supplements and other modifications thereto, but only to the extent
that such amendments, restatements, extensions, supplements and other
modifications are not prohibited by any Loan Document; and (b) references to any
Law shall include all statutory and regulatory provisions consolidating,
amending, replacing, supplementing or interpreting such Law.
1.06 TIMES OF DAY.
Unless otherwise specified, all references herein to times of day shall be
references to Eastern time (daylight or standard, as applicable).
1.07 LETTER OF CREDIT AMOUNTS.
Unless otherwise specified, all references herein to the amount of a Letter
of Credit at any time shall be deemed to mean the maximum face amount of such
Letter of Credit after giving effect to all increases thereof contemplated by
such Letter of Credit or the Letter of Credit Application therefor, whether or
not such maximum face amount is in effect at such time.
1.08 BORROWING BASE.
The Borrowing Base shall be determined and computed to avoid duplication or
multiple inclusion of any item of Collateral. The Administrative Agent may make
such adjustments or corrections to any Borrowing Base Certificate as the
Administrative Agent may determine in good faith is necessary or appropriate to
determine and compute the Borrowing Base in accordance with the intent of this
Agreement, and any such determination will be binding on the Loan Parties.
Furthermore, the Administrative Agent may exclude from the Borrowing Base, or
require the Borrower or the applicable subsidiary thereof to establish reserves
with respect to, Accounts that the Administrative Agent has determined, in good
faith in its reasonable discretion in accordance with its internal credit
policies, that (a) collection of the Account is insecure or (b) the Account is
not likely to be paid by reason of the Account Debtor's financial inability to
pay. The Administrative Agent shall give the Borrower twenty (20) Business Days
prior written notice of any such adjustment or correction (a) in the eligibility
criteria used to determine the Borrowing Base (including, without limitation,
the establishment of any reserves) and (b) to the methodology for calculating
the Borrowing Base.
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ARTICLE II.
THE COMMITMENTS AND CREDIT EXTENSIONS
2.01 REVOLVING CREDIT LOANS.
(a) REVOLVING CREDIT COMMITMENT. Subject to the terms and conditions
set forth herein, each Lender severally agrees to make revolving loans (each
such loan, a "REVOLVING CREDIT LOAN") to the Borrower from time to time, on any
Business Day during the Availability Period, in an aggregate amount not to
exceed at any time outstanding the amount of such Lender's Revolving Credit
Commitment; PROVIDED, HOWEVER, that after giving effect to any Revolving Credit
Borrowing, (i) the Revolving Credit Outstandings shall not exceed the Borrowing
Limit and (ii) the aggregate Outstanding Amount of the Revolving Credit Loans of
any Lender, PLUS such Lender's Revolving Credit Commitment Percentage of the
Outstanding Amount of all L/C Obligations, PLUS such Lender's Revolving Credit
Commitment Percentage of the Outstanding Amount of all Swing Line Loans shall
not exceed such Lender's Revolving Credit Commitment. Within the limits of each
Lender's Revolving Credit Commitment, and subject to the other terms and
conditions hereof, the Borrower may borrow under this SECTION 2.01, prepay under
SECTION 2.06, and reborrow under this SECTION 2.01. Revolving Credit Loans may
be Base Rate Loans or Eurodollar Rate Loans, as further provided herein.
(b) BORROWING PROCEDURES.
(i) Each Revolving Credit Borrowing shall be made upon the
Borrower's irrevocable notice to the Administrative Agent, which may be given by
telephone. Each such notice must be received by the Administrative Agent not
later than 11:00 a.m. (A) three Business Days prior to the requested date of any
Revolving Credit Borrowing of Eurodollar Rate Loans and (B) on the requested
date of any Revolving Credit Borrowing of Base Rate Loans; PROVIDED, HOWEVER,
that if the Borrower wishes to request Eurodollar Rate Loans having an Interest
Period other than one, two, three or six months in duration as provided in the
definition of "Interest Period", the applicable notice must be received by the
Administrative Agent not later than 11:00 a.m. four Business Days prior to the
requested date of such Revolving Credit Borrowing, whereupon the Administrative
Agent shall give prompt notice to the Lenders of such request and determine
whether the requested Interest Period is available to all of them. Not later
than 11:00 a.m., three Business Days before the requested date of such Revolving
Credit Borrowing, the Administrative Agent shall notify the Borrower (which
notice may be by telephone) whether or not the requested Interest Period is
available to all of the Lenders. Each telephonic notice by the Borrower pursuant
to this SECTION 2.01(b) must be confirmed promptly by delivery to the
Administrative Agent of a written Loan Notice, appropriately completed and
signed by a Responsible Officer of the Borrower. Each Revolving Credit Borrowing
of Eurodollar Rate Loans shall be in a principal amount of $1,000,000 or a whole
multiple of $1,000,000 in excess thereof. Except as provided in SECTIONS 2.04(c)
and 2.05(c), each Revolving Credit Borrowing of Base Rate Loans shall be in a
principal amount of $500,000 or a whole multiple of $100,000 in excess thereof.
Each Loan Notice (whether telephonic or written) shall specify (A) the requested
date of the Revolving Credit Borrowing (which shall be a Business Day), (B) the
principal amount of Revolving Credit Loans to be borrowed, (C) the Type of
Revolving Credit Loans to be borrowed, and (D) if applicable, the duration of
the Interest Period with respect thereto. If the Borrower fails to specify a
Type of Revolving Credit Loan in a Loan Notice, then the applicable
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Revolving Credit Loans shall be made as Base Rate Loans. If the Revolving Credit
Borrower requests a Borrowing of Eurodollar Rate Loans in any such Loan Notice,
but fails to specify an Interest Period, it will be deemed to have specified an
Interest Period of one month.
(ii) Following receipt of a Loan Notice, the Administrative
Agent shall promptly notify each Lender of the amount of its Revolving Credit
Commitment Percentage of the applicable Revolving Credit Loans. Each Lender
shall make the amount of its Revolving Credit Loan available to the
Administrative Agent in immediately available funds at the Administrative
Agent's Office not later than 1:00 p.m. on the Business Day specified in the
applicable Loan Notice. Upon satisfaction of the applicable conditions set forth
in SECTION 5.02 (and, if such Revolving Credit Borrowing is the initial Credit
Extension, SECTION 5.01), the Administrative Agent shall make all funds so
received available to the Borrower in like funds as received by the
Administrative Agent either by (A) crediting the account of the Borrower on the
books of Bank of America with the amount of such funds or (B) wire transfer of
such funds, in each case in accordance with instructions provided to (and
reasonably acceptable to) the Administrative Agent by the Borrower; PROVIDED,
HOWEVER, that if, on the date the Loan Notice with respect to such Revolving
Credit Borrowing is given by the Borrower, there are L/C Borrowings outstanding,
then the proceeds of such Revolving Credit Borrowing shall be applied, FIRST, to
the payment in full of any such L/C Borrowings and SECOND, to the Borrower as
provided above.
(iii) The Administrative Agent shall promptly notify the
Borrower and the Lenders of the interest rate applicable to any Interest Period
for Revolving Credit Loans bearing interest based upon the Eurodollar Rate upon
determination of such interest rate. The determination of the Eurodollar Rate by
the Administrative Agent shall be conclusive in the absence of manifest error.
At any time that Revolving Credit Loans bearing interest based upon the Base
Rate are outstanding, the Administrative Agent shall notify the Borrower and the
Lenders of any change in Bank of America's prime rate used in determining the
Base Rate promptly following the public announcement of such change.
(iv) During the existence of a Default, no Loans may be
requested as Eurodollar Rate Loans without the consent of the Required Lenders.
2.02 TERM LOAN.
(a) TERM COMMITMENT. Subject to the terms and conditions set forth
herein, each Lender severally agrees to make available to the Borrower on the
Closing Date such Lender's Term Loan Percentage of a term loan (the "TERM LOAN";
each component thereof may be referred to herein as a "TERM LOAN") in an
aggregate principal amount equal to the Term Loan Commitments. The Term Loan may
consist of Base Rate Loans or Eurodollar Rate Loans, or a combination thereof,
as the Borrower may request. Amounts repaid on the Term Loan may not be
reborrowed.
(b) BORROWING PROCEDURES.
(i) The Borrower shall give irrevocable notice to the
Administrative Agent, which may be given by telephone, not later than 11:00 a.m.
(or such later time as the
32
Administrative Agent and the Borrower shall agree) (A) on the Closing Date, with
respect to the portion of the Term Loan initially consisting of a Base Rate
Loan, or (B) on the third Business Day prior to the Closing Date, with respect
to the portion of the Term Loan initially consisting of one or more Eurodollar
Rate Loans. Each Term Loan Borrowing consisting of Eurodollar Rate Loans shall
be in a principal amount of $1,000,000 or a whole multiple of $1,000,000 in
excess thereof. Each portion of the Term Loan consisting of Base Rate Loans
shall be in a principal amount of $500,000 or a whole multiple of $100,000 in
excess thereof. Such Loan Notice shall be irrevocable and shall specify (A) that
the funding of the Term Loan is requested, (B) whether the funding of the Term
Loan shall be comprised of Base Rate Loans, Eurodollar Rate Loans or a
combination thereof, and (C) if applicable, the duration of the Interest Period
with respect thereto. If the Borrower shall fail to deliver such Loan Notice to
the Administrative Agent by 11:00 a.m. on the third Business Day prior to the
Closing Date, then the full amount of the Term Loan shall be disbursed on the
Closing Date as a Base Rate Loan. If the Borrower fails to specify a Type of
Loan in a Loan Notice, then the Term Loan shall be made as a Base Rate Loan. If
the Borrower requests that the Term Loan or a portion thereof consist of
Eurodollar Rate Loans in any such Loan Notice, but fails to specify an Interest
Period, it will be deemed to have specified an Interest Period of one month.
Each telephonic notice by the Borrower pursuant to this SECTION 2.02(b) must be
confirmed promptly by delivery to the Administrative Agent of a written Loan
Notice, appropriately completed and signed by a Responsible Officer of the
Borrower.
(ii) Following receipt of a Loan Notice, the Administrative
Agent shall promptly notify each Lender of the amount of its Term Loan
Percentage of the Term Loan. Each Lender shall make the amount of the Term Loan
to be made by such Lender available to the Administrative Agent in immediately
available funds at the Administrative Agent's Office not later than 1:00 p.m. on
the Closing Date. Upon satisfaction of the applicable conditions set forth in
SECTION 5.01 and SECTION 5.02, the Administrative Agent shall make all funds so
received available to the Borrower in like funds as received by the
Administrative Agent either by (A) crediting the account of the Borrower on the
books of Bank of America with the amount of such funds or (B) wire transfer of
such funds, in each case in accordance with instructions provided to (and
reasonably acceptable to) the Administrative Agent by the Borrower.
(iii) The Administrative Agent shall promptly notify the
Borrower and the Lenders of the interest rate applicable to any Interest Period
for any portion of the Term Loan bearing interest based upon Eurodollar Rate
Loans upon determination of such interest rate. The determination of the
Eurodollar Rate by the Administrative Agent shall be conclusive in the absence
of manifest error. At any time that any portion of the Term Loan bearing
interest based upon Base Rate is outstanding, the Administrative Agent shall
notify the Borrower and the Lenders of any change in Bank of America's prime
rate used in determining the Base Rate promptly following the public
announcement of such change.
2.03 CONVERSIONS AND CONTINUATIONS OF REVOLVING CREDIT LOANS AND TERM
LOAN.
(a) The Borrower shall have to option to convert Loans (other than
Swing Line Loans) from one Type to the other and to continue Eurodollar Rate
Loans. Each conversion of Loans from one Type to the other, and each
continuation of Eurodollar Rate Loans shall be made upon the Borrower's
irrevocable notice to the Administrative Agent, which may be given by telephone.
Each such notice must be received by the Administrative Agent not later than
11:00
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a.m. three Business Days prior to the requested date of any conversion to or
continuation of Eurodollar Rate Loans or of any conversion of Eurodollar Rate
Loans to Base Rate Loans; PROVIDED, HOWEVER, that if the Borrower wishes to
convert to or continue Eurodollar Rate Loans having an Interest Period other
than one, two, three or six months in duration as provided in the definition of
"Interest Period", (i) the applicable notice must be received by the
Administrative Agent not later than 11:00 a.m. four Business Days prior to the
requested date of such conversion or continuation, whereupon the Administrative
Agent shall give prompt notice to the Lenders of such request and determine
whether the requested Interest Period is available to all of them and (ii) not
later than 11:00 a.m., three Business Days before the requested date of such
conversion or continuation, the Administrative Agent shall notify the Borrower
(which notice may be by telephone) whether or not the requested Interest Period
is available to all of the Lenders. Each telephonic notice by the Borrower
pursuant to this SECTION 2.03(a) must be confirmed promptly by delivery to the
Administrative Agent of a written Loan Notice, appropriately completed and
signed by a Responsible Officer of the Borrower. Each conversion to or
continuation of Eurodollar Rate Loans shall be in a principal amount of
$1,000,000 or a whole multiple of $1,000,000 in excess thereof. Each conversion
to Base Rate Loans shall be in a principal amount of $500,000 or a whole
multiple of $100,000 in excess thereof. Each Loan Notice (whether telephonic or
written) shall specify (i) whether the Borrower is requesting a conversion of
Revolving Credit Loans or a Term Loan, as applicable, from one Type to the
other, or a continuation of Eurodollar Rate Loans, (ii) the requested date of
the conversion or continuation (which shall be a Business Day), (iii) the
principal amount of Loans to be converted or continued, (iv) the Type of Loans
to which existing Loans are to be converted, and (v) if applicable, the duration
of the Interest Period with respect thereto. If the Borrower fails to give a
timely notice requesting a conversion or continuation of Eurodollar Rate Loans,
then the applicable Eurodollar Rate Loans shall be converted to Base Rate Loans.
Any such automatic conversion to Base Rate Loans shall be effective as of the
last day of the Interest Period then in effect with respect to the applicable
Eurodollar Rate Loans. If the Borrower requests a conversion to or continuation
of Eurodollar Rate Loans in any such Loan Notice, but fails to specify an
Interest Period, it will be deemed to have specified an Interest Period of one
month.
(b) Following receipt of a Loan Notice, the Administrative Agent shall
promptly notify each Lender. If no timely notice of a conversion or continuation
is provided by the Borrower, the Administrative Agent shall notify each Lender
of the details of any automatic conversion to Base Rate Loans described in the
preceding subsection.
(c) Except as otherwise provided herein, a Eurodollar Rate Loan may be
continued or converted only on the last day of an Interest Period for such
Eurodollar Rate Loan. During the existence of a Default, no Loans may be
converted to or continued as Eurodollar Rate Loans without the consent of the
Required Lenders.
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2.04 LETTERS OF CREDIT.
(a) LETTER OF CREDIT COMMITMENT.
(i) Subject to the terms and conditions set forth herein, (A)
the L/C Issuer agrees, in reliance upon the agreements of the other Lenders set
forth in this SECTION 2.04, (1) from time to time on any Business Day during the
period from the Closing Date until the Letter of Credit Expiration Date, to
issue Letters of Credit for the account of the Borrower and to amend or renew
Letters of Credit previously issued by it, in accordance with subsection (b)
below, and (2) to honor drafts under the Letters of Credit; and (B) the Lenders
severally agree to participate in Letters of Credit issued for the account of
the Borrower; PROVIDED that the L/C Issuer shall not be obligated to make any
L/C Credit Extension with respect to any Letter of Credit, and no Lender shall
be obligated to participate in any Letter of Credit if as of the date of such
L/C Credit Extension, (x) the Revolving Credit Outstandings would exceed the
Borrowing Limit, (y) the aggregate Outstanding Amount of the Revolving Credit
Loans of any Lender, PLUS such Lender's Revolving Credit Commitment Percentage
of the Outstanding Amount of all L/C Obligations, PLUS such Lender's Revolving
Credit Commitment Percentage of the Outstanding Amount of all Swing Line Loans
would exceed such Lender's Revolving Credit Commitment, or (z) the Outstanding
Amount of the L/C Obligations would exceed the Letter of Credit Sublimit. Within
the foregoing limits, and subject to the terms and conditions hereof, the
Borrower's ability to obtain Letters of Credit shall be fully revolving, and
accordingly the Borrower may, during the foregoing period, obtain Letters of
Credit to replace Letters of Credit that have expired or that have been drawn
upon and reimbursed.
(ii) The L/C Issuer shall be under no obligation to issue any
Letter of Credit if:
(A) any order, judgment or decree of any Governmental
Authority or arbitrator shall by its terms purport to enjoin or restrain the L/C
Issuer from issuing such Letter of Credit, or any Law applicable to the L/C
Issuer or any request or directive (whether or not having the force of law) from
any Governmental Authority with jurisdiction over the L/C Issuer shall prohibit,
or request that the L/C Issuer refrain from, the issuance of letters of credit
generally or such Letter of Credit in particular or shall impose upon the L/C
Issuer with respect to such Letter of Credit any restriction, reserve or capital
requirement (for which the L/C Issuer is not otherwise compensated hereunder)
not in effect on the Closing Date, or shall impose upon the L/C Issuer any
unreimbursed loss, cost or expense which was not applicable on the Closing Date
and which the L/C Issuer in good ▇▇▇▇▇ ▇▇▇▇▇ material to it;
(B) subject to SECTION 2.04(b)(iii), the expiry date
of such requested Letter of Credit would occur more than twelve months after the
date of issuance or last renewal, unless the Required Lenders have approved such
expiry date;
(C) the expiry date of such requested Letter of Credit
would occur after the Letter of Credit Expiration Date, unless all the Lenders
have approved such expiry date;
(D) the issuance of such Letter of Credit would
violate one or more policies of the L/C Issuer as such policies are consistently
applied to all similarly situated customers of the L/C Issuer; or
35
(E) such Letter of Credit is in an initial amount less
than $100,000, in the case of a commercial Letter of Credit, or $500,000, in the
case of a standby Letter of Credit.
(iii) The L/C Issuer shall be under no obligation to amend any
Letter of Credit if (A) the L/C Issuer would have no obligation at such time to
issue such Letter of Credit in its amended form under the terms hereof, or (B)
the beneficiary of such Letter of Credit does not accept the proposed amendment
to such Letter of Credit.
(b) PROCEDURES FOR ISSUANCE AND AMENDMENT OF LETTERS OF CREDIT;
AUTO-RENEWAL LETTERS OF CREDIT.
(i) Each Letter of Credit shall be issued or amended, as the
case may be, upon the request of the Borrower delivered to the L/C Issuer (with
a copy to the Administrative Agent) in the form of a Letter of Credit
Application, appropriately completed and signed by a Responsible Officer of the
Borrower. Such Letter of Credit Application must be received by the L/C Issuer
and the Administrative Agent not later than 11:00 a.m. at least two Business
Days (or such later date and time as the L/C Issuer may agree in a particular
instance in its sole discretion) prior to the proposed issuance date or date of
amendment, as the case may be. In the case of a request for an initial issuance
of a Letter of Credit, such Letter of Credit Application shall specify in form
and detail satisfactory to the L/C Issuer: (A) the proposed issuance date of the
requested Letter of Credit (which shall be a Business Day); (B) the amount
thereof; (C) the expiry date thereof; (D) the name and address of the
beneficiary thereof; (E) the documents to be presented by such beneficiary in
case of any drawing thereunder; (F) the full text of any certificate to be
presented by such beneficiary in case of any drawing thereunder; and (G) such
other matters as the L/C Issuer may require. In the case of a request for an
amendment of any outstanding Letter of Credit, such Letter of Credit Application
shall specify in form and detail satisfactory to the L/C Issuer (A) the Letter
of Credit to be amended; (B) the proposed date of amendment thereof (which shall
be a Business Day); (C) the nature of the proposed amendment; and (D) such other
matters as the L/C Issuer may require.
(ii) Promptly after receipt of any Letter of Credit
Application, the L/C Issuer will confirm with the Administrative Agent (by
telephone or in writing) that the Administrative Agent has received a copy of
such Letter of Credit Application from the Borrower and, if not, the L/C Issuer
will provide the Administrative Agent with a copy thereof. Upon receipt by the
L/C Issuer of confirmation from the Administrative Agent that the requested
issuance or amendment is permitted in accordance with the terms hereof, then,
subject to the terms and conditions hereof, the L/C Issuer shall, on the
requested date, issue a Letter of Credit for the account of the Borrower or
enter into the applicable amendment, as the case may be, in each case in
accordance with the L/C Issuer's usual and customary business practices.
Immediately upon the issuance of each Letter of Credit, each Lender shall be
deemed to, and hereby irrevocably and unconditionally agrees to, purchase from
the L/C Issuer a risk participation in such Letter of Credit in an amount equal
to the product of such Lender's Revolving Credit Commitment Percentage TIMES the
amount of such Letter of Credit.
(iii) If the Borrower so requests in any applicable Letter of
Credit Application, the L/C Issuer may, in its sole and absolute discretion,
agree to issue a Letter of Credit that has automatic renewal provisions (each,
an "AUTO-RENEWAL LETTER OF CREDIT"); PROVIDED that any
36
such Auto-Renewal Letter of Credit must permit the L/C Issuer to prevent any
such renewal at least once in each twelve-month period (commencing with the date
of issuance of such Letter of Credit) by giving prior notice to the beneficiary
thereof not later than a day (the "NONRENEWAL NOTICE DATE") in each such
twelve-month period to be agreed upon at the time such Letter of Credit is
issued. Unless otherwise directed by the L/C Issuer, the Borrower shall not be
required to make a specific request to the L/C Issuer for any such renewal. Once
an Auto-Renewal Letter of Credit has been issued, the Lenders shall be deemed to
have authorized (but may not require) the L/C Issuer to permit the renewal of
such Letter of Credit at any time to an expiry date not later than the Letter of
Credit Expiration Date; PROVIDED, HOWEVER, that the L/C Issuer shall not permit
any such renewal if (A) the L/C Issuer has determined that it would have no
obligation at such time to issue such Letter of Credit in its renewed form under
the terms hereof (by reason of the provisions of SECTION 2.04(a)(ii) or
otherwise), or (B) it has received notice (which may be by telephone or in
writing) on or before the day that is two Business Days before the Nonrenewal
Notice Date (1) from the Administrative Agent that the Required Lenders have
elected not to permit such renewal or (2) from the Administrative Agent, any
Lender or the Borrower that one or more of the applicable conditions specified
in SECTION 5.02 is not then satisfied.
(iv) Promptly after its delivery of any Letter of Credit or
any amendment to a Letter of Credit to an advising bank with respect thereto or
to the beneficiary thereof, the L/C Issuer will also deliver to the Borrower and
the Administrative Agent a true and complete copy of such Letter of Credit or
amendment.
(c) DRAWINGS AND REIMBURSEMENTS; FUNDING OF PARTICIPATIONS.
(i) Upon receipt from the beneficiary of any Letter of Credit
of any notice of a drawing under such Letter of Credit, the L/C Issuer shall
notify the Borrower and the Administrative Agent thereof. Not later than 11:00
a.m. on the date of any payment by the L/C Issuer under a Letter of Credit (each
such date, an "HONOR DATE"), the Borrower shall reimburse the L/C Issuer through
the Administrative Agent in an amount equal to the amount of such drawing. If
the Borrower fails to so reimburse the L/C Issuer by such time, the
Administrative Agent shall promptly notify each Lender of the Honor Date, the
amount of the unreimbursed drawing (the "UNREIMBURSED AMOUNT"), and the amount
of such Lender's Revolving Credit Commitment Percentage thereof. In such event,
the Borrower shall be deemed to have requested a Revolving Credit Borrowing of
Base Rate Loans to be disbursed on the Honor Date in an amount equal to the
Unreimbursed Amount, without regard to the minimum and multiples specified in
SECTION 2.01 for the principal amount of Base Rate Loans, but subject to the
amount of the unutilized portion of the Revolving Credit Commitments and the
conditions set forth in SECTION 5.02 (other than the delivery of a Loan Notice).
Any notice given by the L/C Issuer or the Administrative Agent pursuant to this
SECTION 2.04(c)(i) may be given by telephone if immediately confirmed in
writing; PROVIDED that the lack of such an immediate confirmation shall not
affect the conclusiveness or binding effect of such notice.
(ii) Each Lender (including the Lender acting as L/C Issuer)
shall upon any notice pursuant to SECTION 2.04(c)(i) make funds available to the
Administrative Agent for the account of the L/C Issuer at the Administrative
Agent's Office in an amount equal to its Revolving Credit Commitment Percentage
of the Unreimbursed Amount not later than 1:00 p.m. on the Business Day
specified in such notice by the Administrative Agent, whereupon, subject to
37
the provisions of SECTION 2.04(c)(iii), each Lender that so makes funds
available shall be deemed to have made a Revolving Credit Loan bearing interest
at the Base Rate to the Borrower in such amount. The Administrative Agent shall
remit the funds so received to the L/C Issuer.
(iii) With respect to any Unreimbursed Amount that is not fully
refinanced by a Revolving Credit Borrowing of Base Rate Loans because the
conditions set forth in SECTION 5.02 cannot be satisfied or for any other
reason, the Borrower shall be deemed to have incurred from the L/C Issuer an L/C
Borrowing in the amount of the Unreimbursed Amount that is not so refinanced,
which L/C Borrowing shall be due and payable on demand (together with interest)
and shall bear interest at the Default Rate. In such event, each Lender's
payment to the Administrative Agent for the account of the L/C Issuer pursuant
to SECTION 2.04(c)(ii) shall be deemed payment in respect of its participation
in such L/C Borrowing and shall constitute an L/C Advance from such Lender in
satisfaction of its participation obligation under this SECTION 2.04.
(iv) Until each Lender funds its Revolving Credit Loan or L/C
Advance pursuant to this SECTION 2.04(c) to reimburse the L/C Issuer for any
amount drawn under any Letter of Credit, interest in respect of such Lender's
Revolving Credit Commitment Percentage of such amount shall be solely for the
account of the L/C Issuer.
(v) Each Lender's obligation to make Revolving Credit Loans
or L/C Advances to reimburse the L/C Issuer for amounts drawn under Letters of
Credit, as contemplated by this SECTION 2.04(c), shall be absolute and
unconditional and shall not be affected by any circumstance, including (A) any
set-off, counterclaim, recoupment, defense or other right which such Lender may
have against the L/C Issuer, the Borrower or any other Person for any reason
whatsoever; (B) the occurrence or continuance of a Default, or (C) any other
occurrence, event or condition, whether or not similar to any of the foregoing;
PROVIDED, HOWEVER, that each Lender's obligation to make Revolving Credit Loans
pursuant to this SECTION 2.04(c) is subject to the conditions set forth in
SECTION 5.02 (other than delivery by the Borrower of a Loan Notice). No such
making of an L/C Advance shall relieve or otherwise impair the obligation of the
Borrower to reimburse the L/C Issuer for the amount of any payment made by the
L/C Issuer under any Letter of Credit, together with interest as provided
herein.
(vi) If any Lender fails to make available to the
Administrative Agent for the account of the L/C Issuer any amount required to be
paid by such Lender pursuant to the foregoing provisions of this SECTION 2.04(c)
by the time specified in SECTION 2.04(c)(ii), the L/C Issuer shall be entitled
to recover from such Lender (acting through the Administrative Agent), on
demand, such amount with interest thereon for the period from the date such
payment is required to the date on which such payment is immediately available
to the L/C Issuer at a rate per annum equal to the Federal Funds Rate from time
to time in effect. A certificate of the L/C Issuer submitted to any Lender
(through the Administrative Agent) with respect to any amounts owing under this
clause (vi) shall be conclusive absent manifest error.
(d) REPAYMENT OF PARTICIPATIONS.
(i) At any time after the L/C Issuer has made a payment under
any Letter of Credit and has received from any Lender such Lender's L/C Advance
in respect of such payment in accordance with SECTION 2.04(c), if the
Administrative Agent receives for the account of the
38
L/C Issuer any payment in respect of the related Unreimbursed Amount or interest
thereon (whether directly from the Borrower or otherwise, including proceeds of
Cash Collateral applied thereto by the Administrative Agent), the Administrative
Agent will distribute to such Lender its Revolving Credit Commitment Percentage
thereof (appropriately adjusted, in the case of interest payments, to reflect
the period of time during which such Lender's L/C Advance was outstanding) in
the same funds as those received by the Administrative Agent.
(ii) If any payment received by the Administrative Agent for
the account of the L/C Issuer pursuant to SECTION 2.04(c)(i) is required to be
returned under any of the circumstances described in SECTION 12.06 (including
pursuant to any settlement entered into by the L/C Issuer in its discretion),
each Lender shall pay to the Administrative Agent for the account of the L/C
Issuer its Revolving Credit Commitment Percentage thereof on demand of the
Administrative Agent, plus interest thereon from the date of such demand to the
date such amount is returned by such Lender, at a rate per annum equal to the
Federal Funds Rate from time to time in effect.
(e) OBLIGATIONS ABSOLUTE. The obligation of the Borrower to reimburse
the L/C Issuer for each drawing under each Letter of Credit and to repay each
L/C Borrowing shall be absolute, unconditional and irrevocable, and shall be
paid strictly in accordance with the terms of this Agreement under all
circumstances, including the following:
(i) any lack of validity or enforceability of such Letter of
Credit, this Agreement, or any other agreement or instrument relating thereto;
(ii) the existence of any claim, counterclaim, set-off,
defense or other right that the Borrower may have at any time against any
beneficiary or any transferee of such Letter of Credit (or any Person for whom
any such beneficiary or any such transferee may be acting), the L/C Issuer or
any other Person, whether in connection with this Agreement, the transactions
contemplated hereby or by such Letter of Credit or any agreement or instrument
relating thereto, or any unrelated transaction;
(iii) any draft, demand, certificate or other document
presented under such Letter of Credit proving to be forged, fraudulent, invalid
or insufficient in any respect or any statement therein being untrue or
inaccurate in any respect; or any loss or delay in the transmission or otherwise
of any document required in order to make a drawing under such Letter of Credit;
(iv) any payment by the L/C Issuer under such Letter of Credit
against presentation of a draft or certificate that does not strictly comply
with the terms of such Letter of Credit; or any payment made by the L/C Issuer
under such Letter of Credit to any Person purporting to be a trustee in
bankruptcy, debtor-in-possession, assignee for the benefit of creditors,
liquidator, receiver or other representative of or successor to any beneficiary
or any transferee of such Letter of Credit, including any arising in connection
with any proceeding under any Debtor Relief Law; or
39
(v) any other circumstance or happening whatsoever, whether
or not similar to any of the foregoing, including any other circumstance that
might otherwise constitute a defense available to, or a discharge of, the
Borrower.
The Borrower shall promptly examine a copy of each Letter of Credit and
each amendment thereto that is delivered to it and, in the event of any claim of
noncompliance with the Borrower's instructions or other irregularity, the
Borrower will immediately notify the L/C Issuer. The Borrower shall be
conclusively deemed to have waived any such claim against the L/C Issuer and its
correspondents unless such notice is given as aforesaid.
(f) ROLE OF L/C ISSUER. Each Lender and the Borrower agree that, in
paying any drawing under a Letter of Credit, the L/C Issuer shall not have any
responsibility to obtain any document (other than any sight draft, certificates
and documents expressly required by the Letter of Credit) or to ascertain or
inquire as to the validity or accuracy of any such document or the authority of
the Person executing or delivering any such document. None of the L/C Issuer,
any Agent-Related Person nor any of the respective correspondents, participants
or assignees of the L/C Issuer shall be liable to any Lender for (i) any action
taken or omitted in connection herewith at the request or with the approval of
the Lenders or the Required Lenders, as applicable; (ii) any action taken or
omitted in the absence of bad faith, gross negligence or willful misconduct; or
(iii) the due execution, effectiveness, validity or enforceability of any
document or instrument related to any Letter of Credit or Letter of Credit
Application. The Borrower hereby assumes all risks of the acts or omissions of
any beneficiary or transferee with respect to its use of any Letter of Credit;
PROVIDED, HOWEVER, that this assumption is not intended to, and shall not,
preclude the Borrower's pursuing such rights and remedies as it may have against
the beneficiary or transferee at law or under any other agreement. None of the
L/C Issuer, any Agent-Related Person, nor any of the respective correspondents,
participants or assignees of the L/C Issuer, shall be liable or responsible for
any of the matters described in clauses (i) through (v) of SECTION 2.04(e);
PROVIDED, HOWEVER, that anything in such clauses to the contrary
notwithstanding, the Borrower may have a claim against the L/C Issuer, and the
L/C Issuer may be liable to the Borrower, to the extent, but only to the extent,
of any direct, as opposed to consequential or exemplary, damages suffered by the
Borrower which the Borrower proves were caused by the L/C Issuer's bad faith,
willful misconduct or gross negligence or the L/C Issuer's willful failure to
pay under any Letter of Credit after the presentation to it by the beneficiary
of a sight draft and certificate(s) strictly complying with the terms and
conditions of a Letter of Credit. In furtherance and not in limitation of the
foregoing, the L/C Issuer may accept documents that appear on their face to be
in order, without responsibility for further investigation, regardless of any
notice or information to the contrary, and the L/C Issuer shall not be
responsible for the validity or sufficiency of any instrument transferring or
assigning or purporting to transfer or assign a Letter of Credit or the rights
or benefits thereunder or proceeds thereof, in whole or in part, which may prove
to be invalid or ineffective for any reason.
(g) CASH COLLATERAL. Upon the request of the Administrative Agent, (i)
if the L/C Issuer has honored any full or partial drawing request under any
Letter of Credit and such drawing has resulted in an L/C Borrowing, or (ii) if,
as of the Letter of Credit Expiration Date, any Letter of Credit may for any
reason remain outstanding and partially or wholly undrawn, the Borrower shall
immediately Cash Collateralize the then Outstanding Amount of all L/C
Obligations (in an amount equal to such Outstanding Amount determined as of the
date of such
40
L/C Borrowing or the Letter of Credit Expiration Date, as the case may be). For
purposes hereof, "CASH COLLATERALIZE" means to pledge and deposit with or
deliver to the Administrative Agent, for the benefit of the L/C Issuer and the
Lenders, as collateral for the L/C Obligations, cash or deposit account balances
pursuant to documentation in form and substance satisfactory to the
Administrative Agent and the L/C Issuer (which documents are hereby consented to
by the Lenders). Derivatives of such term have corresponding meanings. The
Borrower hereby grants to the Administrative Agent, for the benefit of the L/C
Issuer and the Lenders, a security interest in all such cash, deposit accounts
and all balances therein and all proceeds of the foregoing. Cash collateral
shall be maintained in blocked, non-interest bearing deposit accounts at Bank of
America.
(h) APPLICABILITY OF ISP98 AND UCP. Unless otherwise expressly agreed
by the L/C Issuer and the Borrower when a Letter of Credit is issued, (i) the
rules of the "International Standby Practices 1998" published by the Institute
of International Banking Law & Practice (or such later version thereof as may be
in effect at the time of issuance) shall apply to each standby Letter of Credit,
and (ii) the rules of the Uniform Customs and Practice for Documentary Credits,
as most recently published by the International Chamber of Commerce (the "ICC")
at the time of issuance (including the ICC decision published by the Commission
on Banking Technique and Practice on April 6, 1998 regarding the European single
currency (euro)) shall apply to each commercial Letter of Credit.
(i) LETTER OF CREDIT FEES. The Borrower shall pay to the
Administrative Agent for the account of each Lender in accordance with its
Revolving Credit Commitment Percentage a Letter of Credit Fee for each Letter of
Credit equal to the Applicable Rate TIMES the daily maximum amount available to
be drawn under such Letter of Credit (whether or not such maximum amount is then
in effect under such Letter of Credit). The Letter of Credit Fees shall be
computed on a quarterly basis in arrears. The Letter of Credit Fees shall be due
and payable on the last Business Day of each March, June, September and
December, commencing with the first such date to occur after the issuance of
such Letter of Credit, on the Letter of Credit Expiration Date and thereafter on
demand. If there is any change in the Applicable Rate during any quarter, the
daily maximum amount of each Letter of Credit shall be computed and multiplied
by the Applicable Rate separately for each period during such quarter that such
Applicable Rate was in effect.
(j) FRONTING FEE AND DOCUMENTARY AND PROCESSING CHARGES PAYABLE TO L/C
ISSUER. The Borrower shall pay directly to the L/C Issuer for its own account a
fronting fee with respect to each Letter of Credit in the amounts and at the
times specified in the Fee Letter. In addition, the Borrower shall pay directly
to the L/C Issuer for its own account the customary issuance, presentation,
amendment and other processing fees, and other standard costs and charges, of
the L/C Issuer relating to letters of credit as from time to time in effect.
Such customary fees and standard costs and charges are due and payable on demand
and are nonrefundable.
(k) CONFLICT WITH LETTER OF CREDIT APPLICATION. In the event of any
conflict between the terms hereof and the terms of any Letter of Credit
Application, the terms hereof shall control.
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2.05 SWING LINE LOANS.
(a) THE SWING LINE. Subject to the terms and conditions set forth
herein, the Swing Line Lender agrees to make loans (each such loan, a "SWING
LINE LOAN") to the Borrower from time to time on any Business Day during the
Availability Period in an aggregate amount not to exceed at any time outstanding
the amount of the Swing Line Sublimit, notwithstanding the fact that such Swing
Line Loans, when aggregated with the Revolving Credit Commitment Percentage of
the Outstanding Amount of Revolving Credit Loans and L/C Obligations of the
Lender acting as Swing Line Lender, may exceed the amount of such Lender's
Revolving Credit Commitment; PROVIDED, HOWEVER, that after giving effect to any
Swing Line Loan, (i) the Revolving Credit Outstandings shall not exceed the
Borrowing Limit, and (ii) the aggregate Outstanding Amount of the Revolving
Credit Loans of any Lender, PLUS such Lender's Revolving Credit Commitment
Percentage of the Outstanding Amount of all L/C Obligations, PLUS such Lender's
Revolving Credit Commitment Percentage of the Outstanding Amount of all Swing
Line Loans shall not exceed such Lender's Revolving Credit Commitment, and
PROVIDED, FURTHER, that the Borrower shall not use the proceeds of any Swing
Line Loan to refinance any outstanding Swing Line Loan. Within the foregoing
limits, and subject to the other terms and conditions hereof, the Borrower may
borrow under this SECTION 2.05, prepay under SECTION 2.06, and reborrow under
this SECTION 2.05. Each Swing Line Loan shall be a Base Rate Loan. Immediately
upon the making of a Swing Line Loan, each Lender shall be deemed to, and hereby
irrevocably and unconditionally agrees to, purchase from the Swing Line Lender a
risk participation in such Swing Line Loan in an amount equal to the product of
such Lender's Revolving Credit Commitment Percentage TIMES the amount of such
Swing Line Loan.
(b) BORROWING PROCEDURES. Each Swing Line Borrowing shall be made upon
the Borrower's irrevocable notice to the Swing Line Lender and the
Administrative Agent, which may be given by telephone. Each such notice must be
received by the Swing Line Lender and the Administrative Agent not later than
1:00 p.m. on the requested borrowing date, and shall specify (i) the amount to
be borrowed, which shall be a minimum of $100,000, and (ii) the requested
borrowing date, which shall be a Business Day. Each such telephonic notice must
be confirmed promptly by delivery to the Swing Line Lender and the
Administrative Agent of a written Swing Line Loan Notice, appropriately
completed and signed by a Responsible Officer of the Borrower. Promptly after
receipt by the Swing Line Lender of any telephonic Swing Line Loan Notice, the
Swing Line Lender will confirm with the Administrative Agent (by telephone or in
writing) that the Administrative Agent has also received such Swing Line Loan
Notice and, if not, the Swing Line Lender will notify the Administrative Agent
(by telephone or in writing) of the contents thereof. Unless the Swing Line
Lender has received notice (by telephone or in writing) from the Administrative
Agent (including at the request of any Lender) prior to 2:00 p.m. on the date of
the proposed Swing Line Borrowing (A) directing the Swing Line Lender not to
make such Swing Line Loan as a result of the limitations set forth in the
proviso to the first sentence of SECTION 2.05(a), or (B) that one or more of the
applicable conditions specified in ARTICLE V is not then satisfied, then,
subject to the terms and conditions hereof, the Swing Line Lender will, not
later than 3:00 p.m. on the borrowing date specified in such Swing Line Loan
Notice, make the amount of its Swing Line Loan available to the Borrower at its
office by crediting the account of the Borrower on the books of the Swing Line
Lender in immediately available funds.
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(c) REFINANCING OF SWING LINE LOANS.
(i) The Swing Line Lender at any time in its sole and
absolute discretion may request, on behalf of the Borrower (which hereby
irrevocably authorizes the Swing Line Lender to so request on its behalf), that
each Lender make a Revolving Credit Loan bearing interest at the Base Rate in an
amount equal to such Lender's Revolving Credit Commitment Percentage of the
amount of Swing Line Loans then outstanding. Such request shall be made in
writing (which written request shall be deemed to be a Loan Notice for purposes
hereof) and in accordance with the requirements of SECTION 2.01, without regard
to the minimum and multiples specified therein for the principal amount of Base
Rate Loans, but subject to the unutilized portion of the Revolving Credit
Commitments and the conditions set forth in SECTION 5.02. The Swing Line Lender
shall furnish the Borrower with a copy of the applicable Loan Notice promptly
after delivering such notice to the Administrative Agent. Each Lender shall make
an amount equal to its Revolving Credit Commitment Percentage of the amount
specified in such Loan Notice available to the Administrative Agent in
immediately available funds for the account of the Swing Line Lender at the
Administrative Agent's Office not later than 1:00 p.m. on the day specified in
such Loan Notice, whereupon, subject to SECTION 2.05(c)(ii), each Lender that so
makes funds available shall be deemed to have made a Revolving Credit Loan
bearing interest at the Base Rate to the Borrower in such amount. The
Administrative Agent shall remit the funds so received to the Swing Line Lender.
(ii) If for any reason any Swing Line Loan cannot be
refinanced by such a Revolving Credit Borrowing in accordance with SECTION
2.05(c)(i), the request for Revolving Credit Loans bearing interest at the Base
Rate submitted by the Swing Line Lender as set forth herein shall be deemed to
be a request by the Swing Line Lender that each of the Lenders fund its risk
participation in the relevant Swing Line Loan and each Lender's payment to the
Administrative Agent for the account of the Swing Line Lender pursuant to
SECTION 2.05(c)(i) shall be deemed payment in respect of such participation.
(iii) If any Lender fails to make available to the
Administrative Agent for the account of the Swing Line Lender any amount
required to be paid by such Lender pursuant to the foregoing provisions of this
SECTION 2.05(c) by the time specified in SECTION 2.05(c)(i), the Swing Line
Lender shall be entitled to recover from such Lender (acting through the
Administrative Agent), on demand, such amount with interest thereon for the
period from the date such payment is required to the date on which such payment
is immediately available to the Swing Line Lender at a rate per annum equal to
the Federal Funds Rate from time to time in effect. A certificate of the Swing
Line Lender submitted to any Lender (through the Administrative Agent) with
respect to any amounts owing under this clause (iii) shall be conclusive absent
manifest error.
(iv) Each Lender's obligation to make Revolving Credit Loans
or to purchase and fund risk participations in Swing Line Loans pursuant to this
SECTION 2.05(c) shall be absolute and unconditional and shall not be affected by
any circumstance, including (A) any set-off, counterclaim, recoupment, defense
or other right which such Lender may have against the Swing Line Lender, the
Borrower or any other Person for any reason whatsoever, (B) the occurrence or
continuance of a Default, or (C) any other occurrence, event or condition,
whether or not similar to any of the foregoing; PROVIDED, HOWEVER, that each
Lender's obligation to make Revolving Credit Loans pursuant to this SECTION
2.05(c) is subject to the conditions set forth in
43
SECTION 5.02. No such funding of risk participations shall relieve or otherwise
impair the obligation of the Borrower to repay Swing Line Loans, together with
interest as provided herein.
(d) REPAYMENT OF PARTICIPATIONS.
(i) At any time after any Lender has purchased and funded a
risk participation in a Swing Line Loan, if the Swing Line Lender receives any
payment on account of such Swing Line Loan, the Swing Line Lender will
distribute to such Lender its Revolving Credit Commitment Percentage of such
payment (appropriately adjusted, in the case of interest payments, to reflect
the period of time during which such Lender's risk participation was funded) in
the same funds as those received by the Swing Line Lender.
(ii) If any payment received by the Swing Line Lender in
respect of principal or interest on any Swing Line Loan is required to be
returned by the Swing Line Lender under any of the circumstances described in
SECTION 12.06 (including pursuant to any settlement entered into by the Swing
Line Lender in its discretion), each Lender shall pay to the Swing Line Lender
its Revolving Credit Commitment Percentage thereof on demand of the
Administrative Agent, plus interest thereon from the date of such demand to the
date such amount is returned, at a rate per annum equal to the Federal Funds
Rate. The Administrative Agent will make such demand upon the request of the
Swing Line Lender.
(e) INTEREST FOR ACCOUNT OF SWING LINE LENDER. The Swing Line Lender
shall be responsible for invoicing the Borrower for interest on the Swing Line
Loans. Until each Lender funds its Revolving Credit Loan bearing interest at the
Base Rate or risk participation pursuant to this SECTION 2.05 to refinance such
Lender's Revolving Credit Commitment Percentage of any Swing Line Loan, interest
in respect of such Revolving Credit Commitment Percentage shall be solely for
the account of the Swing Line Lender.
(f) PAYMENTS DIRECTLY TO SWING LINE LENDER. The Borrower shall make
all payments of principal and interest in respect of the Swing Line Loans
directly to the Swing Line Lender.
2.06 PREPAYMENTS.
(a) VOLUNTARY PREPAYMENTS OF REVOLVING CREDIT LOANS. The Borrower may,
upon notice to the Administrative Agent, at any time or from time to time,
voluntarily prepay Revolving Credit Loans in whole or in part without premium or
penalty; PROVIDED that (i) such notice must be received by the Administrative
Agent not later than 11:00 a.m. (A) three Business Days prior to any date of
prepayment of Eurodollar Rate Loans and (B) on the date of prepayment of Base
Rate Loans; (ii) any prepayment of Eurodollar Rate Loans shall be in a principal
amount of $1,000,000 or a whole multiple of $1,000,000 in excess thereof; and
(iii) any prepayment of Base Rate Loans shall be in a principal amount of
$500,000 or a whole multiple of $100,000 in excess thereof or, in each case, if
less, the entire principal amount thereof then outstanding. Each such notice
shall specify the date and amount of such prepayment and the Type(s) of
Revolving Credit Loans to be prepaid. The Administrative Agent will promptly
notify each Lender of its receipt of each such notice, and of the amount of such
Lender's Revolving Credit Commitment Percentage of such prepayment. If such
notice is given by the Borrower, the Borrower shall make such prepayment and the
payment amount specified in such
44
notice shall be due and payable on the date specified therein. Any prepayment of
a Eurodollar Rate Loan shall be accompanied by all accrued interest thereon,
together with any additional amounts required pursuant to SECTION 4.05. Each
such prepayment shall be applied to the Revolving Credit Loans of the Lenders in
accordance with their respective Revolving Credit Commitment Percentages.
(b) VOLUNTARY PREPAYMENTS OF SWING LINE LOANS. The Borrower may, upon
notice to the Swing Line Lender (with a copy to the Administrative Agent), at
any time or from time to time, voluntarily prepay Swing Line Loans in whole or
in part without premium or penalty; PROVIDED that (i) such notice must be
received by the Swing Line Lender and the Administrative Agent not later than
1:00 p.m. on the date of the prepayment, and (ii) any such prepayment shall be
in a minimum principal amount of $100,000. Each such notice shall specify the
date and amount of such prepayment. If such notice is given by the Borrower, the
Borrower shall make such prepayment and the payment amount specified in such
notice shall be due and payable on the date specified therein.
(c) VOLUNTARY PREPAYMENTS OF TERM LOAN. The Borrower may, upon notice
to the Administrative Agent, at any time or from time to time, voluntarily
prepay the Term Loan in whole or in part without premium or penalty; PROVIDED
that (i) such notice must be received by the Administrative Agent not later than
11:00 a.m. (A) three Business Days prior to any date of prepayment of Eurodollar
Rate Loans and (B) on the date of prepayment of Base Rate Loans; (ii) any
prepayment of Eurodollar Rate Loans shall be in a principal amount of $1,000,000
or a whole multiple of $1,000,000 in excess thereof; and (iii) any prepayment of
Base Rate Loans shall be in a principal amount of $500,000 or a whole multiple
of $100,000 in excess thereof or, in each case, if less, the entire principal
amount thereof then outstanding. Each such notice shall specify the date and
amount of such prepayment and the Type(s) of Loans to be prepaid. The
Administrative Agent will promptly notify each Lender of its receipt of each
such notice, and of the amount of such Lender's Term Loan Percentage of such
prepayment. If such notice is given by the Borrower, the Borrower shall make
such prepayment and the payment amount specified in such notice shall be due and
payable on the date specified therein. Any prepayment of a Eurodollar Rate Loan
shall be accompanied by all accrued interest thereon, together with any
additional amounts required pursuant to SECTION 4.05. Each such prepayment shall
be applied to the outstanding principal installments of the Term Loan in the
order of maturities (and shall be applied to the Term Loan of the Lenders in
accordance with their respective Term Loan Percentages).
(d) MANDATORY PREPAYMENTS OF REVOLVING CREDIT LOANS. If for any reason
the Revolving Credit Outstandings at any time exceed the Borrowing Limit then in
effect, the Borrower shall immediately prepay Revolving Credit Loans and/or
Swing Line Loans and/or Cash Collateralize the L/C Obligations in an aggregate
amount equal to such excess; PROVIDED, HOWEVER, that the Borrower shall not be
required to Cash Collateralize the L/C Obligations pursuant to this SECTION
2.06(d) unless, after the prepayment in full of the Revolving Credit Loans and
Swing Line Loans, the Revolving Credit Outstandings exceed the Borrowing Limit
then in effect.
45
(e) MANDATORY PREPAYMENTS OF THE LOANS.
(i) DEBT PROCEEDS. The Borrower shall make mandatory
principal prepayments of the Loans in the manner set forth in SECTION
2.06(e)(vi) below in amounts equal to one hundred percent (100%) of the
aggregate Net Cash Proceeds from any incurrence of Indebtedness by any Loan
Party permitted pursuant to SECTION 8.03(o). Such prepayment shall be made
within three (3) Business Days after the date of receipt of Net Cash Proceeds of
any such transaction.
(ii) EQUITY PROCEEDS. The Borrower shall make mandatory
principal prepayments of the Loans in the manner set forth in SECTION
2.06(e)(vi) below in amounts equal to one hundred percent (100%) of the
aggregate Net Cash Proceeds from any offering of equity securities by any Loan
Party (excluding (A) the Net Cash Proceeds of any IPO to the extent such Net
Cash Proceeds are used to repay the Senior Subordinated Notes as set forth in
Section 2.06(e)(vii) below, (B) the Net Cash Proceeds of any offerings of equity
securities to management pursuant to incentive compensation plans in the
ordinary course of business, (C) the Net Cash Proceeds of any offering of equity
securities in connection with any Permitted Acquisition to GTCR Fund VII,
co-investors that are existing shareholders of Holdings at the time of such
offering of equity securities, or any seller with respect to such Permitted
Acquisition, and (D) the Net Cash Proceeds of any other offering of equity
securities (other than an IPO) to GTCR Fund VII and to co-investors that are
existing shareholders of Holdings at the time of such offering of equity
securities, in an aggregate amount not to exceed $20,000,000 (excluding any
offering of equity securities pursuant to clause (C) above)); PROVIDED that the
mandatory prepayment set forth in this SECTION 2.06(e)(ii) shall terminate upon
the receipt by the Administrative Agent of a Compliance Certificate and
supporting financial information, all in form and substance reasonably
satisfactory to the Administrative Agent, evidencing that the Consolidated
Leverage Ratio is equal to or less than 2.25 to 1.00. Any such prepayment
required by this SECTION 2.06(e)(ii) shall be made within three (3) Business
Days after the date of receipt of Net Cash Proceeds of any such transaction.
(iii) ASSET SALE PROCEEDS. No later than one hundred eighty
(180) days following the receipt by any Loan Party, the Borrower shall make
mandatory principal prepayments of the Term Loan in the manner set forth in
SECTION 2.06(e)(vi) below in amounts equal to one hundred percent (100%) of the
aggregate Net Cash Proceeds from the Disposition or series of related
Dispositions of assets by any Loan Party permitted pursuant to SECTION 8.05(k)
AND (l) (the "DISPOSITION PROCEEDS"). Notwithstanding any of the foregoing to
the contrary, upon and during the continuance of a Default under Section 10.1(a)
and upon notice from the Administrative Agent, all Disposition Proceeds received
by any Loan Party shall be applied to make prepayments of the Loans, such
prepayments to be made within the later to occur of three (3) Business Days
after the date of receipt of Disposition Proceeds of any such transaction and
the occurrence of any such Default.
(iv) INSURANCE AND CONDEMNATION PROCEEDS. No later than one
hundred eighty (180) days following the date of receipt by any Loan Party of any
Net Cash Proceeds under any of the insurance policies maintained pursuant to
SECTION 7.07 or from any condemnation proceeding (the "INSURANCE AND
CONDEMNATION PROCEEDS") which have not been reinvested as of such date in
similar replacement assets (unless such Insurance and Condemnation Proceeds have
46
been committed to be reinvested within such one hundred eighty (180) day period
and are thereafter actually reinvested within two hundred seventy (270) days
after receipt thereof), the Borrower shall make mandatory principal prepayments
of the Loans in the manner set forth in SECTION 2.06(e)(vi) below in amounts
equal to one hundred percent (100%) of the aggregate amount of such Insurance
and Condemnation Proceeds received by any Loan Party. Notwithstanding any of the
foregoing to the contrary, upon and during the continuance of a Default under
Section 10.1(a) and upon notice from the Administrative Agent, all Insurance and
Condemnation Proceeds received by any Loan Party shall be applied to make
prepayments of the Loans, such prepayments to be made within three (3) Business
Days after the date of receipt of such Insurance and Condemnation Proceeds.
(v) EXCESS CASH FLOW. Within one hundred (100) days after the
end of any Fiscal Year, commencing with the Fiscal Year ending December 31,
2003, for which the Consolidated Total Leverage Ratio as of the end of such
Fiscal Year (A) equals or exceeds 2.25 to 1.00, the Borrower shall make a
mandatory principal prepayment of the Loans in the manner set forth in SECTION
2.06(e)(vi) below in an amount equal to seventy-five percent (75%) of Excess
Cash Flow, if any, for such Fiscal Year and (B) is less than 2.25 to 1.00, the
Borrower shall make a mandatory principal prepayment of the Loans in the manner
set forth in SECTION 2.06(e)(vi) below in an amount equal to 50% of Excess Cash
Flow, if any for such Fiscal Year; PROVIDED that the mandatory prepayment set
forth in this SECTION 2.06(e)(v) shall terminate with respect to any Fiscal Year
during which an IPO is consummated and all subsequent Fiscal Years, but not with
respect to any prior Fiscal Year (except that no Excess Cash Flow payments shall
be made for a prior year if an IPO is consummated prior to the date on which
such Excess Cash Flow payment is due).
(vi) NOTICE; MANNER OF PAYMENT. Upon the occurrence of any
event triggering the prepayment requirement under SECTIONS 2.06(e)(i) through
and including 2.06(e)(v), the Borrower shall promptly give written notice to the
Administrative Agent and upon receipt of such notice, the Administrative Agent
shall promptly so notify the Lenders. Each prepayment under this SECTION 2.06(e)
shall be applied as follows: (A) FIRST, to reduce on a PRO RATA basis the
remaining scheduled principal installments of the Term Loan pursuant to SECTION
2.08(c) and (B) SECOND, to the extent of any excess, to reduce permanently the
Revolving Credit Commitments, pursuant to SECTION 2.07(b). Notwithstanding
anything in this SECTION 2.06(e) to the contrary, any Term Loan Lender shall
have the right to refuse its PRO RATA share (based on Term Loan Percentage) of
any such mandatory prepayment at which time the remaining amount shall be
applied FIRST, to reduce the Outstanding Amount of Revolving Credit Loans
(without a reduction in the Revolving Credit Commitments), and then, to the
extent of any remaining funds, the Borrower may elect to (a) prepay the
outstanding Term Loans in the manner set forth in this SECTION 2.06(e)
regardless of the election of the Term Loan Lender or (b) retain such excess
amount.
(vii) IPO PROCEEDS. The Borrower shall use the Net Cash
Proceeds of any IPO (A) FIRST, to repay in full the then outstanding Senior
Subordinated Bridge Notes and (B) SECOND, to repay the Loans in the order set
forth in SECTION 2.06(e)(vi); PROVIDED that if an Event of Default under SECTION
10.01(a) or SECTION 10.01(b) (but only to the extent such Event of Default under
Section 10.01(b) arises as a result of a violation of SECTION 8.17(a) or SECTION
8.17(b)) shall have occurred and be continuing at the time of such IPO, the
Borrower shall be required to use
47
the Net Cash Proceeds of such IPO to repay the Loans in the order set forth in
SECTION 2.06(e)(vi) up to the amount required to cure such Event of Default in a
manner satisfactory to the Administrative Agent (and the Borrower shall not be
permitted to apply such Net Cash Proceeds to repay the then outstanding Senior
Subordinated Bridge Notes until such Event of Default is so cured); PROVIDED
FURTHER that the mandatory prepayment set forth in this SECTION 2.06(e)(vii)
shall terminate upon the receipt by the Administrative Agent of a Compliance
Certificate and supporting financial information, all in form and substance
reasonably satisfactory to the Administrative Agent, evidencing that the
Consolidated Leverage Ratio is equal to or less than 2.25 to 1.00.
(viii) MISCELLANEOUS. Amounts prepaid under the Term Loan
pursuant to this SECTION 2.06(e) may not be reborrowed and will constitute a
permanent reduction in the Term Loan Commitment. Each prepayment shall be
accompanied by any amount required to be paid pursuant to SECTION 4.05 hereof.
2.07 TERMINATION OR REDUCTION OF REVOLVING CREDIT COMMITMENTS.
(a) VOLUNTARY TERMINATION OR REDUCTION. The Borrower may, upon notice
to the Administrative Agent, voluntarily terminate the Revolving Credit
Commitments, or from time to time, voluntarily permanently reduce the Revolving
Credit Commitments; PROVIDED that (i) any such notice shall be received by the
Administrative Agent not later than 11:00 a.m. five Business Days prior to the
date of termination or reduction, (ii) any such partial reduction shall be in an
aggregate amount of $1,000,000 or any whole multiple of $1,000,000 in excess
thereof, (iii) the Borrower shall not terminate or reduce the Revolving Credit
Commitments if, after giving effect thereto and to any concurrent prepayments
hereunder, the Revolving Credit Outstandings would exceed the Revolving Credit
Commitments, (iv) if, after giving effect to any reduction of the Revolving
Credit Commitments, the Letter of Credit Sublimit or the Swing Line Sublimit
exceeds the amount of the Revolving Credit Commitments, such Sublimit shall be
automatically reduced by the amount of such excess and (v) the Borrower may not
voluntarily terminate the Revolving Credit Commitments, and may not voluntarily
permanently reduce the Revolving Credit Commitments below $10,000,000, until the
Term Loans are paid in full. The Administrative Agent will promptly notify the
Lenders of any such notice of termination or reduction of the Revolving Credit
Commitments. Any reduction of the Revolving Credit Commitments shall be applied
to the Revolving Credit Commitment of each Lender according to its Revolving
Credit Commitment Percentage. All Commitment Fees accrued until the effective
date of any termination of the Revolving Credit Commitments shall be paid on the
effective date of such termination.
(b) EXCESS PROCEEDS. If at any time proceeds ("EXCESS PROCEEDS")
remain after the prepayment of Term Loans pursuant to SECTION 2.06(e), the
Revolving Credit Commitments shall be permanently reduced on the date of the
required prepayment under SECTION 2.06(e) by an amount equal to the amount of
such Excess Proceeds; PROVIDED that any proceeds remaining after the refusal by
any Term Loan Lender to accept prepayment of the Term Loan pursuant to SECTION
2.06(e)(vi) shall not constitute "Excess Proceeds". Any such reduction of the
Revolving Credit Commitments shall be applied to the Revolving Credit Commitment
of each Lender according to its Revolving Credit Percentage. All Commitment Fees
accrued until the effective date of any
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termination of the Revolving Credit Commitments shall be paid on the effective
date of such termination.
2.08 REPAYMENT OF LOANS.
(a) REPAYMENT OF REVOLVING CREDIT LOANS. The Borrower shall repay to
the Lenders on the Revolving Credit Maturity Date the aggregate principal amount
of Revolving Credit Loans outstanding on such date.
(b) REPAYMENT OF SWING LINE LOANS. The Borrower shall repay each Swing
Line Loan on the earlier to occur of (i) the date that is five Business Days
after such Swing Line Loan is made and (ii) the Revolving Credit Maturity Date.
(c) REPAYMENT OF TERM LOAN. The Borrower shall repay the outstanding
principal amount of the Term Loan in consecutive quarterly installments
commencing March 31, 2003 as follows (as such installments may hereafter be
adjusted as a result of prepayments made pursuant to SECTION 2.06(c) OR (e)), in
each case unless accelerated sooner pursuant to SECTION 10.02:
PRINCIPAL INSTALLMENT
YEAR PAYMENT DATE ($)
------- ------------------ ---------------------
2003 March 31, 2003 $ 1,250,000
June 30, 2003 $ 1,250,000
September 30, 2003 $ 1,250,000
December 31, 2003 $ 1,250,000
2004 March 31, 2004 $ 1,250,000
June 30, 2004 $ 1,250,000
September 30, 2004 $ 1,250,000
December 31, 2004 $ 1,250,000
2005 March 31, 2005 $ 2,500,000
June 30, 2005 $ 2,500,000
September 30, 2005 $ 2,500,000
December 31, 2005 $ 2,500,000
2006 March 31, 2006 $ 6,250,000
June 30, 2006 $ 6,250,000
September 30, 2006 $ 6,250,000
December 31, 2006 $ 6,250,000
2007 March 31, 2007 $ 8,750,000
June 30, 2007 $ 8,750,000
September 30, 2007 $ 8,750,000
November 26, 2007 $ 8,750,000
If not sooner paid, the Term Loan shall be paid in full, together with
accrued interest thereon, on the Term Loan Maturity Date.
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ARTICLE III.
GENERAL LOAN PROVISIONS
3.01 INTEREST.
(a) Subject to the provisions of subsection (b) below, (i) each
Eurodollar Rate Loan shall bear interest on the outstanding principal amount
thereof for each Interest Period at a rate per annum equal to the Eurodollar
Rate for such Interest Period PLUS the Applicable Rate; (ii) each Base Rate Loan
(other than Swing Line Loans) shall bear interest on the outstanding principal
amount thereof from the applicable borrowing date at a rate per annum equal to
the Base Rate PLUS the Applicable Rate; and (iii) each Swing Line Loan shall
bear interest on the outstanding principal amount thereof from the applicable
borrowing date at a rate per annum equal to the Base Rate PLUS the Applicable
Rate.
(b) If any amount payable by the Borrower under any Loan Document is
not paid when due (without regard to any applicable grace periods), whether at
stated maturity, by acceleration or otherwise, such amount shall thereafter bear
interest at the Default Rate to the fullest extent permitted by applicable Laws.
Furthermore, upon the request of the Required Lenders, while any Event of
Default exists, the Borrower shall pay interest on the principal amount of all
outstanding Obligations hereunder at the Default Rate to the fullest extent
permitted by applicable Laws. Accrued and unpaid interest on past due amounts
(including interest on past due interest) shall be due and payable upon demand.
(c) Interest on each Loan shall be due and payable in arrears on each
Interest Payment Date applicable thereto and at such other times as may be
specified herein. Interest hereunder shall be due and payable in accordance with
the terms hereof before and after judgment, and before and after the
commencement of any proceeding under any Debtor Relief Law.
3.02 FEES.
In addition to certain fees described in subsections (i) and (j) of SECTION
2.04:
(a) COMMITMENT FEE. The Borrower shall pay to the Administrative
Agent, for the account of each Lender in accordance with its Revolving Credit
Commitment Percentage, a commitment fee (the "COMMITMENT FEE") equal to the
Applicable Rate TIMES the actual daily amount by which the Revolving Credit
Commitments exceed the sum of (i) the Outstanding Amount of Revolving Credit
Loans and (ii) the Outstanding Amount of L/C Obligations. The Commitment Fee
shall accrue at all times during the Availability Period, including at any time
during which one or more of the conditions in ARTICLE V is not met, and shall be
due and payable quarterly in arrears on the last Business Day of each calendar
quarter, commencing with the first such date to occur after the Closing Date,
and on the Revolving Credit Maturity Date. The Commitment Fee shall be
calculated quarterly in arrears, and if there is any change in the Applicable
Rate during any quarter, the actual daily amount shall be computed and
multiplied by the Applicable Rate separately for each period during such quarter
that such Applicable Rate was in effect.
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(b) OTHER FEES.
(i) The Borrower shall pay to the Arranger and the
Administrative Agent, for their own respective accounts, fees in the amounts and
at the times separately agreed upon (including, without limitation, those fees
required to be paid by the Borrower pursuant to the terms of the Fee Letter).
Such fees shall be fully earned when paid and shall not be refundable for any
reason whatsoever.
(ii) The Borrower shall pay to the Lenders such fees as shall
have been separately agreed upon in writing in the amounts and at the times so
specified. Such fees shall be fully earned when paid and shall not be refundable
for any reason whatsoever.
3.03 COMPUTATION OF INTEREST AND FEES.
All computations of interest for Base Rate Loans, when the Base Rate is
determined by Bank of America's "prime rate," shall be made on the basis of a
year of 365 or 366 days, as the case may be, and actual days elapsed. All other
computations of fees and interest shall be made on the basis of a 360-day year
and actual days elapsed (which results in more fees or interest, as applicable,
being paid than if computed on the basis of a 365-day year). Interest shall
accrue on each Loan for the day on which the Loan is made, and shall not accrue
on a Loan, or any portion thereof, for the day on which the Loan or such portion
is paid, PROVIDED that any Loan that is repaid on the same day on which it is
made shall, subject to SECTION 3.05(a), bear interest for one day.
3.04 EVIDENCE OF DEBT.
(a) The Credit Extensions made by each Lender shall be evidenced by
one or more accounts or records maintained by such Lender and by the
Administrative Agent in the ordinary course of business. The accounts or records
maintained by the Administrative Agent and each Lender shall be conclusive
absent manifest error of the amount of the Credit Extensions made by the Lenders
to the Borrower and the interest and payments thereon. Any failure to so record
or any error in doing so shall not, however, limit or otherwise affect the
obligation of the Borrower hereunder to pay any amount owing with respect to the
Obligations. In the event of any conflict between the accounts and records
maintained by any Lender and the accounts and records of the Administrative
Agent in respect of such matters, the accounts and records of the Administrative
Agent shall control in the absence of manifest error. Upon the request of any
Lender made through the Administrative Agent, the Borrower shall execute and
deliver to such Lender (through the Administrative Agent) a Note, which shall
evidence such Lender's Loans in addition to such accounts or records. Each
Lender may attach schedules to its Note and endorse thereon the date, Type (if
applicable), amount and maturity of its Loans and payments with respect thereto.
(b) In addition to the accounts and records referred to in subsection
(a), each Lender and the Administrative Agent shall maintain in accordance with
its usual practice accounts or records evidencing the purchases and sales by
such Lender of participations in Letters of Credit and Swing Line Loans. In the
event of any conflict between the accounts and records maintained by the
Administrative Agent and the accounts and records of any Lender in respect of
such
51
matters, the accounts and records of the Administrative Agent shall control in
the absence of manifest error.
3.05 PAYMENTS GENERALLY.
(a) All payments to be made by the Borrower shall be made without
condition or deduction for any counterclaim, defense, recoupment or setoff.
Except as otherwise expressly provided herein, all payments by the Borrower
hereunder shall be made to the Administrative Agent, for the account of the
respective Lenders to which such payment is owed, at the Administrative Agent's
Office in Dollars and in immediately available funds not later than 2:00 p.m. on
the date specified herein. The Administrative Agent will promptly distribute to
each Lender its Revolving Credit Commitment Percentage or Term Loan Percentage,
as applicable (or other applicable share as provided herein), of such payment in
like funds as received by wire transfer to such Lender's Lending Office. All
payments received by the Administrative Agent after 2:00 p.m. shall be deemed
received on the next succeeding Business Day and any applicable interest or fee
shall continue to accrue.
(b) If any payment to be made by the Borrower shall come due on a day
other than a Business Day, payment shall be made on the next following Business
Day, and such extension of time shall be reflected in computing interest or
fees, as the case may be.
(c) Unless the Borrower or any Lender has notified the Administrative
Agent, prior to the date any payment is required to be made by it to the
Administrative Agent hereunder, that the Borrower or such Lender, as the case
may be, will not make such payment, the Administrative Agent may assume that the
Borrower or such Lender, as the case may be, has timely made such payment and
may (but shall not be so required to), in reliance thereon, make available a
corresponding amount to the Person entitled thereto. If and to the extent that
such payment was not in fact made to the Administrative Agent in immediately
available funds, then:
(i) if the Borrower failed to make such payment, each Lender
shall forthwith on demand repay to the Administrative Agent the portion of such
assumed payment that was made available to such Lender in immediately available
funds, together with interest thereon in respect of each day from and including
the date such amount was made available by the Administrative Agent to such
Lender to the date such amount is repaid to the Administrative Agent in
immediately available funds at the Federal Funds Rate from time to time in
effect; and
(ii) if any Lender failed to make such payment, such Lender
shall forthwith on demand pay to the Administrative Agent the amount thereof in
immediately available funds, together with interest thereon for the period from
the date such amount was made available by the Administrative Agent to the
Borrower to the date such amount is recovered by the Administrative Agent (the
"COMPENSATION PERIOD") at a rate per annum equal to the Federal Funds Rate from
time to time in effect. If such Lender pays such amount to the Administrative
Agent, then such amount shall constitute such Lender's Loan included in the
applicable Borrowing. If such Lender does not pay such amount forthwith upon the
Administrative Agent's demand therefor, the Administrative Agent may make a
demand therefor upon the Borrower, and the Borrower shall pay such amount to the
Administrative Agent, together with interest thereon for the Compensation Period
at a rate per annum equal to the rate of interest applicable to the
52
applicable Borrowing (which amount shall be credited to the Borrower's next
quarterly interest payment pursuant to 3.01) Nothing herein shall be deemed to
relieve any Lender from its obligation to fulfill its Commitment or to prejudice
any rights which the Administrative Agent or the Borrower may have against any
Lender as a result of any default by such Lender hereunder.
A notice of the Administrative Agent to any Lender or the Borrower with
respect to any amount owing under this subsection (c) shall be conclusive,
absent manifest error.
(d) If any Lender makes available to the Administrative Agent funds
for any Loan to be made by such Lender as provided in the foregoing provisions
of this ARTICLE III, and such funds are not made available to the Borrower by
the Administrative Agent because the conditions to the applicable Credit
Extension set forth in ARTICLE V are not satisfied or waived in accordance with
the terms hereof, the Administrative Agent shall return such funds (in like
funds as received from such Lender) to such Lender, without interest.
(e) The obligations of the Lenders hereunder to make Loans and to fund
participations in Letters of Credit and Swing Line Loans are several and not
joint. The failure of any Lender to make any Loan or to fund any such
participation on any date required hereunder shall not relieve any other Lender
of its corresponding obligation to do so on such date, and no Lender shall be
responsible for the failure of any other Lender to so make its Loan or purchase
its participation.
(f) Nothing herein shall be deemed to obligate any Lender to obtain
the funds for any Loan in any particular place or manner or to constitute a
representation by any Lender that it has obtained or will obtain the funds for
any Loan in any particular place or manner.
3.06 SHARING OF PAYMENTS.
If, other than as expressly provided elsewhere herein, any Lender shall
obtain on account of the Loans made by it, or the participations in L/C
Obligations or in Swing Line Loans held by it, any payment (whether voluntary,
involuntary, through the exercise of any right of set-off, or otherwise) in
excess of its ratable share (or other share contemplated hereunder) thereof,
such Lender shall immediately (a) notify the Administrative Agent of such fact
and (b) purchase from the other Lenders such participations in the Loans made by
them and/or such subparticipations in the participations in L/C Obligations or
Swing Line Loans held by them, as the case may be, as shall be necessary to
cause such purchasing Lender to share the excess payment in respect of such
Loans or such participations, as the case may be, pro rata with each of them;
PROVIDED, HOWEVER, that if all or any portion of such excess payment is
thereafter recovered from the purchasing Lender under any of the circumstances
described in SECTION 12.06 (including pursuant to any settlement entered into by
the purchasing Lender in its discretion), such purchase shall to that extent be
rescinded and each other Lender shall repay to the purchasing Lender the
purchase price paid therefor, together with an amount equal to such paying
Lender's ratable share (according to the proportion of (i) the amount of such
paying Lender's required repayment to (ii) the total amount so recovered from
the purchasing Lender) of any interest or other amount paid or payable by the
purchasing Lender in respect of the total amount so recovered, without further
interest thereon. The Borrower agrees that any Lender so purchasing a
participation from another Lender may, to the fullest extent permitted by law,
exercise all its rights of payment
53
(including the right of set-off, but subject to SECTION 12.09) with respect to
such participation as fully as if such Lender were the direct creditor of the
Borrower in the amount of such participation. The Administrative Agent will keep
records (which shall be conclusive and binding in the absence of manifest error)
of participations purchased under this Section and will in each case notify the
Lenders following any such purchases or repayments. Each Lender that purchases a
participation pursuant to this Section shall from and after such purchase have
the right to give all notices, requests, demands, directions and other
communications under this Agreement with respect to the portion of the
Obligations purchased to the same extent as though the purchasing Lender were
the original owner of the Obligations purchased.
3.07 SECURITY.
The Obligations shall be secured as provided in the Security Documents.
ARTICLE IV.
TAXES, YIELD PROTECTION AND ILLEGALITY
4.01 TAXES.
(a) Any and all payments by the Borrower to or for the account of the
Administrative Agent or any Lender under any Loan Document shall be made free
and clear of and without deduction for any and all present or future taxes,
duties, levies, imposts, deductions, assessments, fees, withholdings or similar
charges, and all liabilities with respect thereto, EXCLUDING, in the case of the
Administrative Agent and each Lender, taxes imposed on or measured by its
overall net income, and franchise taxes imposed on it (in lieu of net income
taxes), by the United States or by the jurisdiction (or any political
subdivision thereof) under the Laws of which the Administrative Agent or such
Lender, as the case may be, is organized or maintains a lending office (all such
non-excluded taxes, duties, levies, imposts, deductions, assessments, fees,
withholdings or similar charges, and liabilities being hereinafter referred to
as "TAXES"). If the Borrower shall be required by any Laws to deduct any Taxes
from or in respect of any sum payable under any Loan Document to the
Administrative Agent or any Lender, (i) the sum payable shall be increased as
necessary so that after making all required deductions (including deductions
applicable to additional sums payable under this Section), each of the
Administrative Agent and such Lender receives an amount equal to the sum it
would have received had no such deductions been made, (ii) the Borrower shall
make such deductions, (iii) the Borrower shall pay the full amount deducted to
the relevant taxation authority or other authority in accordance with applicable
Laws, and (iv) within 30 days after the date of such payment, the Borrower shall
furnish to the Administrative Agent (which shall forward the same to such
Lender) the original or a certified copy of a receipt or other evidence of
payment thereof reasonably satisfactory to the Administrative Agent.
(b) In addition, the Borrower agrees to pay any and all present or
future stamp, court or documentary taxes and any other excise or property taxes
or charges or similar levies which arise from any payment made under any Loan
Document or from the execution, delivery, performance, enforcement or
registration of, or otherwise with respect to, any Loan Document (hereinafter
referred to as "OTHER TAXES").
54
(c) If the Borrower shall be required to deduct or pay any Taxes or
Other Taxes from or in respect of any sum payable under any Loan Document to the
Administrative Agent or any Lender, the Borrower shall also pay to the
Administrative Agent or to such Lender, as the case may be, at the time interest
is paid, such amount (in addition to, but not in duplication of, any amounts the
Borrower is required to deduct or pay pursuant to other provisions of this
Section 4.01) that the Administrative Agent or such Lender specifies to the
Borrower is necessary to be received by the Administrative Agent or such Lender
in order for the Administrative Agent's or such Lender's after-tax yield under
the Loan Documents (taking into account all Taxes and Other Taxes, as well as
any taxes imposed on or measured by net income) to be the same as such after-tax
yield would have been if such Taxes or Other Taxes had not been imposed. To the
extent reasonably requested by the Borrower, the Administrative Agent or such
Lender, as the case may be, shall provide documentation and other evidence to
the Borrower supporting the amount specified by the Administrative Agent or such
Lender in the previous sentence.
(d) The Borrower agrees to indemnify the Administrative Agent and each
Lender for, from and against (i) the full amount of Taxes and Other Taxes
(including any Taxes or Other Taxes imposed or asserted by any jurisdiction on
amounts payable under this Section) paid by the Administrative Agent and such
Lender, (ii) amounts payable under SECTION 4.01(c) and (iii) any liability
(including additions to tax, penalties, interest and expenses) arising therefrom
or with respect thereto, in each case whether or not such Taxes or Other Taxes
were correctly or legally imposed or asserted by the relevant Governmental
Authority. Payment under this subsection (d) shall be made within 30 days after
the date the Lender or the Administrative Agent makes a demand therefor.
(e) Each Lender agrees, upon the request of the Borrower, to use
reasonable efforts (consistent with its internal policies and with legal and
regulatory restrictions) to avoid or minimize amounts which might otherwise be
payable pursuant to this Section 4.01 if such efforts or actions will not, in
the good faith judgment of such Lender, otherwise be materially disadvantageous
to such Lender.
4.02 ILLEGALITY.
If any Lender determines that any Law has made it unlawful, or that any
Governmental Authority has asserted that it is unlawful, for any Lender or its
applicable Lending Office to make, maintain or fund Eurodollar Rate Loans, or to
determine or charge interest rates based upon the Eurodollar Rate, then, on
notice thereof by such Lender to the Borrower through the Administrative Agent,
any obligation of such Lender to make or continue Eurodollar Rate Loans or to
convert Base Rate Loans to Eurodollar Rate Loans shall be suspended until such
Lender notifies the Administrative Agent and the Borrower that the circumstances
giving rise to such determination no longer exist. Upon receipt of such notice,
the Borrower shall, upon demand from such Lender (with a copy to the
Administrative Agent), prepay or, if applicable, convert all Eurodollar Rate
Loans of such Lender to Base Rate Loans, either on the last day of the Interest
Period therefor, if such Lender may lawfully continue to maintain such
Eurodollar Rate Loans to such day, or immediately, if such Lender may not
lawfully continue to maintain such Eurodollar Rate Loans. Upon any such
prepayment or conversion, the Borrower shall also pay accrued interest on the
amount so prepaid or converted. Each Lender agrees to designate a different
Lending Office if such designation will avoid the need for such notice and will
not, in the good faith judgment of such Lender, otherwise be materially
disadvantageous to such Lender.
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4.03 INABILITY TO DETERMINE RATES.
If the Required Lenders determine that for any reason adequate and
reasonable means do not exist for determining the Eurodollar Base Rate for any
requested Interest Period with respect to a proposed Eurodollar Rate Loan, or
that the Eurodollar Base Rate for any requested Interest Period with respect to
a proposed Eurodollar Rate Loan does not adequately and fairly reflect the cost
to such Lenders of funding such Loan, the Administrative Agent will promptly so
notify the Borrower and each Lender. Thereafter, the obligation of the Lenders
to make or maintain Eurodollar Rate Loans shall be suspended until the
Administrative Agent (upon the instruction of the Required Lenders) revokes such
notice. Upon receipt of such notice, the Borrower may revoke any pending request
for a Borrowing of, conversion to or continuation of Eurodollar Rate Loans or,
failing that, will be deemed to have converted such request into a request for a
Revolving Credit Borrowing of Base Rate Loans in the amount specified therein.
4.04 INCREASED COST AND REDUCED RETURN; CAPITAL ADEQUACY.
(a) If any Lender determines that as a result of the introduction of
or any change in or in the interpretation of any Law, or such Lender's
compliance therewith, there shall be any increase in the cost to such Lender of
agreeing to make or making, funding or maintaining Eurodollar Rate Loans or (as
the case may be) issuing or participating in Letters of Credit, or a reduction
in the amount received or receivable by such Lender in connection with any of
the foregoing (excluding for purposes of this subsection (a) any such increased
costs or reduction in amount resulting from (i) Taxes or Other Taxes (as to
which SECTION 4.01 shall govern), (ii) changes in the basis of taxation of
overall net income or overall gross income by the United States, or any foreign
jurisdiction, or any political subdivision of either thereof under the Laws of
which such Lender is organized or has its Lending Office, and (iii) reserve
requirements utilized in the determination of the Eurodollar Rate), then from
time to time upon demand of such Lender (with a copy of such demand to the
Administrative Agent), the Borrower shall pay to such Lender such additional
amounts as will compensate such Lender for such increased cost or reduction.
(b) If any Lender determines that the introduction of any Law
regarding capital adequacy or any change therein or in the interpretation
thereof, or compliance by such Lender (or its Lending Office) therewith, has the
effect of reducing the rate of return on the capital of such Lender or any
corporation controlling such Lender as a consequence of such Lender's
obligations hereunder (taking into consideration its policies with respect to
capital adequacy and such Lender's desired return on capital), then from time to
time upon demand of such Lender (with a copy of such demand to the
Administrative Agent), the Borrower shall pay to such Lender such additional
amounts as will compensate such Lender for such reduction.
4.05 FUNDING LOSSES.
(a) Upon demand of any Lender (with a copy to the Administrative
Agent) from time to time, the Borrower shall promptly compensate such Lender for
and hold such Lender harmless from any loss, cost or expense incurred by it as a
result of:
56
(i) any continuation, conversion, payment or prepayment of
any Loan other than a Base Rate Loan on a day other than the last day of the
Interest Period for such Loan (whether voluntary, mandatory, automatic, by
reason of acceleration, or otherwise);
(ii) any failure by the Borrower (for a reason other than the
failure of such Lender to make a Loan) to prepay, borrow, continue or convert
any Loan other than a Base Rate Loan on the date or in the amount notified by
the Borrower; or
(iii) any assignment of a Eurodollar Rate Loan on a day other
than the last day of the Interest Period therefor as a result of a request by
the Borrower pursuant to SECTION 12.16;
including any loss of anticipated profits and any loss or expense arising from
the liquidation or reemployment of funds obtained by it to maintain such Loan or
from fees payable to terminate the deposits from which such funds were obtained.
The Borrower shall also pay any customary administrative fees charged by such
Lender in connection with the foregoing.
(b) Upon demand of the Administrative Agent from time to time, the
Borrower shall promptly compensate the Administrative Agent for and hold the
Administrative Agent harmless from any loss, cost or expense incurred by it with
respect to Eurodollar Rate Loans on account of the syndication of the Revolving
Credit Commitments or the Term Loan Commitments during the 180 day period
following the Closing Date (PROVIDED that the Administrative Agent shall use its
reasonable efforts during such 180 day period to limit such losses, costs and
expenses).
For purposes of calculating amounts payable by the Borrower to the Lenders under
this SECTION 4.05, each Lender shall be deemed to have funded each Eurodollar
Rate Loan made by it at the Eurodollar Base Rate used in determining the
Eurodollar Rate for such Loan by a matching deposit or other borrowing in the
London interbank eurodollar market for a comparable amount and for a comparable
period, whether or not such Eurodollar Rate Loan was in fact so funded.
4.06 MATTERS APPLICABLE TO ALL REQUESTS FOR COMPENSATION.
(a) A certificate of the Administrative Agent or any Lender claiming
compensation under this ARTICLE IV and setting forth the additional amount or
amounts to be paid to it hereunder shall be conclusive in the absence of
manifest error. In determining such amount, the Administrative Agent or such
Lender may use any reasonable averaging and attribution methods.
(b) Upon any Lender's making a claim for compensation under SECTION
4.01 or 4.04, the Borrower may replace such Lender in accordance with SECTION
12.16.
4.07 SURVIVAL.
All of the Borrower's obligations under this ARTICLE IV shall survive
termination of the Aggregate Commitments and repayment of all other Obligations
hereunder.
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ARTICLE V.
CONDITIONS PRECEDENT TO CREDIT EXTENSIONS
5.01 CONDITIONS OF INITIAL CREDIT EXTENSION.
The obligation of each Lender to make its initial Credit Extension
hereunder is subject to satisfaction of the following conditions precedent:
(a) GENERAL LOAN DOCUMENTS, CERTIFICATES AND OPINIONS. The
Administrative Agent's receipt of the following, each of which shall be
originals or facsimiles (followed promptly by originals) unless otherwise
specified, each properly executed by a Responsible Officer of the signing Loan
Party, each dated the Closing Date (or, in the case of certificates of
governmental officials, a recent date before the Closing Date) and each in form
and substance reasonably satisfactory to the Administrative Agent and its legal
counsel:
(i) PRIMARY LOAN DOCUMENTS. Executed counterparts of this
Agreement, the Security Documents, the Guaranty Agreement and any other
applicable Loan Documents, sufficient in number for distribution to the
Administrative Agent, each Lender and the Borrower;
(ii) NOTES. A Note executed by the Borrower in favor of each
Lender that has requested a Note by giving written notice to the Administrative
Agent prior to the Closing Date;
(iii) GENERAL CERTIFICATES. A certificate of the secretary or
assistant secretary of each Loan Party certifying as to the incumbency and
genuineness of the signature of each officer of each Loan Party executing Loan
Documents to which it is a party and certifying that attached thereto is a true,
correct and complete copy of (A) the articles or certificate of incorporation or
formation of each Loan Party and all amendments thereto, certified as of a
recent date by the appropriate Governmental Authority in its jurisdiction of
incorporation or formation, (B) the bylaws or other governing document of each
Loan Party as in effect on the date of such certifications, (C) resolutions duly
adopted by the board of directors or other governing body of each Loan Party
authorizing the borrowings contemplated hereunder and the execution, delivery
and performance of the Loan Documents to which it is a party and (D)
certificates as of a recent date of the good standing of each Loan Party under
the laws of its jurisdiction of organization and, to the extent requested by the
Administrative Agent, each other jurisdiction where each Loan Party is qualified
to do business and a certificate, if available, of the relevant taxing
authorities of such jurisdictions certifying that such Loan Party has filed
required tax returns and owes no delinquent taxes;
(iv) OFFICER'S CERTIFICATE. A certificate of a Responsible
Officer of each of Holdings and the Borrower certifying (A) that the conditions
specified in SECTIONS 5.01 and 5.02 have been satisfied, (B) that since
September 30, 2002 (both before and after giving effect to the Acquisition),
there has been no change, occurrence or development that has had or could be
reasonably expected to have a Material Adverse Effect and (C) that no actions,
suits, investigations or proceedings are pending or threatened in any court or
before any arbitrator or Governmental Authority that purport (1) to materially
and adversely affect the Loan Parties (other than the CSOC Litigation) or (2) to
affect any transaction contemplated by this Agreement (including, without
limitation, the Acquisition) or the ability of the Loan Parties or any other
58
obligor under the Loan Documents to perform their respective obligations under
the Loan Documents; PROVIDED that the Administrative Agent shall be satisfied
(I) with all indemnification rights of the Borrower with respect to the CSOC
Litigation under the Acquisition Documents and (II) the terms, conditions and
amounts of all reserves and escrow arrangements relating to the CSOC Litigation
and the indemnification thereof;
(v) OPINION OF COUNSEL. A favorable opinion of ▇▇▇▇▇▇▇▇ &
▇▇▇▇▇, counsel to the Loan Parties, addressed to the Administrative Agent and
each Lender, as to such matters concerning the Loan Parties and the Loan
Documents as the Required Lenders may reasonably request;
(vi) BORROWING BASE CERTIFICATE. A Borrowing Base Certificate
as of the Closing Date;
(vii) ACCOUNTS RECEIVABLE AGING REPORT. An accounts receivable
aging report listing all Accounts of the Borrower and its Subsidiaries as of the
Closing Date which report shall include the amount and age of each Account
Debtor and such other information as the Administrative Agent may require, all
in form and substance reasonably satisfactory to the Administrative Agent; and
(viii) OTHER DOCUMENTATION. Such other assurances, certificates,
documents, consents or opinions (including a copy of the opinion issued to the
holders of the Senior Subordinated Bridge Notes that provides that the
Administrative Agent, the L/C Issuer, the Swing Line Lender and the Lenders may
rely on such opinion), the as the Administrative Agent, the L/C Issuer, the
Swing Line Lender or the Required Lenders reasonably may require.
(b) COLLATERAL.
(i) FILINGS AND RECORDINGS. All filings and recordations that
are necessary to perfect the security interests of the Lenders in the collateral
described in the Security Documents (including, without limitation, Assignment
Agreements and Notices of Assignment executed by the applicable Loan Party (but
not the United States or any applicable agency, department or instrumentality
thereof) with respect to each Material Government Contract existing as of the
Closing Date) shall have been received by the Administrative Agent and the
Administrative Agent shall have received evidence satisfactory thereto that upon
such filings and recordations such security interests constitute valid and
perfected first priority Liens therein.
(ii) PLEDGED COLLATERAL. The Administrative Agent shall have
received (A) original stock certificates or other certificates evidencing the
capital stock or other ownership interests pledged pursuant to the Security
Documents, together with an undated stock power for each such certificate duly
executed in blank by the registered owner thereof and (B) each original
promissory note pledged pursuant to the Security Documents.
(iii) LIEN SEARCH. The Administrative Agent shall have received
the results of a Lien search (including a search as to judgments, pending
litigation, bankruptcy and tax matters) made against each Loan Party under the
UCC (or applicable judicial docket) as in effect in any state in which any of
its assets are located, indicating among other things that its assets are free
and clear of any Lien except for Liens permitted hereunder.
59
(iv) HAZARD AND LIABILITY INSURANCE. The Administrative Agent
shall have received certificates of insurance, evidence of payment of all
insurance premiums for the current policy year of each, and, if requested by the
Administrative Agent, copies (certified by a Responsible Officer) of insurance
policies in the form required under the Security Documents and otherwise in form
and substance reasonably satisfactory to the Administrative Agent.
(c) FINANCIAL MATTERS.
(i) FINANCIAL STATEMENTS. The Administrative Agent and the
Lenders shall have received (A) the audited consolidated balance sheet of the
Target and its Subsidiaries and the related consolidated statements of income or
operations, shareholders' equity and cash flows for the fiscal years ended
December 31, 1999, December 31, 2000 and December 31, 2001 (the "AUDITED
FINANCIAL STATEMENTS"), (B) the unaudited consolidated balance sheet of the
Target and its Subsidiaries and the related consolidated statements of income or
operations, shareholders' equity and cash flows for the fiscal quarters ended
March 31, 2002 and June 30, 2002 (the "UNAUDITED QUARTERLY FINANCIAL
STATEMENTS"), (C) the unaudited consolidated balance sheet of the Target and its
Subsidiaries and the related consolidated statements of income or operations for
the calendar months ended July 31, 2002, August 31, 2002, September 30, 2002 and
October 31, 2002 (the "UNAUDITED MONTHLY FINANCIAL STATEMENTS") and (D) the PRO
FORMA financial statements of Holdings and its Subsidiaries after giving effect
to the transactions contemplated by the Transaction Documents (the "PRO FORMA
FINANCIAL STATEMENTS"), all in form and substance satisfactory to the
Administrative Agent and the Lenders and prepared in accordance with GAAP.
(ii) FINANCIAL FORECASTS. The Administrative Agent shall have
received financial forecasts with respect to Holdings and its Subsidiaries
prepared by a Responsible Officer of each of Holdings and the Borrower, each in
form satisfactory to the Administrative Agent, of balance sheets, income
statements and cash flow statements on a monthly basis for the first year
following the Closing Date and on an annual basis for each year thereafter
during the term of this Agreement.
(iii) FINANCIAL CONDITION CERTIFICATE. Holdings and the
Borrower shall have delivered to the Administrative Agent a certificate, in form
and substance reasonably satisfactory to the Administrative Agent, and certified
as accurate by a Responsible Officer of each of Holdings and the Borrower, that
(A) attached thereto are calculations evidencing compliance, as determined on a
PRO FORMA basis as of October 31, 2002 and after giving effect to the
transactions contemplated by the Transaction Documents, with the covenants
contained in SECTION 8.17 and SECTION 8.18, (B) the PRO FORMA financial
statements delivered pursuant to SECTION 5.01(c)(i) and the forecasts delivered
pursuant to SECTION 5.01(c)(ii) were prepared in good faith on the basis of the
assumptions stated therein, which assumptions are believed to be reasonable in
light of then existing conditions, it being understood that forecasts are
subject to inherent uncertainties and (C) attached thereto is a calculation of
the Consolidated Total Leverage Ratio, determined on a PRO FORMA basis as of the
Closing Date and after giving effect to the transactions contemplated by the
Transaction Documents, demonstrating to the satisfaction of the Administrative
Agent that the Consolidated Total Leverage Ratio is less than 3.50 to 1.00.
(iv) FINANCIAL DUE DILIGENCE REPORT. The Administrative Agent
and the Lenders shall have received the report dated July 22, 2002 prepared by
Ernst & Young LLP and the
60
subsequent update setting forth the calculation of the revenues and the gross
margin of the Loan Parties for the twelve month period ending August 31, 2002
(such calculation to be exclusive of any amounts attributable to the INS
Contract).
(v) SOLVENCY CERTIFICATES. The Administrative Agent and the
Lenders shall have received the following (each in form and substance reasonably
satisfactory to the Administrative Agent and the Lenders):
(A) an opinion by Valuation Research, Inc., in form
and substance reasonably satisfactory to the Administrative Agent, as to
the financial condition and the solvency of Holdings, the Borrower and the
other Guarantors, taken as a whole, after giving effect to the transactions
contemplated by the Transaction Documents; and
(B) a certificate, in form and substance reasonably
satisfactory to the Administrative Agent, and certified as accurate by a
Responsible Officer of each of Holdings and the Borrower, as to the
financial condition and the solvency of Holdings, the Borrower and the
other Guarantors, taken as a whole, after giving effect to the transactions
contemplated by the Transaction Documents;
(vi) FEES. The Borrower shall have paid (i) all fees and
expenses required to be paid on or before the Closing Date and (ii) all Attorney
Costs of the Administrative Agent to the extent invoiced prior to or on the
Closing Date, plus such additional amounts of Attorney Costs as shall constitute
its reasonable estimate of Attorney Costs incurred or to be incurred by it
through the closing proceedings (provided that such estimate shall not
thereafter preclude a final settling of accounts between the Borrower and the
Administrative Agent).
(vii) EXISTING
CREDIT AGREEMENT. The Administrative Agent shall
have received evidence, in form and substance reasonably satisfactory thereto,
that the Existing
Credit Agreement has been, or concurrently with the Closing
Date is being, terminated and that all Liens securing obligations under the
Existing
Credit Agreement have been, or concurrently with the Closing Date are
being, released.
(viii) OTHER FINANCIAL INFORMATION. The Administrative Agent
shall have received any updates or modifications to the financial information
previously provided thereto by Holdings and the Borrower, as reasonably
requested by the Administrative Agent.
(d) THE ACQUISITION.
(i) DOCUMENTATION.
(A) ACQUISITION DOCUMENTS. The Acquisition Documents
shall be in form and substance reasonably satisfactory to the
Administrative Agent (including, but not limited to, a cash purchase price
not to exceed $183,400,000 (subject to adjustments for changes to working
capital, net depreciable assets and accrued contract losses)). All material
conditions precedent to complete the Acquisition thereunder shall have been
completed or waived with the Administrative Agent's consent such that the
Acquisition shall occur contemporaneously with the initial funding under
this Agreement on the Closing Date.
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(B) EQUITY PURCHASE AGREEMENT. The Administrative
Agent shall have received a true and correct copy of the Equity Purchase
Agreement.
(C) SENIOR SUBORDINATED NOTE DOCUMENTS. The Senior
Subordinated Note Documents shall be form and substance reasonably
satisfactory to the Administrative Agent.
(D) MANAGEMENT AND CONSULTING AGREEMENTS. The
Administrative Agent shall have received true and correct copies of (1) the
Professional Services Agreement, (2) the Senior Management Agreement, dated
as of September 7, 2001, by and among Holdings, the Borrower and ▇▇▇ ▇.
▇▇▇▇▇, (3) the Senior Management Agreement, dated as of September 7, 2001,
by and among Holdings, the Borrower and ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇, (4) the Senior
Management Agreement, dated as of February 15, 2002, by and among Holdings,
the Borrower and ▇▇▇▇▇ ▇▇▇▇▇▇▇, (5) the Consulting Agreement, dated as of
January 10, 2002, by and among Holdings, the Borrower and ▇▇▇▇▇ ▇▇▇▇▇ and
(6) the Employment Agreement, dated as of September 20, 2002, by and among
Holdings, the Borrower and ▇▇▇▇▇▇▇ ▇▇▇▇▇▇.
(ii) EQUITY CONTRIBUTION, EQUITY ROLLOVER AND SENIOR
SUBORDINATED NOTE ISSUANCE.
(A) EQUITY CONTRIBUTION. Holdings shall have received,
on or prior to the Closing Date, net cash proceeds from the issuance of
certain preferred and common equity securities in an aggregate amount of at
least $63,600,000, and Holdings shall have contributed such net cash
proceeds, on or prior to the Closing Date, to the Borrower (collectively,
the "EQUITY CONTRIBUTION"), such Equity Contribution to be on terms and
conditions reasonably satisfactory to the Administrative Agent.
(B) EQUITY ROLLOVER. Holdings shall have issued, on or
prior to the Closing Date, $33,500,000 of preferred stock of Holdings to
certain shareholders of the Target (the "EQUITY ROLLOVER"), such Equity
Rollover to be on terms and conditions reasonably satisfactory to the
Administrative Agent.
(C) SENIOR SUBORDINATED NOTE ISSUANCE. The Borrower
shall have received, on or prior to the Closing Date, net cash proceeds
from the issuance of the Senior Subordinated Notes in an aggregate amount
of $44,000,000 (collectively, the "SENIOR SUBORDINATED NOTE ISSUANCE"),
such Senior Subordinated Note Issuance to be on terms and conditions
reasonably satisfactory to the Administrative Agent.
(iii) PURCHASE PRICE. The purchase price paid by the Borrower
in connection with the Acquisition (including, without limitation, all estimated
closing costs) shall not exceed $224,000,000 (subject to adjustments for changes
to working capital, net depreciable assets and accrued contract losses).
(iv) NO INJUNCTION, ETC. No action, proceeding, investigation,
regulation or legislation shall have been instituted, threatened or proposed
before any Governmental Authority to enjoin, restrain, or prohibit, or to obtain
substantial damages in respect of, or which is related to or arises out of the
Transaction Documents or the consummation of the transactions contemplated
62
thereby, or which, in the Administrative Agent's reasonable discretion, would
make it inadvisable to consummate the transactions contemplated by this
Agreement and the other Loan Documents.
(v) TRANSACTION CERTIFICATE. The Administrative Agent shall
have received a certificate with respect to the Acquisition, the Equity
Issuance, the Equity Contribution and the Senior Subordinated Note Issuance, in
form and substance reasonably satisfactory to the Administrative Agent and the
Lenders, identifying each Transaction Document and attaching true, complete and
correct copies of such Transaction Documents together with all amendments and
modifications thereto.
(vi) OTHER DOCUMENTS. The Administrative Agent shall have
received any other documents reasonably requested thereby in connection with the
Acquisition, the Equity Contribution, the Equity Rollover and the Senior
Subordinated Note Issuance, and each such document shall be in form and
substance reasonably satisfactory to the Administrative Agent.
(e) MISCELLANEOUS.
(i) GOVERNMENTAL AND THIRD PARTY APPROVALS. The Loan Parties
shall have received all material governmental, shareholder and third party
consents (including ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ clearance) and approvals necessary (as
determined in the reasonable discretion of the Administrative Agent) in
connection with the transactions contemplated by this Agreement and the other
Loan Documents and the other transactions contemplated hereby (including,
without limitation, the Acquisition, the Equity Contribution, the Equity
Rollover and the Senior Subordinated Note Issuance) and all applicable waiting
periods shall have expired without any action being taken by any Person that
could reasonably be expected restrain, prevent or impose any material adverse
conditions on any of the Loan Parties or such other transactions or that could
seek or threaten any of the foregoing, and no law or regulation shall be
applicable which in the reasonable judgment of the Administrative Agent could
reasonably be expected to have such effect.
(ii) CORPORATE STRUCTURE AND CAPITALIZATION OF HOLDINGS AND
THE BORROWER. The capital and ownership structure and the shareholder
arrangements of the Loan Parties, on the Closing Date and on a PRO FORMA basis
after giving effect to the transactions contemplated by the Transaction
Documents, shall be reasonably satisfactory to the Administrative Agent (and the
Administrative Agent and the Lenders shall have received satisfactory evidence
that (A) at least 60% of the ownership interest in Holdings shall be owned
collectively by GTCR Fund VII and GTCR Co-Invest, (B) all common stock in the
Borrower shall be owned by Holdings, and (C) all common stock or other ownership
interests in the Borrower's Subsidiaries shall be owned by the Borrower or one
or more Subsidiaries thereof).
(iii) AVAILABILITY. On the Closing Date and after giving effect
to the transactions contemplated by the Transaction Documents, the Borrower
shall demonstrate that at least $15,000,000 of the Revolving Credit Commitments
remains undrawn.
(iv) DEBT RATINGS. On or prior to the Closing Date, the
Borrower shall have received ratings for its senior secured debt of at least B+
from Standard & Poor's Ratings Group,
63
a division of The ▇▇▇▇▇▇-▇▇▇▇ Companies, Inc., and B1 from ▇▇▇▇▇'▇ Investors
Service, Inc., in each case with a stable outlook.
(v) LOAN NOTICE. The Administrative Agent shall have received
a Loan Notice, as applicable, from the Borrower in accordance with SECTION
2.01(b) and SECTION 2.02(b).
(vi) PROFESSIONAL SERVICES AGREEMENT. The Administrative Agent
shall have received the written acknowledgement by the parties to the
Professional Services Agreement of the restrictions set forth in SECTION 8.10
and that such restrictions do not constitute a breach of the Professional
Services Agreement.
(vii) OTHER DOCUMENTS. All opinions, certificates and other
instruments, and all proceedings in connection with the transactions
contemplated by the Transaction Documents, shall be reasonably satisfactory in
form and substance to the Administrative Agent. The Administrative Agent shall
have received copies of all other documents, certificates and instruments
reasonably requested thereby, with respect to the transactions contemplated by
the Transaction Documents.
5.02 CONDITIONS TO ALL CREDIT EXTENSIONS.
The obligation of each Lender to honor any Request for Credit Extension is
subject to the following conditions precedent:
(a) The representations and warranties of the Borrower and each other
Loan Party contained in ARTICLE VI and each other Loan Document that are subject
to materiality or Material Adverse Effect qualifications shall be true and
correct in all respects and the representations and warranties of the Borrower
and each other Loan Party contained in ARTICLE VI and each other Loan Document
that are not subject to materiality or Material Adverse Effect qualifications
shall be true and correct in all material respects, in each case, on and as of
the date of such Credit Extension both before and after giving effect to such
proposed Credit Extension, except to the extent that such representations and
warranties specifically refer to an earlier date, in which case they shall be
true and correct as of such earlier date, and except that for purposes of this
SECTION 5.02, the representations and warranties contained in subsections (a)
and (b) of SECTION 6.05 shall be deemed to refer to the most recent statements
furnished pursuant to clauses (a) and (b), respectively, of SECTION 7.01.
(b) No Default or Event of Default shall exist, or would result from
such proposed Credit Extension.
(c) The Administrative Agent and, if applicable, the L/C Issuer or the
Swing Line Lender shall have received a Request for Credit Extension in
accordance with the requirements hereof.
(d) The Administrative Agent shall have received each additional
document, instrument, legal opinion or other item reasonably requested by it.
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Each Request for Credit Extension submitted by the Borrower shall be deemed
to be a representation and warranty that the conditions specified in SECTIONS
5.02(a) and (b) have been satisfied on and as of the date of the applicable
Credit Extension.
ARTICLE VI.
REPRESENTATIONS AND WARRANTIES
Holdings and the Borrower represent and warrant to the Administrative Agent
and the Lenders that:
6.01 EXISTENCE, QUALIFICATION AND POWER; COMPLIANCE WITH LAWS.
Holdings and each of its Subsidiaries (a) is a corporation, partnership or
limited liability company duly organized or formed, validly existing and, and
except as set forth on SCHEDULE 6.01, in good standing under the Laws of the
jurisdiction of its incorporation or organization, (b) has all requisite power
and authority and all requisite governmental licenses, authorizations, consents
and approvals to (i) own its assets and carry on its business as now being
conducted and hereafter proposed to be conducted and (ii) execute, deliver and
perform its obligations under the Loan Documents to which it is a party, except,
in each case, where the failure to have all such licenses, authorizations,
consents and approvals could not reasonably be expected to have a Material
Adverse Effect, (c) is duly qualified and is licensed and in good standing under
the Laws of each jurisdiction where its ownership, lease or operation of
properties or the conduct of its business requires such qualification or
license, except where the failure to qualify, be licensed and be in good
standing could not reasonably be expected to have a Material Adverse Effect and
(d) is in compliance with all Laws, except where the failure to comply could not
reasonably be expected to have a Material Adverse Effect. The jurisdictions in
which Holdings and each of its Subsidiaries is organized and qualified to do
business as of the Closing Date are described on SCHEDULE 6.01.
6.02 AUTHORIZATION; NO CONTRAVENTION.
The execution, delivery and performance by each Loan Party of each Loan
Document to which such Person is party, have been duly authorized by all
necessary corporate or other organizational action, and do not and will not (a)
contravene the terms of any of such Person's Organization Documents; (b)
conflict with or result in any breach or contravention of, or the creation of
any Lien under, (i) any Contractual Obligation to which such Person is a party
or (ii) any order, injunction, writ or decree of any Governmental Authority or
any arbitral award to which such Person or its property is subject; or (c)
violate any Law (except in the case of clauses (b) or (c) where such conflict,
breach, contravention or violation could not reasonably be expected to have a
Material Adverse Effect).
6.03 GOVERNMENTAL AUTHORIZATION; OTHER CONSENTS.
(a) No approval, consent, exemption, authorization, or other action
by, or notice to, or filing with, any Governmental Authority or any other Person
is necessary or required in connection with the execution, delivery or
performance by, or enforcement against, any Loan Party of this Agreement or any
other Loan Document except (i) as may be required by Laws
65
affecting the offering and sale of securities generally, (ii) filings with the
United States Copyright Office and/or the United States Patent and Trademark
Office, (iii) filings under the UCC and/or the Assignment of Claims Act, (iv)
the consent of Stamford Computer Group under the equipment lease referred to in
Item 3 of Schedule 8.01 (which will be obtained within 60 days after the Closing
Date) and (v) those notices, consents and authorizations which have been
obtained prior to the Closing Date.
(b) Holdings and each of its Subsidiaries (i) has all Governmental
Approvals required by any applicable Law for it to conduct its business, each of
which is in full force and effect, is final and not subject to review on appeal
and is not the subject of any pending or, to the best of its knowledge,
threatened attack by direct or collateral proceeding, (ii) is in compliance with
each Governmental Approval applicable to it and in compliance with all other
applicable Laws relating to it or any of its respective properties and (iii) has
timely filed all material reports, documents and other materials required to be
filed by it under all applicable Laws with any Governmental Authority and has
retained all material records and documents required to be retained by it under
applicable Law (except, in each case, where the failure to do so could not
reasonably be expected to have a Material Adverse Effect).
6.04 BINDING EFFECT.
This Agreement has been, and each other Loan Document, when delivered
hereunder, will have been, duly executed and delivered by each Loan Party that
is party thereto. This Agreement constitutes, and each other Loan Document when
so delivered will constitute, a legal, valid and binding obligation of such Loan
Party, enforceable against each Loan Party that is party thereto in accordance
with its terms, except as such enforceability may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium or similar state or federal
debtor relief laws which affect the enforcement of creditors' rights in general
and the availability of equitable remedies.
6.05 FINANCIAL STATEMENTS; NO MATERIAL ADVERSE EFFECT.
(a) (i) The Audited Financial Statements (A) were prepared in
accordance with GAAP consistently applied throughout the period covered thereby,
except as otherwise expressly noted therein, (B) fairly present in all material
respects the financial condition of the Target and its Subsidiaries as of the
date thereof and their results of operations for the period covered thereby in
accordance with GAAP consistently applied throughout the period covered thereby,
except as otherwise expressly noted therein, and (C) show all indebtedness and
other liabilities, direct or contingent, of the Target and its Subsidiaries as
of the date thereof, including, without limitation, liabilities for taxes,
commitments and Indebtedness, in each case, with respect to this clause (C), to
the extent required to be disclosed under GAAP.
(ii) The Unaudited Quarterly Financial Statements and the
Unaudited Monthly Financial Statements (A) were prepared in accordance with GAAP
consistently applied throughout the periods covered thereby, except as otherwise
expressly noted therein, (B) fairly present in all material respects the
financial condition of the Target and its Subsidiaries as of the dates thereof
and their results of operations for the periods covered thereby in accordance
with GAAP consistently applied throughout the periods covered thereby, except as
otherwise
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expressly noted therein, and (C) show all indebtedness and other liabilities,
direct or contingent, of the Target and its Subsidiaries as of the dates
thereof, including, without limitation, liabilities for taxes, commitments and
Indebtedness, in each case, with respect to this clause (C), to the extent
required to be disclosed under GAAP, subject, in the case of clauses (A) and
(B), to the absence of footnotes and to normal year-end audit adjustments.
(b) The Pro Forma Financial Statements (A) were prepared in accordance
with GAAP, (B) fairly present in all material respects the PRO FORMA financial
condition of Holdings and its Subsidiaries as of the Closing Date, and (C) show
all PRO FORMA indebtedness and other liabilities, direct or contingent, of
Holdings and its Subsidiaries as of the Closing Date, including, without
limitation, liabilities for taxes, commitments and Indebtedness, in each case,
with respect to this clause (C), to the extent to be disclosed under GAAP,
subject, in the case of clauses (A) and (B), to the absence of footnotes and to
normal year-end audit adjustments.
(c) SCHEDULE 6.05 sets forth all material Indebtedness of Holdings and
its Subsidiaries as of the Closing Date.
(d) Since June 30, 2002, there has been no event or circumstance,
either individually or in the aggregate, that has had or could reasonably be
expected to have a Material Adverse Effect.
(e) As of the Closing Date (after giving effect to the Acquisition,
the other transactions contemplated by this Agreement and the other Transaction
Documents) and after giving effect to each Credit Extension made hereunder,
Holdings and each of its Subsidiaries will be Solvent.
6.06 LITIGATION.
There are no actions, suits, proceedings, claims or disputes pending or, to
the knowledge of any Loan Party after due and diligent investigation, threatened
or contemplated, at law, in equity, in arbitration or before any Governmental
Authority, by or against Holdings or any of its Subsidiaries or against any of
their properties or revenues that (a) purport to affect or pertain to this
Agreement or any other Loan Document, or any of the transactions contemplated
hereby, (other than the existing proceeding to terminate the Proxy Agreement) or
(b) either individually or in the aggregate, if determined adversely, could
reasonably be expected to have a Material Adverse Effect.
6.07 NO DEFAULT.
Neither Holdings nor any of its Subsidiaries is in default under or with
respect to any Contractual Obligation that could, either individually or in the
aggregate, reasonably be expected to have a Material Adverse Effect. No Default
or an Event of Default has occurred and is continuing or would result from the
consummation of the transactions contemplated by this Agreement or any other
Loan Document.
6.08 OWNERSHIP OF PROPERTY; LIENS.
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Holdings and each of its Subsidiaries has good record and marketable title
in fee simple to, or valid leasehold interests in, all real property necessary
or used in the ordinary conduct of its business, and legal title to all of its
personal property and assets, including, but not limited to, those reflected on
the balance sheets of Holdings and its Subsidiaries delivered pursuant to
SECTION 7.01, except those which have been disposed of by Holdings or its
Subsidiaries subsequent to such date which dispositions have been in the
ordinary course of business or as otherwise expressly permitted hereunder. The
property of Holdings and its Subsidiaries is subject to no Liens, other than
Liens permitted by SECTION 8.01.
6.09 ENVIRONMENTAL COMPLIANCE.
(a) The properties owned, leased or operated by Holdings and each of
its Subsidiaries now or in the past do not contain, and to their knowledge have
not previously contained, any Hazardous Materials in amounts or concentrations
which (i) constitute or constituted a violation of applicable Environmental Laws
or (ii) could give rise to liability under applicable Environmental Laws, except
where, in the case of clauses (i) or (ii), such violation or liability could not
reasonably be expected, individually or in the aggregate, to have a Material
Adverse Effect;
(b) Holdings and each of its Subsidiaries and such properties and all
operations conducted in connection therewith are in compliance, and have been in
compliance, with all applicable Environmental Laws, and there is no
contamination at, under or about such properties or such operations which could
reasonably be expected to interfere with the continued operation of such
properties or impair the fair saleable value thereof, except for any such
noncompliance or contamination that could not reasonably be expected,
individually or in the aggregate, to have a Material Adverse Effect;
(c) Neither Holdings nor any of its Subsidiaries has received any
notice of violation, alleged violation, non-compliance, liability or potential
liability regarding environmental matters, Hazardous Materials, or compliance
with Environmental Laws, nor does Holdings or any of its Subsidiaries have
knowledge or reason to believe that any such notice will be received or is being
threatened, except where such violation, alleged violation, non-compliance,
liability or potential liability which is the subject of such notice could not
reasonably be expected, individually or in the aggregate, to have a Material
Adverse Effect;
(d) Hazardous Materials have not been transported or disposed of to or
from the properties owned, leased or operated by Holdings and its Subsidiaries
in violation of, or in a manner or to a location which could reasonably be
expected to give rise to liability under, Environmental Laws, nor have any
Hazardous Materials been generated, treated, stored or disposed of at, on or
under any of such properties in violation of, or in a manner that could
reasonably be expected to give rise to liability under, any applicable
Environmental Laws, except where such violation or liability could not
reasonably be expected, individually or in the aggregate, to have a Material
Adverse Effect;
(e) No judicial proceedings or governmental or administrative action
is pending, or, to the knowledge of the Borrower, threatened, under any
Environmental Law to which Holdings and its Subsidiaries are or will be named as
a potentially responsible party with respect to such
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properties or operations conducted in connection therewith, nor are there any
consent decrees or other decrees, consent orders, administrative orders or other
orders, or other administrative or judicial requirements outstanding under any
Environmental Law with respect to Holdings or any of its Subsidiaries or such
properties or such operations, except where such proceeding, action, decree,
order or other requirement could not reasonably be expected, individually or in
the aggregate, to have a Material Adverse Effect; and
(f) There has been no release, or to the best of Holdings' and the
Borrower's knowledge, threat of release, of Hazardous Materials at or from
properties owned, leased or operated by Holdings or any of its Subsidiaries, now
or in the past, in violation of or in amounts or in a manner that could
reasonably expected to give rise to liability under Environmental Laws, except
where such violation or liability could not reasonably be expected, individually
or in the aggregate, to have a Material Adverse Effect.
6.10 INSURANCE.
The properties of Holdings and each of its Subsidiaries are insured with
financially sound and reputable insurance companies which are not Affiliates of
Holdings or the Borrower (unless such insurance is provided on an arms-length
basis), in such amounts, with such deductibles and covering such risks as are
customarily carried by companies engaged in similar businesses and owning
similar properties in localities where Holdings and such Subsidiaries operates.
6.11 TAXES.
Holdings and each of its Subsidiaries have filed all Federal, state and
other material tax returns and reports required to be filed, and have paid all
Federal, state and other material taxes, assessments, fees and other
governmental charges levied or imposed upon them or their properties, income or
assets otherwise due and payable, except those which are being contested in good
faith by appropriate proceedings diligently conducted and for which adequate
reserves have been provided in accordance with GAAP. Such tax returns and
reports accurately reflect in all material respects all liability for taxes of
Holdings and its Subsidiaries for the periods covered thereby. There is no
ongoing audit or examination or, to the knowledge of the Borrower, other
investigation by any Governmental Authority of the tax liability of Holdings and
its Subsidiaries and no Governmental Authority has asserted any Lien or other
claim against any Holdings or any of its Subsidiaries with respect to unpaid
taxes which has not been discharged or resolved, in each case, except as could
not reasonably be expected to have a Material Adverse Effect. The charges,
accruals and reserves on the books of Holdings and its Subsidiaries in respect
of federal, state, local and other taxes for the Fiscal Year 2002 and Fiscal
Years occurring thereafter, Holdings and its Subsidiaries are in the judgment of
Holdings and the Borrower adequate, and Holdings and the Borrower do not
anticipate any material amount of additional taxes or assessments for any of
such years. There is no proposed tax assessment against Holdings or any of its
Subsidiaries that would, if made, reasonably be expected to have a Material
Adverse Effect.
6.12 ERISA COMPLIANCE.
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(a) As of the Closing Date, neither the Borrower nor any ERISA
Affiliate maintains or contributes to, or has any obligation under, any Pension
Plans or Multiemployer Plans other than those identified on SCHEDULE 6.12(a).
(b) Except as could not reasonably be expected to have a Material
Adverse Effect, (i) each Plan is in compliance with the applicable provisions of
ERISA, the Code and other Federal or state Laws and (ii) each Plan that is
intended to qualify under Section 401(a) of the Code has received a favorable
determination letter from the IRS or an application for such a letter is
currently being processed by the IRS with respect thereto and, to the best
knowledge of the Borrower, nothing has occurred which would prevent, or cause
the loss of, such qualification. Furthermore, the Borrower and each ERISA
Affiliate have made all required contributions to each Plan subject to Section
412 of the Code, and no application for a funding waiver or an extension of any
amortization period pursuant to Section 412 of the Code has been made with
respect to any Plan.
(c) There are no pending or, to the best knowledge of the Borrower,
threatened claims, actions or lawsuits, or action by any Governmental Authority,
with respect to any Plan that could reasonably be expected to have a Material
Adverse Effect. There has been no prohibited transaction or violation of the
fiduciary responsibility rules with respect to any Plan that has resulted or
could reasonably be expected to result in a Material Adverse Effect.
(d) (i) No ERISA Event has occurred or is reasonably expected to
occur; (ii) no Pension Plan has any Unfunded Pension Liability; (iii) neither
the Borrower nor any ERISA Affiliate has incurred, or reasonably expects to
incur, any liability under Title IV of ERISA with respect to any Pension Plan
(other than premiums due and not delinquent under Section 4007 of ERISA); (iv)
neither the Borrower nor any ERISA Affiliate has incurred, or reasonably expects
to incur, any liability (and no event has occurred which, with the giving of
notice under Section 4219 of ERISA, would result in such liability) under
Sections 4201 or 4243 of ERISA with respect to a Multiemployer Plan; (v) except
as disclosed on SCHEDULE 6.12(d), neither the Borrower nor any ERISA Affiliate
has engaged in a transaction that could be subject to Sections 4069 or 4212(c)
of ERISA; and (vi) except as could not reasonably be expected to result in a
Material Adverse Effect, neither the Borrower nor any ERISA Affiliate has
engaged in a nonexempt prohibited transaction described in Section 406 of ERISA
or Section 4975 of the Code.
6.13 SUBSIDIARIES.
As of the Closing Date, Holdings has no Subsidiaries other than those
specifically disclosed in Part (a) of SCHEDULE 6.13 and has no equity
investments in any other corporation or entity other than those specifically
disclosed in Part (b) of SCHEDULE 6.13. As of the Closing Date, the
capitalization of Holdings and its Subsidiaries consists of the number of
shares, authorized, issued and outstanding, of such classes and series, with or
without par value, described on SCHEDULE 6.13. Except as described on SCHEDULE
6.13, all outstanding shares have been duly authorized and validly issued and
are fully paid and nonassessable, and not subject to any preemptive or similar
rights. The shareholders of the Subsidiaries of Holdings and the number of
shares owned by each as of the Closing Date are described on SCHEDULE 6.13. As
of the Closing Date, there are no outstanding stock purchase warrants,
subscriptions, options,
70
securities, instruments or other rights of any type or nature whatsoever, which
are convertible into, exchangeable for or otherwise provide for or permit the
issuance of capital stock of Holdings or its Subsidiaries, except as described
on SCHEDULE 6.13.
6.14 MARGIN REGULATIONS; INVESTMENT COMPANY ACT; PUBLIC UTILITY HOLDING
COMPANY ACT.
(a) Neither Holdings nor any of its Subsidiaries is engaged,
principally or as one of its important activities, in the business of
"purchasing" or "carrying" any "margin stock" (as each such term is defined or
used in Regulation U issued by the FRB), or extending credit for the purpose of
purchasing or carrying margin stock. No part of the proceeds of any of the Loans
or Letters of Credit will be used for purchasing or carrying margin stock or for
any purpose which violates, or which would be inconsistent with, the provisions
of Regulation T, U or X issued by the FRB.
(b) Neither Holdings nor any of its Subsidiaries or any Person
Controlling Holdings or any of its Subsidiaries (i) is a "holding company," or a
"subsidiary company" of a "holding company," or an "affiliate" of a "holding
company" or of a "subsidiary company" of a "holding company," within the meaning
of the Public Utility Holding Company Act of 1935, or (ii) is or is required to
be registered as an "investment company" under the Investment Company Act of
1940, as amended, and the Borrower is not an "affiliated person" of, or
"promoter" or "principal underwriter" for, an "investment company," as such
terms are defined under the Investment Company Act of 1940, as amended.
6.15 DISCLOSURE.
The Borrower has disclosed to the Administrative Agent and the Lenders all
agreements, instruments and corporate or other restrictions to which Holdings or
any of its Subsidiaries is subject, and all other matters known to it, that,
individually or in the aggregate, could reasonably be expected to result in a
Material Adverse Effect. No financial statement, material report, material
certificate or other material information furnished (whether in writing or
orally) by or on behalf of Holdings or any of its Subsidiaries to the
Administrative Agent or any Lender in connection with the transactions
contemplated hereby and the negotiation of this Agreement or delivered hereunder
(as modified or supplemented by other information so furnished) contains any
material misstatement of fact or omits to state any material fact necessary to
make the statements therein, in the light of the circumstances under which they
were made, not misleading; PROVIDED that, with respect to projected financial
information, pro forma financial information and estimated financial
information, the Borrower represents only that such information was prepared in
good faith based upon assumptions believed to be reasonable at the time.
6.16 COMPLIANCE WITH LAWS.
Holdings and each of its Subsidiaries is in compliance in all material
respects with the requirements of all Laws and all orders, writs, injunctions
and decrees applicable to it or to its properties, except in such instances in
which (a) such requirement of Law or order, writ, injunction or decree is being
contested in good faith by appropriate proceedings diligently
71
conducted or (b) the failure to comply therewith, either individually or in the
aggregate, could not reasonably be expected to have a Material Adverse Effect.
6.17 INTELLECTUAL PROPERTY; LICENSES, ETC.
Holdings and each of its Subsidiaries own, or possess the right to use, all
of the trademarks, service marks, trade names, copyrights, patents, patent
rights, franchises, licenses and other intellectual property rights
(collectively, "IP RIGHTS") that are reasonably necessary for the operation of
their respective businesses, without conflict with the rights of any other
Person, except as could not reasonably be expected to have a Material Adverse
Effect. To the best knowledge of Holdings and the Borrower, no slogan or other
advertising device, product, process, method, substance, part or other material
now employed, or now contemplated to be employed, by Holdings or any of its
Subsidiaries infringes upon any IP Rights held by any other Person. Except as
specifically disclosed in SCHEDULE 6.17, to the best knowledge of the Holdings
and the Borrower: (i) no event has occurred which permits, or after notice or
lapse of time or both would permit, the revocation or termination of any
material IP Rights, and (ii) neither Holdings nor any of its Subsidiaries is
liable to any Person for infringement under applicable Law with respect to any
such IP Rights as a result of its business operations.
6.18 EMPLOYEE RELATIONS.
Holdings and each of its Subsidiaries has not had an undue level of
employee attrition in place and is not, as of the Closing Date, party to any
collective bargaining agreement nor has any labor union been recognized as the
representative of its employees except as set forth on SCHEDULE 6.18. Holdings
and the Borrower know of no pending, threatened or contemplated strikes, work
stoppage or other collective labor disputes involving its respective employees
or those of its respective Subsidiaries.
6.19 MATERIAL GOVERNMENT CONTRACTS.
SCHEDULE 6.19 sets forth a complete and accurate list of all Material
Government Contracts of Holdings and its Subsidiaries in effect as of the
Closing Date (except for classified Material Government Contracts which may not
be disclosed to third parties pursuant to the express written terms thereof).
Other than as set forth in SCHEDULE 6.19, each such Material Government Contract
in existence on the Closing Date is, and after giving effect to the consummation
of the transactions contemplated by the Loan Documents will be in full force and
effect as of the Closing Date in accordance with the terms thereof. Holdings and
its Subsidiaries have made available for review by the Administrative Agent a
true and complete copy of each Material Government Contract required to be
listed on SCHEDULE 6.19 (except for classified Material Government Contracts
which may not be disclosed to third parties pursuant to the express written
terms thereof). As of the Closing Date, neither Holdings nor any of its
Subsidiaries (nor, to the knowledge of Holdings and the Borrower, any other
party thereto) is in breach of or in default under any Material Government
Contract, except where such breach or default could not reasonably be expected
to have a Material Adverse Effect.
6.20 BURDENSOME PROVISIONS.
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Neither Holdings nor any of its Subsidiaries is a party to any indenture,
agreement, lease or other instrument, or subject to any corporate or partnership
restriction, Governmental Approval or applicable Law which is so unusual or
burdensome as in the foreseeable future could be reasonably expected to have a
Material Adverse Effect. Neither Holdings nor any of its Subsidiaries presently
anticipates that future expenditures needed to meet the provisions of any
statutes, orders, rules or regulations of a Governmental Authority will be so
burdensome as to have a Material Adverse Effect. Neither Holdings nor any of its
Subsidiaries is party to any agreement or instrument or otherwise subject to any
restriction or encumbrance that restricts or limits its ability to make dividend
payments or other distributions in respect of its capital stock to Holdings, the
Borrower or any Subsidiary or to transfer any of its assets or properties to
Holdings, the Borrower or any other Subsidiary in each case other than existing
under or by reason of the Loan Documents, the Equity Purchase Agreement, the
Subordinated Debt Documents, documentation executed in connection with certain
capital leases or applicable Law.
6.21 SURVIVAL OF REPRESENTATIONS AND WARRANTIES, ETC.
All representations and warranties set forth in this Article VI and all
representations and warranties contained in any certificate, or any of the Loan
Documents (including, but not limited to, any such representation or warranty
made in or in connection with any amendment thereto) shall constitute
representations and warranties made under this Agreement. All representations
and warranties made under this Agreement shall be made or deemed to be made at
and as of the Closing Date (except those that are expressly made as of a
specific date), shall survive the Closing Date and shall not be waived by the
execution and delivery of this Agreement, any investigation made by or on behalf
of the Lenders or any borrowing hereunder.
ARTICLE VII.
AFFIRMATIVE COVENANTS
So long as any Lender shall have any Commitment hereunder, any Loan or
other Obligation (other than contingent indemnity obligations) hereunder shall
remain unpaid or unsatisfied, or any Letter of Credit shall remain outstanding,
Holdings and the Borrower shall, and shall cause each of their Subsidiaries to:
7.01 FINANCIAL STATEMENTS.
Deliver to the Administrative Agent (for further delivery by the
Administrative Agent to each Lender), in form and detail reasonably satisfactory
to the Administrative Agent and the Required Lenders:
(a) ANNUAL FINANCIAL STATEMENTS. As soon as available, but in any
event within 90 days after the end of each Fiscal Year of Holdings, a
consolidated balance sheet of Holdings and its Subsidiaries as at the end of
such Fiscal Year, and the related consolidated statements of income or
operations, shareholders' equity and cash flows for such Fiscal Year, setting
forth in each case in comparative form the figures for the previous Fiscal Year,
all in reasonable detail and prepared in accordance with GAAP, audited and
accompanied by a report and opinion of an independent certified public
accountant of nationally recognized standing reasonably acceptable to the
Required Lenders, which report and opinion shall be prepared in accordance with
73
generally accepted auditing standards and shall not be subject to any "going
concern" or like qualification or exception or any qualification or exception as
to the scope of such audit; and
(b) QUARTERLY FINANCIAL STATEMENTS. As soon as available, but in any
event within 45 days after the end of each of the first three Fiscal Quarters of
each Fiscal Year of Holdings, a consolidated balance sheet of Holdings and its
Subsidiaries as at the end of such Fiscal Quarter, and the related consolidated
statements of income or operations, shareholders' equity and cash flows for such
Fiscal Quarter and for the portion of Holdings' Fiscal Year then ended, setting
forth in each case in comparative form the figures for the corresponding Fiscal
Quarter of the previous Fiscal Year and the corresponding portion of the
previous Fiscal Year, all in reasonable detail and certified by a Responsible
Officer of Holdings as fairly presenting in all material respects the financial
condition, results of operations, shareholders' equity and cash flows of
Holdings and its Subsidiaries in accordance with GAAP, subject only to normal
year-end audit adjustments and the absence of footnotes.
(c) MONTHLY FINANCIAL STATEMENTS. As soon as available, but in any
event within 20 days after the end of each calendar month, a consolidated and
consolidating balance sheet of Holdings and its Subsidiaries as at the end of
such calendar month, and the related consolidated and consolidating statements
of income or operations, shareholders' equity and cash flows for such calendar
month and for the portion of Holdings' Fiscal Year then ended, all in reasonable
detail; PROVIDED that the delivery requirement set forth in this subsection (c)
shall terminate and no longer be required after the closing and funding of an
IPO.
(d) ANNUAL BUSINESS PLAN AND FINANCIAL PROJECTIONS. Beginning for
Fiscal Year 2004, as soon as practicable and in any event within thirty (30)
days after the beginning of each Fiscal Year, a business plan of Holdings and
its Subsidiaries for the ensuing twelve (12) calendar months, such plan to be
prepared in accordance with GAAP and to include, on a quarterly basis, the
following: a quarterly operating and capital budget, a projected income
statement, statement of cash flows and balance sheet and a report containing
management's discussion and analysis of such projections, accompanied by a
certificate from the chief financial officer of Holdings to the effect that, to
the best of such officer's knowledge, such projections are good faith estimates
(utilizing reasonable assumptions made in light of then existing circumstances)
of the financial condition and operations of Holdings and its Subsidiaries for
such period (it being understood that projections are subject to inherent
uncertainties).
As to any information referred to in this SECTION 7.01 and contained in
materials furnished pursuant to SECTION 7.02(f), the Borrower shall not be
separately required to furnish such information under clause (a) or (b) above,
but the foregoing shall not be in derogation of the obligation of the Borrower
to furnish the information and materials described in subsections (a) and (b)
above at the times specified therein.
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7.02 CERTIFICATES; OTHER INFORMATION.
Deliver to the Administrative Agent (for further delivery by the
Administrative Agent to each Lender), in form and detail reasonably satisfactory
to the Administrative Agent and the Required Lenders:
(a) concurrently with the delivery of the financial statements
referred to in SECTION 7.01(a), a certificate of its independent certified
public accountants certifying such financial statements and stating that in
making the examination necessary therefor no knowledge was obtained of any
Default existing under Section 8.17 of this Agreement or, if any such Default
shall exist, stating the nature and status of such event;
(b) concurrently with the delivery of the financial statements
referred to in SECTION 7.01(a) and SECTION 7.01(b), a duly completed Compliance
Certificate signed by a Responsible Officer of each of Holdings and the
Borrower;
(c) as soon as available, but in any event within twenty (20) days
after the end of each calendar month (and, upon the occurrence and during the
continuation of a Default, on a more frequent basis if requested by the
Administrative Agent), a duly completed Borrowing Base Certificate signed by a
Responsible Officer of each of Holdings and the Borrower as of the last Business
Day of such month;
(d) as soon as available, but in any event within twenty (20) days
after the end of each calendar month (and, upon the occurrence and during the
continuation of a Default, on a more frequent basis if requested by the
Administrative Agent), an accounts receivable aging report listing all Accounts
of the Borrower and its Subsidiaries as of the last Business Day of such month
which report shall include the amount and age of each Account Debtor and such
other information as the Administrative Agent may reasonably require, all in
form and substance reasonably satisfactory to the Administrative Agent. Within
thirty (30) days upon the request of the Administrative Agent at any time after
the occurrence and during the continuance of a Default or Event of Default, the
Borrower shall provide the name and mailing address of each Account Debtor to
the Administrative Agent;
(e) promptly upon the receipt thereof, copies of any detailed audit
reports, management letters or recommendations submitted to the board of
directors (or the audit committee of the board of directors) of Holdings by
independent accountants in connection with the accounts or books of Holdings or
any Subsidiary, or any audit of any of them;
(f) promptly after the same are available, copies of each annual
report, proxy or financial statement or other report or communication sent to
the stockholders of Holdings generally, and copies of all annual, regular,
periodic and special reports and registration statements which Holdings may file
or be required to file with the SEC under Section 13 or 15(d) of the Securities
Exchange Act of 1934, and not otherwise required to be delivered to the
Administrative Agent pursuant hereto;
(g) promptly, such additional information regarding the business,
financial or corporate affairs of Holdings or any Subsidiary, or compliance with
the terms of the Loan Documents, as the Administrative Agent may from time to
time reasonably request; and
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(h) within twenty (20) days after the end of each Fiscal Quarter (and,
upon the occurrence and during the continuation of a Default, on a more frequent
basis if requested by the Administrative Agent), a list of (A) all Material
Government Contracts which have (i) been completed or have lapsed, expired or
terminated or (ii) been entered into (except for classified Material Government
Contracts which may not be disclosed to third parties pursuant to the express
written terms thereof) or (B) all Federal Governmental Prime Contracts, and
where applicable delivery and task orders under any Federal Governmental Prime
Contract, which have become Material Government Contracts (except for classified
Material Government Contracts which may not be disclosed to third parties
pursuant to the express written terms thereof), in each case, since the most
recent list provided by the Borrower and signed by a Responsible Officer of the
Borrower.
Documents required to be delivered pursuant to SECTION 7.01(a) or (b) or
SECTION 7.02(c), (d) or (f) (to the extent any such documents are included in
materials otherwise filed with the SEC) may be delivered electronically and if
so delivered, shall be deemed to have been delivered on the date (i) on which
Holdings posts such documents, or provides a link thereto on Holdings' website
on the Internet at the website address listed on SCHEDULE 12.02; or (ii) on
which such documents are posted on Holdings' behalf on another relevant website,
if any, to which each Lender and the Administrative Agent have access (whether a
commercial, third-party website or whether sponsored by the Administrative
Agent) or attached to an email sent to Administrative Agent's email address;
PROVIDED that: (i) Holdings shall deliver paper copies of such documents to the
Administrative Agent or any Lender that requests Holdings to deliver such paper
copies until a written request to cease delivering paper copies is given by the
Administrative Agent or such Lender and (ii) Holdings shall notify (which may be
by facsimile or electronic mail) the Administrative Agent and each Lender of the
posting of any such documents and provide to the Administrative Agent by
electronic mail electronic versions (i.e., soft copies) of such documents.
Notwithstanding anything contained herein, in every instance Holdings and the
Borrower shall be required to provide paper copies of the Compliance
Certificates and Borrowing Base Certificates required by SECTION 7.02(b) and
SECTION 7.02(c) to the Administrative Agent and each of the Lenders. Except for
such Compliance Certificates and Borrowing Base Certificates, the Administrative
Agent shall have no obligation to request the delivery or to maintain copies of
the documents referred to above, and in any event shall have no responsibility
to monitor compliance by Holdings and the Borrower with any such request for
delivery, and each Lender shall be solely responsible for requesting delivery to
it or maintaining its copies of such documents.
7.03 NOTICES.
Promptly, upon knowledge thereof, notify the Administrative Agent and each
Lender:
(a) of the occurrence of any Default or Event of Default;
(b) of any matter that has resulted or could reasonably be expected to
result in a Material Adverse Effect, including the commencement of, or any
material development in, any litigation or proceeding affecting Holdings or any
of its Subsidiaries, including pursuant to any applicable Environmental Laws
which if determined adversely could reasonably be expected to result in a
Material Adverse Effect;
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(c) of the occurrence of any ERISA Event;
(d) of any material change in accounting policies or financial
reporting practices by Holdings or any of its Subsidiaries; and
(f) of any of the events described in Section 2.06(e).
Each notice pursuant to this Section shall be accompanied by a statement of
a Responsible Officer of each of Holdings and the Borrower setting forth details
of the occurrence referred to therein and stating what action Holdings and the
Borrower has taken and proposes to take with respect thereto. The Borrower shall
use reasonable efforts to ensure that each notice pursuant to SECTION 7.03(a)
shall describe with particularity any and all provisions of this Agreement and
any other Loan Document that have been breached.
7.04 PAYMENT OF OBLIGATIONS.
Pay and discharge as the same shall become due and payable, (a) all
material tax liabilities, assessments and governmental charges or levies upon it
or its properties or assets, unless the same are being contested in good faith
by appropriate proceedings diligently conducted and adequate reserves in
accordance with GAAP are being maintained by Holdings or such Subsidiary, unless
the same are being contested in good faith by appropriate proceedings diligently
conducted and adequate reserves in accordance with GAAP are being maintained by
Holdings or such Subsidiary; and (b) all lawful claims which, if unpaid, would
by law become a Lien upon its property.
7.05 PRESERVATION OF EXISTENCE, ETC.
(a) Preserve, renew and maintain in full force and effect its legal
existence and good standing under the Laws of the jurisdiction of its
organization except in a transaction permitted by SECTION 8.04 or SECTION 8.05;
(b) take all commercially reasonable actions required to maintain all rights,
privileges, permits, licenses and franchises necessary or desirable in the
normal conduct of its business, except to the extent that failure to do so could
not reasonably be expected to have a Material Adverse Effect; and (c) preserve
or renew all of its issued patents and registered trademarks, trade names and
service marks, the non-preservation of which could reasonably be expected to
have a Material Adverse Effect.
7.06 MAINTENANCE OF PROPERTIES.
(a) Maintain, preserve and protect all of its material properties and
equipment necessary in the operation of its business in good working order and
condition, ordinary wear and tear and casualty excepted; (b) make all necessary
repairs thereto and renewals and replacements thereof except where the failure
to do so could not reasonably be expected to have a Material Adverse Effect; and
(c) use the standard of care typical in the industry in the operation and
maintenance of its facilities.
7.07 MAINTENANCE OF INSURANCE.
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In addition to the specific insurance requirements of the Security
Documents, maintain with financially sound and reputable insurance companies
reasonably acceptable to the Administrative Agent and the Required Lenders not
Affiliates of Holdings or the Borrower (unless such insurance is provided on an
arms-length basis), insurance with respect to its properties and business
against loss or damage of the kinds customarily insured against by Persons
engaged in the same or similar business, of such types and in such amounts as
are customarily carried under similar circumstances by such other Persons and
providing for not less than 30 days' prior notice to the Administrative Agent of
termination, lapse or cancellation of such insurance and deliver to the
Administrative Agent upon its request a detailed list of the insurance then in
effect, stating the names of the insurance companies, the amounts and rates of
the insurance, the dates of the expiration thereof and the properties and risks
covered thereby.
7.08 COMPLIANCE WITH LAWS.
Comply in all material respects with the requirements of all Laws and all
orders, writs, injunctions and decrees applicable to it or to its business or
property, (except in such instances in which such requirement of Law or order,
writ, injunction or decree is being contested in good faith by appropriate
proceedings diligently conducted), and maintain in full force and effect all
Governmental Approvals applicable to it or to its business or property, except
where the failure to so comply or maintain such Governmental Approval could not
reasonably be expected, individually or in the aggregate, to have a Material
Adverse Effect.
7.09 ENVIRONMENTAL LAWS
In addition to and without limiting the generality of SECTION 7.08, (a)
comply with, and ensure such compliance by all tenants and subtenants with all
applicable Environmental Laws and obtain and comply with and maintain, and
ensure that all tenants and subtenants, if any, obtain and comply with and
maintain, any and all licenses, approvals, notifications, registrations or
permits required by applicable Environmental Laws, except where the failure to
do so could not reasonably be expected, individually or in the aggregate, 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 with all lawful orders
and directives of any Governmental Authority regarding Environmental Laws,
except where the failure to conduct or complete such actions, or comply with
such orders or directions, could not reasonably be expected, individually or in
the aggregate, to have a Material Adverse Effect, and (c) defend, indemnify and
hold harmless the Administrative Agent and the Lenders, and their respective
parents, Subsidiaries, Affiliates, employees, agents, officers and directors,
from and against any claims, demands, penalties, fines, liabilities,
settlements, damages, costs and expenses of whatever kind or nature known or
unknown, contingent or otherwise, arising out of, or in any way relating to the
presence of Hazardous Materials, or the violation of, noncompliance with or
liability under any Environmental Laws applicable to the operations of Holdings
or any such Subsidiary, or any orders, requirements or demands of Governmental
Authorities related thereto, including, without limitation, reasonable
attorney's and consultant's fees, investigation and laboratory fees, response
costs, court costs and litigation expenses, except to the extent that any of the
foregoing directly result from the gross negligence or willful misconduct of the
party seeking indemnification therefor.
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7.10 COMPLIANCE WITH ERISA.
In addition to and without limiting the generality of SECTION 7.08, (a)
except where the failure to so comply could not, individually or in the
aggregate, reasonably be expected to have a Material Adverse Effect, (i) comply
with all material applicable provisions of ERISA and the regulations and
published interpretations thereunder with respect to all Plans, (ii) not take
any action or fail to take action the result of which could be a liability to
the PBGC or to a Multiemployer Plan, (iii) not participate in any prohibited
transaction that could result in any civil penalty under ERISA or tax under the
Code and (iv) operate each Plan in such a manner that will not incur any tax
liability under Section 4980B of the Code and (b) furnish to the Administrative
Agent upon the Administrative Agent's request such information about any Plan as
may be reasonably requested by the Administrative Agent.
7.11 COMPLIANCE WITH AGREEMENTS.
Comply in all respects with each term, condition and provision of all
leases, agreements and other instruments entered into in the conduct of its
business including, without limitation, all Material Government Contracts and
any other Contractual Obligation, in each case, the failure to comply with which
could reasonably be expected to have a Material Adverse Effect; PROVIDED, that
Holdings or any such Subsidiary may contest any such lease, agreement or other
instrument in good faith through applicable proceedings so long as adequate
reserves are maintained in accordance with GAAP.
7.12 BOOKS AND RECORDS.
(a) Maintain proper books of record and account, in which full, true and
correct entries in conformity with GAAP consistently applied shall be made of
all financial transactions and matters involving the assets and business of
Holdings or such Subsidiary, as the case may be and (b) maintain such books of
record and account in material conformity with all applicable requirements of
any Governmental Authority having regulatory jurisdiction over Holdings or such
Subsidiary, as the case may be, except where the failure to comply could not
reasonably be expected to have a Material Adverse Effect.
7.13 INSPECTION RIGHTS.
Except with respect to information and records which Holdings, the Borrower
and their Subsidiaries may not under applicable Law disseminate or disclose to
the Administrative Agent and the Lenders, permit representatives and independent
contractors of the Administrative Agent and each Lender to visit and inspect any
of its properties, to examine its corporate, financial and operating records,
and make copies thereof or abstracts therefrom, and to discuss its affairs,
finances and accounts with its directors, officers, and independent public
accountants at such reasonable times during normal business hours and as often
as may be reasonably desired, upon reasonable advance notice to Holdings
(including, without limitation, the right to conduct up to two (2) field audits
and examinations of the books, records, accounts, inventory and other assets of
Holdings, the Borrower and their Subsidiaries in any calendar year). So long as
no Default or Event of Default has occurred and is continuing, only the two (2)
semi-annual field audits and examinations referred to above shall be at the
expense of Holdings and the Borrower. Upon the
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occurrence and during the continuation of a Default or Event of Default, the
Administrative Agent or any Lender (or any of their respective representatives
or independent contractors) may do any of the foregoing at the expense of
Holdings and the Borrower at any time during normal business hours and without
advance notice.
7.14 USE OF PROCEEDS.
Use the proceeds of the Credit Extensions (a) for general corporate
purposes, (b) to finance a portion of the purchase price of the Acquisition, (c)
to finance future Permitted Acquisitions and (d) the other purposes described
herein, and not in contravention of any Law or of any Loan Document.
7.15 ADDITIONAL SUBSIDIARIES.
(a) ADDITIONAL DOMESTIC SUBSIDIARIES. Notify the Administrative Agent
at the time that any Person becomes a Domestic Subsidiary of the Borrower, and
promptly thereafter (and in any event within 30 days), cause such Person to (a)
become a Subsidiary Guarantor by executing and delivering to the Administrative
Agent a counterpart of the Subsidiary Guaranty Agreement or such other document
as the Administrative Agent shall deem appropriate for such purpose, (b) deliver
to the Administrative Agent a duly executed Joinder Agreement and comply with
the terms of each Security Document, (c) deliver to the Administrative Agent
documents of the types referred to in clauses (iii) and (iv) of SECTION 5.01(a)
and favorable opinions of counsel to such Person (which shall cover, among other
things, the legality, validity, binding effect and enforceability of the
documentation referred to in clauses (a) and (b)) and (d) deliver to the
Administrative Agent such other documents and closing certificates as may be
reasonably requested by the Administrative Agent, all in form, content and scope
reasonably satisfactory to the Administrative Agent.
(b) ADDITIONAL FOREIGN SUBSIDIARIES. Notify the Administrative Agent
at the time that any Person becomes a Foreign Subsidiary of the Borrower, and
promptly thereafter (and in any event within 30 days), cause (a) the applicable
Loan Party to deliver to the Administrative Agent a supplement to the Security
Documents pledging sixty-five percent (65%) of the total outstanding ownership
interest or capital stock of such new Foreign Subsidiary and a consent thereto
executed by such new Foreign Subsidiary (including, without limitation, if
applicable, original stock certificates (or the equivalent thereof pursuant to
the Applicable Laws and practices of any relevant foreign jurisdiction)
evidencing the capital stock of such new Foreign Subsidiary, together with an
appropriate undated stock power for each certificate duly executed in blank by
the registered owner thereof), (b) such Person to deliver to the Administrative
Agent documents of the types referred to in clauses (iii) and (iv) of SECTION
5.01(a) and favorable opinions of counsel to such Person (which shall cover,
among other things, the legality, validity, binding effect and enforceability of
the documentation referred to in clauses (a) and (b)), and (c) such Person to
deliver to the Administrative Agent such other documents and closing
certificates as may be reasonably requested by the Administrative Agent, all in
form, content and scope reasonably satisfactory to the Administrative Agent.
7.16 SWAP CONTRACTS.
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Upon the earlier to occur of (a) thirty (30) days following the
consummation of an IPO and (b) one (1) year after the Closing Date, execute Swap
Contracts with respect to interest rate exposure with durations of at least two
(2) years and with an aggregate notional principal amount thereunder equal to at
least fifty percent (50%) of the outstanding amount of Consolidated Funded
Indebtedness on the date such Swap Contracts are executed and with a Lender or
other counterparty reasonably satisfactory to the Administrative Agent and
otherwise in form and substance reasonably satisfactory to the Administrative
Agent; PROVIDED that so long as the Senior Subordinated Notes bear interest at a
fixed rate of interest, such Indebtedness shall count towards such fifty percent
(50%) requirement.
7.17 PROCEEDS OF EQUITY OR INDEBTEDNESS; ESCROW AND INDEMNIFICATION
PAYMENTS.
(a) Within three (3) days after the date of receipt by Holdings of the
Net Cash Proceeds from the offering of equity securities of Holdings or the
issuance of Indebtedness by Holdings, Holdings shall promptly contribute such
Net Cash Proceeds to the Borrower as equity (unless Holdings is permitted to use
such proceeds to fund transactions permitted pursuant to SECTIONS 8.06(c), and
8.10) and, to the extent required pursuant to SECTION 2.06(e), the Borrower
shall apply such amounts received to repay outstanding Loans.
(b) Within three (3) days after the date of receipt by Holdings of (i)
any indemnification payment made pursuant to the Acquisition Agreement and the
other Acquisition Documents or (ii) any payment or distribution under the Escrow
Agreement (as defined in the Acquisition Agreement), Holdings shall promptly
contribute any such payment or distribution to the Borrower as equity.
7.18 FURTHER ASSURANCES.
Make, execute and deliver all such additional and further acts, things,
deeds and instruments as the Administrative Agent or the Required Lenders
(through the Administrative Agent) may reasonably require to document and
consummate the transactions contemplated hereby and to vest completely in and
insure the Administrative Agent and the Lenders their respective rights under
this Agreement, the Notes, the Letters of Credit and the other Loan Documents.
ARTICLE VIII.
NEGATIVE COVENANTS
So long as any Lender shall have any Commitment hereunder, any Loan or
other Obligation (other than contingent indemnity obligations) hereunder shall
remain unpaid or unsatisfied, or any Letter of Credit shall remain outstanding,
Holdings and the Borrower shall not, nor permit any of their Subsidiaries to,
directly or indirectly:
8.01 LIENS.
Create, incur, assume or suffer to exist any Lien upon any of its property,
assets or revenues, whether now owned or hereafter acquired, other than the
following:
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(a) Liens pursuant to any Loan Document;
(b) Liens existing on the date hereof and listed on SCHEDULE 8.01 and
any renewals or extensions thereof, PROVIDED that the property covered thereby
is not increased and any renewal or extension of the obligations secured or
benefited thereby is permitted by SECTION 8.03(c);
(c) Liens for taxes, assessments, charges or other government levies
not yet due or which are being contested in good faith and by appropriate
proceedings diligently conducted, and for which adequate reserves with respect
thereto are maintained on the books of the applicable Person in accordance with
GAAP;
(d) carriers', warehousemen's, mechanics', materialmen's, repairmen's
or other like Liens arising in the ordinary course of business which are not
overdue for a period of more than 30 days or which are being contested in good
faith and by appropriate proceedings diligently conducted, if adequate reserves
with respect thereto are maintained on the books of the applicable Person in
accordance with GAAP;
(e) pledges or deposits in the ordinary course of business in
connection with workers' compensation, unemployment insurance and other social
security legislation, other than any Lien imposed by ERISA;
(f) deposits to secure the performance of bids, tenders, trade
contracts, liability to insurance carriers and leases (other than Indebtedness),
statutory obligations, surety bonds (other than bonds related to judgments or
litigation), performance bonds, contractual or warranty obligations and other
obligations of a like nature incurred in the ordinary course of business;
(g) easements, rights-of-way, restrictions and other similar
encumbrances affecting real property which, in the aggregate, are not
substantial in amount, and which do not in any case materially detract from the
value of the property subject thereto or materially interfere with the ordinary
conduct of the business of the applicable Person;
(h) Liens securing judgments for the payment of money not constituting
an Event of Default under SECTION 10.01(h) or securing appeal or other surety
bonds related to such judgments;
(i) Liens securing Indebtedness permitted under SECTION 8.03(f);
PROVIDED that (i) such Liens do not at any time encumber any property other than
the property financed by such Indebtedness and (ii) the Indebtedness secured
thereby does not exceed the cost or fair market value, whichever is lower, of
the property being acquired on the date of acquisition;
(j) any interest or title of a lessor, sublicensor, or licensor under
any lease or license entered into in the ordinary course of business and
covering only the assets so leased or licensed;
(k) licenses, sublicenses, leases or subleases granted to third
Persons in the ordinary course of business not interfering in any material
respect with the business of the Holdings or its Subsidiaries;
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(l) contractual or statutory Liens of landlords or Liens of suppliers
(including sellers of goods);
(m) rights of setoff or bankers' liens upon deposits of cash in favor
of banks or other financial institutions; PROVIDED such bank or other financial
institution has executed and delivered a deposit account control agreement with
respect to such deposits pursuant to the Collateral Agreement;
(n) Liens arising from precautionary UCC financing statements
regarding operating leases or consignments; and
(o) Liens on tangible property or tangible assets of the Borrower and
its Subsidiaries acquired pursuant to a Permitted Acquisition, or on tangible
property or tangible assets of any Subsidiary of the Borrower which are in
existence at the time that such Subsidiary of the Borrower is acquired pursuant
to a Permitted Acquisition (PROVIDED that such Liens (i) are not incurred in
connection with, or in anticipation of, such Permitted Acquisition, (ii) are not
"blanket" or all asset Liens, and (iii) do not attach to any other property or
assets of the Borrower and its Subsidiaries).
8.02 INVESTMENTS.
Make any Investments, except:
(a) Investments held by the Borrower and its Subsidiaries in the form
of cash equivalents or short-term marketable securities;
(b) advances to officers, directors and employees of the Borrower and
its Subsidiaries in an aggregate amount not to exceed $500,000 at any time
outstanding, for travel, entertainment, relocation and analogous ordinary
business purposes;
(c) Investments of Holdings in the Borrower, Investments of the
Borrower in any Subsidiary Guarantor and Investments of any Subsidiary Guarantor
in another Subsidiary Guarantor;
(d) Investments by the Borrower and its Subsidiaries consisting of
extensions of credit in the nature of accounts receivable or notes receivable
arising from the grant of trade credit in the ordinary course of business, and
Investments received in satisfaction or partial satisfaction thereof from
financially troubled account debtors to the extent reasonably necessary in order
to prevent or limit loss;
(e) Guarantees by the Borrower and its Subsidiaries permitted by
SECTION 8.03;
(f) Investments by the Borrower or any Subsidiary thereof in the form
of acquisitions of all or substantially all of the business or a line of
business (whether by the acquisition of capital stock, assets or any combination
thereof) of any other Person (each, a "PERMITTED ACQUISITION"); PROVIDED that:
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(i) the Person to be acquired shall be a going concern,
engaged in a business, or the assets to be acquired shall be used in a
business which is similar or complimentary to the line of business of the
Borrower and its Subsidiaries as required pursuant to SECTION 8.08;
(ii) the Borrower or such Subsidiary (unless the Person to be
acquired complies with SECTION 7.15), as applicable, shall be the surviving
Person and no Change in Control shall have been effected thereby;
(iii) the Borrower shall have delivered written notice of such
proposed acquisition to the Administrative Agent (for delivery by the
Administrative Agent to the Lenders) and the Lenders, which notice shall
include the proposed closing date of such proposed acquisition, not less
than twenty (20) calendar days prior to such proposed closing date;
(iv) the Borrower shall have delivered to the Administrative
Agent copies of (A) the Permitted Acquisition Documents, which shall be in
form and substance reasonably satisfactory to the Administrative Agent and
shall be delivered to the Administrative Agent promptly upon the
finalization thereof, and (B) the Permitted Acquisition Diligence
Information, which shall be in form and substance reasonably satisfactory
to the Administrative Agent, not less than ten (10) calendar days prior to
the proposed closing date of such proposed acquisition;
(v) the Borrower shall have certified on or before the
closing date of such proposed acquisition, in writing and in a form
reasonably acceptable to the Administrative Agent and the Lenders, that
such proposed acquisition has been approved by the board of directors or
equivalent governing body of the Person to be acquired;
(v) no Default or Event of Default shall have occurred and be
continuing both before and after giving effect to such proposed
acquisition;
(vi) the Borrower shall have complied with SECTION 7.15;
(vii) the Borrower shall have delivered to the Administrative
Agent (for delivery by the Administrative Agent to the Lenders) and the
Lenders a Compliance Certificate dated as of the closing date of such
proposed acquisition demonstrating, in form and substance reasonably
satisfactory thereto, PRO FORMA compliance with each covenant contained in
SECTION 8.17 and SECTION 8.18 (both before and after giving effect to such
proposed acquisition);
(viii) the Borrower shall have at least $5,000,000 in
availability under the Borrowing Limit after giving effect to such proposed
acquisition;
(ix) the Person to be acquired shall demonstrate positive
Consolidated EBITDA (calculated with respect to such Person notwithstanding
the definition thereof) for the most recent one (1) year period then ended,
both prior to such proposed acquisition and after giving effect thereto, by
providing the Administrative Agent and
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Lenders copies of the most recent financial statements and projections, all
in form and substance reasonably satisfactory to the Administrative Agent
and the Lenders;
(x) the Person to be acquired is not subject to material
pending litigation which could reasonably be expected to have a Material
Adverse Effect; and
(xi) the Borrower shall have obtained the prior written
consent of the Administrative Agent and the Required Lenders prior to the
consummation of such proposed acquisition if (A) prior to the closing and
funding of an IPO, (1) the aggregate purchase price of such acquisition or
series of related acquisitions (including, without limitation, all cash
payments, Indebtedness and other obligations assumed, earn out payments
(valued at an amount to be agreed upon between the Borrower and the
Administrative Agent), seller financing or deferred payments, but excluding
working capital adjustments in an aggregate amount not to exceed ten
percent (10%) of the aggregate purchase price of such acquisition) exceeds
$5,000,000 or (2) the aggregate purchase price of all acquisitions
(including, without limitation, all cash payments, Indebtedness and other
obligations assumed, earn out payments (valued at an amount to be agreed
upon between the Borrower and the Administrative Agent), seller financing
or deferred payments, but excluding working capital adjustments in an
aggregate amount not to exceed ten percent (10%) of the aggregate purchase
price of such acquisition) consummated during the term of this Agreement
(including, without limitation, such proposed acquisition) exceeds
$15,000,000 and (B) after the closing and funding of an IPO, (1) the
aggregate purchase price of such acquisition or series of related
acquisitions (including, without limitation, all cash payments,
Indebtedness and other obligations assumed, earn out payments (valued at an
amount to be agreed upon between the Borrower and the Administrative
Agent), seller financing or deferred payments, but excluding working
capital adjustments in an aggregate amount not to exceed ten percent (10%)
of the aggregate purchase price of such acquisition) exceeds $15,000,000 or
(2) the aggregate purchase price of all acquisitions (including, without
limitation, all cash payments, Indebtedness and other obligations assumed,
earn out payments (valued at an amount to be agreed upon between the
Borrower and the Administrative Agent), seller financing or deferred
payments, but excluding working capital adjustments in an aggregate amount
not to exceed ten percent (10%) of the aggregate purchase price of such
acquisition) consummated during the term of this Agreement (including,
without limitation, such proposed acquisition and all acquisitions
consummated prior to the closing and funding of an IPO) exceeds
$40,000,000;
(g) loans by the Borrower and its Subsidiaries to officers, directors
and employees of Borrower and its Subsidiaries to facilitate their purchase of
stock or options in Holdings;
(h) loans by the Borrower and its Subsidiaries to Holdings to the
extent such amount could also be made as a distribution permitted under 8.06(c);
(i) intercompany loans made by the Borrower to Subsidiary Guarantors,
among Subsidiary Guarantors or to the Borrower from its Subsidiaries;
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(j) Investments by the Borrower and its Subsidiaries received in
connection with the bankruptcy or reorganization of, or settlement of delinquent
accounts and disputes with, customers and suppliers;
(k) Investments arising as a result of the Borrower or its
Subsidiaries entering into Swap Agreements permitted pursuant to SECTION
8.03(e);
(l) Investments by the Borrower and its Subsidiaries constituting
endorsements for collection or deposit in the ordinary course of business;
(m) Investments by the Borrower and its Subsidiaries in deposit
accounts opened in the ordinary course of business; PROVIDED that the applicable
depository bank or other financial institution has executed and delivered a
deposit account control agreement with respect to such deposit accounts pursuant
to the Collateral Agreement;
(n) Investments by the Borrower and its Subsidiaries consisting of
accounts receivable, payments or other credits and other Investments and
extensions of credit arising in the ordinary course of business and consistent
with past practices (including, and without limitation, endorsement of
negotiable instruments);
(o) Investments by the Borrower and its Subsidiaries in the form of
promissory notes acquired in connection with Dispositions permitted pursuant to
Section 8.05 (PROVIDED that (i) the aggregate outstanding amount of all such
Investments shall not exceed $500,000 at any one time and (ii) any such
Investment shall be due and payable within eighteen (18) months of the date of
execution of such Investment); and
(p) other Investments by the Borrower and its Subsidiaries not
exceeding $1,000,000 in the aggregate in any Fiscal Year of the Borrower.
8.03 INDEBTEDNESS.
Create, incur, assume or suffer to exist any Indebtedness, except:
(a) Indebtedness under the Loan Documents;
(b) Indebtedness (i) under the Senior Subordinated Notes in an
aggregate principal amount not to exceed the aggregate principal amount
outstanding on the Closing Date, LESS any repayment or prepayment thereof, and
(ii) any refinancings, refundings, renewals or extensions thereof; PROVIDED that
(A) the principal amount of such Indebtedness is not increased at the time of
such refinancing, refunding, renewal or extension except by an amount equal to a
reasonable premium or other reasonable amount paid, and fees and expenses
reasonably incurred, in connection with such refinancing and by an amount equal
to any existing commitments unutilized thereunder and (B) such refinancing,
refunding, renewal or extension shall be (I) on subordination terms at least as
favorable to the Lenders, (II) no more restrictive on the Borrower and its
Subsidiaries than such Indebtedness being refinanced, refunded, renewed or
extended and (III) in an amount not less than the amount outstanding at the time
of such refinancing, refunding, renewal or extension;
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(c) Indebtedness of the Borrower and its Subsidiaries outstanding on
the date hereof and not otherwise permitted under this SECTION 8.03 and listed
on SCHEDULE 8.03 and any refinancings, refundings, renewals or extensions
thereof; PROVIDED that (i) the amount of such Indebtedness is not increased at
the time of such refinancing, refunding, renewal or extension except by an
amount equal to a reasonable premium or other reasonable amount paid, and fees
and expenses reasonably incurred, in connection with such refinancing and by an
amount equal to any existing commitments unutilized thereunder and (ii) any
refinancing, refunding, renewal or extension of any Subordinated Indebtedness
shall be (A) on subordination terms at least as favorable to the Lenders, (B) no
more restrictive on the Borrower and its Subsidiaries than the Subordinated
Indebtedness being refinanced, refunded, renewed or extended and (C) in an
amount not less than the amount outstanding at the time of such refinancing,
refunding, renewal or extension;
(d) Guarantees of Holdings, the Borrower and its Subsidiaries in
respect of Indebtedness otherwise permitted hereunder of the Borrower and its
Subsidiaries or in respect of ordinary course obligations (other than
Indebtedness) incurred in the ordinary course of business;
(e) obligations (contingent or otherwise) of the Borrower and its
Subsidiaries existing or arising under any Swap Contract; PROVIDED that (i) such
obligations are (or were) entered into by such Person pursuant to this Agreement
or in the ordinary course of business for the purpose of directly mitigating
risks associated with liabilities, commitments, investments, assets, or property
held or reasonably anticipated by such Person, or changes in the value of
securities issued by such Person, and not for purposes of speculation or taking
a "market view;" and (ii) such Swap Contract does not contain any provision
exonerating the non-defaulting party from its obligation to make payments on
outstanding transactions to the defaulting party;
(f) Indebtedness of the Borrower and its Subsidiaries in respect of
capital leases and purchase money obligations for fixed or Capital Assets within
the limitations set forth in SECTION 8.01(i) (i) which is outstanding on the
date hereof and listed on SCHEDULE 8.03 and any refinancings, refundings,
renewals or extensions thereof and (ii) which is incurred after the date hereof
(PROVIDED, HOWEVER, that the aggregate amount of all such Indebtedness which is
incurred pursuant to this clause (ii) shall not at any one time outstanding
shall exceed $5,000,000);
(g) Indebtedness of the Borrower and its Subsidiaries in the form of
intercompany loans permitted in SECTION 8.02(i);
(h) Indebtedness consisting of promissory notes issued by Holdings and
its Subsidiaries to current or former officers, directors and employees or their
spouses or estates of Holdings or its Subsidiaries to purchase or redeem capital
stock or options of Holdings; PROVIDED that any such promissory note is
subordinated to the Obligations under this Agreement on terms and conditions
reasonably acceptable to the Administrative Agent;
(i) Indebtedness acquired or assumed by Borrower and its Subsidiaries
in connection with any Permitted Acquisition;
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(j) Indebtedness of the Borrower and its Subsidiaries under
performance bonds, surety bonds, statutory obligations or appeal bonds or with
respect to workers' compensation claims or other bonds permitted under SECTION
8.01(e) or SECTION 8.01(f);
(k) the accrual of interest, the accretion or amortization of original
issue discount, the payment of interest on any Indebtedness of the Borrower and
its Subsidiaries in the form of additional Indebtedness with the same terms;
(l) Indebtedness of Holdings and its Subsidiaries that may be deemed
to exist under the Acquisition Agreement as a result of Holdings' obligation to
pay working capital adjustments thereunder;
(m) Indebtedness incurred by Holdings and its Subsidiaries arising
from agreements providing for indemnification, adjustment of purchase price or
similar obligations, or from guarantees or letters of credit, surety bonds or
performance bonds securing the performance of Holdings and its Subsidiaries
pursuant to agreements in connection with acquisitions or dispositions of any
business, assets or Subsidiary, in each case solely to the extent permitted
hereunder;
(n) unsecured Indebtedness incurred in the ordinary course of business
to finance insurance premiums, in an aggregate amount not to exceed $1,500,000
outstanding at any one time; and
(o) unsecured Indebtedness of the Borrower and its Subsidiaries in an
aggregate principal amount not to exceed $500,000 at any time outstanding;
PROVIDED that the Borrower and its Subsidiaries shall have complied with the
requirements of SECTION 2.06(e).
8.04 FUNDAMENTAL CHANGES.
Merge, dissolve, liquidate, consolidate with or into another Person, or
Dispose of (whether in one transaction or in a series of transactions) all or
substantially all of its assets (whether now owned or hereafter acquired) to or
in favor of any Person, except that, so long as no Default exists or would
result therefrom:
(a) any Subsidiary of the Borrower may merge with (i) the Borrower
(PROVIDED that the Borrower shall be the continuing or surviving Person), or
(ii) any one or more other Subsidiaries of the Borrower (PROVIDED that when any
Subsidiary Guarantor is merging with another Subsidiary of the Borrower, the
Subsidiary Guarantor shall be the continuing or surviving Person unless such
other Subsidiary becomes a Subsidiary Guarantor);
(b) any Subsidiary of the Borrower may Dispose of all or substantially
all of its assets (upon voluntary liquidation or otherwise) to the Borrower or
to another Subsidiary of the Borrower; PROVIDED that if the transferor in such a
transaction is a Subsidiary Guarantor, then the transferee must either be the
Borrower or a Subsidiary Guarantor which has satisfied all relevant requirements
of SECTION 7.15; and
(c) mergers of Subsidiaries of the Borrower in connection with
Permitted Acquisitions.
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8.05 DISPOSITIONS.
Make any Disposition or enter into any agreement to make any Disposition,
except:
(a) Dispositions by the Borrower and its Subsidiaries of damaged,
obsolete, unusable or worn out property, whether now owned or hereafter
acquired, or surplus equipment acquired in connection with the Acquisition,
which such surplus equipment is no longer necessary to the conduct of the
operations of the Borrower and its Subsidiaries as a result of the consolidation
of operations following the Acquisition, in each case, in the ordinary course of
business;
(b) Dispositions by the Borrower and its Subsidiaries of (i) inventory
in the ordinary course of business and (ii) equipment procured on behalf of a
customer in the ordinary course of business and pursuant to a (A) purchase
order, (B) written contract or (C) other express agreement;
(c) Dispositions by the Borrower and its Subsidiaries of equipment or
real property to the extent that (i) such property is exchanged for credit
against the purchase price of similar replacement property or (ii) the proceeds
of such Disposition are reasonably promptly applied to the purchase price of
such replacement property within one hundred and eighty (180) days after receipt
thereof, or have been committed to be reinvested within such one hundred eighty
(180) day period and are thereafter actually reinvested within two hundred
seventy (270) days after the receipt thereof;
(d) Dispositions by any Subsidiary of the Borrower of property to the
Borrower or to any other Subsidiary of the Borrower which has satisfied any
relevant requirements of SECTION 7.15; PROVIDED that if the transferor of such
property is a Guarantor, the transferee thereof must either be the Borrower or a
Subsidiary Guarantor;
(e) Dispositions by the Borrower and its Subsidiaries permitted by
SECTION 8.04;
(f) licenses of IP Rights by the Borrower and its Subsidiaries in the
ordinary course of business;
(g) Dispositions by the Borrower and its Subsidiaries not to exceed
$2,000,000 in the aggregate during the term of this Agreement;
(h) sales or discounts or receivables by the Borrower and its
Subsidiaries in the ordinary course of business;
(i) the lease or license of real or personal property by the Borrower
and its Subsidiaries in the ordinary course of business;
(j) Dispositions by the Borrower and its Subsidiaries consisting of
leases and subleases of real property solely to the extent that such real
property is not necessary for the normal conduct of operations of the Borrower
and its Subsidiaries; and
(k) Dispositions by the Borrower or any Subsidiary thereof, of assets
acquired in connection with any Permitted Acquisition that the Borrower or such
Subsidiary intended to sell
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at the time of such Permitted Acquisition; PROVIDED (i) such assets were
identified in writing to the Administrative Agent at the time of such Permitted
Acquisition and (ii) the aggregate fair market value of such assets does NOT
exceed fifteen percent (15%) of the aggregate purchase price paid in connection
with such Permitted Acquisition (including, without limitation, all cash
payments, Indebtedness and other obligations assumed, earn-out payments (valued
at an amount to be agreed upon between the Borrower and the Administrative
Agent), seller financing, deferred payments or equity issued) and (iii) the Net
Cash Proceeds from each such Disposition shall be applied to the mandatory
prepayment of the Loans in accordance with SECTION 2.06(e);
(l) other Dispositions of property by the Borrower and its
Subsidiaries in the ordinary course of business or as otherwise permitted by the
Required Lenders; PROVIDED that the Net Cash Proceeds from each such Disposition
shall be applied to the mandatory prepayment of the Loans in accordance with
SECTION 2.06(e);
PROVIDED, HOWEVER, that any Disposition pursuant to clauses (a) through (g)
shall be for fair market value.
8.06 RESTRICTED PAYMENTS.
Declare or make, directly or indirectly, any Restricted Payment, or incur
any obligation (contingent or otherwise) to do so, except that as long as no
Default or Event of Default is continuing or would result therefrom:
(a) each Subsidiary of the Borrower may make Restricted Payments to
the Borrower and to wholly-owned Domestic Subsidiaries (and, in the case of a
Restricted Payment by a non-wholly-owned Subsidiary, to the Borrower and any
Domestic Subsidiary of the Borrower and to each other owner of capital stock or
other equity interests of such Subsidiary of the Borrower on a PRO RATA basis
based on their relative ownership interests);
(b) the Borrower and each Subsidiary of the Borrower may declare and
make dividend payments or other distributions payable solely in the common stock
or other common equity interests of such Person;
(c) the Borrower may declare and make (and each Subsidiary of the
Borrower may declare and make to enable the Borrower to do the same) dividend
payments to Holdings so that Holdings may (i) pay corporate operating
(including, without limitation, directors fees and expenses) and overhead
expenses in the ordinary course of business, (ii) pay any taxes which are due
and payable in the ordinary course of business by the Loan Parties as part of
the consolidated group, (iii) pay indemnification claims made by an officer or
director or shareholder of Holdings; (iv) purchase capital stock or options from
present or former employees, officers, directors or consultants of Holdings or
its Subsidiaries or their respective estates, spouses or family members upon the
death, disability or termination of employment of such employee, officer,
director or consultant, or make payments with respect to Indebtedness used to
repurchase such capital stock or options (PROVIDED that the aggregate amount of
payments under this clause (iv) shall not exceed $2,500,000 in any Fiscal Year
PLUS (A) proceeds of key-man life insurance maintained by Holdings on the life
of the Person with respect to whom such repurchase is made, (B) notes permitted
to be issued pursuant to SECTION 8.03(h) and (C) equity proceeds not subject to
any
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prepayment requirements and which have not previously funded any repurchase
pursuant to this SECTION 8.06(c)(iv); PROVIDED FURTHER that (i) the cancellation
of debt shall not constitute a redemption and (ii) the consideration for the
purchase of capital stock or options pursuant to this clause (iv) may include
the issuance of another equity security); (v) pay fees due and owning under the
Professional Services Agreement, subject to the restrictions set forth in 8.10;
and (vi) make payments pursuant to the Acquisition Agreement or any other
agreement relating to a Permitted Acquisition in the nature of working capital
adjustments; and
(d) Subsidiaries of the Borrower may make dividends or other
distributions to the Borrower or to another Subsidiary Guarantor.
8.07 LIMITATIONS ON EXCHANGE AND ISSUANCE OF CAPITAL STOCK.
Issue, sell or otherwise dispose of any class or series of capital stock
that, by its terms or by the terms of any security into which it is convertible
or exchangeable, is, or upon the happening of an event or passage of time would
be, (a) convertible or exchangeable into Indebtedness or (b) required to be
redeemed or repurchased, including at the option of the holder, in whole or in
part, or has, or upon the happening of an event or passage of time would have, a
redemption or similar payment due (unless such redemption or repurchase is
contingent (unless such contingency has been satisfied) not required prior to
the date that is six (6) months after the later of the Revolving Credit Maturity
Date or the Term Loan Maturity Date).
8.08 CHANGE IN NATURE OF BUSINESS.
(a) With respect to the Borrower and its Subsidiaries, engage in any
material line of business substantially different from those lines of business
conducted by Holdings, the Borrower and their Subsidiaries on the date hereof or
any business substantially complementary related or incidental thereto.
(b) With respect to Holdings, engage in any business, operations or
activities other than holding the capital stock of the Borrower and the
employment of senior management (which senior management may perform management
functions on behalf of Holdings and its Subsidiaries in the ordinary course of
business, including corporate development, acquisition planning, strategic
planning, client development, due diligence activities and accounting
functions).
8.09 ACCOUNTING CHANGES; ORGANIZATIONAL DOCUMENTS.
(a) Change its Fiscal Year end, or make any change in its accounting
treatment and reporting practices except as required by GAAP; or
(b) Amend, modify or change its articles of incorporation (or
corporate charter or other similar organizational documents) or amend, modify or
change its bylaws (or other similar documents) in any manner adverse in any
respect to the rights or interests of the Lenders.
8.10 TRANSACTIONS WITH AFFILIATES.
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Enter into any transaction of any kind with any Affiliate of Holdings or
the Borrower, whether or not in the ordinary course of business, other than (a)
on fair and reasonable terms substantially as favorable to Holdings, the
Borrower or such Subsidiary as would be obtainable by Holdings, the Borrower or
such Subsidiary at the time in a comparable arm's length transaction with a
Person other than an Affiliate, (b) the transactions entered into pursuant to
the Equity Purchase Agreement, the Senior Management Agreements, the Acquisition
Documents, (including, without limitation, the Transitional Services Agreement),
(c) transactions otherwise permitted hereunder, (d) customary indemnities to
officers and directors and (e) payments to the Sponsor, pursuant to the
Professional Services Agreement, consisting of (i) a management fee not to
exceed $300,000 per year, (ii) a placement fee not to exceed on percent (1%) of
any equity raised by Holdings after the Closing Date and (iii) out-of-pocket
fees and expenses in connection with the performance of its obligations under
the Professional Services Agreement and in connection with any financing of
Holdings; PROVIDED, that no Default shall have occurred and be continuing or
would result from the making of any such payment, it being understood that any
such fees not paid as a result of this proviso (herein the "BLOCKED FEES") and
expenses may, notwithstanding any such Default, continue to accrue, and may be
payable, subject to the provisions of this SECTION 8.10, upon the cure or waiver
of any such Default.
8.11 BURDENSOME AGREEMENTS.
Enter into any Contractual Obligation (other than this Agreement or any
other Loan Document) that (a) limits the ability (i) of any Subsidiary of the
Borrower to make Restricted Payments to the Borrower or any Subsidiary Guarantor
or to otherwise transfer property (other than limitations applicable under
SECTION 8.03(f) with respect to the Capital Asset which is the subject of such
Indebtedness) to the Borrower or any Subsidiary Guarantor, (ii) of Holdings or
any Subsidiary to Guarantee the Indebtedness of the Borrower or (iii) of
Holdings or any Subsidiary to create, incur, assume or suffer to exist Liens on
property of such Person (except, with respect to clause (iii), as set forth in
the Senior Subordinated Note Documents and the Equity Purchase Agreement);
PROVIDED, HOWEVER, that this clause (iii) shall not prohibit any negative pledge
incurred or provided in favor of any holder of Indebtedness permitted under
SECTION 8.03(f) solely to the extent any such negative pledge relates to the
property financed by or the subject of such Indebtedness; (b) contains covenants
more restrictive than the provisions of Articles VII and VIII; or (c) requires
the grant of a Lien to secure an obligation of such Person if a Lien is granted
to secure another obligation of such Person.
8.12 USE OF PROCEEDS.
Use the proceeds of any Credit Extension, whether directly or indirectly,
and whether immediately, incidentally or ultimately, to purchase or carry margin
stock (within the meaning of Regulation U of the FRB) or to extend credit to
others for the purpose of purchasing or carrying margin stock or to refund
indebtedness originally incurred for such purpose.
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8.13 IMPAIRMENT OF SECURITY INTERESTS.
Take or omit to take any action, which might or would have the result of
materially impairing the security interests in favor of the Administrative Agent
with respect to the Collateral or grant to any Person (other than the
Administrative Agent for the benefit of itself and the Lenders pursuant to the
Security Documents) any interest whatsoever in the Collateral, except for Liens
permitted under SECTION 8.01 and Dispositions permitted under SECTION 8.05.
8.14 AMENDMENTS, PAYMENTS AND PREPAYMENTS OF SUBORDINATED INDEBTEDNESS.
(a) Amend or modify (or permit the modification or amendment of) any
of the terms or provisions of any Subordinated Indebtedness (including, without
limitation, the Senior Subordinated Notes), including, without limitation, any
amendment or modification to (i) increase the maximum principal amount of the
Senior Subordinated Notes or any other obligations thereunder or increase the
interest rate applicable thereto, (ii) change any date upon which payments of
principal or interest on any Senior Subordinated Note or other obligations
thereunder are due to an earlier date, (iii) add or make more restrictive any
event of default or any covenant with respect to the Senior Subordinated Notes
or any other obligations thereunder (other than proportional amendments to the
covenants thereunder corresponding to and made in connection with an amendment
to the covenants set forth herein), (iv) change any redemption or prepayment
provision of the Senior Subordinated Notes or any other payment obligations
thereunder to an earlier date or add any additional events requiring such
redemption, payment or prepayment, (v) alter the subordination provisions with
respect to the Bridge Loan Obligations or other Subordinated Obligations (each
as defined in the Bridge Loan Agreement) or the Loan Obligations or other
Subordinated Obligations (each as defined in the Investment Agreement Senior
Subordinated), including, without limitation, subordinating any such obligation
to any Indebtedness other than the Obligations, (vi) grant or suffer any holder
of Senior Subordinated Notes to acquire any Lien or security interest in any
assets of Holdings, the Borrower or any of their respective Subsidiaries or any
other assets securing the Obligations, (vii) change or amend any other term of
the Senior Subordinated Notes or any other obligations thereunder if such change
or amendment would result in a default or event of default under this Agreement
or the other Loan Documents, (viii) extend the maturity date of the Senior
Subordinated Bridge Notes to be later than the first anniversary of the Closing
Date; PROVIDED, that if prior to such first anniversary, Holdings has filed a
registration statement on Form S-1 (or successor form) with the SEC with respect
to an IPO and such registration statement has not been withdrawn prior to such
first anniversary, such maturity date may be extended until the earlier of (A)
February 28, 2004 or (B) the date of withdrawal of such registration statement
or (ix) any other term or provision of the Senior Subordinated Notes, which
amendment or modification would in any way materially adversely affect the
rights or interests of the Administrative Agent and Lenders hereunder.
(b) Cancel, forgive, make any payment or prepayment on, or redeem or
acquire for value (including, without limitation, (i) by way of depositing with
any trustee with respect thereto money or securities before due for the purpose
of paying when due and (ii) at the maturity thereof) any Subordinated
Indebtedness, other than (A) prepayment of the Senior Subordinated Notes
pursuant to SECTION 2.06(e)(vii), (B) refinancing of the Senior Subordinated
Notes pursuant to SECTION 8.03(b), and (C) regularly scheduled payments of
accrued interest on the Senior Subordinated Notes, to the extent such payments
are permitted under the applicable
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subordination provisions set forth in the Subordinated Note Agreement (PROVIDED
that, with respect to this clause (C), accrued interest payments that may be
paid in cash, paid in kind or capitalized, in each case at the option of the
Borrower, shall be deemed to be regularly scheduled payments of accrued
interest).
8.15 ACQUISITION DOCUMENTS.
Amend, modify, waive or supplement (or permit the modification, amendment,
waiver or supplementation of) any of the terms or provisions of the Acquisition
Documents in any respect which would materially adversely affect the rights or
interests of the Administrative Agent and Lenders hereunder.
8.16 EQUITY PURCHASE AGREEMENT.
Amend, modify, waive or supplement (or permit the modification, amendment,
waiver or supplementation of) any of the terms or provisions of the Equity
Purchase Agreement in any respect which would materially adversely affect the
rights or interests of the Administrative Agent and Lenders hereunder.
8.17 FINANCIAL COVENANTS.
(a) CONSOLIDATED TOTAL LEVERAGE RATIO. Permit the Consolidated Total
Leverage Ratio at any time during any period of four (4) consecutive Fiscal
Quarters set forth below to be greater than:
(i) during any period prior to the closing and funding of an
IPO, the ratio set forth below opposite such period:
Maximum Consolidated Total
Four Fiscal Quarters Ending Leverage Ratio
---------------------------------------------------------------------------------------------
Closing Date through and including September 30, 2003 4.00 to 1.00
October 1, 2003 through and including September 30, 2004 3.75 to 1.00
October 1, 2004 and thereafter 3.50 to 1.00
(ii) during any period after the closing and funding of an
IPO, 2.50 to 1.00.
(b) CONSOLIDATED SENIOR LEVERAGE RATIO. Permit the Consolidated Senior
Leverage Ratio at any time during any period of four (4) consecutive Fiscal
Quarters to be greater than the ratio set forth below opposite such period
(PROVIDED that the covenant set forth in this subsection (b) shall terminate and
no longer be tested after the closing and funding of an IPO):
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Maximum Consolidated Senior
Four Fiscal Quarters Ending Leverage Ratio
---------------------------------------------------------------------------------------------
Closing Date through and including June 30, 2003 2.75 to 1.00
July 1, 2003 through and including December 31, 2003 2.50 to 1.00
January 1, 2004 through and including December 31, 2004 2.25 to 1.00
January 1, 2005 and thereafter 2.00 to 1.00
(c) CONSOLIDATED FIXED CHARGE COVERAGE RATIO. Permit the Consolidated
Fixed Charge Coverage Ratio at any time during any period of four (4)
consecutive Fiscal Quarters to be less than 1.25 to 1.00.
(d) MINIMUM CONSOLIDATED EBITDA. Permit Consolidated EBITDA for during
any period of four (4) consecutive Fiscal Quarters to be less than the amounts
set forth below opposite such period:
Minimum Consolidated
Four Fiscal Quarters Ending EBITDA
-------------------------------------------------------------------------------------------
Closing Date through and including December 31, 2002 $ 35,000,000
January 1, 2003 through and including March 31, 2003 $ 34,500,000
April 1, 2003 through and including June 30, 2003 $ 32,500,000
July 1, 2003 through and including September 30, 2003 $ 31,000,000
October 1, 2003 through and including December 31, 2003 $ 33,700,000
January 1, 2004 through and including December 31, 2004 $ 35,200,000
January 1, 2005 through and including December 31, 2005 $ 37,700,000
January 1, 2006 through and including December 31, 2006 $ 39,700,000
Thereafter $ 42,400,000
PROVIDED that (i) the minimum Consolidated EBITDA amounts set forth in this
subsection (d) shall be adjusted by the Administrative Agent following any
Permitted Acquisition to reflect increases to Consolidated EBITDA from such
Permitted Acquisition and (ii) the covenant set forth in this subsection (d)
shall terminate and no longer be tested upon after the receipt by the
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Administrative Agent of a Compliance Certificate and supporting financial
information, all in form and substance satisfactory to the Administrative Agent,
demonstrating a Consolidated Total Leverage Ratio equal to or less than 2.25 to
1.00.
8.18 CAPITAL EXPENDITURES.
Make or become legally obligated to make any Capital Expenditures
(excluding normal replacements and maintenance which are properly charged to
current operations), except for Capital Expenditures in the ordinary course of
business not exceeding, in the aggregate for Holdings and it Subsidiaries (a)
from October 1, 2002 through and including December 31, 2002, $4,000,000, and
(b) during any Fiscal Year, $10,000,000; PROVIDED that all Capital Expenditures
incurred in the ordinary course of business for the purpose of maintaining or
replacing existing Capital Assets shall not exceed $2,500,000 in the aggregate
for Holdings and its Subsidiaries during any Fiscal Year (commencing with Fiscal
Year 2003); PROVIDED FURTHER that so long as no Default has occurred and is
continuing or would result from such expenditure, any portion of any amount set
forth above, if not expended in the Fiscal Year (commencing with Fiscal Year
2003) for which it is permitted above, may be carried over for expenditure in
the next following Fiscal Year.
ARTICLE IX.
GUARANTY OF HOLDINGS
9.01 GUARANTY OF OBLIGATIONS.
Holdings hereby unconditionally guarantees to the Administrative Agent for
the ratable benefit of the Administrative Agent and the Lenders, and their
respective successors, endorsees, transferees and assigns, the prompt payment
and performance of all Obligations of the Borrower, whether primary or secondary
(whether by way of endorsement or otherwise), whether now existing or hereafter
arising, whether or not from time to time reduced or extinguished (except by
payment thereof) or hereafter increased or incurred, whether or not recovery may
be or hereafter become barred by the statute of limitations, whether enforceable
or unenforceable as against the Borrower, whether or not discharged, stayed or
otherwise affected by any bankruptcy, insolvency or other similar law or
proceeding, whether created directly with the Administrative Agent or any Lender
or acquired by the Administrative Agent or any Lender through assignment,
endorsement or otherwise, whether matured or unmatured, whether joint or
several, as and when the same become due and payable (whether at maturity or
earlier, by reason of acceleration, mandatory repayment or otherwise), in
accordance with the terms of any such instruments evidencing any such
obligations, including all renewals, extensions or modifications thereof (all
Obligations of the Borrower, including all of the foregoing, being hereinafter
collectively referred to as the "GUARANTEED OBLIGATIONS").
9.02 NATURE OF GUARANTY.
(a) Holdings agrees that this Parent Guaranty is a continuing,
unconditional guaranty of payment and performance and not of collection, and
that its obligations under this Parent Guaranty shall be primary, absolute and
unconditional, irrespective of, and unaffected by:
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(i) the genuineness, validity, regularity, enforceability or
any future amendment of, or change in, this Agreement or any other Loan
Document or any other agreement, document or instrument to which Holdings,
the Borrower, any Subsidiary thereof or any Affiliate thereof is or may
become a party;
(ii) the absence of any action to enforce this Parent
Guaranty, this Agreement or any other Loan Document or the waiver or
consent by the Administrative Agent or any Lender with respect to any of
the provisions of this Parent Guaranty, this Agreement or any other Loan
Document;
(iii) the existence, value or condition of, or failure to
perfect its Lien against, any security for or other guaranty of the
Guaranteed Obligations or any action, or the absence of any action, by the
Administrative Agent or any Lender in respect of such security or guaranty
(including, without limitation, the release of any such security or
guaranty);
(iv) any structural change in, restructuring of or similar
change of Holdings, the Borrower or any of their Subsidiaries; or
(v) any other action or circumstances which might otherwise
constitute a legal or equitable discharge or defense of a surety or
guarantor;
it being agreed by Holdings that its obligations under this Parent Guaranty
shall not be discharged until the final and indefeasible payment and
performance, in full, of the Guaranteed Obligations (other than contingent
indemnity obligations) and the termination of the Commitments.
(b) Holdings represents, warrants and agrees that its obligations
under this Parent Guaranty are not and shall not be subject to any
counterclaims, offsets or defenses of any kind against the Administrative Agent,
the Lenders or the Borrower whether now existing or which may arise in the
future.
(c) Holdings hereby agrees and acknowledges that the Guaranteed
Obligations, and any of them, shall conclusively be deemed to have been created,
contracted or incurred, or renewed, extended, amended or waived, in reliance
upon this Parent Guaranty, and all dealings between Holdings, the Borrower and
any of the Subsidiary Guarantors, on the one hand, and the Administrative Agent
and the Lenders, on the other hand, likewise shall be conclusively presumed to
have been had or consummated in reliance upon this Parent Guaranty.
9.03 WAIVERS.
To the extent permitted by law, Holdings expressly waives all of the
following rights and defenses (and agrees not to take advantage of or assert any
such right or defense):
(a) rights it may now or in the future have under any statute, or at
law or in equity, or otherwise, to compel the Administrative Agent or any Lender
to proceed in respect of the Guaranteed Obligations against the Borrower or any
other Person or against any security for or
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other guaranty of the payment and performance of the Guaranteed Obligations
before proceeding against, or as a condition to proceeding against, Holdings;
(b) any defense based upon the failure of the Administrative Agent or
any Lender to commence an action in respect of the Guaranteed Obligations
against Holdings, the Borrower, any Subsidiary Guarantor, any other guarantor or
any other Person or any security for the payment and performance of the
Guaranteed Obligations;
(c) any right to insist upon, plead or in any manner whatever claim or
take the benefit or advantage of, any appraisal, valuation, stay, extension,
marshalling of assets or redemption laws, or exemption, whether now or at any
time hereafter in force, which may delay, prevent or otherwise affect the
performance by Holdings of its obligations under, or the enforcement by the
Administrative Agent or the Lenders of, this Parent Guaranty;
(d) any right of diligence, presentment, demand, protest and notice
(except as specifically required herein) of whatever kind or nature with respect
to any of the Guaranteed Obligations and waives, to the extent permitted by law,
the benefit of all provisions of law which are or might be in conflict with the
terms of this Parent Guaranty; and
(e) any and all right to notice of the creation, renewal, extension or
accrual of any of the Guaranteed Obligations and notice of or proof of reliance
by the Administrative Agent or any Lender upon, or acceptance of, this Parent
Guaranty.
Holdings agrees that any notice or directive given at any time to the
Administrative Agent or any Lender which is inconsistent with any of the
foregoing waivers shall be null and void and may be ignored by the
Administrative Agent or such Lender, and, in addition, may not be pleaded or
introduced as evidence in any litigation relating to this Parent Guaranty for
the reason that such pleading or introduction would be at variance with the
written terms of this Parent Guaranty, unless the Administrative Agent and the
Required Lenders have specifically agreed otherwise in writing. The foregoing
waivers are of the essence of the transaction contemplated by this Agreement and
the other Loan Documents and, but for this Parent Guaranty and such waivers, the
Administrative Agent and Lenders would decline to enter into this Agreement and
the other Loan Documents.
9.04 MODIFICATION OF LOAN DOCUMENTS, ETC.
Neither the Administrative Agent nor any Lender shall incur any liability
to Holdings as a result of any of the following, and none of the following shall
impair or release this Parent Guaranty or any of the obligations of Holdings
under this Parent Guaranty:
(a) any change or extension of the manner, place or terms of payment
of, or renewal or alteration of all or any portion of, the Guaranteed
Obligations;
(b) any action under or in respect of this Agreement or the other Loan
Documents in the exercise of any remedy, power or privilege contained herein or
therein or available to any of them at law, in equity or otherwise, or waiver or
refrain from exercising any such remedies, powers or privileges;
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(c) any amendment or modification, in any manner whatsoever, of this
Agreement or the other Loan Documents;
(d) any extension or waiver of the time for performance by Holdings,
the Borrower, any Subsidiary Guarantor or any other Person of, or compliance
with, any term, covenant or agreement on its part to be performed or observed
under this Agreement or any other Loan Document, or waiver of such performance
or compliance or consent to a failure of, or departure from, such performance or
compliance;
(e) any taking and holding of security or collateral for the payment
of the Guaranteed Obligations or any sale, exchange, release, disposal of, or
other dealing with, any property pledged, mortgaged or conveyed, or in which the
Administrative Agent or any Lender has been granted a Lien, to secure any
Indebtedness of Holdings, the Borrower, any Subsidiary Guaranty or any other
Person to the Administrative Agent or any Lender;
(f) any release anyone who may be liable in any manner for the payment
of any amounts owed by Holdings, the Borrower, any Subsidiary Guarantor or any
other Person to the Administrative Agent or any Lender;
(g) any modification or termination of the terms of any intercreditor
or subordination agreement pursuant to which claims of other creditors of
Holdings, the Borrower, any Subsidiary Guarantor or any other Person are
subordinated to the claims of the Administrative Agent or any Lender; or
(h) any application of any sums by whomever paid or however realized
to any amounts owing by Holdings, the Borrower, any Subsidiary Guarantor or any
other Person to the Administrative Agent or any Lender on account of the
Guaranteed Obligations in such manner as the Administrative Agent or any Lender
shall determine in its reasonable discretion.
9.05 DEMAND BY ADMINISTRATIVE AGENT.
In addition to the terms set forth in this ARTICLE IX, and in no manner
imposing any limitation on such terms, if all or any portion of the then
outstanding Guaranteed Obligations under this Agreement are declared to be
immediately due and payable, then Holdings shall, upon demand in writing
therefor by the Administrative Agent to Holdings, pay all or such portion of the
outstanding Guaranteed Obligations then declared due and payable.
Notwithstanding the foregoing, Holdings agrees that, in the event of the
dissolution or insolvency of Holdings, the Borrower or any Subsidiary Guarantor,
or the inability or failure of Holdings, the Borrower or any Subsidiary
Guarantor to pay debts as they become due, or an assignment by Holdings, the
Borrower or any Subsidiary Guarantor for the benefit of creditors, or the
commencement of any case or proceeding in respect of Holdings, the Borrower or
any Subsidiary Guarantor under bankruptcy, insolvency or similar laws, and if
such event shall occur at a time when any of the Guaranteed Obligations may not
then be due and payable, Holdings will pay to the Administrative Agent, for the
ratable benefit of the Lenders and their respective successors, indorsees,
transferees and assigns, forthwith the full amount which would be payable
hereunder by Holdings if all such Guaranteed Obligations were then due and
payable.
9.06 REMEDIES.
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Upon the occurrence and during the continuance of any Event of Default,
with the consent of the Required Lenders, the Administrative Agent may, or upon
the request of the Required Lenders, the Administrative Agent shall, enforce
against Holdings its obligations and liabilities hereunder and exercise such
other rights and remedies as may be available to the Administrative Agent
hereunder, under the other Loan Documents or otherwise.
9.07 REINSTATEMENT.
Holdings agrees that, if any payment made by the Borrower or any other
Person applied to the Guaranteed Obligations is at any time annulled, set aside,
rescinded, invalidated, declared to be fraudulent or preferential or otherwise
required to be refunded or repaid, or the proceeds of any Collateral are
required to be returned by the Administrative Agent or any Lender to the
Borrower, its estate, trustee, receiver or any other Person, including, without
limitation, Holdings or any Subsidiary Guarantor, under any applicable Law or
equitable cause, then, to the extent of such payment or repayment, Holdings'
liability hereunder (and any Lien or Collateral securing such liability) shall
be and remain in full force and effect, as fully as if such payment had never
been made, and, if prior thereto, this Parent Guaranty shall have been canceled
or surrendered (and if any Lien or Collateral securing Holdings' liability
hereunder shall have been released or terminated by virtue of such cancellation
or surrender), this Parent Guaranty (and such Lien or Collateral) shall be
reinstated in full force and effect, and such prior cancellation or surrender
shall not diminish, release, discharge, impair or otherwise affect the
obligations of Holdings in respect of the amount of such payment (or any Lien or
Collateral securing such obligation).
9.08 PAYMENTS.
Payments by Holdings shall be made to the Administrative Agent, to be
credited and applied upon the Guaranteed Obligations, in immediately available
Dollars to an account designated by the Administrative Agent or at the
Administrative Agent's Office or at any other address that may be specified in
writing from time to time by the Administrative Agent.
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9.09 NO SUBROGATION.
Until all amounts owing to the Administrative Agent and the Lenders on
account of the Guaranteed Obligations are paid in full and the Commitments are
terminated, Holdings hereby waives any claims or other rights which it may now
or hereafter acquire against the Borrower that arise from the existence or
performance of Holdings' obligations under this Parent Guaranty, including,
without limitation, any right of subrogation, reimbursement, exoneration,
indemnification, any right to participate in any claim or remedy of the
Administrative Agent or the Lenders against the Borrower or any Collateral which
the Administrative Agent or the Lenders now have or may hereafter acquire,
whether or not such claim, remedy or right arises in equity or under contract,
statute or common law, by any payment made hereunder or otherwise, including
without limitation, the right to take or receive from the Borrower, directly or
indirectly, in cash or other property or by set-off or in any other manner,
payment or security on account of such claim or other rights. If any amount
shall be paid to Holdings on account of such rights at any time when all of the
Obligations shall not have been paid in full, such amount shall be held by
Holdings in trust for the Administrative Agent, segregated from other funds of
Holdings, and shall, forthwith upon receipt by Holdings, be turned over to the
Administrative Agent in the exact form received by Holdings (duly indorsed by
Holdings to the Administrative Agent, if required) to be applied against the
Obligations, whether matured or unmatured, in such order as set forth herein.
ARTICLE X.
EVENTS OF DEFAULT AND REMEDIES
10.01 EVENTS OF DEFAULT.
Any of the following shall constitute an Event of Default:
(a) NON-PAYMENT. The Borrower or any other Loan Party fails to pay (i)
when and as required to be paid herein, any amount of principal of any Loan or
any L/C Obligation, or (ii) within three (3) days after the same becomes due,
any interest on any Loan or on any L/C Obligation, or any Commitment Fee or
other fee due hereunder, or (iii) within five (5) days after the same becomes
due, any other amount payable hereunder or under any other Loan Document; or
(b) SPECIFIC COVENANTS. The Borrower or any other Loan Party fails to
perform or observe any term, covenant or agreement contained in any of SECTION
7.01, SECTION 7.02, SECTION 7.03, SECTION 7.05, SECTION 7.10, SECTION 7.12,
SECTION 7.13, SECTION 7.15 or SECTION 7.16 or ARTICLE VIII; or
(c) OTHER DEFAULTS. The Borrower or any other Loan Party fails to
perform or observe any other covenant or agreement (not specified in subsection
(a) or (b) above) contained in any Loan Document on its part to be performed or
observed and such failure continues for thirty (30) days after written notice
thereof has been given to the Borrower by the Administrative Agent; or
(d) REPRESENTATIONS AND WARRANTIES. Any representation, warranty,
certification or statement of fact made or deemed made by or on behalf of the
Borrower or any other Loan Party
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herein, in any other Loan Document, or in any document delivered in connection
herewith or therewith shall be materially incorrect or materially misleading
when made or deemed made; or
(e) CROSS-DEFAULT.
(i) Holdings, the Borrower or any Subsidiary (A) fails after
all applicable grace periods to make any payment when due (whether by scheduled
maturity, required prepayment, acceleration, demand, or otherwise) in respect of
any Indebtedness (other than Indebtedness hereunder and Indebtedness under Swap
Contracts) having an aggregate principal amount (including undrawn committed or
available amounts and including amounts owing to all creditors under any
combined or syndicated credit arrangement) of more than the Threshold Amount, or
(B) fails to observe or perform any other agreement or condition relating to any
such Indebtedness or contained in any instrument or agreement evidencing,
securing or relating thereto, or any other event occurs, the effect of which
default or other event is to cause, or to permit the holder or holders 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 be demanded or to become due or to be repurchased, prepaid,
defeased or redeemed (automatically or otherwise), or an offer to repurchase,
prepay, defease or redeem such Indebtedness to be made, prior to its stated
maturity, or such Guarantee to become payable or cash collateral in respect
thereof to be demanded; or
(ii) There occurs under any Swap Contract an Early Termination
Date (as defined in such Swap Contract) resulting from (A) any event of default
under such Swap Contract as to which the Borrower or any Subsidiary is the
Defaulting Party (as defined in such Swap Contract) or (B) any Termination Event
(as so defined) under such Swap Contract as to which Holdings, the Borrower or
any Subsidiary is an Affected Party (as so defined) and, in either event, the
Swap Termination Value owed by Holdings, the Borrower or such Subsidiary as a
result thereof is greater than the Threshold Amount; or
(iii) Holdings, the Borrower or any Subsidiary shall default in
the payment when due, or in the performance or observance, of any material
obligation or material condition of any Contractual Obligation the result of
which could reasonably be expected to have a Material Adverse Effect, unless,
but only as long as, the existence of any such default is being contested by
Holdings, the Borrower or any such Subsidiary in good faith by appropriate
proceedings and adequate reserves in respect thereof have been established on
the books of Holdings, the Borrower or any such Subsidiary to the extent
required by GAAP; or
(f) INSOLVENCY PROCEEDINGS, ETC. Holdings, the Borrower or any
Subsidiary institutes or consents to the institution of any proceeding under any
Debtor Relief Law, or makes an assignment for the benefit of creditors; or
applies for or consents to the appointment of any receiver, trustee, custodian,
conservator, liquidator, rehabilitator or similar officer for it or for all or
any material part of its property; or any receiver, trustee, custodian,
conservator, liquidator, rehabilitator or similar officer is appointed without
the application or consent of such Person and the appointment continues
undischarged or unstayed for 60 calendar days; or any proceeding under any
Debtor Relief Law relating to any such Person or to all or any material part of
its property is instituted without the consent of such Person and continues
undismissed or unstayed for 60 calendar days, or an order for relief is entered
in any such proceeding; or
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(g) INABILITY TO PAY DEBTS; ATTACHMENT. (i) Holdings, the Borrower or
any Subsidiary becomes unable or admits in writing its inability or fails
generally to pay its debts as they become due, or (ii) any writ or warrant of
attachment or execution or similar process is issued or levied against all or
any material part of the property of any such Person and is not released,
vacated or fully bonded within 30 days after its issue or levy; or
(h) JUDGMENTS. There is entered against Holdings, the Borrower or any
Subsidiary (i) a final judgment or order for the payment of money in an
aggregate amount exceeding the Threshold Amount (to the extent not paid or
covered by indemnification or independent third-party insurance as to which the
insurer does not dispute coverage), or (ii) any one or more non-monetary final
judgments that have, or could reasonably be expected to have, individually or in
the aggregate, a Material Adverse Effect and, in either case, (A) enforcement
proceedings are commenced by any creditor upon such judgment or order, or (B)
there is a period of 30 consecutive days during which a stay of enforcement of
such judgment, by reason of a pending appeal or otherwise, is not in effect; or
(i) ENVIRONMENTAL. Holdings, the Borrower or any Subsidiary shall
incur any Environmental Liability and such liability would reasonably be likely,
individually or in the aggregate, to have a Material Adverse Effect.
(j) ERISA. (i) An ERISA Event occurs with respect to a Pension Plan or
Multiemployer Plan which has resulted or could reasonably be expected to result
in liability of the Borrower under Title IV of ERISA to the Pension Plan,
Multiemployer Plan or the PBGC in an aggregate amount in excess of the Threshold
Amount, or (ii) Holdings, the Borrower or any ERISA Affiliate fails to pay when
due, after the expiration of any applicable grace period, any installment
payment with respect to its withdrawal liability under Section 4201 of ERISA
under a Multiemployer Plan in an aggregate amount in excess of the Threshold
Amount; or
(k) INVALIDITY OF LOAN DOCUMENTS. Any Loan Document, at any time after
its execution and delivery and for any reason other than as expressly permitted
hereunder or satisfaction in full of all the Obligations, ceases to be in full
force and effect; or any Loan Party or any other Person contests in any manner
the validity or enforceability of any Loan Document; or any Loan Party denies
that it has any or further liability or obligation under any Loan Document, or
purports to revoke, terminate or rescind any Loan Document;
(l) CHANGE OF CONTROL. There occurs any Change of Control;
(m) PROXY AGREEMENT. The failure of the Proxy Agreement to be
terminated (or amended in form and substance reasonably satisfactory to the
Administrative Agent) on or prior to the date that is one hundred and eighty
(180) days after the Closing Date (as such deadline may be extended upon the
consent of the Administrative Agent (such consent not to be unreasonably
withheld));
(n) SENIOR SUBORDINATED NOTES. The Senior Subordinated Rollover Notes
shall not have been issued on or prior to the maturity of the Senior
Subordinated Bridge Notes (as such maturity date may be extended pursuant to the
terms of the Senior Subordinated Note Agreement
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and subject to Section 8.14), unless the Senior Subordinated Bridge Notes shall
have been previously paid in full in a manner permitted under this Agreement.
(o) ▇.▇. ▇▇▇ ▇▇▇▇ & ASSOCIATES, INC.
(i) ▇.▇. ▇▇▇ ▇▇▇▇ & Associates, Inc. shall (A) engage in any
business, operations or activities or (B) hold any material assets.
(ii) Holdings, the Borrower or any Subsidiary thereof shall
make any Investment in, or Disposition to, ▇.▇. ▇▇▇ ▇▇▇▇ & Associates, Inc.
(iii) The failure of Holdings, the Borrower and their
Subsidiaries to dissolve ▇.▇. ▇▇▇ ▇▇▇▇ & Associates, Inc. within ninety
(90) days of the Closing Date (such dissolution to be in form and substance
satisfactory to the Administrative Agent).
10.02 REMEDIES UPON EVENT OF DEFAULT.
If any Event of Default occurs and is continuing, the Administrative Agent
shall, at the request of, or may, with the consent of, the Required Lenders,
take any or all of the following actions:
(a) declare the commitment of each Lender to make Loans and any
obligation of the L/C Issuer to make L/C Credit Extensions to be terminated,
whereupon such commitments and obligation shall be terminated;
(b) declare the unpaid principal amount of all outstanding Loans, all
interest accrued and unpaid thereon, and all other amounts owing or payable
hereunder or under any other Loan Document to be immediately due and payable,
without presentment, demand, protest or other notice of any kind, all of which
are hereby expressly waived by the Borrower;
(c) require that the Borrower Cash Collateralize the L/C Obligations
(in an amount equal to the then Outstanding Amount thereof); and
(d) exercise on behalf of itself and the Lenders all rights and
remedies available to it and the Lenders under the Loan Documents or applicable
Law;
PROVIDED, HOWEVER, that upon the occurrence of an actual or deemed entry of an
order for relief with respect to the Borrower under the Bankruptcy Code of the
United States, the obligation of each Lender to make Loans and any obligation of
the L/C Issuer to make L/C Credit Extensions shall automatically terminate, the
unpaid principal amount of all outstanding Loans and all interest and other
amounts as aforesaid shall automatically become due and payable, and the
obligation of the Borrower to Cash Collateralize the L/C Obligations as
aforesaid shall automatically become effective, in each case without further act
of the Administrative Agent or any Lender.
10.03 APPLICATION OF FUNDS.
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After the exercise of remedies provided for in SECTION 10.02 (or after the
Loans have automatically become immediately due and payable and the L/C
Obligations have automatically been required to be Cash Collateralized as set
forth in the proviso to SECTION 10.02), any amounts received on account of the
Obligations shall be applied by the Administrative Agent in the following order:
FIRST, to payment of that portion of the Obligations constituting fees,
indemnities, expenses and other amounts (including Attorney Costs and amounts
payable under ARTICLE IV) payable to the Administrative Agent in its capacity as
such;
SECOND, to payment of that portion of the Obligations constituting fees,
indemnities and other amounts (other than principal and interest) payable to the
Lenders (including Attorney Costs and amounts payable under ARTICLE IV), ratably
among them in proportion to the amounts described in this clause SECOND payable
to them;
THIRD, to payment of that portion of the Obligations constituting accrued
and unpaid interest on the Loans and L/C Borrowings, ratably among the Lenders
in proportion to the respective amounts described in this clause THIRD payable
to them;
FOURTH, to payment of that portion of the Obligations constituting unpaid
principal of the Loans and L/C Borrowings, ratably among the Lenders in
proportion to the respective amounts described in this clause FOURTH held by
them;
FIFTH, to the Administrative Agent for the account of the L/C Issuer, to
Cash Collateralize that portion of L/C Obligations comprised of the aggregate
undrawn amount of Letters of Credit;
SIXTH, to payment of that portion of the Obligations constituting
termination payments due in respect of a Swap Contract with any with any Person
that is a Lender or an Affiliate thereof at the time such Swap Contract was
executed, ratably among the Lenders in proportion to the respective amounts
described in this clause SIXTH held by them; and
LAST, the balance, if any, after all of the Obligations have been
indefeasibly paid in full, to the Borrower or as otherwise required by Law.
Subject to SECTION 2.04(c), amounts used to Cash Collateralize the aggregate
undrawn amount of Letters of Credit pursuant to clause FIFTH above shall be
applied to satisfy drawings under such Letters of Credit as they occur. If any
amount remains on deposit as Cash Collateral after all Letters of Credit have
either been fully drawn or expired, such remaining amount shall be applied to
the other Obligations, if any, in the order set forth above.
ARTICLE XI.
ADMINISTRATIVE AGENT
11.01 APPOINTMENT AND AUTHORIZATION OF ADMINISTRATIVE AGENT.
(a) Each Lender hereby irrevocably appoints, designates and authorizes
the Administrative Agent to take such action on its behalf under the provisions
of this Agreement
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and each other Loan Document and to exercise such powers and perform such duties
as are expressly delegated to it by the terms of this Agreement or any other
Loan Document, together with such powers as are reasonably incidental thereto.
Notwithstanding any provision to the contrary contained elsewhere herein or in
any other Loan Document, the Administrative Agent shall not have any duties or
responsibilities, except those expressly set forth herein, nor shall the
Administrative Agent have or be deemed to have any fiduciary relationship with
any Lender or participant, and no implied covenants, functions,
responsibilities, duties, obligations or liabilities shall be read into this
Agreement or any other Loan Document or otherwise exist against the
Administrative Agent. Without limiting the generality of the foregoing sentence,
the use of the term "agent" herein and in the other Loan Documents with
reference to the Administrative Agent is not intended to connote any fiduciary
or other implied (or express) obligations arising under agency doctrine of any
applicable Law. Instead, such term is used merely as a matter of market custom,
and is intended to create or reflect only an administrative relationship between
independent contracting parties.
(b) The L/C Issuer shall act on behalf of the Lenders with respect to
any Letters of Credit issued by it and the documents associated therewith, and
the L/C Issuer shall have all of the benefits and immunities (i) provided to the
Administrative Agent in this ARTICLE X with respect to any acts taken or
omissions suffered by the L/C Issuer in connection with Letters of Credit issued
by it or proposed to be issued by it and the applications and agreements for
letters of credit pertaining to such Letters of Credit as fully as if the term
"Administrative Agent" as used in this ARTICLE X and in the definition of
"Agent-Related Person" included the L/C Issuer with respect to such acts or
omissions, and (ii) as additionally provided herein with respect to the L/C
Issuer.
11.02 DELEGATION OF DUTIES.
The Administrative Agent may execute any of its duties under this Agreement
or any other Loan Document by or through agents, employees or attorneys-in-fact
and shall be entitled to advice of counsel and other consultants or experts
concerning all matters pertaining to such duties. The Administrative Agent shall
not be responsible for the negligence or misconduct of any agent or
attorney-in-fact that it selects in the absence of gross negligence or willful
misconduct.
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11.03 LIABILITY OF ADMINISTRATIVE AGENT.
No Agent-Related Person shall (a) be liable for any action taken or omitted
to be taken by any of them under or in connection with this Agreement or any
other Loan Document or the transactions contemplated hereby (except for its own
gross negligence or willful misconduct in connection with its duties expressly
set forth herein), or (b) be responsible in any manner to any Lender or
participant for any recital, statement, representation or warranty made by any
Loan Party or any officer thereof, contained herein or in any other Loan
Document, 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 any other Loan Document, or the validity,
effectiveness, genuineness, enforceability or sufficiency of this Agreement or
any other Loan Document, or for any failure of any Loan Party or any other party
to any Loan Document to perform its obligations hereunder or thereunder. No
Agent-Related Person shall be under any obligation to any Lender or participant
to ascertain or to inquire as to the observance or performance of any of the
agreements contained in, or conditions of, this Agreement or any other Loan
Document, or to inspect the properties, books or records of any Loan Party or
any Affiliate thereof.
11.04 RELIANCE BY ADMINISTRATIVE AGENT.
(a) The Administrative Agent shall be entitled to rely, and shall be
fully protected in relying, upon any writing, communication, signature,
resolution, representation, notice, consent, certificate, affidavit, letter,
telegram, facsimile, telex or telephone message, electronic mail message,
statement or other document or conversation believed by it to be genuine and
correct and to have been signed, sent or made by the proper Person or Persons,
and upon advice and statements of legal counsel (including counsel to any Loan
Party), independent accountants and other experts selected by the Administrative
Agent. The Administrative Agent shall be fully justified in failing or refusing
to take any action under any Loan Document unless it shall first receive such
advice or concurrence of the Required Lenders as it deems appropriate and, if it
so requests, 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
this Agreement or any other Loan Document in accordance with a request or
consent of the Required Lenders (or such greater number of Lenders as may be
expressly required hereby in any instance) and such request and any action taken
or failure to act pursuant thereto shall be binding upon all the Lenders.
(b) For purposes of determining compliance with the conditions
specified in SECTION 5.01, each Lender that has signed this Agreement shall be
deemed to have consented to, approved or accepted or to be satisfied with, each
document or other matter required thereunder to be consented to or approved by
or acceptable or satisfactory to a Lender unless the Administrative Agent shall
have received notice from such Lender prior to the proposed Closing Date
specifying its objection thereto.
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11.05 NOTICE OF DEFAULT.
The Administrative Agent shall not be deemed to have knowledge or notice of
the occurrence of any Default, except with respect to defaults in the payment of
principal, interest and fees required to be paid to the Administrative Agent for
the account of the Lenders, unless the Administrative Agent shall have received
written notice from a Lender or the Borrower referring to this Agreement,
describing such Default and stating that such notice is a "notice of default."
The Administrative Agent will notify the Lenders of its receipt of any such
notice. The Administrative Agent shall take such action with respect to such
Default as may be directed by the Required Lenders in accordance with ARTICLE X;
PROVIDED, HOWEVER, that unless and until the Administrative Agent has received
any such direction, the Administrative Agent may (but shall not be obligated to)
take such action, or refrain from taking such action, with respect to such
Default as it shall deem advisable or in the best interest of the Lenders.
11.06 CREDIT DECISION; DISCLOSURE OF INFORMATION BY ADMINISTRATIVE
AGENT.
Each Lender acknowledges that no Agent-Related Person has made any
representation or warranty to it, and that no act by the Administrative Agent
hereafter taken, including any consent to and acceptance of any assignment or
review of the affairs of any Loan Party or any Affiliate thereof, shall be
deemed to constitute any representation or warranty by any Agent-Related Person
to any Lender as to any matter, including whether Agent-Related Persons have
disclosed material information in their possession. Each Lender represents to
the Administrative Agent that it has, independently and without reliance upon
any Agent-Related Person and based on such documents and information as it has
deemed appropriate, made its own appraisal of and investigation into the
business, prospects, operations, property, financial and other condition and
creditworthiness of the Loan Parties and their respective Subsidiaries, and all
applicable bank or other regulatory Laws relating to the transactions
contemplated hereby, and made its own decision to enter into this Agreement and
to extend credit to the Borrower and the other Loan Parties hereunder. Each
Lender also represents that it will, independently and without reliance upon any
Agent-Related Person and based on such documents and information as it shall
deem appropriate at the time, continue to make its own credit analysis,
appraisals and decisions in taking or not taking action under this Agreement and
the other Loan Documents, and to make such investigations as it deems necessary
to inform itself as to the business, prospects, operations, property, financial
and other condition and creditworthiness of the Borrower and the other Loan
Parties. Except for notices, reports and other documents expressly required to
be furnished to the Lenders by the Administrative Agent herein, the
Administrative Agent shall not have any duty or responsibility to provide any
Lender with any credit or other information concerning the business, prospects,
operations, property, financial and other condition or creditworthiness of any
of the Loan Parties or any of their respective Affiliates which may come into
the possession of any Agent-Related Person.
11.07 INDEMNIFICATION OF ADMINISTRATIVE AGENT.
Whether or not the transactions contemplated hereby are consummated, the
Lenders shall indemnify upon demand each Agent-Related Person (to the extent not
reimbursed by or on behalf of any Loan Party and without limiting the obligation
of any Loan Party to do so), pro rata, and hold harmless each Agent-Related
Person for, from and against any and all Indemnified
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Liabilities incurred by it; PROVIDED, HOWEVER, that no Lender shall be liable
for the payment to any Agent-Related Person of any portion of such Indemnified
Liabilities to the extent determined in a final, nonappealable judgment by a
court of competent jurisdiction to have resulted from such Agent-Related
Person's own gross negligence or willful misconduct; PROVIDED, HOWEVER, that no
action taken in accordance with the directions of the Required Lenders shall be
deemed to constitute gross negligence or willful misconduct for purposes of this
Section. Without limitation of the foregoing, each Lender shall reimburse the
Administrative Agent upon demand for its ratable share of any costs or
out-of-pocket expenses (including Attorney Costs) incurred by the Administrative
Agent in connection with the preparation, execution, delivery, administration,
modification, amendment or enforcement (whether through negotiations, legal
proceedings or otherwise) of, or legal advice in respect of rights or
responsibilities under, this Agreement, any other Loan Document, or any document
contemplated by or referred to herein, to the extent that the Administrative
Agent is not reimbursed for such expenses by or on behalf of the Borrower and
the other Loan Parties. The undertaking in this Section shall survive
termination of the Aggregate Commitments, the payment of all other Obligations
and the resignation of the Administrative Agent.
11.08 ADMINISTRATIVE AGENT IN ITS INDIVIDUAL CAPACITY.
Bank of America and its Affiliates may make loans to, issue letters of
credit for the account of, accept deposits from, acquire equity interests in and
generally engage in any kind of banking, trust, financial advisory, underwriting
or other business with each of the Loan Parties and their respective Affiliates
as though Bank of America were not the Administrative Agent or the L/C Issuer
hereunder and without notice to or consent of the Lenders. The Lenders
acknowledge that, pursuant to such activities, Bank of America or its Affiliates
may receive information regarding any Loan Party or its Affiliates (including
information that may be subject to confidentiality obligations in favor of such
Loan Party or such Affiliate) and acknowledge that the Administrative Agent
shall be under no obligation to provide such information to them. With respect
to its Loans, Bank of America shall have the same rights and powers under this
Agreement as any other Lender and may exercise such rights and powers as though
it were not the Administrative Agent or the L/C Issuer, and the terms "Lender"
and "Lenders" include Bank of America in its individual capacity.
11.09 SUCCESSOR ADMINISTRATIVE AGENT.
The Administrative Agent may resign as Administrative Agent upon 30 days'
notice to the Lenders and the Borrower; PROVIDED that any such resignation by
Bank of America shall also constitute its resignation as L/C Issuer and Swing
Line Lender. If the Administrative Agent resigns under this Agreement, the
Required Lenders shall appoint from among the Lenders a successor administrative
agent for the Lenders, which successor administrative agent shall be consented
to by the Borrower at all times other than during the existence of an Event of
Default (which consent of the Borrower shall not be unreasonably withheld or
delayed). If no successor administrative agent is appointed prior to the
effective date of the resignation of the Administrative Agent, the
Administrative Agent may appoint, after consulting with the Lenders and the
Borrower, a successor administrative agent from among the Lenders. Upon the
acceptance of its appointment as successor administrative agent hereunder, the
Person acting as such successor administrative agent shall succeed to all the
rights, powers and duties of the
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retiring Administrative Agent, L/C Issuer and Swing Line Lender and the
respective terms "Administrative Agent," "L/C Issuer" and "Swing Line Lender"
shall mean such successor administrative agent, Letter of Credit issuer and
swing line lender, the retiring Administrative Agent's appointment, powers and
duties as Administrative Agent shall be terminated and the retiring L/C Issuer's
and Swing Line Lender's rights, powers and duties as such shall be terminated,
without any other or further act or deed on the part of such retiring L/C Issuer
or Swing Line Lender or any other Lender, other than the obligation of the
successor L/C Issuer to issue letters of credit in substitution for the Letters
of Credit, if any, outstanding at the time of such succession or to make other
arrangements satisfactory to the retiring L/C Issuer to effectively assume the
obligations of the retiring L/C Issuer with respect to such Letters of Credit.
After any retiring Administrative Agent's resignation hereunder as
Administrative Agent, the provisions of this ARTICLE XI and SECTION 12.04 and
SECTION 12.05 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. If no
successor administrative agent has accepted appointment as Administrative Agent
by the date which is 30 days following a retiring Administrative Agent's notice
of resignation, the retiring Administrative Agent's resignation shall
nevertheless thereupon become effective and the Lenders shall perform all of the
duties of the Administrative Agent hereunder until such time, if any, as the
Required Lenders in consultation with the Borrower appoint a successor agent as
provided for above.
11.10 ADMINISTRATIVE AGENT MAY FILE PROOFS OF CLAIM.
In case of the pendency of any receivership, insolvency, liquidation,
bankruptcy, reorganization, arrangement, adjustment, composition or other
judicial proceeding relative to any Loan Party, the Administrative Agent
(irrespective of whether the principal of any Loan or L/C Obligation shall then
be due and payable as herein expressed or by declaration or otherwise and
irrespective of whether the Administrative Agent shall have made any demand on
the Borrower) shall be entitled and empowered, by intervention in such
proceeding or otherwise
(a) to file and prove a claim for the whole amount of the principal
and interest owing and unpaid in respect of the Loans, L/C Obligations and all
other Obligations that are owing and unpaid and to file such other documents as
may be necessary or advisable in order to have the claims of the Lenders and the
Administrative Agent (including any claim for the reasonable compensation,
expenses, disbursements and advances of the Lenders and the Administrative Agent
and their respective agents and counsel and all other amounts due the Lenders
and the Administrative Agent under SECTION 2.04(i) and SECTION 2.04(j), SECTION
3.02 and SECTION 12.04) allowed in such judicial proceeding; and
(b) to collect and receive any monies or other property payable or
deliverable on any such claims and to distribute the same;
and any custodian, receiver, assignee, trustee, liquidator, sequestrator or
other similar official in any such judicial proceeding is hereby authorized by
each Lender to make such payments to the Administrative Agent and, in the event
that the Administrative Agent shall consent to the making of such payments
directly to the Lenders, to pay to the Administrative Agent any amount due for
the reasonable compensation, expenses, disbursements and advances of the
Administrative Agent
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and its agents and counsel, and any other amounts due the Administrative Agent
under SECTION 3.02 and SECTION 12.04.
Nothing contained herein shall be deemed to authorize the Administrative
Agent to authorize or consent to or accept or adopt on behalf of any Lender any
plan of reorganization, arrangement, adjustment or composition affecting the
Obligations or the rights of any Lender or to authorize the Administrative Agent
to vote in respect of the claim of any Lender in any such proceeding.
11.11 COLLATERAL AND GUARANTY MATTERS.
The Lenders irrevocably authorize the Administrative Agent, at its option
and in its discretion,
(a) to release any Lien on any property granted to or held by the
Administrative Agent under any Loan Document (i) upon termination of the
Aggregate Commitments and payment in full of all Obligations (other than
contingent indemnification obligations) and the expiration or termination of all
Letters of Credit, (ii) that is sold or to be sold as part of or in connection
with any sale permitted hereunder or under any other Loan Document, or (iii)
subject to SECTION 12.01, if approved, authorized or ratified in writing by the
Required Lenders;
(b) to subordinate any Lien on any property granted to or held by the
Administrative Agent under any Loan Document to the holder of any Lien on such
property that is permitted by SECTION 8.01(i); and
(c) to release any Subsidiary Guarantor from its obligations under the
Subsidiary Guaranty Agreement if such Person ceases to be a Subsidiary as a
result of a transaction permitted hereunder.
Upon request by the Administrative Agent at any time, the Required Lenders
will confirm in writing the Administrative Agent's authority to release or
subordinate its interest in particular types or items of property, or to release
any Subsidiary Guarantor from its obligations under the Subsidiary Guaranty
Agreement pursuant to this SECTION 11.11.
11.12 OTHER AGENTS; ARRANGERS AND MANAGERS.
None of the Lenders or other Persons identified on the facing page or
signature pages of this Agreement as a "syndication agent," "documentation
agent," "co-agent," "book manager," "lead manager," "arranger," "lead arranger"
or "co-arranger" shall have any right, power, obligation, liability,
responsibility or duty under this Agreement other than, in the case of such
Lenders, those applicable to all Lenders as such. Without limiting the
foregoing, none of the Lenders or other Persons so identified shall have or be
deemed to have any fiduciary relationship with any Lender. Each Lender
acknowledges that it has not relied, and will not rely, on any of the Lenders or
other Persons so identified in deciding to enter into this Agreement or in
taking or not taking action hereunder.
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ARTICLE XII.
MISCELLANEOUS
12.01 AMENDMENTS, ETC.
No amendment or waiver of any provision of this Agreement or any other Loan
Document, and no consent to any departure by the Borrower or any other Loan
Party therefrom, shall be effective unless in writing signed by the Required
Lenders and the Borrower or the applicable Loan Party, as the case may be, and
acknowledged by the Administrative Agent, and each such waiver or consent shall
be effective only in the specific instance and for the specific purpose for
which given; PROVIDED, HOWEVER, that no such amendment, waiver or consent shall:
(a) waive any condition set forth in SECTION 5.01(a) without the
written consent of each Lender;
(b) extend or increase the Commitment of any Lender (or reinstate any
Commitment terminated pursuant to SECTION 10.02) without the written consent of
such Lender;
(c) postpone any date fixed by this Agreement or any other Loan
Document for any payment (excluding mandatory prepayments) of principal,
interest, fees or other amounts due to the Lenders (or any of them) hereunder or
under any other Loan Document without the written consent of each Lender
directly affected thereby;
(d) reduce the principal of, or the rate of interest specified herein
on, any Loan or L/C Borrowing, or (subject to clause (iv) of the second proviso
to this SECTION 12.01) any fees or other amounts payable hereunder or under any
other Loan Document without the written consent of each Lender directly affected
thereby; PROVIDED, HOWEVER, that only the consent of the Required Lenders shall
be necessary (i) to amend the definition of "Default Rate" or to waive any
obligation of the Borrower to pay interest at the Default Rate or (ii) to amend
any financial covenant hereunder (or any defined term used therein) even if the
effect of such amendment would be to reduce the rate of interest on any Loan or
L/C Borrowing or to reduce any fee payable hereunder;
(e) change SECTION 3.06 or SECTION 10.03 in a manner that would alter
the pro rata sharing of payments required thereby without the written consent of
each Lender;
(f) change any provision of this Section or the definition of
"Required Lenders" or any other provision hereof specifying the number or
percentage of Lenders required to amend, waive or otherwise modify any rights
hereunder or make any determination or grant any consent hereunder, without the
written consent of each Lender;
(g) release Holdings from its obligations under the Parent Guaranty
without the written consent of each Lender;
(h) release any Subsidiary Guarantor from its obligations under the
Subsidiary Guaranty Agreement without the written consent of each Lender except
to the extent pursuant to a transaction permitted under SECTION 8.04 or 8.05; or
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(i) release all or a material portion of the Collateral or release any
Security Document (other than asset sales permitted pursuant to SECTION 8.05 and
as otherwise specifically permitted or contemplated in this Agreement or the
applicable Security Document) without the written consent of each Lender;
and, PROVIDED FURTHER, that (i) no amendment, waiver or consent shall, unless in
writing and signed by the L/C Issuer in addition to the Lenders required above,
affect the rights or duties of the L/C Issuer under this Agreement or any Letter
of Credit Application relating to any Letter of Credit issued or to be issued by
it; (ii) no amendment, waiver or consent shall, unless in writing and signed by
the Swing Line Lender in addition to the Lenders required above, affect the
rights or duties of the Swing Line Lender under this Agreement; (iii) no
amendment, waiver or consent shall, unless in writing and signed by the
Administrative Agent in addition to the Lenders required above, affect the
rights or duties of the Administrative Agent under this Agreement or any other
Loan Document; and (iv) the Fee Letter may be amended, or rights or privileges
thereunder waived, in a writing executed only by the parties thereto.
Notwithstanding anything to the contrary herein, no Defaulting Lender shall have
any right to approve or disapprove any amendment, waiver or consent hereunder,
except that the Commitment of such Lender may not be increased or extended
without the consent of such Lender.
12.02 NOTICES AND OTHER COMMUNICATIONS; FACSIMILE COPIES.
(a) GENERAL. Unless otherwise expressly provided herein, all notices
and other communications provided for hereunder shall be in writing (including
by facsimile transmission). All such written notices shall be mailed, faxed or
delivered to the applicable address, facsimile number or (subject to subsection
(c) below) electronic mail address, and all notices and other communications
expressly permitted hereunder to be given by telephone shall be made to the
applicable telephone number, as follows:
(i) if to Holdings, the Borrower, the Administrative Agent,
the L/C Issuer or the Swing Line Lender, to the address, facsimile number,
electronic mail address or telephone number specified for such Person on
SCHEDULE 12.02 or to such other address, facsimile number, electronic mail
address or telephone number as shall be designated by such party in a notice to
the other parties; and
(ii) if to any other Lender, to the address, facsimile number,
electronic mail address or telephone number specified in its Administrative
Questionnaire or to such other address, facsimile number, electronic mail
address or telephone number as shall be designated by such party in a notice to
the Borrower, the Administrative Agent, the L/C Issuer and the Swing Line
Lender.
All such notices and other communications shall be deemed to be given or made
upon the earlier to occur of (i) actual receipt by the relevant party hereto and
(ii) (A) if delivered by hand or by courier, when signed for by or on behalf of
the relevant party hereto; (B) if delivered by mail, four Business Days after
deposit in the mails, postage prepaid; (C) if delivered by facsimile, when sent
and receipt has been confirmed by telephone; and (D) if delivered by electronic
mail (which form of delivery is subject to the provisions of subsection (c)
below), when delivered; PROVIDED, HOWEVER, that notices and other communications
to the Administrative Agent, the L/C
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Issuer and the Swing Line Lender pursuant to ARTICLE II shall not be effective
until actually received by such Person. In no event shall a voicemail message be
effective as a notice, communication or confirmation hereunder.
(b) EFFECTIVENESS OF FACSIMILE DOCUMENTS AND SIGNATURES. Loan
Documents may be transmitted and/or signed by facsimile. The effectiveness of
any such documents and signatures shall, subject to applicable Law, have the
same force and effect as manually-signed originals and shall be binding on all
Loan Parties, the Administrative Agent and the Lenders. The Administrative Agent
may also require that any such documents and signatures be confirmed by a
manually-signed original thereof; PROVIDED, HOWEVER, that the failure to request
or deliver the same shall not limit the effectiveness of any facsimile document
or signature.
(c) LIMITED USE OF ELECTRONIC MAIL. Electronic mail and Internet and
intranet websites may be used only to distribute routine communications, such as
financial statements and other information as provided in SECTION 7.02, and to
distribute Loan Documents for execution by the parties thereto, and may not be
effective for any other purpose.
(d) RELIANCE BY ADMINISTRATIVE AGENT AND LENDERS. The Administrative
Agent and the Lenders shall be entitled to rely and act upon any notices
(including telephonic Loan Notices and Swing Line Loan Notices) purportedly
given by or on behalf of the Borrower even if (i) such notices were not made in
a manner specified herein, were incomplete or were not preceded or followed by
any other form of notice specified herein, or (ii) the terms thereof, as
understood by the recipient, varied from any confirmation thereof. The Borrower
shall indemnify each Agent-Related Person and each Lender for, from and against
all losses, costs, expenses and liabilities resulting from the reliance by such
Person on each notice purportedly given by or on behalf of the Borrower. All
telephonic notices to and other communications with the Administrative Agent may
be recorded by the Administrative Agent, and each of the parties hereto hereby
consents to such recording.
12.03 NO WAIVER; CUMULATIVE REMEDIES.
No failure by any Lender or the Administrative Agent to exercise, and no
delay by any such Person in exercising, any right, remedy, power or privilege
hereunder shall operate as a waiver thereof; 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.
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12.04 ATTORNEY COSTS, EXPENSES AND TAXES.
Each of Holdings and the Borrower agrees (a) to pay or reimburse the
Administrative Agent for all reasonable out-of-pocket costs and all reasonable
out-of-pocket expenses incurred in connection with the development, preparation,
negotiation, execution, filing, recording and insurance of this Agreement and
the other Loan Documents and any amendment, waiver, consent or other
modification of the provisions hereof and thereof (whether or not the
transactions contemplated hereby or thereby are consummated), and the
consummation and administration of the transactions contemplated hereby and
thereby, including all Attorney Costs, and (b) to pay or reimburse the
Administrative Agent and each Lender for all reasonable out-of-pocket costs and
reasonable out-of-pocket expenses incurred in connection with the enforcement,
attempted enforcement, or preservation of any rights or remedies under this
Agreement or the other Loan Documents (including all such reasonable
out-of-pocket costs and reasonable out-of-pocket expenses incurred during any
"workout" or restructuring in respect of the Obligations and during any legal
proceeding, including any proceeding under any Debtor Relief Law), including all
Attorney Costs. The foregoing costs and expenses shall include all search,
filing, recording, title insurance and appraisal charges and fees and taxes
related thereto, and other out-of-pocket expenses incurred by the Administrative
Agent and the cost of independent public accountants and other outside experts
retained by the Administrative Agent or any Lender. All amounts due under this
SECTION 12.04 shall be payable within thirty Business Days after demand
therefor. The agreements in this Section shall survive the termination of the
Aggregate Commitments and repayment of all other Obligations.
12.05 INDEMNIFICATION.
Whether or not the transactions contemplated hereby are consummated, each
of Holdings and the Borrower shall indemnify and hold harmless each
Agent-Related Person, each Lender and their respective Affiliates, directors,
officers, employees, counsel, agents and attorneys-in-fact (collectively the
"INDEMNITEES") for, from and against any and all actual liabilities,
obligations, losses, damages, penalties, claims, demands, actions, judgments,
suits, reasonable out-of-pocket costs, expenses and disbursements (including,
without limitation, Attorney Costs) of any kind or nature whatsoever which may
at any time be imposed on, incurred by or asserted against any such Indemnitee
in any way relating to or arising out of or in connection with (a) the
execution, delivery, enforcement, performance or administration of any Loan
Document or any other agreement, letter or instrument delivered in connection
with the transactions contemplated thereby or the consummation of the
transactions contemplated thereby (PROVIDED that each of Holdings and the
Borrower shall not be obligated to reimburse any Lender (other than the
Administrative Agent) for legal fees and expenses incurred prior to the Closing
Date in connection with the negotiation and closing of the Loan Documents), (b)
any Commitment, Loan or Letter of Credit or the use or proposed use of the
proceeds therefrom (including any refusal by the L/C Issuer to honor a demand
for payment under a Letter of Credit if the documents presented in connection
with such demand do not strictly comply with the terms of such Letter of
Credit), (c) any actual or alleged presence or release of Hazardous Materials on
or from any property currently or formerly owned or operated by Holdings, the
Borrower or any Subsidiary, or any Environmental Liability related in any way to
Holdings, the Borrower or any Subsidiary, or (d) any actual or prospective
claim, litigation, investigation or proceeding relating to any of the foregoing,
whether based on contract, tort or any other theory (including any investigation
of,
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preparation for, or defense of any pending or threatened claim, investigation,
litigation or proceeding) and regardless of whether any Indemnitee is a party
thereto (all the foregoing, collectively, the "INDEMNIFIED LIABILITIES"), in all
cases, whether or not caused by or arising, in whole or in part, out of the
negligence of the Indemnitee; PROVIDED that such indemnity shall not, as to any
Indemnitee, be available to the extent that such liabilities, obligations,
losses, damages, penalties, claims, demands, actions, judgments, suits, costs,
expenses or disbursements are determined by a court of competent jurisdiction by
final and nonappealable judgment to have resulted primarily from the bad faith,
gross negligence or willful misconduct of such Indemnitee or any of its
Affiliates or any of their respective directors, officers, employees, advisors
or agents. No Indemnitee shall be liable for any damages arising from the use by
others of any information or other materials obtained through IntraLinks or
other similar information transmission systems in connection with this
Agreement, nor shall any Indemnitee have any liability for any indirect or
consequential damages relating to this Agreement or any other Loan Document or
arising out of its activities in connection herewith or therewith (whether
before or after the Closing Date). All amounts due under this SECTION 12.05
shall be payable within thirty Business Days after demand therefor. The
agreements in this Section shall survive the resignation of the Administrative
Agent, the replacement of any Lender, the termination of the Aggregate
Commitments and the repayment, satisfaction or discharge of all the other
Obligations.
12.06 PAYMENTS SET ASIDE.
To the extent that any payment by or on behalf of Holdings, the Borrower or
any Subsidiary is made to the Administrative Agent or any Lender, or the
Administrative Agent or any Lender exercises its right of set-off, and such
payment or the proceeds of such set-off or any part thereof is subsequently
invalidated, declared to be fraudulent or preferential, set aside or required
(including pursuant to any settlement entered into by the Administrative Agent
or such Lender in its discretion) to be repaid to a trustee, receiver or any
other party, in connection with any proceeding under any Debtor Relief Law or
otherwise, then (a) to the extent of such recovery, the obligation or part
thereof originally intended to be satisfied shall be revived and continued in
full force and effect as if such payment had not been made or such set-off had
not occurred, and (b) each Lender severally agrees to pay to the Administrative
Agent upon demand its applicable share of any amount so recovered from or repaid
by the Administrative Agent, plus interest thereon from the date of such demand
to the date such payment is made at a rate per annum equal to the Federal Funds
Rate from time to time in effect.
12.07 SUCCESSORS AND ASSIGNS.
(a) The provisions of this Agreement shall be binding upon and inure
to the benefit of the parties hereto and their respective successors and assigns
permitted hereby, except that Holdings and the Borrower may not assign or
otherwise transfer any of their respective rights or obligations hereunder
without the prior written consent of each Lender and no Lender may assign or
otherwise transfer any of its rights or obligations hereunder except (i) to an
Eligible Assignee in accordance with the provisions of subsection (b) of this
Section, (ii) by way of participation in accordance with the provisions of
subsection (d) of this Section, or (iii) by way of pledge or assignment of a
security interest subject to the restrictions of subsection (f) or (i) of this
Section 12.07 (and any other attempted assignment or transfer by any party
hereto shall be
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null and void). Nothing in this Agreement, expressed or implied, shall be
construed to confer upon any Person (other than the parties hereto, their
respective successors and assigns permitted hereby, Participants to the extent
provided in subsection (d) of this Section and, to the extent expressly
contemplated hereby, the Indemnitees) any legal or equitable right, remedy or
claim under or by reason of this Agreement.
(b) Any Lender may at any time assign to one or more Eligible
Assignees all or a portion of its rights and obligations under this Agreement
(including all or a portion of its Commitment and the Loans (including for
purposes of this subsection (b), participations in L/C Obligations and in Swing
Line Loans) at the time owing to it); PROVIDED that (i) except in the case of an
assignment of the entire remaining amount of the assigning Lender's Commitment
and the Loans at the time owing to it or in the case of an assignment to a
Lender or an Affiliate of a Lender or an Approved Fund (as defined in subsection
(g) of this Section) with respect to a Lender, the aggregate amount of the
Commitment (which for this purpose includes Loans outstanding thereunder)
subject to each such assignment, determined as of the date the Assignment and
Assumption with respect to such assignment is delivered to the Administrative
Agent or, if "Trade Date" is specified in the Assignment and Assumption, as of
the Trade Date, shall not be less than $5,000,000 unless each of the
Administrative Agent and, so long as no Event of Default has occurred and is
continuing, the Borrower otherwise consents (each such consent not to be
unreasonably withheld or delayed); (ii) each partial assignment shall be made as
an assignment of a proportionate part of all the assigning Lender's rights and
obligations under this Agreement with respect to the Loans or the Commitment
assigned, except that this clause (ii) shall not apply to rights in respect of
Swing Line Loans; (iii) any assignment of a Commitment must be approved by the
Administrative Agent, the L/C Issuer and the Swing Line Lender unless the Person
that is the proposed assignee is itself a Lender (whether or not the proposed
assignee would otherwise qualify as an Eligible Assignee); and (iv) the parties
to each assignment shall execute and deliver to the Administrative Agent an
Assignment and Assumption, together with a processing and recordation fee of
$3,500. Subject to acceptance and recording thereof by the Administrative Agent
pursuant to subsection (c) of this Section, from and after the effective date
specified in each Assignment and Assumption, the Eligible Assignee thereunder
shall be a party to this Agreement and, to the extent of the interest assigned
by such Assignment and Assumption, have the rights and obligations of a Lender
under this Agreement, and the assigning Lender thereunder shall, to the extent
of the interest assigned by such Assignment and Assumption, be released from its
obligations under this Agreement (and, in the case of an Assignment and
Assumption covering all of the assigning Lender's rights and obligations under
this Agreement, such Lender shall cease to be a party hereto but shall continue
to be entitled to the benefits of SECTION 4.01, SECTION 4.04, SECTION 4.05,
SECTION 12.04 and SECTION 12.05 with respect to facts and circumstances
occurring prior to the effective date of such assignment). Upon request, the
Borrower (at its expense) shall execute and deliver a Note to the assignee
Lender. Any assignment or transfer by a Lender of rights or obligations under
this Agreement that does not comply with this subsection shall be treated for
purposes of this Agreement as a sale by such Lender of a participation in such
rights and obligations in accordance with subsection (d) of this Section.
(c) The Administrative Agent, acting solely for this purpose as an
agent of the Borrower, shall maintain at the Administrative Agent's Office a
copy of each Assignment and Assumption delivered to it and a register for the
recordation of the names and addresses of the
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Lenders, and the Commitments of, and principal amounts of the Loans and L/C
Obligations owing to, each Lender pursuant to the terms hereof from time to time
(the "REGISTER"). The entries in the Register shall be conclusive, and the
Borrower, the Administrative Agent and the Lenders may treat each Person whose
name is recorded in the Register pursuant to the terms hereof as a Lender
hereunder for all purposes of this Agreement, notwithstanding notice to the
contrary. The Register shall be available for inspection by the Borrower and any
Lender, at any reasonable time and from time to time upon reasonable prior
notice.
(d) Any Lender may at any time, without the consent of, or notice to,
the Borrower or the Administrative Agent, sell participations to any Person
(other than a natural person or Holdings, the Borrower or any of their
Affiliates or Subsidiaries) (each, a "PARTICIPANT") in all or a portion of such
Lender's rights and/or obligations under this Agreement (including all or a
portion of its Commitment and/or the Loans (including such Lender's
participations in L/C Obligations and/or Swing Line Loans) owing to it);
PROVIDED that (i) such Lender's obligations under this Agreement shall remain
unchanged, (ii) such Lender shall remain solely responsible to the other parties
hereto for the performance of such obligations and (iii) the Borrower, the
Administrative Agent and the other Lenders shall continue to deal solely and
directly with such Lender in connection with such Lender's rights and
obligations under this Agreement. Any agreement or instrument pursuant to which
a Lender sells such a participation shall provide that such Lender shall retain
the sole right to enforce this Agreement and to approve any amendment,
modification or waiver of any provision of this Agreement; PROVIDED that such
agreement or instrument may provide that such Lender will not, without the
consent of the Participant, agree to any amendment, waiver or other modification
described in the first proviso to SECTION 12.01 that directly affects such
Participant. Subject to subsection (e) of this Section, the Borrower agrees that
each Participant shall be entitled to the benefits of SECTION 4.01, SECTION 4.04
and SECTION 4.05 to the same extent as if it were a Lender and had acquired its
interest by assignment pursuant to subsection (b) of this Section. To the extent
permitted by law, each Participant also shall be entitled to the benefits of
SECTION 12.09 as though it were a Lender, PROVIDED such Participant agrees to be
subject to SECTION 3.06 as though it were a Lender.
(e) A Participant shall not be entitled to receive any greater payment
under SECTION 4.01 or 4.04 than the applicable Lender would have been entitled
to receive with respect to the participation sold to such Participant, unless
the sale of the participation to such Participant is made with the Borrower's
prior written consent. A Participant that would be a Foreign Lender if it were a
Lender shall not be entitled to the benefits of SECTION 4.01 unless the Borrower
is notified of the participation sold to such Participant and such Participant
agrees, for the benefit of the Borrower, to comply with SECTION 12.15 as though
it were a Lender.
(f) Any Lender may at any time pledge or assign a security interest in
all or any portion of its rights under this Agreement (including under its Note,
if any) to secure obligations of such Lender, including any pledge or assignment
to secure obligations to a Federal Reserve Bank; PROVIDED that no such pledge or
assignment shall release such Lender from any of its obligations hereunder or
substitute any such pledgee or assignee for such Lender as a party hereto.
(g) As used herein, the following terms have the following meanings:
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"ELIGIBLE ASSIGNEE" means (a) a Lender; (b) an Affiliate of a
Lender; (c) an Approved Fund; and (d) any other Person (other than a
natural person) approved by (i) the Administrative Agent, the L/C Issuer
and the Swing Line Lender, and (ii) unless an Event of Default has occurred
and is continuing, the Borrower (each such approval not to be unreasonably
withheld or delayed); PROVIDED that notwithstanding the foregoing,
"Eligible Assignee" shall not include Holdings, the Borrower or any of
their Affiliates or Subsidiaries.
"FUND" means any Person (other than a natural person) that is (or
will be) engaged in making, purchasing, holding or otherwise investing in
commercial loans and similar extensions of credit in the ordinary course of
its business.
"APPROVED FUND" means any Fund that is administered or managed by
(a) a Lender, (b) an Affiliate of a Lender or (c) an entity or an Affiliate
of an entity that administers or manages a Lender.
(h) Notwithstanding anything to the contrary contained herein, any
Lender that is a Fund may create a security interest in all or any portion of
the Loans owing to it and the Note, if any, held by it to the trustee for
holders of obligations owed, or securities issued, by such Fund as security for
such obligations or securities, PROVIDED that unless and until such trustee
actually becomes a Lender in compliance with the other provisions of this
SECTION 12.07, (i) no such pledge shall release the pledging Lender from any of
its obligations under the Loan Documents and (ii) such trustee shall not be
entitled to exercise any of the rights of a Lender under the Loan Documents even
though such trustee may have acquired ownership rights with respect to the
pledged interest through foreclosure or otherwise.
(i) Notwithstanding anything to the contrary contained herein, if at
any time Bank of America assigns all of its Commitment and Loans pursuant to
subsection (b) above, Bank of America may, (i) upon 30 days' notice to the
Borrower and the Lenders, resign as L/C Issuer and/or (ii) upon 30 days' notice
to the Borrower, resign as Swing Line Lender. In the event of any such
resignation as L/C Issuer or Swing Line Lender, the Borrower shall be entitled
to appoint from among the Lenders a successor L/C Issuer or Swing Line Lender
hereunder; PROVIDED, HOWEVER, that no failure by the Borrower to appoint any
such successor shall affect the resignation of Bank of America as L/C Issuer or
Swing Line Lender, as the case may be. If Bank of America resigns as L/C Issuer,
it shall retain all the rights and obligations of the L/C Issuer hereunder with
respect to all Letters of Credit outstanding as of the effective date of its
resignation as L/C Issuer and all L/C Obligations with respect thereto
(including the right to require the Lenders to make Revolving Credit Loans
bearing interest at the Base Rate or fund risk participations in Unreimbursed
Amounts pursuant to SECTION 2.04(c)). If Bank of America resigns as Swing Line
Lender, it shall retain all the rights of the Swing Line Lender provided for
hereunder with respect to Swing Line Loans made by it and outstanding as of the
effective date of such resignation, including the right to require the Lenders
to make Base Rate Revolving Credit Loans or fund risk participations in
outstanding Swing Line Loans pursuant to SECTION 2.05(c).
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12.08 CONFIDENTIALITY.
Each of the Administrative Agent and the Lenders agrees to maintain the
confidentiality of the Information (as defined below), except that Information
may be disclosed (a) to its and its Affiliates' directors, officers, employees
and agents, including accountants, legal counsel and other advisors (it being
understood that the Persons to whom such disclosure is made will be informed of
the confidential nature of such Information and instructed to keep such
Information confidential in accordance with the terms hereof); (b) to the extent
requested by any regulatory authority (provided that to the extent practical,
such Person being requested or required to disclose such information shall
provide advance notice to the Borrower (however, such Person shall have no
liability for any failure to provide such notice)); (c) to the extent required
by applicable laws or regulations or by any subpoena or similar legal process
(provided that to the extent practical, such Person being requested or required
to disclose such information shall provide advance notice to the Borrower
(however, such Person shall have no such liability for any failure to provide
such notice)); (d) to any other party to this Agreement; (e) in connection with
the exercise of any remedies hereunder or any suit, action or proceeding
relating to this Agreement or the enforcement of rights hereunder; (f) subject
to an agreement containing provisions substantially the same as those of this
Section prior to disclosure, to (i) any Eligible Assignee of or Participant in,
or any prospective Eligible Assignee of or Participant in, any of its rights or
obligations under this Agreement or (ii) any direct or indirect contractual
counterparty or prospective counterparty (or such contractual counterparty's or
prospective counterparty's professional advisor) to any credit derivative
transaction relating to obligations of the Loan Parties; (g) with the prior
written consent of the Borrower; (h) to the extent such Information (i) becomes
publicly available other than as a result of a breach of this Section or (ii)
becomes available to the Administrative Agent or any Lender on a nonconfidential
basis from a source other than the Borrower; or (i) to the National Association
of Insurance Commissioners or any other similar organization. In addition, the
Administrative Agent and the Lenders may disclose the existence of this
Agreement and information about this Agreement to market data collectors,
similar service providers to the lending industry, and service providers to the
Administrative Agent and the Lenders in connection with the administration and
management of this Agreement, the other Loan Documents, the Commitments, and the
Credit Extensions. For the purposes of this Section, "INFORMATION" means all
information received from any Loan Party relating to any Loan Party or its
business, other than any such information that is available to the
Administrative Agent or any Lender on a nonconfidential basis prior to
disclosure by any Loan Party; PROVIDED that, in the case of information received
from a Loan Party after the date hereof, such information is clearly identified
in writing at the time of delivery as confidential. Any Person required to
maintain the confidentiality of Information as provided in this Section shall be
considered to have complied with its obligation to do so if such Person has
exercised the same degree of care to maintain the confidentiality of such
Information as such Person would accord to its own confidential information;
PROVIDED that such degree of care is no less than a reasonable degree of care.
12.09 SET-OFF.
In addition to any rights and remedies of the Lenders provided by law, upon
the occurrence and during the continuance of any Event of Default, each Lender
is authorized at any time and from time to time, without prior notice to
Holdings, the Borrower or any other Loan
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Party, any such notice being waived by Holdings and the Borrower (on their own
behalf and on behalf of each Loan Party) to the fullest extent permitted by law,
to set off and apply any and all deposits (general or special, time or demand,
provisional or final) at any time held by, and other indebtedness at any time
owing by, such Lender to or for the credit or the account of the respective Loan
Parties against any and all Obligations owing to such Lender hereunder or under
any other Loan Document, now or hereafter existing, irrespective of whether or
not the Administrative Agent or such Lender shall have made demand under this
Agreement or any other Loan Document and although such Obligations may be
contingent or unmatured or denominated in a currency different from that of the
applicable deposit or indebtedness. Each Lender agrees promptly to notify the
Borrower 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.
12.10 INTEREST RATE LIMITATION.
Notwithstanding anything to the contrary contained in any Loan Document,
the interest paid or agreed to be paid under the Loan Documents shall not exceed
the maximum rate of non-usurious interest permitted by applicable Law (the
"MAXIMUM RATE"). If the Administrative Agent or any Lender shall receive
interest in an amount that exceeds the Maximum Rate, the excess interest shall
be applied to the principal of the Loans or, if it exceeds such unpaid
principal, refunded to the Borrower. In determining whether the interest
contracted for, charged, or received by the Administrative Agent or a Lender
exceeds the Maximum Rate, such Person may, to the extent permitted by applicable
Law, (a) characterize any payment that is not principal as an expense, fee, or
premium rather than interest, (b) exclude voluntary prepayments and the effects
thereof, and (c) amortize, prorate, allocate, and spread in equal or unequal
parts the total amount of interest throughout the contemplated term of the
Obligations hereunder.
12.11 COUNTERPARTS.
This Agreement may be executed in one or more counterparts, each of which
shall be deemed an original, but all of which together shall constitute one and
the same instrument.
12.12 INTEGRATION.
This Agreement, together with the other Loan Documents, comprises the
complete and integrated agreement of the parties on the subject matter hereof
and thereof and supersedes all prior agreements, written or oral, on such
subject matter. In the event of any conflict between the provisions of this
Agreement and those of any other Loan Document, the provisions of this Agreement
shall control; PROVIDED that the inclusion of supplemental rights or remedies in
favor of the Administrative Agent or the Lenders in any other Loan Document
shall not be deemed a conflict with this Agreement. Each Loan Document was
drafted with the joint participation of the respective parties thereto and shall
be construed neither against nor in favor of any party, but rather in accordance
with the fair meaning thereof.
12.13 SURVIVAL OF REPRESENTATIONS AND WARRANTIES.
All representations and warranties made hereunder and in any other Loan
Document or other document delivered pursuant hereto or thereto or in connection
herewith or therewith shall
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survive the execution and delivery hereof and thereof. Such representations and
warranties have been or will be relied upon by the Administrative Agent and each
Lender, regardless of any investigation made by the Administrative Agent or any
Lender or on their behalf and notwithstanding that the Administrative Agent or
any Lender may have had notice or knowledge of any Default at the time of any
Credit Extension, and shall continue in full force and effect as long as any
Loan or any other Obligation hereunder shall remain unpaid or unsatisfied or any
Letter of Credit shall remain outstanding.
12.14 SEVERABILITY.
If any provision of this Agreement or the other Loan Documents is held to
be illegal, invalid or unenforceable, (a) the legality, validity and
enforceability of the remaining provisions of this Agreement and the other Loan
Documents shall not be affected or impaired thereby and (b) the parties shall
endeavor in good faith negotiations to replace the illegal, invalid or
unenforceable provisions with valid provisions the economic effect of which
comes as close as possible to that of the illegal, invalid or unenforceable
provisions. The invalidity of a provision in a particular jurisdiction shall not
invalidate or render unenforceable such provision in any other jurisdiction.
12.15 TAX FORMS.
(a) (i) Each Lender that is not a "United States person" within
the meaning of Section 7701(a)(30) of the Code (a "FOREIGN LENDER") shall
deliver to the Administrative Agent and the Borrower, on or prior to the Closing
Date (or, with respect to an assignment of an interest herein, on or prior to
the effective date of such assignment), two duly signed completed copies of
either IRS Form W-8BEN or any successor thereto (relating to such Foreign Lender
and entitling it to an exemption from, or reduction of, withholding tax on all
payments to be made to such Foreign Lender by the Borrower pursuant to this
Agreement) or IRS Form W-8ECI or any successor thereto (relating to all payments
to be made to such Foreign Lender by the Borrower pursuant to this Agreement) or
such other evidence satisfactory to the Borrower and the Administrative Agent
that such Foreign Lender is entitled to an exemption from, or reduction of, U.S.
withholding tax, including any exemption pursuant to Section 881(c) of the Code.
Thereafter and from time to time, each such Foreign Lender shall (A) promptly
submit to the Administrative Agent and the Borrower such additional duly
completed and signed copies of one of such forms (or such successor forms as
shall be adopted from time to time by the relevant United States taxing
authorities) as may then be available under then current United States laws and
regulations to avoid, or such evidence as is satisfactory to the Borrower and
the Administrative Agent of any available exemption from or reduction of, United
States withholding taxes in respect of all payments to be made to such Foreign
Lender by the Borrower pursuant to this Agreement, (B) promptly notify the
Administrative Agent of any change in circumstances which would modify or render
invalid any claimed exemption or reduction, and (C) take such steps as shall not
be materially disadvantageous to it, in the reasonable judgment of such Lender,
and as may be reasonably necessary (including the re-designation of its Lending
Office) to avoid any requirement of applicable Laws that the Borrower make any
deduction or withholding for taxes from amounts payable to such Foreign Lender.
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(ii) Each Foreign Lender, to the extent it does not act or
ceases to act for its own account with respect to any portion of any sums paid
or payable to such Lender under any of the Loan Documents (for example, in the
case of a typical participation by such Lender), shall deliver to the
Administrative Agent on the date when such Foreign Lender ceases to act for its
own account with respect to any portion of any such sums paid or payable, and at
such other times as may be necessary in the determination of the Administrative
Agent (in the reasonable exercise of its discretion), (A) two duly signed
completed copies of the forms or statements required to be provided by such
Lender as set forth above, to establish the portion of any such sums paid or
payable with respect to which such Lender acts for its own account that is not
subject to U.S. withholding tax, and (B) two duly signed completed copies of IRS
Form W-8IMY (or any successor thereto), together with any information such
Lender chooses to transmit with such form, and any other certificate or
statement of exemption required under the Code, to establish that such Lender is
not acting for its own account with respect to a portion of any such sums
payable to such Lender.
(iii) The Borrower shall not be required to pay any additional
amount to any Foreign Lender under SECTION 4.01 (a) with respect to any Taxes
required to be deducted or withheld on the basis of the information,
certificates or statements of exemption such Lender transmits with an IRS Form
W-8IMY pursuant to this SECTION 12.15(a) or (b) if such Lender shall have failed
to satisfy the foregoing provisions of this SECTION 12.15(a); PROVIDED that if
such Lender shall have satisfied the requirement of this SECTION 12.15(a) on the
date such Lender became a Lender or ceased to act for its own account with
respect to any payment under any of the Loan Documents, nothing in this SECTION
12.15(a) shall relieve the Borrower of its obligation to pay any amounts
pursuant to SECTION 4.01 in the event that, as a result of any change in any
applicable law, treaty or governmental rule, regulation or order, or any change
in the interpretation, administration or application thereof, such Lender is no
longer properly entitled to deliver forms, certificates or other evidence at a
subsequent date establishing the fact that such Lender or other Person for the
account of which such Lender receives any sums payable under any of the Loan
Documents is not subject to withholding or is subject to withholding at a
reduced rate.
(iv) The Administrative Agent may, without reduction, withhold
any Taxes required to be deducted and withheld from any payment under any of the
Loan Documents with respect to which the Borrower is not required to pay
additional amounts under this SECTION 12.15(a).
(b) Upon the request of the Administrative Agent, each Lender that is
a "United States person" within the meaning of Section 7701(a)(30) of the Code
shall deliver to the Administrative Agent two duly signed completed copies of
IRS Form W-9. If such Lender fails to deliver such forms, then the
Administrative Agent may, notwithstanding SECTION 4.01, withhold from any
interest payment to such Lender an amount equivalent to the applicable back-up
withholding tax imposed by the Code, without reduction.
(c) If any Governmental Authority asserts that the Borrower or the
Administrative Agent did not properly withhold or backup withhold, as the case
may be, any tax or other amount from payments made to or for the account of any
Lender, such Lender shall indemnify the Administrative Agent therefor, including
all penalties and interest, any taxes imposed by any
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jurisdiction on the amounts payable to the Administrative Agent under this
Section, and costs and expenses (including Attorney Costs) of the Administrative
Agent. The obligation of the Lenders under this Section shall survive the
termination of the Aggregate Commitments, repayment of all other Obligations
hereunder and the resignation of the Administrative Agent.
12.16 REPLACEMENT OF LENDERS.
Under any circumstances set forth herein providing that the Borrower shall
have the right to replace a Lender as a party to this Agreement, the Borrower
may, upon notice to such Lender and the Administrative Agent, replace such
Lender by causing such Lender to assign its Commitment (with the assignment fee
to be paid by the Borrower in such instance) pursuant to SECTION 12.07(b) to one
or more other Lenders or Eligible Assignees procured by the Borrower; PROVIDED,
HOWEVER, that if the Borrower elects to exercise such right with respect to any
Lender pursuant to SECTION 4.06(b), it shall be obligated to replace all Lenders
that have made similar requests for compensation pursuant to SECTION 4.01 or
4.04. The Borrower shall (x) pay in full all principal, interest, fees and other
amounts owing to such Lender through the date of replacement (including any
amounts payable pursuant to SECTION 4.05), (y) provide appropriate assurances
and indemnities (which may include letters of credit) to the L/C Issuer and the
Swing Line Lender as each may reasonably require with respect to any continuing
obligation to fund participation interests in any L/C Obligations or any Swing
Line Loans then outstanding, and (z) release such Lender from its obligations
under the Loan Documents. Any Lender being replaced shall execute and deliver an
Assignment and Assumption with respect to such Lender's Commitment and
outstanding Loans and participations in L/C Obligations and Swing Line Loans.
12.17 GOVERNING LAW.
(a) THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE
WITH, THE LAW OF THE STATE OF
NEW YORK APPLICABLE TO AGREEMENTS MADE AND TO BE
PERFORMED ENTIRELY WITHIN SUCH STATE; PROVIDED THAT THE ADMINISTRATIVE AGENT AND
EACH LENDER SHALL RETAIN ALL RIGHTS ARISING UNDER FEDERAL LAW.
(b) ANY LEGAL ACTION OR PROCEEDING WITH RESPECT TO THIS AGREEMENT OR
ANY OTHER LOAN DOCUMENT MAY BE BROUGHT IN ▇▇▇ ▇▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇
SITTING IN
NEW YORK,
NEW YORK OR OF THE UNITED STATES DISTRICT COURTS OF SUCH
STATE, AND BY EXECUTION AND DELIVERY OF THIS AGREEMENT, HOLDINGS, THE BORROWER,
THE ADMINISTRATIVE AGENT AND EACH LENDER CONSENTS, FOR ITSELF AND IN RESPECT OF
ITS PROPERTY, TO THE NON-EXCLUSIVE JURISDICTION OF THOSE COURTS. HOLDINGS, THE
BORROWER, THE ADMINISTRATIVE AGENT AND EACH LENDER IRREVOCABLY WAIVES ANY
OBJECTION, INCLUDING 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 ACTION OR PROCEEDING IN SUCH JURISDICTION IN RESPECT OF ANY LOAN
DOCUMENT OR OTHER DOCUMENT RELATED THERETO. HOLDINGS, THE BORROWER, THE
ADMINISTRATIVE AGENT AND EACH LENDER WAIVES
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PERSONAL SERVICE OF ANY SUMMONS, COMPLAINT OR OTHER PROCESS, WHICH MAY BE MADE
BY ANY OTHER MEANS PERMITTED BY THE LAW OF SUCH STATE.
12.18 WAIVER OF RIGHT TO TRIAL BY JURY.
EACH PARTY TO THIS AGREEMENT HEREBY EXPRESSLY WAIVES ANY RIGHT TO TRIAL BY
JURY OF ANY CLAIM, DEMAND, ACTION OR CAUSE OF ACTION ARISING UNDER ANY LOAN
DOCUMENT OR IN ANY WAY CONNECTED WITH OR RELATED OR INCIDENTAL TO THE DEALINGS
OF THE PARTIES HERETO OR ANY OF THEM WITH RESPECT TO ANY LOAN DOCUMENT, OR THE
TRANSACTIONS RELATED THERETO, IN EACH CASE WHETHER NOW EXISTING OR HEREAFTER
ARISING, AND WHETHER FOUNDED IN CONTRACT OR TORT OR OTHERWISE; AND EACH PARTY
HEREBY AGREES AND CONSENTS THAT ANY SUCH CLAIM, DEMAND, ACTION OR CAUSE OF
ACTION SHALL BE DECIDED BY COURT TRIAL WITHOUT A JURY, AND THAT ANY PARTY TO
THIS AGREEMENT MAY FILE AN ORIGINAL COUNTERPART OR A COPY OF THIS SECTION WITH
ANY COURT AS WRITTEN EVIDENCE OF THE CONSENT OF THE SIGNATORIES HERETO TO THE
WAIVER OF THEIR RIGHT TO TRIAL BY JURY.
12.19 ENTIRE AGREEMENT.
This Agreement and the other Loan Documents represent the final agreement
among the parties and may not be contradicted by evidence of prior,
contemporaneous, or subsequent oral agreements of the parties. There are no
unwritten oral agreements among the parties.
[Signature Pages Follow]
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed as of the date first above written.
DIGITALNET, INC.,
as the Borrower
By: /s/ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
--------------------------------------------
Name: ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
Title: Chief Financial Officer, Treasurer and
Secretary
DIGITALNET HOLDINGS, INC.,
as a Guarantor
By: /s/ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
--------------------------------------------
Name: ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
Title: Chief Financial Officer, Treasurer and
Secretary
1
BANK OF AMERICA, N.A.,
as Administrative Agent
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
--------------------------------------------
Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Title: Senior Agency Officer
2
BANK OF AMERICA, N.A.,
as Lender, L/C Issuer and Swing Line Lender
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇
--------------------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇
Title: Senior Vice President
3
MADISON CAPITAL FUNDING LLC,
as Syndication Agent and Lender
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇
--------------------------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇
Title: Senior Managing Director
4
▇▇▇▇▇▇▇ ▇▇▇▇▇ CAPITAL, a division of
▇▇▇▇▇▇▇ ▇▇▇▇▇ Business Financial Services Inc.,
as Documentation Agent and Lender
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇
--------------------------------------------
Name: ▇▇▇▇▇▇ ▇▇▇▇▇
Title: Vice President
5
[OTHER LENDERS]
6
