Exhibit 10.4
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CREDIT AGREEMENT
dated as of June 23, 1999,
among
ANTEON CORPORATION,
THE LENDERS NAMED HEREIN
and
CREDIT SUISSE FIRST BOSTON,
as Lead Arranger and Administrative Agent
---------------------------
MELLON BANK, N.A.,
Co-Arranger, Collateral Agent and Syndication Agent
DEUTSCHE BANK AG, New York Branch
Documentation Agent
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[CS&M Ref No. 5865-038]
TABLE OF CONTENTS
Page
ARTICLE I
Definitions
SECTION 1.01. Defined Terms...........................................2
SECTION 1.02. Terms Generally........................................24
ARTICLE II
The Credits
SECTION 2.01. Commitments.............................................25
SECTION 2.02. Loans...................................................25
SECTION 2.03. Borrowing Procedure.....................................27
SECTION 2.04. Evidence of Debt; Repayment of Loans....................27
SECTION 2.05. Fees...................................................28
SECTION 2.06. Interest on Loans.......................................29
SECTION 2.07. Default Interest........................................29
SECTION 2.08. Alternate Rate of Interest..............................29
SECTION 2.09. Termination and Reduction of Commitments................29
SECTION 2.10. Conversion and Continuation of Borrowings..............30
SECTION 2.11. Repayment of Term Borrowings............................31
SECTION 2.12. Prepayment..............................................31
SECTION 2.13. Mandatory Prepayments...................................32
SECTION 2.14. Reserve Requirements; Change in Circumstances...........33
SECTION 2.15. Change in Legality......................................34
SECTION 2.16. Indemnity...............................................35
SECTION 2.17. Pro Rata Treatment......................................35
SECTION 2.18. Sharing of Setoffs......................................36
SECTION 2.19. Payments................................................36
SECTION 2.20. Taxes...................................................36
SECTION 2.21. Assignment of Commitments Under Certain Circumstances;
Duty to Mitigate.......................................38
SECTION 2.22. Swingline Loans.........................................39
SECTION 2.23. Letters of Credit.......................................40
ARTICLE III
Representations and Warranties
SECTION 3.01. Organization; Powers....................................44
SECTION 3.02. Authorization..........................................44
SECTION 3.03. Enforceability..........................................45
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SECTION 3.04. Governmental Approvals; Contracts.......................45
SECTION 3.05. Financial Statements....................................45
SECTION 3.06. No Material Adverse Change..............................46
SECTION 3.07. Title to Properties; Possession Under Leases............46
SECTION 3.08. Subsidiaries............................................46
SECTION 3.09. Litigation; Compliance with Laws........................46
SECTION 3.10. Agreements..............................................47
SECTION 3.11. Federal Reserve Regulations.............................47
SECTION 3.12. Investment Company Act; Public Utility Holding Company
Act.....................................................47
SECTION 3.13. Use of Proceeds.........................................47
SECTION 3.14. Tax Returns.............................................47
SECTION 3.15. No Material Misstatements...............................47
SECTION 3.16. Employee Benefit Plans..................................47
SECTION 3.17. Environmental Matters...................................48
SECTION 3.18. Insurance...............................................49
SECTION 3.19. Security Documents......................................49
SECTION 3.20. Location of Real Property...............................49
SECTION 3.21. Labor Matters...........................................49
SECTION 3.22. Solvency................................................50
SECTION 3.23. Year 2000...............................................50
ARTICLE IV
Conditions of Lending
SECTION 4.01. All Credit Events.......................................50
SECTION 4.02. First Credit Event......................................51
ARTICLE V
Affirmative Covenants
SECTION 5.01. Existence; Businesses and Properties....................55
SECTION 5.02. Insurance...............................................55
SECTION 5.03. Obligations and Taxes...................................56
SECTION 5.04. Financial Statements, Reports, etc......................56
SECTION 5.05. Litigation and Other Notices............................59
SECTION 5.06. Employee Benefits.......................................59
SECTION 5.07. Maintaining Records; Access to Properties and
Inspections.............................................59
SECTION 5.08. Use of Proceeds.........................................59
SECTION 5.09. Compliance with Environmental Laws......................59
SECTION 5.10. Preparation of Environmental Reports....................60
SECTION 5.11. Audits..................................................60
SECTION 5.12. Further Assurances......................................60
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ARTICLE VI
Negative Covenants
SECTION 6.01. Indebtedness............................................61
SECTION 6.02. Liens...................................................62
SECTION 6.03. Sale and Lease-Back Transactions........................63
SECTION 6.04. Investments, Loans and Advances.........................63
SECTION 6.05. Mergers, Consolidations, Sales of Assets and
Acquisitions............................................66
SECTION 6.06. Dividends and Distributions; Restrictions on Ability of
Subsidiaries to Pay Dividends...........................66
SECTION 6.07. Transactions with Affiliates............................67
SECTION 6.08. Capital Expenditures....................................68
SECTION 6.09. Interest Coverage Ratio.................................68
SECTION 6.10. Fixed Charge Coverage Ratio.............................68
SECTION 6.11. Maximum Leverage Ratio..................................68
SECTION 6.12. Senior Leverage Ratio...................................69
SECTION 6.13. Minimum EBITDA..........................................69
SECTION 6.14. Limitation on Modifications of Indebtedness;
Modifications of Certificate of Incorporation, By-laws
and Certain Other Agreements, etc.......................69
SECTION 6.15. Limitation on Creation of Subsidiaries..................70
SECTION 6.16. Business................................................70
SECTION 6.17. Designated Senior Indebtedness..........................70
SECTION 6.18. Fiscal Year.............................................70
SECTION 6.19. Maintenance of Accounts.................................70
ARTICLE VII
Events of Default
ARTICLE VIII
The Administrative Agent and the Collateral Agent
ARTICLE IX
Miscellaneous
SECTION 9.01. Notices.................................................75
SECTION 9.02. Survival of Agreement...................................76
SECTION 9.03. Binding Effect..........................................76
SECTION 9.04. Successors and Assigns..................................76
SECTION 9.05. Expenses; Indemnity.....................................80
SECTION 9.06. Right of Setoff.........................................81
SECTION 9.07. Applicable Law..........................................81
SECTION 9.08. Waivers; Amendment......................................81
SECTION 9.09. Interest Rate Limitation................................82
SECTION 9.10. Entire Agreement........................................82
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SECTION 9.11. WAIVER OF JURY TRIAL....................................83
SECTION 9.12. Severability............................................83
SECTION 9.13. Counterparts............................................83
SECTION 9.14. Headings................................................83
SECTION 9.15. Jurisdiction; Consent to Service of Process.............83
SECTION 9.16. Confidentiality.........................................84
Schedule 1.01(a) Subsidiary Guarantors
Schedule 2.01 Lenders and Commitments
Schedule 2.13(e) Excess Cash Flow Payments
Schedule 3.04 Government Contracts
Schedule 3.08 Subsidiaries
Schedule 3.09 Litigation
Schedule 3.17 Environmental Matters
Schedule 3.18 Insurance
Schedule 3.20 Real Property Owned In Fee
Schedule 4.02(a) Other Local Counsel
Schedule 4.02(f) Foreign Subsidiary Pledged Stock
Schedule 6.01 Outstanding Indebtedness on Closing Date
Schedule 6.02 Liens Existing on Closing Date
Schedule 6.04(m) Existing Investments
Exhibit A Form of Administrative Questionnaire
Exhibit B Form of Assignment and Acceptance
Exhibit C Form of Borrowing Request
Exhibit D Form of Indemnity, Subrogation and Contribution Agreement
Exhibit E Form of Pledge Agreement
Exhibit F Form of Security Agreement
Exhibit G Form of Subsidiary Guarantee Agreement
Exhibit H-1 Form of Opinion of ▇▇▇▇, Weiss, Rifkind, ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇
Exhibit H-2 Form of Opinion of ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Esq., General Counsel of the
Borrower
Exhibit H-3 Form of Opinion of Local Counsel
Exhibit I Form of Compliance Certificate
Exhibit J Form of Borrowing Base/Non-Default Certificate
Exhibit K Form of Subordination Provisions
Exhibit L Form of Solvency Certificate
Exhibit M Form of Acknowledgment, Waiver and Consent of Minority Owner
CREDIT AGREEMENT dated as of June 23, 1999, among
ANTEON CORPORATION, a Virginia corporation (the
"Borrower"), the Lenders (as defined in Article I),
CREDIT SUISSE FIRST BOSTON, a bank organized under the
laws of Switzerland, acting through its New York branch,
as issuing bank (in such capacity, the "Issuing Bank"),
and as administrative agent (in such capacity, the
"Administrative Agent") for the Lenders, MELLON BANK,
N.A., a national banking association, as syndication
agent (in such capacity, the "Syndication Agent"), as
swingline lender (in such capacity, the "Swingline
Lender"), and as collateral agent (in such capacity, the
"Collateral Agent") for the Lenders, and DEUTSCHE BANK
AG, New York Branch, as documentation agent (in such
capacity, the "Documentation Agent").
Pursuant to the Merger Agreement (such term and each other capitalized
term used but not defined herein having the meaning given it in Article I), Sub
will merge (the "Merger") with and into A&T, with A&T surviving such Merger as a
wholly owned Subsidiary of the Borrower. In connection with the Merger, the
existing stockholders and option holders of A&T will be entitled to receive an
aggregate of approximately $111,000,000 in cash (the "Merger Consideration"),
net of the exercise price of certain options.
The Borrower has requested the Lenders to extend credit in the form of (a)
Term Loans on the Closing Date, in an aggregate principal amount not in excess
of $60,000,000, and (b) Revolving Loans at any time and from time to time prior
to the Revolving Credit Maturity Date, in an aggregate principal amount at any
time outstanding not in excess of $120,000,000. The Borrower has requested the
Swingline Lender to extend credit, at any time and from time to time prior to
the Revolving Credit Maturity Date, in the form of Swingline Loans. The Borrower
has requested the Issuing Bank to issue Letters of Credit, in an aggregate face
amount at any time outstanding not in excess of $10,000,000, to support payment
obligations, performance guarantees and bid bonds incurred by the Borrower and
its Subsidiaries in the conduct of their business. The proceeds of the Term
Loans are to be used solely (a) to repay all amounts outstanding under the
Existing Credit Agreements and (b) to pay related fees and expenses. The
proceeds of the Senior Subordinated Notes and the Equity Contribution are to be
used solely (a) to pay the Merger Consideration and (b) to pay related fees and
expenses. The proceeds of the Revolving Loans and the Swingline Loans are to be
used solely for general corporate purposes, including refinancing existing
Indebtedness on the Closing Date and Permitted Acquisitions.
The Lenders are willing to extend such credit to the Borrower and the
Issuing Bank is willing to issue Letters of Credit for the account of the
Borrower on the terms and subject to the conditions set forth herein.
Accordingly, the parties hereto agree as follows:
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ARTICLE I
Definitions
SECTION 1.01. Defined Terms. As used in this Agreement, the following
terms shall have the meanings specified below:
"A&T" shall mean Analysis & Technology, Inc., a Connecticut corporation.
"ABR Borrowing" shall mean a Borrowing comprised of ABR Loans.
"ABR Loan" shall mean any ABR Term Loan or ABR Revolving Loan.
"ABR Revolving Loan" shall mean any Revolving Loan bearing interest at a
rate determined by reference to the Alternate Base Rate in accordance with the
provisions of Article II.
"ABR Term Borrowing" shall mean a Borrowing comprised of ABR Term Loans.
"ABR Term Loan" shall mean any Term Loan bearing interest at a rate
determined by reference to the Alternate Base Rate in accordance with the
provisions of Article II.
"Account" shall mean any right to payment for goods sold or leased or for
services rendered, whether or not earned by performance.
"Account Debtor" shall mean, with respect to any Account, the obligor with
respect to such Account.
"Adjusted LIBO Rate" shall mean, with respect to any Eurodollar Borrowing
for any Interest Period, an interest rate per annum (rounded upwards, if
necessary, to the next 1/16 of 1%) equal to the product of (a) the LIBO Rate in
effect for such Interest Period and (b) Statutory Reserves.
"Administrative Agent Fees" shall have the meaning assigned to such term
in Section 2.05(b).
"Administrative Questionnaire" shall mean an Administrative Questionnaire
in the form of Exhibit A, or such other form as may be supplied from time to
time by the Administrative Agent.
"Affiliate" shall mean, when used with respect to a specified 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; provided, however, that for purposes of Section 6.07, the term
"Affiliate" shall also include any person that directly or indirectly owns 10%
or more of any class of Equity Interests of the person specified or that is an
officer or director of the person specified.
"Agents" shall mean the Administrative Agent and the Collateral Agent.
"Aggregate Revolving Credit Exposure" shall mean the aggregate amount of
the Lenders' Revolving Credit Exposures.
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"Alternate Base Rate" shall mean, for any day, a rate per annum (rounded
upwards, if necessary, to the next 1/16 of 1%) equal to the greater of (a) the
Prime Rate in effect on such day less 1/4 of 1% and (b) the Federal Funds
Effective Rate in effect on such day plus 1/2 of 1%. If for any reason the
Administrative Agent shall have determined (which determination shall be
conclusive absent manifest error) that it is unable to ascertain the Federal
Funds Effective Rate for any reason, including the inability or failure of the
Administrative Agent to obtain sufficient quotations in accordance with the
terms of the definition thereof, the Alternate Base Rate shall be determined
without regard to clause (b) of the preceding sentence until the circumstances
giving rise to such inability no longer exist. Any change in the Alternate Base
Rate due to a change in the Prime Rate or the Federal Funds Effective Rate shall
be effective on the effective date of such change in the Prime Rate or the
Federal Funds Effective Rate, respectively. The term "Prime Rate" shall mean the
rate of interest per annum publicly announced from time to time by the
Administrative Agent as its prime rate for dollars in effect at its principal
office in New York City; each change in the Prime Rate shall be effective on the
date such change is publicly announced as being effective. The term "Federal
Funds Effective Rate" shall mean, for any day, the weighted average of the rates
on overnight Federal funds transactions with members of the Federal Reserve
System arranged by Federal funds brokers, as published on the next succeeding
Business Day by the Federal Reserve Bank of New York, or, if such rate is not so
published for any day that is a Business Day, the average of the quotations for
the day for such transactions received by the Administrative Agent from three
Federal funds brokers of recognized standing selected by it.
"Applicable Percentage" shall mean, for any day, with respect to any
Eurodollar Loan or ABR Loan, or with respect to the Commitment Fees, as the case
may be, the applicable percentage set forth below under the caption "Eurodollar
Spread", "ABR Spread" or "Fee Percentage", as the case may be, based upon the
Leverage Ratio as of the relevant date of determination (provided, that if
financial statements and a certificate with respect to the fourth fiscal quarter
in any year satisfying the requirements of paragraphs (b) and (g) of Section
5.04 shall be delivered to the Administrative Agent within 60 days after the end
of such fiscal quarter, then from the second Business Day following the date on
which such financial statements and certificate are so delivered until the
relevant date of determination following such fiscal quarter end the Applicable
Percentage shall be based upon the Leverage Ratio as of such fiscal quarter end,
as determined on the basis of such financial statements):
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Eurodollar Fee
Leverage Ratio Spread ABR Spread Percentage
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Category 1 3.25% 2.25% 0.500%
Greater than 4.75 to 1.00
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Category 2 3.00% 2.00% 0.500%
Greater than 4.25 to 1.00
but less than or equal to
4.75 to 1.00
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Eurodollar Fee
Leverage Ratio Spread ABR Spread Percentage
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Category 3 2.75% 1.75% 0.375%
Greater than 3.50 to 1.00
but less than or equal to
4.25 to 1.00
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Category 4 2.50% 1.50% 0.375%
Greater than 3.00 to 1.00
but less than or equal to
3.50 to 1.00
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Category 5 2.25% 1.25% 0.375%
Greater than 2.50 to 1.00
but less than or equal to
3.00 to 1.00
--------------------------------------------------------------------------------
Category 6 1.75% 0.75% 0.250%
Less than or equal to
2.50 to 1.00
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Except as set forth in the proviso immediately preceding the table above,
each change in the Applicable Percentage resulting from a change in the Leverage
Ratio shall be effective with respect to all Loans, Commitments and Letters of
Credit outstanding on and after the date of delivery to the Administrative Agent
of the financial statements and certificates required by Section 5.04(a) or (b)
and Section 5.04(g), respectively, indicating such change until the date
immediately preceding the next date of delivery of such financial statements and
certificates indicating another such change; provided, however, that (a) at any
time during which the Borrower has failed to deliver when due the financial
statements and certificates required by Section 5.04(a) or (b) and Section
5.04(g), respectively, or (b) at the option of the Agents or upon the request of
the Required Lenders, at any time after the occurrence and during the
continuance of an Event of Default, the Leverage Ratio shall be deemed to be in
Category 1 for purposes of determining the Applicable Percentage.
Notwithstanding the foregoing, from the date hereof through and including
December 31, 1999, the Leverage Ratio shall be deemed to be in Category 1 for
purposes of determining the Applicable Percentage.
"Approved Margin Stock" shall have the meaning assigned to such term in
Section 6.04(k).
"Asset Sale" shall mean the sale, transfer or other disposition (by way of
merger, casualty, condemnation or otherwise) by the Borrower or any of the
Subsidiaries to any person other than the Borrower or any Subsidiary Guarantor
of (a) any Equity Interests of any of the Subsidiaries (other than directors'
qualifying shares) or (b) any other assets of the Borrower or any of the
Subsidiaries (other than (i) inventory, excess, damaged, obsolete or worn out
assets, scrap and Permitted Investments, in each case disposed of in the
ordinary
5
course of business, (ii) dispositions between or among Foreign Subsidiaries or
(iii) dispositions of Approved Margin Stock), provided that any asset sale or
series of related asset sales described in clause (b) above having a value not
in excess of $250,000 shall be deemed not to be an "Asset Sale" for purposes of
this Agreement.
"Assignment and Acceptance" shall mean an assignment and acceptance
entered into by a Lender and an assignee, and accepted by the Administrative
Agent, in the form of Exhibit B or such other form as shall be approved by the
Administrative Agent.
"Assignment of Claims Act" shall mean the Assignment of Claims Act of
1940, as amended from time to time.
"Board" shall mean the Board of Governors of the Federal Reserve System of
the United States of America.
"Borrowing" shall mean a group of Loans of a single Type made, converted
or continued by the Lenders on a single date and, in the case of Eurodollar
Loans, as to which a single Interest Period is in effect.
"Borrowing Base" shall mean an amount equal to the sum, without
duplication, of:
(a) 90% of the Net Value (as defined below) of Eligible Billed
Borrowing Base Receivables representing amounts due and owing from
Domestic Account Debtors that are outstanding less than 91 days from the
date of original invoice, plus
(b) 70% of the Net Value of Eligible Billed Borrowing Base
Receivables representing amounts due and owing from Foreign Account
Debtors that are not fully supported by a letter of credit, guarantees,
bonds or similar credit support issued by a financial institution in form
and substance reasonably acceptable to the Agents and that are outstanding
less than 61 days from the date of original invoice, plus
(c) 90% of the Net Value of Eligible Billed Borrowing Base
Receivables that represent amounts due and owing from Foreign Account
Debtors that are fully supported by letters of credit, guarantees, bonds
or similar credit support issued by financial institutions in form and
substance reasonably acceptable to the Agents and that are outstanding
less than 91 days from the date of original invoice, plus
(d) 75% of the Net Value of Eligible Unbilled Borrowing Base
Receivables; plus
(e) the Eligible Margin Stock Amount; plus
(f) until the second anniversary of the Closing Date, $10,000,000.
As used herein, the "Net Value" of an Eligible Billed Borrowing Base Receivable
or an Eligible Unbilled Borrowing Base Receivable shall be its face amount, net
of any discount for prompt payment (and net of any other amount representing
payment of finance charges, late charges or interest (however denominated)), and
net of any portion thereof that constitutes payment of sales, use or other
taxes. The Borrowing Base shall be computed monthly in accordance with Section
5.04(h). The Borrowing Base at any time in effect shall be determined by
reference to the Borrowing Base Certificate most recently delivered hereunder.
6
"Borrowing Base/Non-Default Certificate" shall have the meaning assigned
to such term in Section 5.04(h).
"Borrowing Request" shall mean a request by the Borrower in accordance
with the terms of Section 2.03 and substantially in the form of Exhibit C, or
such other form as shall be approved by the Administrative Agent or the
Swingline Lender, as applicable.
"Business Day" shall mean any day other than a Saturday, Sunday or day on
which banks in New York City are authorized or required by law to close;
provided, however, that when used in connection with a Eurodollar Loan, the term
"Business Day" shall also exclude any day on which banks are not open for
dealings in dollar deposits in the London interbank market.
"Capital Expenditures" shall mean, for any period and with respect to any
person, all expenditures during such period by such person that would be
classified as capital expenditures in accordance with GAAP or are made in
property that is the subject of a Synthetic Lease to which such person becomes a
lessee party during such period, but excluding any such expenditure made (a) to
restore, replace or rebuild property to the condition of such property
immediately prior to any damage, loss, destruction or condemnation of such
property, to the extent such expenditure is made with insurance proceeds,
condemnation awards or indemnification or damage recovery proceeds relating to
any such damage, loss, destruction or condemnation, (b) with proceeds from the
sale or exchange of property to the extent utilized to purchase functionally
equivalent property or equipment, (c) as the purchase price of any Permitted
Acquisition or (d) with the proceeds of a substantially contemporaneous equity
contribution from Holdings.
"Capital Lease Obligations" of any person shall mean the obligations of
such person to pay rent or other amounts under any lease of (or other
arrangement conveying the right to use) real or personal property, or a
combination thereof, which obligations are required to be classified and
accounted for as capital leases on a balance sheet of such person under GAAP,
and the amount of such obligations shall be the capitalized amount thereof
determined in accordance with GAAP.
"Change in Control" shall mean (a) prior to a Qualified Public Offering,
the failure by the Permitted Investors to own, directly or indirectly,
beneficially and of record, Equity Interests in the Borrower representing at
least 51% of the aggregate ordinary voting power represented by the issued and
outstanding Equity Interests in the Borrower; (b) after a Qualified Public
Offering, the failure by the Permitted Investors to own, directly or indirectly,
beneficially and of record, Equity Interests in the Borrower representing at
least 35% of the aggregate ordinary voting power represented by the issued and
outstanding Equity Interests in the Borrower; (c) after a Qualified Public
Offering, the acquisition of ownership, directly or indirectly, beneficially or
of record, by any person or group (within the meaning of the Securities Exchange
Act of 1934 and the rules of the Securities and Exchange Commission
thereunder as in effect on the date hereof) other than the Permitted Investors,
of Equity Interests representing a greater percentage of the aggregate ordinary
voting power represented by the issued and outstanding Equity Interests in the
Borrower then held, directly or indirectly, beneficially and of record, by the
Permitted Investors; (d) occupation of a majority of the seats (other than
vacant seats) on the board of directors of Holdings by persons who were neither
(i) nominated by the board of directors of Holdings or any Permitted Investor
nor (ii) appointed by the directors so nominated; or (e) the occurrence of a
"Change of Control" or similar event (however denominated) under and as defined
in the Senior Subordinated Note Documents or any other Indebtedness of Holdings,
7
the Borrower or any Subsidiary in an aggregate outstanding principal amount in
excess of $10,000,000.
"Change in Law" shall mean (a) the adoption of any law, rule or regulation
after the date of this Agreement, (b) any change in any law, rule or regulation
or in the interpretation or application thereof by any Governmental Authority
after the date of this Agreement or (c) compliance by any Lender or the Issuing
Bank (or, for purposes of Section 2.15, by any lending office of such Lender or
by such Lender's or the Issuing Bank's holding company, if any) with any
request, guideline or directive (whether or not having the force of law) of any
Governmental Authority made or issued after the date of this Agreement.
"Closing Date" shall mean the date of the first Credit Event.
"Code" shall mean the Internal Revenue Code of 1986, as amended from time
to time.
"Collateral" shall mean all the "Collateral" as defined in any Security
Document.
"Collateral Agent's Fee Letter" shall mean the Fee Letter dated April 29,
1999, between the Borrower and the Collateral Agent.
"Collateral Agent's Fees" shall have the meaning assigned to such term in
Section 2.05(b).
"Commitment" shall mean, with respect to any Lender, such Lender's
Revolving Credit Commitment, Term Loan Commitment and Swingline Commitment.
"Commitment Fee" shall have the meaning assigned to such term in Section
2.05(a).
"Compliance Certificate" shall have the meaning assigned to such term in
Section 5.04(g).
"Confidential Information Memorandum" shall mean the Confidential
Information Memorandum of the Borrower dated April 1999.
"Control" shall mean 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 ownership of voting securities, by contract or otherwise,
and the terms "Controlling" and "Controlled" shall have meanings correlative
thereto.
"Credit Event" shall have the meaning assigned to such term in Section
4.01.
"Current Assets" shall mean, at any time, the consolidated current assets
(other than cash and Permitted Investments) of the Borrower and its consolidated
Subsidiaries.
"Current Liabilities" shall mean, at any time, the consolidated current
liabilities of the Borrower and its consolidated Subsidiaries at such time, but
excluding, without duplication, (a) the current portion of any long-term
Indebtedness and (b) outstanding Revolving Loans and Swingline Loans.
"Default" shall mean any event or condition which upon notice, lapse of
time or both would constitute an Event of Default.
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"Disability" shall mean, for purposes of Section 6.06(a), the substantial
inability to perform the employee's then present duties and responsibilities by
reason of any medically determinable physical or mental impairment which can be
expected to last for a period of not less than 6 months in a 12-month period, or
any substantially similar definition contained in any stock option or stock
repurchase agreement between Holdings or the Borrower or any of its Subsidiaries
and any of their employees.
"dollars" or "$" shall mean lawful money of the United States of America.
"Domestic Account Debtor" shall mean an Account Debtor incorporated or
organized under the laws of, or with its principal place of business in, and any
Governmental Authority that is, the United States, any State thereof, any
municipality of any such State or the District of Columbia.
"Domestic Subsidiaries" shall mean all Subsidiaries incorporated or
organized under the laws of the United States of America, any State thereof or
the District of Columbia.
"EBITDA" for any period shall mean Net Income for such period, to which
shall be added back (a) the Interest Expense of the Borrower and its
consolidated Subsidiaries for such period to the extent deducted in calculating
Net Income for such period, (b) all charges against income calculated in
accordance with GAAP for Federal, state, local and foreign income taxes and
assessments, including all interest, penalties and additions imposed with
respect to such amounts, of the Borrower and its consolidated Subsidiaries for
such period, to the extent deducted in calculating Net Income for such period,
(c) the aggregate depreciation expense of the Borrower and its consolidated
Subsidiaries for such period, (d) the aggregate amortization expense of the
Borrower and its consolidated Subsidiaries for such period, and (e) Noncash
Nonrecurring Charges (only to the extent that such Noncash Nonrecurring Charges
do not exceed 10% of Net Income for such period), minus any noncash gain to the
extent included in determining Net Income, all as determined on a consolidated
basis in accordance with GAAP. For purposes of determining the Leverage Ratio
and the Senior Leverage Ratio as of September 30, 1999, December 31, 1999, and
March 31, 2000, EBITDA shall be deemed to be (i) $8,665,000 for the fiscal
quarter ended December 31, 1998, (ii) $8,829,000 for the fiscal quarter ended
March 31, 1999 and (iii) the sum of the actual EBITDA of the Borrower and of A&T
for the fiscal quarter ended June 30, 1999 (assuming the Merger had occurred on
April 1, 1999), plus $655,000.
"Eligible Billed Borrowing Base Receivables" shall mean all rights to
payment due and to become due to the Borrower or any Subsidiary Guarantor that
(a) constitute an "account" as defined in the Uniform Commercial Code as in
effect in the applicable jurisdiction, (b) represent amounts due and owing (i)
for products actually delivered or services actually performed or rendered by or
on behalf of the Borrower or any Subsidiary Guarantor pursuant to a written
contract or written agreement now or hereafter entered into by the Borrower or
any Subsidiary Guarantor and a person that is not an Affiliate of the Borrower,
or (ii) as interim ▇▇▇▇▇▇▇▇ or progress payments in accordance with fixed price
contracts between the Borrower or any Subsidiary Guarantor and a person that is
not an Affiliate of the Borrower, (c) have been properly billed, (d) arise in
the ordinary course of the Loan Parties' business, (e) are due, owing and not
subject to any defense, setoff or counterclaim, except if the person that is the
obligor under any such account has disputed liability or made any claim of
setoff or counterclaim, only the portion of the account subject to such defense,
setoff or counterclaim shall be deemed an Ineligible Receivable, (f) are not
final invoices and (g) are not Ineligible Receivables.
9
"Eligible Margin Stock Amount" at any time, shall mean an amount equal to
75% of the fair market value of any Approved Margin Stock pledged to the
Collateral Agent to secure the Obligations. For purposes of the foregoing, the
fair market value of any Approved Margin Stock on any date shall be the average
of the closing prices on the principal U.S. securities exchange on which such
Approved Margin Stock is traded for the period of 20 consecutive trading days
preceding the date of determination. In the event (x) any Approved Margin Stock
is not listed or traded on a securities exchange or (y) the fair market value of
any Approved Margin Stock cannot be determined in accordance with the preceding
sentence because closing prices for such Approved Margin Stock are not
available, the Agents may use any reasonable estimate of the market value of
such Approved Margin Stock as of the close of business on the Business Day
preceding the date of determination.
"Eligible Unbilled Borrowing Base Receivables" shall mean rights to
payment due and to become due to the Borrower or any Subsidiary Guarantor (a)
under Government Contracts or (b) under contracts with any other Account Debtor
that are approved by the Agents from time to time (the "Approved Contracts"),
that (i) constitute an "account" as defined in the Uniform Commercial Code as in
effect in the applicable jurisdiction, (ii) in the case of Government Contracts,
are eligible to be billed to the Government in accordance with the applicable
Government Contract or are eligible to be billed to a prime contractor pursuant
to a subcontract under a contract between the prime contractor and the
Government, and in the case of Approved Contracts, are eligible to be billed to
the Account Debtor in accordance with the applicable Approved Contract, in any
case within 30 days of the "as of " date of the applicable Borrowing
Base/Non-Default Certificate (with no additional performance required by any
person, and no condition to payment by the Government or prime contractor or
Account Debtor, as applicable, other than receipt of an appropriate invoice),
(iii) have not been billed to the Government or the prime contractor or Account
Debtor under the Approved Contract, as applicable, solely as a result of timing
differences between the date the revenue is recognized on the applicable Loan
Party's books and the date the invoice is actually rendered, (iv) represent
revenue recognized on the books of the Borrower or any Subsidiary Guarantor not
more than 30 days prior to the "as of" date of the applicable Borrowing
Base/Non-Default Certificate, (v) may, in accordance with GAAP, be included as
current assets of the Borrower or any Subsidiary Guarantor, even though such
amounts have not been billed to the Government or the prime contractor or
Account Debtor under the Approved Contract, as applicable and (vi) are not
Ineligible Receivables.
"environment" shall mean ambient air, surface water and groundwater
(including potable water, navigable water and wetlands), the land surface or
subsurface strata, the workplace or as otherwise defined in any Environmental
Law.
"Environmental Claim" shall mean any written accusation, allegation,
notice of violation, claim, demand, order, directive, cost recovery action or
other cause of action by, or on behalf of, any Governmental Authority or any
person for damages, injunctive or equitable relief, personal injury (including
sickness, disease or death), Remedial Action costs, tangible or intangible
property damage, natural resource damages, nuisance, pollution, any adverse
effect on the environment caused by any Hazardous Material, or for fines,
penalties or restrictions, resulting from or based upon (a) the existence, or
the continuation of the existence, of a Release (including sudden or non-sudden,
accidental or non-accidental Releases), (b) exposure to any Hazardous Material,
(c) the presence, use, handling, transportation, storage, treatment or disposal
of any Hazardous Material or (d) the violation or alleged violation of any
Environmental Law or Environmental Permit.
10
"Environmental Law" shall mean any and all applicable present and future
treaties, laws, rules, regulations, codes, ordinances, orders, decrees,
judgments, injunctions, notices or binding agreements issued, promulgated or
entered into by any Governmental Authority, relating in any way to the
environment, preservation or reclamation of natural resources, the management,
Release or threatened Release of any Hazardous Material or to health and safety
matters, including the Comprehensive Environmental Response, Compensation and
Liability Act of 1980, as amended by the Superfund Amendments and
Reauthorization Act of 1986, 42 U.S.C. ▇▇.▇▇. 9601 et seq. (collectively
"CERCLA"), the Solid Waste Disposal Act, as amended by the Resource Conservation
and Recovery Act of 1976 and Hazardous and Solid Waste Amendments of 1984, 42
U.S.C. ▇▇.▇▇. 6901 et seq., the Federal Water Pollution Control Act, as amended
by the Clean Water Act of 1977, 33 U.S.C. ▇▇.▇▇. 1251 et seq., the Clean Air Act
of 1970, as amended 42 U.S.C. ▇▇.▇▇. 7401 et seq., the Toxic Substances Control
Act of 1976, 15 U.S.C. ▇▇.▇▇. 2601 et seq., the Occupational Safety and Health
Act of 1970, as amended, 29 U.S.C. ▇▇.▇▇. 651 et seq., the Emergency Planning
and Community Right-to-Know Act of 1986, 42 U.S.C. ▇▇.▇▇. 11001 et seq., the
Safe Drinking Water Act of 1974, as amended, 42 U.S.C. ▇▇.▇▇. 300(f) et seq.,
the Hazardous Materials Transportation Act, 49 U.S.C. ▇▇.▇▇. 5101 et seq., and
any similar or implementing state, local or foreign law, and all amendments or
regulations promulgated under any of the foregoing.
"Environmental Permit" shall mean any permit, approval, authorization,
certificate, license, variance, filing or permission required by or from any
Governmental Authority pursuant to any Environmental Law.
"Equity Contribution" shall mean the purchase by Affiliates of
▇▇▇▇▇▇-▇▇▇▇▇▇ Capital, Inc. of the Holdings Convertible Notes for not less than
$22,500,000 in cash, and the contribution by Holdings of the amount so received
to the Borrower as common equity.
"Equity Interests" shall mean shares of capital stock, partnership
interests, membership interests in a limited liability company, beneficial
interests in a trust or other equity ownership interests in a person.
"Equity Issuance" shall mean any issuance or sale by Holdings, the
Borrower or any Subsidiary of any Equity Interests of Holdings, the Borrower or
any Subsidiary, as applicable, or any obligations convertible into or
exchangeable for, or giving any person a right, option or warrant to acquire
such Equity Interests or such convertible or exchangeable obligations, except in
each case for (a) any issuance or sale to Holdings, the Borrower or any
Subsidiary, (b) any issuance or sale of Equity Interests or such convertible or
exchangeable obligations of Holdings to one or more Permitted Investors, (c) any
issuance of directors' qualifying shares, and (d) sales or issuances of common
stock of Holdings or the Borrower to management or employees of Holdings, the
Borrower or any Subsidiary under any employee stock option or stock purchase
plan or employee benefit plan in existence from time to time.
"ERISA" shall mean the Employee Retirement Income Security Act of 1974, as
the same may be amended from time to time.
"ERISA Affiliate" shall mean any trade or business (whether or not
incorporated) that, together with the Borrower, is treated as a single employer
under Section 414(b) or (c) of the Code, or solely for purposes of Section 302
of ERISA and Section 412 of the Code, is treated as a single employer under
Section 414 of the Code.
11
"ERISA Event" shall mean (a) any "reportable event", as defined in Section
4043 of ERISA or the regulations issued thereunder, with respect to a Plan
(other than an event for which the 30-day notice period is waived); (b) the
existence with respect to any Plan of an "accumulated funding deficiency" (as
defined in Section 412 of the Code or Section 302 of ERISA), whether or not
waived; (c) the filing pursuant to Section 412(d) of the Code or Section 303(d)
of ERISA of an application for a waiver of the minimum funding standard with
respect to any Plan; (d) the incurrence by the Borrower or any of its ERISA
Affiliates of any liability under Title IV of ERISA with respect to the
termination of any Plan; (e) the receipt by the Borrower or any of its ERISA
Affiliates from the PBGC or a plan administrator of any notice relating to the
intention to terminate any Plan or Plans or to appoint a trustee to administer
any Plan; (f) the incurrence by the Borrower or any of its ERISA Affiliates of
any liability with respect to the withdrawal from any Plan or Multiemployer
Plan; (g) the receipt by the Borrower or any of its ERISA Affiliates of any
notice, or the receipt by any Multiemployer Plan from the Borrower or any of its
ERISA Affiliates of any notice, concerning the imposition of Withdrawal
Liability or a determination that a Multiemployer Plan is, or is expected to be,
insolvent or in reorganization, within the meaning of Title IV of ERISA; or (h)
any Foreign Benefit Event.
"Eurodollar Borrowing" shall mean a Borrowing comprised of Eurodollar
Loans.
"Eurodollar Loan" shall mean any Eurodollar Revolving Loan or Eurodollar
Term Loan.
"Eurodollar Revolving Loan" shall mean any Revolving Loan bearing interest
at a rate determined by reference to the Adjusted LIBO Rate in accordance with
the provisions of Article II.
"Eurodollar Term Borrowing" shall mean a Borrowing comprised of Eurodollar
Term Loans.
"Eurodollar Term Loan" shall mean any Term Loan bearing interest at a rate
determined by reference to the Adjusted LIBO Rate in accordance with the
provisions of Article II.
"Event of Default" shall have the meaning assigned to such term in Article
VII.
"Excess Cash Flow" shall mean, for any fiscal year of the Borrower, the
excess of (a) the sum, of (i) EBITDA for such fiscal year and (ii) reductions to
noncash working capital of the Borrower and its consolidated Subsidiaries for
such fiscal year (i.e., the decrease, if any, in Current Assets minus Current
Liabilities from the beginning to the end of such fiscal year) over (b) the sum,
without duplication, of (i) the amount of any Tax Payments payable with respect
to such fiscal year, (ii) cash interest paid (net of cash interest received) by
the Borrower and its consolidated Subsidiaries during such fiscal year, (iii)
Capital Expenditures made in cash in accordance with Section 6.08 during such
fiscal year, except to the extent financed with the proceeds of Indebtedness,
casualty or condemnation proceeds, (iv) permanent repayments of Indebtedness
made by the Borrower and its consolidated Subsidiaries during such fiscal year,
but only to the extent that such prepayments by their terms cannot be reborrowed
or redrawn and do not occur in connection with a refinancing of all or any
portion of such Indebtedness and (v) additions to noncash working capital for
such fiscal year (i.e., the increase, if any, in Current Assets minus Current
Liabilities from the beginning to the end of such fiscal year); provided that to
the extent otherwise included
12
therein, the Net Cash Proceeds of Asset Sales shall be excluded from the
calculation of Excess Cash Flow.
"Excluded Taxes" shall mean, with respect to the Administrative Agent, any
Lender, the Issuing Bank or any other recipient of any payment to be made by or
on account of any obligation of the Borrower hereunder, (a) income or franchise
taxes imposed on (or measured by) its net income by the United States of
America, or by the jurisdiction under the laws of which such recipient is
organized or in which its principal office is located or, in the case of any
Lender, in which its applicable lending office is located, (b) any branch
profits taxes imposed by the United States of America or any similar tax imposed
by any other jurisdiction in which the Borrower is located and (c) in the case
of a Foreign Lender (other than an assignee pursuant to a request by the
Borrower under Section 2.21(a)), any withholding tax that is imposed on amounts
payable to such Foreign Lender at the time such Foreign Lender becomes a party
to this Agreement (or designates a new lending office) or is attributable to
such Foreign Lender's failure to comply with Section 2.20(e), except to the
extent that such Foreign Lender (or its assignor, if any) was entitled, at the
time of designation of a new lending office (or assignment), to receive
additional amounts from the Borrower with respect to such withholding tax
pursuant to Section 2.20(a).
"Existing A&T Credit Agreement" shall mean the Amended and Restated
Revolving Credit and Term Loan Agreement dated as of November 15, 1993, as
amended, between A&T and Fleet National Bank.
"Existing Anteon Credit Agreement" shall mean the Credit Agreement dated
as of March 18, 1998, by and among the Borrower, Vector Data Systems, Inc.,
Techmatics, Inc., various lenders, Mellon Bank, N.A., as agent, and First Union
Capital Markets Group and NationsBank, N.A., as co-documentation agents, as
amended.
"Existing Credit Agreements" shall mean the Existing Anteon Credit
Agreement and the Existing A&T Credit Agreement.
"Fee Letter" shall mean the Fee Letter dated March 7, 1999, between the
Borrower and the Administrative Agent.
"Fees" shall mean the Commitment Fees, the Administrative Agent's Fees,
the Collateral Agent's Fees, the L/C Participation Fees and the Issuing Bank
Fees.
"Financial Officer" of any person shall mean the chief financial officer,
principal accounting officer, Treasurer or Controller of such person.
"Fixed Charge Coverage Ratio" for any period shall mean the ratio of (a)
EBITDA plus the aggregate amount of all rent and lease payments made by the
Borrower and its consolidated Subsidiaries pursuant to operating leases minus
Capital Expenditures and Tax Payments for such period to (b) Fixed Charges for
such period.
"Fixed Charges" for any period shall mean, without duplication, the sum of
(a) Interest Expense (excluding amortization of deferred financing fees,
premiums or interest rate protection agreements and original issue discounts,
provided, however, that the aggregate amount of amortization excluded hereby
shall not exceed 5% of the aggregate amount of the financing giving rise to the
debt issuance costs associated with such amortization) for such period, plus (b)
the aggregate amount of all rent and lease payments made by the Borrower and its
consolidated Subsidiaries pursuant to operating leases for such
13
period, plus (c) scheduled payments (whether or not made) on long term
Indebtedness (including Capital Lease Obligations) of the Borrower and its
consolidated Subsidiaries for such period, all as determined on a consolidated
basis in accordance with GAAP; provided that for clause (c) only, any loans or
advances to Holdings by the Borrower permitted under clause (iii) of the first
proviso of Section 6.06 relating to the payment of principal of the Seller
Purchase Money Note, shall be included in the definition of "Fixed Charges" for
the period in which such loans or advances are made.
"Foreign Account Debtor" shall mean any Account Debtor that is not a
Domestic Account Debtor.
"Foreign Benefit Event" shall mean, with respect to any Foreign Pension
Plan, (a) the existence of unfunded liabilities in excess of the amount
permitted under any applicable law, or in excess of the amount that would be
permitted absent a waiver from a Governmental Authority, (b) the failure to make
the required contributions or payments, under any applicable law, on or before
the due date for such contributions or payments, (c) the receipt of a notice by
a Governmental Authority relating to the intention to terminate any such Foreign
Pension Plan or to appoint a trustee or similar official to administer any such
Foreign Pension Plan, or alleging the insolvency of any such Foreign Pension
Plan and (d) the incurrence of any liability in excess of $2,500,000 (or the
equivalent thereof in another currency) by the Borrower or any of its
Subsidiaries under applicable law on account of the complete or partial
termination of such Foreign Pension Plan or the complete or partial withdrawal
of any participating employer therein, or (e) the occurrence of any transaction
that is prohibited under any applicable law and could reasonably be expected to
result in the incurrence of any liability by the Borrower or any of its
Subsidiaries, or the imposition on the Borrower or any of its Subsidiaries of
any fine, excise tax or penalty resulting from any noncompliance with any
applicable law, in each case in excess of $2,500,000 (or the equivalent thereof
in another currency).
"Foreign Lender" shall mean any Lender that is organized under the laws of
a jurisdiction other than the United States of America, each State thereof and
the District of Columbia.
"Foreign Pension Plan" shall mean any plan, fund (including any
superannuation fund) or other similar program established or maintained outside
the United States by the Borrower or any one or more of its Subsidiaries
primarily for the benefit of employees of the Borrower or such Subsidiaries
residing outside the United States, which plan, fund or other similar program
provides, or results in, retirement income, a deferral of income in
contemplation of retirement or payments to be made upon termination of
employment, and which plan is not subject to ERISA or the Code.
"Foreign Subsidiary" shall mean any Subsidiary that is not a Domestic
Subsidiary.
"GAAP" shall mean United States generally accepted accounting principles
applied on a consistent basis.
"Government" shall mean the United States government or any department or
agency thereof.
"Governmental Authority" shall mean any Federal, state, local or foreign
court or governmental agency, authority, instrumentality or regulatory body.
14
"Government Contracts" shall mean written contracts between the Borrower
or any Subsidiary Guarantor and the Government.
"Granting Lender" shall have the meaning specified in Section 9.04(i).
"Guarantee" of or by any person shall mean any obligation, contingent or
otherwise, of such person guaranteeing or having the economic effect of
guaranteeing any Indebtedness of any other person (the "primary obligor") in any
manner, whether directly or indirectly, and including any obligation of such
person, direct or indirect, (a) to purchase or pay (or advance or supply funds
for the purchase or payment of) such Indebtedness or to purchase (or to advance
or supply funds for the purchase of) any security for the payment of such
Indebtedness, (b) to purchase or lease property, securities or services for the
purpose of assuring the owner of such Indebtedness of the payment of such
Indebtedness or (c) to maintain working capital, equity capital or any other
financial statement condition or liquidity of the primary obligor so as to
enable the primary obligor to pay such Indebtedness; provided, however, that the
term "Guarantee" shall not include endorsements for collection or deposit in the
ordinary course of business.
"Hazardous Materials" shall mean all explosive or radioactive substances
or wastes, hazardous or toxic substances or wastes, pollutants, solid, liquid or
gaseous wastes, including petroleum or petroleum distillates, asbestos or
asbestos containing materials, polychlorinated biphenyls ("PCBs") or
PCB-containing materials or equipment, radon gas, infectious or medical wastes
and all other substances or wastes of any nature regulated pursuant to any
Environmental Law.
"Hedging Agreement" shall mean any interest rate swap agreement, interest
rate cap agreement, interest rate collar agreement, foreign exchange contract,
currency swap agreement or other similar agreement or arrangement designed to
protect against fluctuations in interest or currency exchange rates and not
entered into for speculation.
"Holdings" shall mean Azimuth Technologies, Inc., a Delaware corporation.
"Holdings Convertible Notes" shall mean the 12% subordinated pay-in-kind
convertible notes due 2010 of Holdings, in an original aggregate principal
amount of $22,500,000.
"IMC" shall mean Interactive Media Corp., a Delaware corporation and
wholly owned subsidiary of A&T.
"Inactive Subsidiary" shall mean any Subsidiary of the Borrower that (a)
does not conduct any business operations, (b) has assets with a total book value
not in excess of $10,000 and (c) does not have any Indebtedness outstanding.
"Indebtedness" of any person shall mean, without duplication, (a) all
obligations of such person for borrowed money or with respect to deposits or
advances of any kind, (b) all obligations of such person evidenced by bonds,
debentures, notes or similar instruments, (c) all obligations of such person
upon which interest charges are customarily paid (other than solely on past due
amounts), (d) all obligations of such person under conditional sale or other
title retention agreements relating to property or assets purchased by such
person, (e) all obligations of such person issued or assumed as the deferred
purchase price of property or services (excluding trade accounts payable and
accrued obligations incurred in the ordinary course of business), (f) all
Indebtedness of others secured by (or for which the
15
holder of such Indebtedness has an existing right, contingent or otherwise, to
be secured by) any Lien on property owned or acquired by such person, whether or
not the obligations secured thereby have been assumed, (g) all Guarantees by
such person of Indebtedness of others, (h) all Capital Lease Obligations of such
person, (i) all obligations of such person in respect of interest rate
protection agreements, foreign currency exchange agreements or other interest or
exchange rate hedging arrangements and (j) all obligations of such person as an
account party in respect of letters of credit and bankers' acceptances. The
Indebtedness of any person shall include the Indebtedness of any partnership in
which such person is a general partner, except to the extent that, by its terms,
such Indebtedness is nonrecourse to such person.
"Indemnified Taxes" shall mean Taxes other than Excluded Taxes.
"Indemnity, Subrogation and Contribution Agreement" shall mean the
Indemnity, Subrogation and Contribution Agreement, substantially in the form of
Exhibit D, among the Borrower, the Subsidiary Guarantors and the Collateral
Agent.
"Ineligible Receivables" shall mean all receivables that are (a) evidenced
by a promissory note or similar instrument; (b) owed or payable by an Account
Debtor that is more than 120 days past the last date set for payment in an
original invoice in the payment of 50% or more of the aggregate balance due from
such Account Debtor to the Borrower or a Subsidiary Guarantor; (c) owing from
any person that is the subject of any (i) suit, lien, levy or judgment which
could reasonably be expected to affect the collectability of such receivable, or
(ii) bankruptcy, insolvency or similar process or proceeding; (d) unbilled as a
result of cost variances, retainage provisions, "milestone" requirements or any
other reason, except for timing differences; (e) owed in a currency other than
dollars; or (f) deemed ineligible by either Agent, in its reasonable and good
faith discretion.
"Interest Coverage Ratio" for any period shall mean the ratio of EBITDA
for such period to the Interest Expense (excluding amortization of deferred
financing fees, premiums or interest rate protection agreements and original
issue discounts, provided, however, that the aggregate amount of amortization
excluded hereby shall not exceed 5% of the aggregate amount of the financing
giving rise to the debt issuance costs associated with such amortization) for
such period.
"Interest Expense" for any period shall mean the total interest expense of
the Borrower and its consolidated Subsidiaries (including amortization of
deferred financing fees, premiums or interest rate protection agreements and
original issue discounts), for such period determined on a consolidated basis in
accordance with GAAP.
"Interest Payment Date" shall mean (a) with respect to any ABR Loan (other
than a Swingline Loan), the last Business Day of each March, June, September and
December, (b) with respect to any Eurodollar Loan, the last day of the Interest
Period applicable to the Borrowing of which such Loan is a part and, in the case
of a Eurodollar Borrowing with an Interest Period of more than three months'
duration, each day that would have been an Interest Payment Date had successive
Interest Periods of three months' duration been applicable to such Borrowing,
and, in addition, the date of any prepayment of a Eurodollar Borrowing or
conversion of a Eurodollar Borrowing to an ABR Borrowing and (c) with respect to
any Swingline Loan, the day that such Loan is repaid or required to be repaid.
"Interest Period" shall mean, with respect to any Eurodollar Borrowing,
the period commencing on the date of such Borrowing and ending on the
numerically corresponding
16
day (or, if there is no numerically corresponding day, on the last day) in the
calendar month that is 1, 2, 3 or 6 months thereafter, as the Borrower may elect
(or such other period thereafter as the Borrower may request and all the Lenders
with Loans included in such Borrowing may agree); provided, however, that if any
Interest Period would end on a day other than a Business Day, such Interest
Period shall be extended to the succeeding Business Day unless, such next
succeeding Business Day would fall in the next calendar month, in which case
such Interest Period shall end on the preceding Business Day. Interest shall
accrue from and including the first day of an Interest Period to but excluding
the last day of such Interest Period.
"Investor Notes" shall mean (a) the promissory note made by Holdings in
favor of Azimuth Technologies, L.P., in the original principal amount of
$7,449,250; (b) the Promissory Note made by Holdings in favor of ▇▇▇▇▇▇ ▇.
▇▇▇▇▇▇▇▇▇▇▇, in the original principal amount of $19,250; (c) the Promissory
Note made by Holdings in favor of ▇▇▇▇▇ ▇▇▇▇▇▇, in the original principal amount
of $19,250; and (d) the Promissory Note made by Holdings in favor of ▇▇▇▇▇▇ ▇.
▇▇▇▇▇▇, in the original principal amount of $11,500.
"Issuing Bank" shall mean, as the context may require, (a) Credit Suisse
First Boston, with respect to Letters of Credit issued by it, (b) with respect
to each Existing Letter of Credit, the Lender that issued such Existing Letter
of Credit, (c) any other Lender that may become an Issuing Bank pursuant to
Section 2.23(i) or (k), with respect to Letters of Credit issued by such Lender,
or (d) collectively, all the foregoing.
"Issuing Bank Fees" shall have the meaning assigned to such term in
Section 2.05(c).
"L/C Commitment" shall mean the commitment of the Issuing Bank to issue
Letters of Credit pursuant to Section 2.23.
"L/C Disbursement" shall mean a payment or disbursement made by the
Issuing Bank pursuant to a Letter of Credit.
"L/C Exposure" shall mean at any time the sum of (a) the aggregate undrawn
amount of all outstanding Letters of Credit at such time plus (b) the aggregate
principal amount of all L/C Disbursements that have not yet been reimbursed at
such time. The L/C Exposure of any Revolving Credit Lender at any time shall
mean its Pro Rata Percentage of the aggregate L/C Exposure at such time.
"L/C Participation Fee" shall have the meaning assigned to such term in
Section 2.05(c).
"Lenders" shall mean (a) the financial institutions listed on Schedule
2.01 (other than any such financial institution that has ceased to be a party
hereto pursuant to an Assignment and Acceptance) and (b) any financial
institution that has become a party hereto pursuant to an Assignment and
Acceptance. Unless the context clearly indicates otherwise, the term "Lenders"
shall include the Swingline Lender.
"Letter of Credit" shall mean any letter of credit issued pursuant to
Section 2.23.
"Leverage Ratio" shall mean, on any date, the ratio of Net Debt on such
date to EBITDA for the period of four consecutive fiscal quarters of the
Borrower most recently ended as of such date. Solely for purposes of this
definition, if, at any time the Leverage Ratio is being determined, the Borrower
or any Subsidiary shall have completed a Permitted
17
Acquisition or Asset Sale since the beginning of the relevant four fiscal
quarter period, the Leverage Ratio shall be determined on a pro forma basis as
if such Permitted Acquisition or Asset Sale, and any related incurrence or
repayment of Indebtedness, had occurred at the beginning of such period and
taking into account any identifiable cost savings documented to the reasonable
satisfaction of the Administrative Agent.
"LIBO Rate" shall mean, with respect to any Eurodollar Borrowing for any
Interest Period, the rate per annum determined by the Administrative Agent at
approximately 11:00 a.m. (London time) on the date that is two Business Days
prior to the beginning of the relevant Interest Period by reference to the
British Bankers' Association Interest Settlement Rates for deposits in dollars
(as set forth by the Bloomberg Information Service or any successor thereto or
any other service selected by the Administrative Agent that has been nominated
by the British Bankers' Association as an authorized information vendor for the
purpose of displaying such rates) for a period equal to such Interest Period;
provided that, to the extent that an interest rate is not ascertainable pursuant
to the foregoing provisions of this definition, the "LIBO Rate" shall be the
interest rate per annum determined by the Administrative Agent to be the average
of the rates per annum at which deposits in dollars are offered for such
relevant Interest Period to major banks in the London interbank market in
London, England by the Administrative Agent at approximately 11:00 a.m. (London
time) on the date that is two Business Days prior to the beginning of such
Interest Period.
"Lien" shall mean, with respect to any asset, (a) any mortgage, deed of
trust, lien, pledge, encumbrance, charge or security interest in or on such
asset, (b) the interest of a vendor or a lessor under any conditional sale
agreement, capital lease or title retention agreement (or any financing lease
having substantially the same economic effect as any of the foregoing) relating
to such asset and (c) in the case of securities, any purchase option, call or
similar right of a third party with respect to such securities.
"Loan Documents" shall mean this Agreement, the Subsidiary Guarantee
Agreement, the Security Documents and the Indemnity, Subrogation and
Contribution Agreement.
"Loan Parties" shall mean Holdings, the Borrower and the Subsidiary
Guarantors.
"Loans" shall mean the Revolving Loans, the Term Loans and the Swingline
Loans.
"Margin Stock" shall have the meaning assigned to such term in Regulation
U.
"Material Adverse Effect" shall mean a materially adverse effect on (a)
the business, results of operations, condition (financial or otherwise) or
prospects of the Borrower and the Subsidiaries, taken as a whole, or (b) the
validity or enforceability of any of the Loan Documents or the rights, remedies
or benefits available to the Lenders thereunder.
"Material Contract" shall mean any and all Government Contracts and/or
other contracts or agreements of the Borrower or any Subsidiary involving
amounts in excess of $2,000,000.
"Merger" shall have the meaning given such term in the preamble to this
Agreement.
"Merger Agreement" shall mean the Agreement and Plan of Merger dated as of
March 7, 1999, by and among the Borrower, Sub and A&T, as amended, supplemented
or otherwise modified from time to time in accordance with the terms hereof and
thereof.
18
"Multiemployer Plan" shall mean a multiemployer plan as defined in
Section 4001(a)(3) of ERISA.
"Net Cash Proceeds" shall mean (a) with respect to any Asset Sale, the
cash proceeds (including cash proceeds subsequently received (as and when
received) in respect of noncash consideration initially received), net of (i)
selling expenses (including reasonable broker's fees or commissions, legal fees,
transfer and similar taxes and the Borrower's good faith estimate of income
taxes paid or payable in connection with such sale), (ii) amounts provided as a
reserve, in accordance with GAAP, against any liabilities under any
indemnification obligations or purchase price adjustment associated with such
Asset Sale (provided that, to the extent and at the time any such amounts are
released from such reserve, such amounts shall constitute Net Cash Proceeds) and
(iii) the principal amount, premium or penalty, if any, interest and other
amounts on any Indebtedness for borrowed money which is secured by the asset
sold in such Asset Sale and which is repaid with such proceeds (other than any
such Indebtedness assumed by the purchaser of such asset); provided, however,
that, if (x) the Borrower shall deliver a certificate of a Financial Officer to
the Agents at the time of receipt thereof setting forth the Borrower's intent to
reinvest such proceeds in productive assets of a kind then used or usable in the
business of the Borrower and its Subsidiaries within 270 days of receipt of such
proceeds and (y) no Default or Event of Default shall have occurred and shall be
continuing at the time of such certificate or at the proposed time of the
application of such proceeds, such proceeds shall not constitute Net Cash
Proceeds except to the extent not so used or contractually committed to be used
at the end of such 270-day period, at which time such proceeds shall be deemed
to be Net Cash Proceeds; and (b) with respect to any issuance or disposition of
Indebtedness or any Equity Issuance, the cash proceeds thereof, net of all taxes
and customary fees, commissions, costs and other expenses incurred in connection
therewith.
"Net Debt" at any time shall mean (a) the total Indebtedness of the
Borrower and the Subsidiaries at such time (excluding Indebtedness of the type
described in clause (i) of the definition of such term and, except to the extent
of any unreimbursed drawings, clause (j) of the definition of such term), less
(b) the sum of (i) the amount at such time of all cash and Permitted Investments
of the Borrower and the Subsidiaries and (ii) the Eligible Margin Stock Amount.
"Net Income" shall mean, for any period, net income or loss of the
Borrower and the Subsidiaries for such period determined on a consolidated basis
in accordance with GAAP; provided that there shall be excluded (a) the income of
any Subsidiary to the extent that the declaration or payment of dividends or
similar distributions by the Subsidiary of that income is prohibited by
operation of the terms of its charter or any agreement, instrument, judgment,
decree, statute, rule or governmental regulation applicable to the Subsidiary,
and (b) the income (or loss) of any person accrued prior to the date it becomes
a Subsidiary or is merged into or consolidated with the Borrower or any of the
Subsidiaries or the date that person's assets are acquired by the Borrower or
any of the Subsidiaries.
"Net Senior Debt" at any time shall mean the Net Debt at such time less,
to the extent included therein, the amount of any Indebtedness that is
subordinated to the Obligations pursuant to the subordination provisions
contained in Exhibit K or subordination provisions no less favorable to the
Lenders than those contained in the Senior Subordinated Note Indenture.
"Noncash Nonrecurring Charges" shall mean charges to income (a) that are
not expected to occur in the future and (b) whereby the underlying asset was not
created at least
19
12 months before the period end in which the charge is reflected in the
Borrower's financial statements.
"Obligations" shall mean all obligations defined as "Obligations" in the
Subsidiary Guarantee Agreement and the Security Documents.
"Other Taxes" shall mean any and all present or future stamp or
documentary taxes or any other excise or property taxes, charges or similar
levies arising from any payment made under any Loan Document or from the
execution, delivery or enforcement of, or otherwise with respect to, any Loan
Document.
"PBGC" shall mean the Pension Benefit Guaranty Corporation referred to and
defined in ERISA.
"Perfection Certificate" shall mean the Perfection Certificate
substantially in the form of Annex 2 to the Security Agreement.
"Permitted Acquisition" shall have the meaning assigned to such term in
Section 6.04(i).
"Permitted Investments" shall mean:
(a) direct obligations of, or obligations the principal of and
interest on which are unconditionally guaranteed by, the United States of
America (or by any agency thereof to the extent such obligations are
backed by the full faith and credit of the United States of America), in
each case maturing within one year from the date of acquisition thereof;
(b) investments in commercial paper maturing within 270 days from
the date of acquisition thereof and having, at such date of acquisition,
the highest credit rating obtainable from Standard & Poor's Ratings
Service or from ▇▇▇▇▇'▇ Investors Service, Inc.;
(c) investments in certificates of deposit, banker's acceptances and
time deposits maturing within one year from the date of acquisition
thereof issued or guaranteed by or placed with, and money market deposit
accounts issued or offered by, any domestic office of any Lender or any
commercial bank organized under the laws of the United States of America
or any State thereof that has a combined capital and surplus and undivided
profits of not less than $500,000,000;
(d) fully collateralized repurchase agreements with a term of not
more than 30 days for securities described in clause (a) above and entered
into with a financial institution satisfying the criteria of clause (c)
above;
(e) investments in municipal securities maturing within one year
from the date of acquisition thereof and having, at such date of
acquisition, a rating of at least "AA" by Standard & Poor's Ratings
Service or at least "Aa" by ▇▇▇▇▇'▇ Investors Service, Inc.; and
(f) other short-term investments utilized by Foreign Subsidiaries in
accordance with normal investment practices for cash management in
investments of a type analogous to the foregoing.
20
"Permitted Investors" shall mean (a) Caxton Corporation, ▇▇▇▇▇▇▇▇▇ ▇.
▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ and any other
person who is a Controlled Affiliate of any of the foregoing and any member of
senior management of the Borrower on the Closing Date and (ii) any Related Party
of any of the foregoing.
"person" shall mean any natural person, corporation, business trust, joint
venture, association, company, limited liability company, partnership or
government, or any agency or political subdivision thereof.
"Plan" shall mean any employee pension benefit plan (other than a
Multiemployer Plan) subject to the provisions of Title IV of ERISA or Section
412 of the Code or Section 307 of ERISA, and in respect of which the Borrower or
any ERISA Affiliate is (or, if such plan were terminated, would under Section
4069 of ERISA be deemed to be) an "employer" as defined in Section 3(5) of
ERISA.
"Pledge Agreement" shall mean the Pledge Agreement, substantially in the
form of Exhibit E, between the Borrower, Holdings, the Subsidiaries party
thereto and the Collateral Agent for the benefit of the Secured Parties.
"Properties" shall have the meaning specified in Section 3.17.
"Pro Rata Percentage" of any Revolving Credit Lender at any time shall
mean the percentage of the Total Revolving Credit Commitment represented by such
Lender's Revolving Credit Commitment.
"Qualified Public Offering" shall mean an underwritten public offering of
common stock of, and by, Holdings pursuant to a registration statement filed
with the Securities and Exchange Commission in accordance with the Securities
Act of 1933, as amended, which public equity offering results in gross proceeds
to Holdings of not less than $50,000,000.
"Register" shall have the meaning given such term in Section 9.04(d).
"Regulation T" shall mean Regulation T of the Board as from time to time
in effect and all official rulings and interpretations thereunder or thereof.
"Regulation U" shall mean Regulation U of the Board as from time to time
in effect and all official rulings and interpretations thereunder or thereof.
"Regulation X" shall mean Regulation X of the Board as from time to time
in effect and all official rulings and interpretations thereunder or thereof.
"Related Fund" shall mean, with respect to any Lender that is a fund that
invests in bank loans, any other fund that invests in bank loans and is advised
or managed by the same investment advisor as such Lender or by an Affiliate of
such investment advisor.
"Related Party" shall mean (a) any controlling stockholder, general
partner, wholly owned Subsidiary, or spouse or immediate family member (in the
case of an individual) of any Permitted Investor or (b) any trust, corporation,
partnership or other entity, all the beneficiaries, stockholders, partners or
owners of which consist solely of one or more Permitted Investors and/or such
other persons referred to in the immediately preceding clause (a).
21
"Release" shall mean any spilling, leaking, pumping, pouring, emitting,
emptying, discharging, injecting, escaping, leaching, dumping, disposing,
depositing, dispersing, emanating or migrating of any Hazardous Material in,
into, onto or through the environment.
"Remedial Action" shall mean (a) "remedial action" as such term is defined
in CERCLA, 42 U.S.C. Section 9601(24), and (b) all other actions required by any
Governmental Authority or voluntarily undertaken to: (i) cleanup, remove, treat,
▇▇▇▇▇ or in any other way address any Hazardous Material in the environment;
(ii) prevent the Release or threat of Release, or minimize the further Release
of any Hazardous Material so it does not migrate or endanger or threaten to
endanger public health, welfare or the environment; or (iii) perform studies and
investigations in connection with, or as a precondition to, (i) or (ii) above.
"Repayment Date" shall have the meaning given such term in Section 2.11.
"Required Lenders" shall mean, at any time, Lenders having Loans
(excluding Swingline Loans), L/C Exposure, Swingline Exposure and unused
Revolving Credit and Term Loan Commitments representing greater than 50% of the
sum of all outstanding Loans (excluding Swingline Loans), L/C Exposure,
Swingline Exposure and unused Revolving Credit and Term Loan Commitments at such
time.
"Responsible Officer" of any person shall mean any executive officer or
Financial Officer of such person and any other officer or similar official
thereof responsible for the administration of the obligations of such person in
respect of this Agreement.
"Revolving Credit Borrowing" shall mean a Borrowing comprised of Revolving
Loans.
"Revolving Credit Commitment" shall mean, with respect to each Lender, the
commitment of such Lender to make Revolving Loans hereunder as set forth on
Schedule 2.01, or in the Assignment and Acceptance pursuant to which such Lender
assumed its Revolving Credit Commitment, as applicable, as the same may be (a)
reduced from time to time pursuant to Section 2.09 and (b) reduced or increased
from time to time pursuant to assignments by or to such Lender pursuant to
Section 9.04.
"Revolving Credit Exposure" shall mean, with respect to any Lender at any
time, the aggregate principal amount at such time of all outstanding Revolving
Loans of such Lender, plus the aggregate amount at such time of such Lender's
L/C Exposure, plus the aggregate amount at such time of such Lender's Swingline
Exposure.
"Revolving Credit Lender" shall mean a Lender with a Revolving Credit
Commitment.
"Revolving Credit Maturity Date" shall mean June 30, 2005.
"Revolving Loans" shall mean the revolving loans made by the Lenders to
the Borrower pursuant to clause (b) of Section 2.01. Each Revolving Loan shall
be a Eurodollar Revolving Loan or an ABR Revolving Loan.
"Secured Parties" shall have the meaning assigned to such term in the
Security Agreement.
22
"Security Agreement" shall mean the Security Agreement, substantially in
the form of Exhibit F, among the Borrower, the Subsidiaries party thereto and
the Collateral Agent for the benefit of the Secured Parties.
"Security Documents" shall mean the Security Agreement, the Pledge
Agreement and each of the security agreements, mortgages and other instruments
and documents executed and delivered pursuant to any of the foregoing or
pursuant to Section 5.12.
"Seller Purchase Money Note" shall mean the promissory note made by
Holdings in favor of ▇▇▇▇▇ Technology Services Corporation, in the outstanding
principal amount of $3,650,000.
"Senior Leverage Ratio" shall mean, on any date, the ratio of Net Senior
Debt on such date to EBITDA for the period of four consecutive fiscal quarters
of the Borrower most recently ended as of such date. Solely for purposes of this
definition, if, at any time the Senior Leverage Ratio is being determined, the
Borrower or any Subsidiary shall have completed a Permitted Acquisition or Asset
Sale since the beginning of the relevant four fiscal quarter period, the Senior
Leverage Ratio shall be determined on a pro forma basis as if such Permitted
Acquisition or Asset Sale, and any related incurrence or repayment of
Indebtedness, had occurred at the beginning of such period and taking into
account any identifiable cost savings documented to the reasonable satisfaction
of the Administrative Agent.
"Senior Subordinated Note Documents" shall mean the Senior Subordinated
Notes, the Senior Subordinated Note Indenture and all other documents executed
and delivered with respect to the Senior Subordinated Notes or the Senior
Subordinated Note Indenture.
"Senior Subordinated Note Indenture" shall mean the indenture dated as of
May 11, 1999, between the Borrower, the Subsidiary Guarantors and IBJ Whitehall
Bank and Trust Company, as trustee, as in effect on the Closing Date and as
thereafter amended from time to time in accordance with the requirements hereof
and thereof.
"Senior Subordinated Notes" shall mean the Borrower's 12% Senior
Subordinated Notes Due 2009 in the initial principal amount of $100,000,000
issued pursuant to the Senior Subordinated Note Indenture and any notes issued
by the Borrower in exchange for, and as contemplated by, the Senior Subordinated
Notes with substantially identical terms as the Senior Subordinated Notes.
"SPC" shall have the meaning specified in Section 9.04(i).
"Statutory Reserves" shall mean a fraction (expressed as a decimal), the
numerator of which is the number one and the denominator of which is the number
one minus the aggregate of the maximum reserve percentages (including any
marginal, special, emergency or supplemental reserves) expressed as a decimal
established by the Board for Eurocurrency Liabilities (as defined in Regulation
D of the Board). Such reserve percentages shall include those imposed pursuant
to such Regulation D. Eurodollar Loans shall be deemed to constitute
Eurocurrency Liabilities and to be subject to such reserve requirements without
benefit of or credit for proration, exemptions or offsets that may be available
from time to time to any Lender under such Regulation D. Statutory Reserves
shall be adjusted automatically on and as of the effective date of any change in
any reserve percentage.
"Sub" shall mean Buffalo Acquisition Corporation, a Connecticut
corporation.
23
"subsidiary" shall mean, with respect to any person (herein referred to as
the "parent"), any corporation, partnership, association or other business
entity of which securities or other ownership interests representing more than
50% of the equity or more than 50% of the ordinary voting power are, at the time
any determination is being made, owned, controlled or held, by the parent or one
or more subsidiaries of the parent or by the parent and one or more subsidiaries
of the parent.
"Subsidiary" shall mean any subsidiary of the Borrower.
"Subsidiary Guarantee Agreement" shall mean the Subsidiary Guarantee
Agreement, substantially in the form of Exhibit G, made by the Subsidiary
Guarantors in favor of the Collateral Agent for the benefit of the Secured
Parties.
"Subsidiary Guarantor" shall mean each Subsidiary of the Borrower listed
on Schedule 1.01(a), and each other Subsidiary that is or becomes a party to a
Subsidiary Guarantee Agreement.
"Supermajority Lenders" shall mean, at any time, Lenders having Loans
(excluding Swingline Loans), L/C Exposure, Swingline Exposure and unused
Revolving Credit and Term Loan Commitments representing at least two-thirds of
the sum of all outstanding Loans (excluding Swingline Loans), L/C Exposure,
Swingline Exposure and unused Revolving Credit and Term Loan Commitments at such
time.
"Swingline Commitment" shall mean the commitment of the Swingline Lender
to make loans pursuant to Section 2.22, as the same may be reduced from time to
time pursuant to Section 2.09 or Section 2.22.
"Swingline Exposure" shall mean at any time the aggregate principal amount
at such time of all outstanding Swingline Loans. The Swingline Exposure of any
Revolving Credit Lender at any time shall equal its Pro Rata Percentage of the
aggregate Swingline Exposure at such time.
"Swingline Loan" shall mean any loan made by the Swingline Lender pursuant
to Section 2.22.
"Synthetic Lease" shall mean any synthetic lease, tax retention operating
lease, off-balance sheet loan or similar off-balance sheet financing product
where the transaction is considered indebtedness for borrowed money for Federal
income tax purposes but is classified as an operating lease in accordance with
GAAP for financial reporting purposes.
"Taxes" shall mean any and all present or future taxes, levies, imposts,
duties, deductions, charges, liabilities or withholdings imposed by any
Governmental Authority.
"Tax Payments" shall mean payments in cash in respect of Federal, state,
local and foreign income taxes and assessments, including all interest,
penalties and additions imposed with respect to such amounts, paid or payable by
or on behalf of the Borrower and its consolidated Subsidiaries.
"Term Borrowing" shall mean a Borrowing comprised of Term Loans.
"Term Loan Commitment" shall mean, with respect to each Lender, the
commitment of such Lender to make Term Loans hereunder as set forth on Schedule
2.01, or in the
24
Assignment and Acceptance pursuant to which such Lender assumed its Term Loan
Commitment, as applicable, as the same may be (a) reduced from time to time
pursuant to Section 2.09 and (b) reduced or increased from time to time pursuant
to assignments by or to such Lender pursuant to Section 9.04.
"Term Loan Maturity Date" shall mean June 30, 2005.
"Term Loans" shall mean the term loans made by the Lenders to the Borrower
pursuant to Section 2.01. Each Term Loan shall be a Eurodollar Term Loan or an
ABR Term Loan.
"Total Revolving Credit Commitment" shall mean, at any time, the aggregate
amount of the Revolving Credit Commitments, as in effect at such time.
"Transactions" shall have the meaning assigned to such term in Section
3.02.
"Type", when used in respect of any Loan or Borrowing, shall refer to the
Rate by reference to which interest on such Loan or on the Loans comprising such
Borrowing is determined. For purposes hereof, the term "Rate" shall include the
Adjusted LIBO Rate and the Alternate Base Rate.
"wholly owned Subsidiary" of any person shall mean a subsidiary of such
person of which securities (except for directors' qualifying shares) or other
ownership interests representing 100% of the equity or 100% of the ordinary
voting power are, at the time any determination is being made, owned, controlled
or held by such person or one or more wholly owned subsidiaries of such person
or by such person and one or more wholly owned subsidiaries of such person.
"Withdrawal Liability" shall mean liability to a Multiemployer Plan as a
result of a complete or partial withdrawal from such Multiemployer Plan, as such
terms are defined in Part I of Subtitle E of Title IV of ERISA.
SECTION 1.02. Terms Generally. The definitions in Section 1.01 shall apply
equally to both the singular and plural forms of the terms defined. Whenever the
context may require, any pronoun shall include the corresponding masculine,
feminine and neuter forms. The words "include", "includes" and "including" shall
be deemed to be followed by the phrase "without limitation". All references
herein to Articles, Sections, Exhibits and Schedules shall be deemed references
to Articles and Sections of, and Exhibits and Schedules to, this Agreement
unless the context shall otherwise require. Except as otherwise expressly
provided herein, (a) any reference in this Agreement to any Loan Document shall
mean such document as amended, restated, supplemented or otherwise modified from
time to time and (b) all terms of an accounting or financial nature shall be
construed in accordance with GAAP, as in effect from time to time; provided,
however, that if the Borrower notifies the Administrative Agent that the
Borrower wishes to amend any covenant in Article VI or any related definition to
eliminate the effect of any change in GAAP occurring after the date of this
Agreement on the operation of such covenant (or if the Administrative Agent
notifies the Borrower that the Required Lenders wish to amend Article VI or any
related definition for such purpose), then the Borrower's compliance with such
covenant shall be determined on the basis of GAAP in effect immediately before
the relevant change in GAAP became effective, until either such notice is
withdrawn or such covenant is amended in a manner satisfactory to the Borrower
and the Required Lenders.
25
ARTICLE II
The Credits
SECTION 2.01. Commitments. Subject to the terms and conditions and relying
upon the representations and warranties herein set forth, each Lender agrees,
severally and not jointly, (a) to make a Term Loan to the Borrower on the
Closing Date in a principal amount not to exceed its Term Loan Commitment, and
(b) to make Revolving Loans to the Borrower, at any time and from time to time
on or after the date hereof, and until the earlier of the Revolving Credit
Maturity Date and the termination of the Revolving Credit Commitment of such
Lender in accordance with the terms hereof, in an aggregate principal amount at
any time outstanding that will not result in such Lender's Revolving Credit
Exposure exceeding the lesser of (i) such Lender's Revolving Credit Commitment
and (ii) such Lender's Pro Rata Percentage of the Borrowing Base, each as in
effect at such time. Within the limits set forth in clause (b) of the preceding
sentence and subject to the terms, conditions and limitations set forth herein,
the Borrower may borrow, prepay and reborrow Revolving Loans. Amounts paid or
prepaid in respect of Term Loans may not be reborrowed.
SECTION 2.02. Loans. (a) Each Loan (other than Swingline Loans) shall be
made as part of a Borrowing consisting of Loans made by the Lenders ratably in
accordance with their applicable Commitments; provided, however, that the
failure of any Lender to make any Loan shall not in itself relieve any other
Lender of its obligation to lend hereunder (it being understood, however, that
no Lender shall be responsible for the failure of any other Lender to make any
Loan required to be made by such other Lender). Except for Loans deemed made
pursuant to Section 2.02(f), the Loans comprising any Borrowing shall be in an
aggregate principal amount that is (i) an integral multiple of $1,000,000 or
(ii) equal to the remaining available balance of the applicable Commitments.
(b) Subject to Sections 2.08 and 2.15, each Borrowing shall be comprised
entirely of ABR Loans or Eurodollar Loans as the Borrower may request pursuant
to Section 2.03. Each Lender may at its option make any Eurodollar Loan by
causing any domestic or foreign branch or Affiliate of such Lender to make such
Loan; provided that any exercise of such option shall not affect the obligation
of the Borrower to repay such Loan in accordance with the terms of this
Agreement. Borrowings of more than one Type may be outstanding at the same time;
provided, however, that the Borrower shall not be entitled to request any
Borrowing that, if made, would result in more than eight Eurodollar Borrowings
outstanding hereunder at any time. For purposes of the foregoing, Eurodollar
Borrowings having different Interest Periods, regardless of whether they
commence on the same date, shall be considered separate Borrowings.
(c) Except with respect to Loans made pursuant to Section 2.02(f), each
Lender shall make each Loan to be made by it hereunder on the proposed date
thereof by wire transfer of immediately available funds to such account in New
York City as the Administrative Agent may designate not later than 11:00 a.m.,
New York City time, in the case of a Eurodollar Borrowing, or 1:00 p.m., New
York City time, in the case of an ABR Borrowing, and the Administrative Agent
shall promptly credit the amounts so received to an account in the name of the
Borrower, maintained with the Administrative Agent and designated by the
Borrower in the applicable Borrowing Request or, if a Borrowing shall not occur
on such
26
date because any condition precedent herein specified shall not have been met,
return the amounts so received to the respective Lenders.
(d) Unless the Administrative Agent shall have received notice from a
Lender prior to the date of any Borrowing that such Lender will not make
available to the Administrative Agent such Lender's portion of such Borrowing,
the Administrative Agent may assume that such Lender has made such portion
available to the Administrative Agent on the date of such Borrowing in
accordance with paragraph (c) above and the Administrative Agent may, in
reliance upon such assumption, make available to the Borrower on such date a
corresponding amount. If the Administrative Agent shall have so made funds
available then, to the extent that such Lender shall not have made such portion
available to the Administrative Agent, such Lender and the Borrower severally
agree to repay to the Administrative Agent forthwith on demand such
corresponding amount together with interest thereon, for each day from the date
such amount is made available to the Borrower until the date such amount is
repaid to the Administrative Agent at (i) in the case of the Borrower, the
interest rate applicable at the time to the Loans comprising such Borrowing and
(ii) in the case of such Lender, a rate determined by the Administrative Agent
to represent its cost of overnight or short-term funds (which determination
shall be conclusive absent manifest error). If such Lender shall repay to the
Administrative Agent such corresponding amount, such amount shall constitute
such Lender's Loan as part of such Borrowing for purposes of this Agreement.
(e) Notwithstanding any other provision of this Agreement, the Borrower
shall not be entitled to request any Revolving Credit Borrowing if the Interest
Period requested with respect thereto would end after the Revolving Credit
Maturity Date.
(f) If the Issuing Bank shall not have received from the Borrower the
payment required to be made by Section 2.23(e) within the time specified in such
Section, the Issuing Bank will promptly notify the Administrative Agent of the
L/C Disbursement and the Administrative Agent will promptly notify each
Revolving Credit Lender of such L/C Disbursement and its Pro Rata Percentage
thereof. Each Revolving Credit Lender shall pay by wire transfer of immediately
available funds to the Administrative Agent not later than 2:00 p.m., New York
City time, on such date (or, if such Revolving Credit Lender shall have received
such notice later than 12:00 (noon), New York City time, on any day, not later
than 11:00 a.m., New York City time, on the immediately following Business Day),
an amount equal to such Lender's Pro Rata Percentage of such L/C Disbursement
(it being understood that such amount shall be deemed to constitute an ABR
Revolving Loan of such Lender and such payment shall be deemed to have reduced
the L/C Exposure), and the Administrative Agent will promptly pay to the Issuing
Bank amounts so received by it from the Revolving Credit Lenders. The
Administrative Agent will promptly pay to the Issuing Bank any amounts received
by it from the Borrower pursuant to Section 2.23(e) prior to the time that any
Revolving Credit Lender makes any payment pursuant to this paragraph (f); any
such amounts received by the Administrative Agent thereafter will be promptly
remitted by the Administrative Agent to the Revolving Credit Lenders that shall
have made such payments and to the Issuing Bank, as their interests may appear.
If any Revolving Credit Lender shall not have made its Pro Rata Percentage of
such L/C Disbursement available to the Administrative Agent as provided above,
such Lender and the Borrower severally agree to pay interest on such amount, for
each day from and including the date such amount is required to be paid in
accordance with this paragraph to but excluding the date such amount is paid, to
the Administrative Agent for the account of the Issuing Bank at (i) in the case
of the Borrower, a rate per annum equal to the interest rate applicable to
Revolving Loans pursuant to Section 2.06(a), and (ii) in the case of such
Lender, for the first such day, the Federal Funds Effective Rate, and for each
day thereafter, the Alternate Base Rate.
27
SECTION 2.03. Borrowing Procedure. In order to request a Borrowing (other
than a Swingline Loan or a deemed Borrowing pursuant to Section 2.02(f), as to
which this Section 2.03 shall not apply), the Borrower shall hand deliver or fax
to the Administrative Agent a duly completed Borrowing Request (a) in the case
of a Eurodollar Borrowing, not later than 11:00 a.m., New York City time, three
Business Days before a proposed Borrowing, and (b) in the case of an ABR
Borrowing, not later than 12:00 noon, New York City time, one Business Day
before a proposed Borrowing. Each Borrowing Request shall be irrevocable, shall
be signed by or on behalf of the Borrower and shall specify the following
information: (i) whether the Borrowing then being requested is to be a Term
Borrowing or a Revolving Credit Borrowing, and whether such Borrowing is to be a
Eurodollar Borrowing or an ABR Borrowing; (ii) the date of such Borrowing (which
shall be a Business Day), (iii) the number and location of the account to which
funds are to be disbursed (which shall be an account that complies with the
requirements of Section 2.02(c)); (iv) the amount of such Borrowing; and (v) if
such Borrowing is to be a Eurodollar Borrowing, the Interest Period with respect
thereto; provided, however, that, notwithstanding any contrary specification in
any Borrowing Request, each requested Borrowing shall comply with the
requirements set forth in Section 2.02. If no election as to the Type of
Borrowing is specified in any such notice, then the requested Borrowing shall be
an ABR Borrowing. If no Interest Period with respect to any Eurodollar Borrowing
is specified in any such notice, then the Borrower shall be deemed to have
selected an Interest Period of one month's duration. The Administrative Agent
shall promptly advise the applicable Lenders of any notice given pursuant to
this Section 2.03 (and the contents thereof), and of each Lender's portion of
the requested Borrowing.
SECTION 2.04. Evidence of Debt; Repayment of Loans. (a) The Borrower
hereby unconditionally promises to pay to (i) the Administrative Agent (x) for
the account of each Lender holding Term Loans, the principal amount of each Term
Loan of such Lender as provided in Section 2.11 and (y) for the account of each
Revolving Credit Lender, the then unpaid principal amount of each Revolving Loan
of such Lender on the Revolving Credit Maturity Date and (ii) to the Swingline
Lender, the then unpaid principal amount of each Swingline Loan on the Revolving
Credit Maturity Date.
(b) Each Lender shall maintain in accordance with its usual practice an
account or accounts evidencing the indebtedness of the Borrower to such Lender
resulting from each Loan made by such Lender from time to time, including the
amounts of principal and interest payable and paid such Lender from time to time
under this Agreement.
(c) The Administrative Agent shall maintain accounts in which it will
record (i) the amount of each Loan made hereunder, the Type thereof and the
Interest Period applicable thereto, (ii) the amount of any principal or interest
due and payable or to become due and payable from the Borrower to each Lender
hereunder and (iii) the amount of any sum received by the Administrative Agent
hereunder from the Borrower or any Subsidiary Guarantor and each Lender's share
thereof.
(d) The entries made in the accounts maintained pursuant to paragraphs (b)
and (c) above shall be prima facie evidence of the existence and amounts of the
obligations therein recorded; provided, however, that the failure of any Lender
or the Administrative Agent to maintain such accounts or any error therein shall
not in any manner affect the obligations of the Borrower to repay the Loans in
accordance with their terms.
(e) Any Lender may request that Loans made by it hereunder be evidenced by
a promissory note. In such event, the Borrower shall execute and deliver to such
Lender a
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promissory note payable to such Lender and its registered assigns and in a form
and substance reasonably acceptable to the Administrative Agent and the
Borrower. Notwithstanding any other provision of this Agreement, in the event
any Lender shall request and receive such a promissory note, the interests
represented by such note shall at all times (including after any assignment of
all or part of such interests pursuant to Section 9.04) be represented by one or
more promissory notes payable to the payee named therein or its registered
assigns.
SECTION 2.05. Fees. (a) The Borrower agrees to pay to each Lender, through
the Administrative Agent, on the last day of March, June, September and December
in each year and on each date on which any Commitment of such Lender shall
expire or be terminated as provided herein, a commitment fee (a "Commitment
Fee") equal to the Applicable Percentage per annum in effect from time to time
on the daily unused amount of the Commitments of such Lender (other than the
Swingline Commitment) during the preceding quarter (or other period commencing
with the date hereof or ending with the Revolving Credit Maturity Date or the
date on which the Commitments of such Lender shall expire or be terminated). All
Commitment Fees shall be computed on the basis of the actual number of days
elapsed in a year of 360 days. The Commitment Fee due to each Lender shall
commence to accrue on the date hereof and shall cease to accrue on the date on
which the Commitment of such Lender shall expire or be terminated as provided
herein. For purposes of calculating Commitment Fees only, no portion of the
Revolving Credit Commitments shall be deemed utilized under Section 2.17 as a
result of outstanding Swingline Loans.
(b) The Borrower agrees to pay to the Administrative Agent, for its own
account, the administration fees set forth in the Fee Letter at the times and in
the amounts specified therein (the "Administrative Agent Fees"). The Borrower
agrees to pay to the Collateral Agent, for its own account, the collateral
agent's fees set forth in the Collateral Agent's Fee Letter at the times and in
the amounts specified therein (the "Collateral Agent's Fees").
(c) The Borrower agrees to pay (i) to each Revolving Credit Lender,
through the Administrative Agent, on the last Business Day of March, June,
September and December of each year and on the date on which the Revolving
Credit Commitment of such Lender shall be terminated as provided herein, a fee
(an "L/C Participation Fee") calculated on such Lender's Pro Rata Percentage of
the average daily aggregate L/C Exposure (excluding the portion thereof
attributable to unreimbursed L/C Disbursements) during the preceding quarter (or
shorter period commencing with the date hereof or ending with the Revolving
Credit Maturity Date or the date on which all Letters of Credit have been
canceled or have expired and the Revolving Credit Commitments of all Lenders
shall have been terminated) at a rate equal to the Applicable Percentage from
time to time used to determine the interest rate on Revolving Credit Borrowings
comprised of Eurodollar Loans pursuant to Section 2.06, and (ii) to the Issuing
Bank with respect to each Letter of Credit the standard fronting, issuance and
drawing fees specified from time to time by the Issuing Bank (the "Issuing Bank
Fees"). All L/C Participation Fees and Issuing Bank Fees shall be computed on
the basis of the actual number of days elapsed in a year of 360 days.
(d) All Fees shall be paid on the dates due, in immediately available
funds, to the Administrative Agent for distribution, if and as appropriate,
among the Lenders, except that the Issuing Bank Fees shall be paid directly to
the Issuing Bank. Once paid, none of the Fees shall be refundable under any
circumstances.
SECTION 2.06. Interest on Loans. (a) Subject to the provisions of Section
2.07, the Loans comprising each ABR Borrowing, including each Swingline Loan,
shall bear interest
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(computed on the basis of the actual number of days elapsed over a year of 365
or 366 days, as the case may be, when the Alternate Base Rate is determined by
reference to the Prime Rate and over a year of 360 days at all other times and
calculated from and including the date of such Borrowing to but excluding the
date of repayment thereof) at a rate per annum equal to the Alternate Base Rate
plus the Applicable Percentage in effect from time to time.
(b) Subject to the provisions of Section 2.07, the Loans comprising each
Eurodollar Borrowing shall bear interest (computed on the basis of the actual
number of days elapsed over a year of 360 days) at a rate per annum equal to the
Adjusted LIBO Rate for the Interest Period in effect for such Borrowing plus the
Applicable Percentage in effect from time to time.
(c) Interest on each Loan shall be payable to the Administrative Agent on
the Interest Payment Dates applicable to such Loan except as otherwise provided
in this Agreement. The applicable Alternate Base Rate or Adjusted LIBO Rate
shall be determined by the Administrative Agent, and such determination shall be
conclusive absent manifest error.
SECTION 2.07. Default Interest. If the Borrower shall default in the
payment of the principal of or interest on any Loan or any other amount becoming
due hereunder, by acceleration or otherwise, or under any other Loan Document,
the Borrower shall on demand from time to time pay interest, to the extent
permitted by law, on such defaulted amount to but excluding the date of actual
payment (after as well as before judgment) (a) in the case of overdue principal,
at the rate otherwise applicable to such Loan pursuant to Section 2.06 plus
2.00% per annum and (b) in all other cases, at a rate per annum (computed on the
basis of the actual number of days elapsed over a year of 365 or 366 days, as
the case may be, when determined by reference to the Prime Rate and over a year
of 360 days at all other times) equal to the rate that would be applicable to an
ABR Revolving Loan plus 2.00%.
SECTION 2.08. Alternate Rate of Interest. In the event, and on each
occasion, that on the day two Business Days prior to the commencement of any
Interest Period for a Eurodollar Borrowing the Administrative Agent shall have
determined that dollar deposits in the principal amounts of the Loans comprising
such Borrowing are not generally available in the London interbank market, or
that the rates at which such dollar deposits are being offered will not
adequately and fairly reflect the cost to a majority in interest of the Lenders
making or maintaining such Eurodollar Loans during such Interest Period, or that
reasonable means do not exist for ascertaining the Adjusted LIBO Rate, the
Administrative Agent shall, as soon as practicable thereafter, give written or
fax notice of such determination to the Borrower and the Lenders. In the event
of any such determination, until the Administrative Agent shall have advised the
Borrower and the Lenders that the circumstances giving rise to such notice no
longer exist (which the Administrative Agent agrees to do as soon as practicable
after such circumstances cease to exist), any request by the Borrower for a
Eurodollar Borrowing pursuant to Section 2.03 or 2.10 shall be deemed to be a
request for an ABR Borrowing. Each determination by the Administrative Agent
hereunder shall be conclusive absent manifest error.
SECTION 2.09. Termination and Reduction of Commitments. (a) The Term Loan
Commitments shall automatically terminate at 5:00 p.m., New York City time, on
the Closing Date. The Revolving Credit Commitments, the Swingline Commitment and
the L/C Commitment shall automatically terminate on the Revolving Credit
Maturity Date. Notwithstanding the foregoing, all the Commitments shall
automatically terminate at 5:00 p.m., New York City time, on July 31, 1999, if
the initial Credit Event shall not have occurred by such time.
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(b) Upon at least three Business Days' prior irrevocable written or fax
notice to the Administrative Agent, the Borrower may at any time in whole
permanently terminate, or from time to time in part permanently reduce, the Term
Loan Commitments or the Revolving Credit Commitments; provided, however, that
(i) each partial reduction of the Term Loan Commitments or the Revolving Credit
Commitments shall be in an integral multiple of $1,000,000 and (ii) the Total
Revolving Credit Commitment shall not be reduced to an amount that is less than
the sum of the Aggregate Revolving Credit Exposure at the time.
(c) Each reduction in the Term Loan Commitments or the Revolving Credit
Commitments hereunder shall be made ratably among the Lenders in accordance with
their respective applicable Commitments. The Borrower shall pay to the
Administrative Agent for the account of the applicable Lenders, on the date of
each termination or reduction, the Commitment Fees on the amount of the
Commitments so terminated or reduced accrued to but excluding the date of such
termination or reduction.
SECTION 2.10. Conversion and Continuation of Borrowings. The Borrower
shall have the right at any time upon prior irrevocable notice to the
Administrative Agent (a) not later than 12:00 (noon), New York City time, on the
day of conversion, to convert any Eurodollar Borrowing into an ABR Borrowing,
(b) not later than 10:00 a.m., New York City time, three Business Days prior to
conversion or continuation, to convert any ABR Borrowing into a Eurodollar
Borrowing or to continue any Eurodollar Borrowing as a Eurodollar Borrowing for
an additional Interest Period, and (c) not later than 10:00 a.m., New York City
time, three Business Days prior to conversion, to convert the Interest Period
with respect to any Eurodollar Borrowing to another permissible Interest Period,
subject in each case to the following:
(i) each conversion or continuation shall be made pro rata among the
Lenders in accordance with the respective principal amounts of the Loans
comprising the converted or continued Borrowing;
(ii) if less than all the outstanding principal amount of any
Borrowing shall be converted or continued, then each resulting Borrowing
shall satisfy the limitations specified in Sections 2.02(a) and 2.02(b)
regarding the principal amount and maximum number of Borrowings of the
relevant Type;
(iii) each conversion shall be effected by each Lender and the
Administrative Agent by recording for the account of such Lender the new
Type and/or Interest Period for such Borrowing resulting from such
conversion; accrued interest on any Eurodollar Loan (or portion thereof)
being converted shall be paid by the Borrower at the time of conversion;
(iv) if any Eurodollar Borrowing is converted at a time other than
the end of the Interest Period applicable thereto, the Borrower shall pay,
upon demand, any amounts due to the Lenders pursuant to Section 2.16;
(v) any portion of a Borrowing maturing or required to be repaid in
less than one month may not be converted into or continued as a Eurodollar
Borrowing;
(vi) any portion of a Eurodollar Borrowing that cannot be converted
into or continued as a Eurodollar Borrowing by reason of the immediately
preceding clause shall be automatically converted at the end of the
Interest Period in effect for such Borrowing into an ABR Borrowing;
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(vii) no Interest Period may be selected for any Eurodollar Term
Borrowing that would end later than a Repayment Date occurring on or after
the first day of such Interest Period if, after giving effect to such
selection, the aggregate outstanding amount of (A) the Eurodollar Term
Borrowings with Interest Periods ending on or prior to such Repayment Date
and (B) the ABR Term Borrowings would not be at least equal to the
principal amount of Term Borrowings to be paid on such Repayment Date; and
(viii) upon notice to the Borrower from the Administrative Agent
given at the request of the Required Lenders, after the occurrence and
during the continuance of a Default or Event of Default, no outstanding
Loan may be converted into, or continued as, a Eurodollar Loan.
Each notice pursuant to this Section 2.10 shall be irrevocable and shall
refer to this Agreement and specify (i) the identity and amount of the Borrowing
that the Borrower requests be converted or continued, (ii) whether such
Borrowing is to be converted to or continued as a Eurodollar Borrowing or an ABR
Borrowing, (iii) if such notice requests a conversion, the date of such
conversion (which shall be a Business Day) and (iv) if such Borrowing is to be
converted to or continued as a Eurodollar Borrowing, the Interest Period with
respect thereto. If no Interest Period is specified in any such notice with
respect to any conversion to or continuation as a Eurodollar Borrowing, the
Borrower shall be deemed to have selected an Interest Period of one month's
duration. The Administrative Agent shall advise the Lenders of any notice given
pursuant to this Section 2.10 and of each Lender's portion of any converted or
continued Borrowing. If the Borrower shall not have given notice in accordance
with this Section 2.10 to continue any Eurodollar Borrowing into a subsequent
Interest Period (and shall not otherwise have given notice in accordance with
this Section 2.10 to convert such Borrowing), such Borrowing shall, at the end
of the Interest Period applicable thereto (unless repaid pursuant to the terms
hereof), automatically be converted into an ABR Borrowing.
SECTION 2.11. Repayment of Term Borrowings. (a) The Term Borrowings shall
be payable as to principal in 17 consecutive installments payable on the last
Business Day of March, June, September and December of each year, commencing on
the last Business Day in June 2001 and ending on the Term Loan Maturity Date
(each such date being called a "Repayment Date"). Each of the first 16
installments shall be in an amount equal to 4.6875% of the initial aggregate
principal amount of the Term Borrowings, with the balance due and payable on the
Term Loan Maturity Date.
(b) Each payment of Term Borrowings pursuant to this Section 2.11 shall be
accompanied by accrued interest on the principal amount paid to but excluding
the date of payment.
SECTION 2.12. Prepayment. (a) The Borrower shall have the right at any
time and from time to time to prepay any Borrowing, in whole or in part, upon at
least three Business Days' prior written or fax notice (or telephone notice
promptly confirmed by written or fax notice) in the case of Eurodollar Loans, or
written or fax notice (or telephone notice promptly confirmed by written or fax
notice) on or prior to the date of prepayment in the case of ABR Loans, to the
Administrative Agent before 11:00 a.m., New York City time; provided, however,
that each partial prepayment shall be in an amount that is an integral multiple
of $1,000,000.
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(b) Optional prepayments of Term Loans shall be applied pro rata against
the remaining scheduled installments of principal due in respect of the Term
Loans.
(c) Each notice of prepayment shall specify the prepayment date and the
principal amount of each Borrowing (or portion thereof) to be prepaid, shall be
irrevocable and shall commit the Borrower to prepay such Borrowing by the amount
stated therein on the date stated therein. All prepayments under this Section
2.12 shall be subject to Section 2.16 but otherwise without premium or penalty.
All prepayments of Eurodollar Loans under this Section 2.12 shall be accompanied
by accrued interest on the principal amount being prepaid to the date of
payment. Interest on ABR Loans prepaid under this Section 2.12 shall be paid in
accordance with Section 2.06(c).
SECTION 2.13. Mandatory Prepayments. (a) In the event of any termination
of all the Revolving Credit Commitments, the Borrower shall, on the date of such
termination, repay or prepay all its outstanding Revolving Credit Borrowings and
all outstanding Swingline Loans and replace all outstanding Letters of Credit
and/or deposit an amount equal to the L/C Exposure in cash in a cash collateral
account established with the Collateral Agent for the benefit of the Secured
Parties. In the event of any partial reduction of the Revolving Credit
Commitments, then (i) at or prior to the effective date of such reduction, the
Administrative Agent shall notify the Borrower and the Revolving Credit Lenders
of the Aggregate Revolving Credit Exposure after giving effect thereto and (ii)
if the Aggregate Revolving Credit Exposure would exceed the Total Revolving
Credit Commitment after giving effect to such reduction or termination, then the
Borrower shall, on the date of such reduction or termination, repay or prepay
Revolving Credit Borrowings or Swingline Loans (or a combination thereof) and/or
replace or cash collateralize outstanding Letters of Credit in an amount
sufficient to eliminate such excess.
(b) If on any date the Aggregate Revolving Credit Exposure shall exceed
the Borrowing Base, the Borrower shall on such date repay or prepay Revolving
Credit Borrowings or Swingline Loans (or a combination thereof) and/or replace
or cash collateralize outstanding Letters of Credit in an amount sufficient to
eliminate such excess.
(c) Not later than the third Business Day following the completion of any
Asset Sale, the Borrower shall apply 100% of the Net Cash Proceeds received with
respect thereto to prepay outstanding Term Loans in accordance with Section
2.13(g).
(d) In the event and on each occasion that an Equity Issuance occurs, the
Borrower shall, substantially simultaneously with (and in any event not later
than the third Business Day next following) the occurrence of such Equity
Issuance, apply 50% of the Net Cash Proceeds therefrom to prepay outstanding
Term Loans in accordance with Section 2.13(g).
(e) No later than the earlier of (i) 90 days after the end of each fiscal
year of the Borrower, commencing with the fiscal year ending on December 31,
2000, and (ii) the date on which the financial statements with respect to such
period are delivered pursuant to Section 5.04(a), except as set forth on
Schedule 2.13(e), the Borrower shall prepay outstanding Term Loans in accordance
with Section 2.13(g) in an aggregate principal amount equal to 75% of Excess
Cash Flow for the fiscal year then ended; provided, however, that such
percentage shall be reduced to 50% for any year if the Leverage Ratio at the end
of such year shall have been less than 3.50 to 1.00.
(f) In the event that any Loan Party or any subsidiary of a Loan Party
shall receive Net Cash Proceeds from the issuance or other disposition of
Indebtedness for money
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borrowed of any Loan Party or any subsidiary of a Loan Party (other than
Indebtedness for money borrowed permitted pursuant to Section 6.01), the
Borrower shall, substantially simultaneously with (and in any event not later
than the third Business Day next following) the receipt of such Net Cash
Proceeds by such Loan Party or such subsidiary, apply an amount equal to 100% of
such Net Cash Proceeds to prepay outstanding Term Loans in accordance with
Section 2.13(g).
(g) Mandatory prepayments of outstanding Term Loans under this Agreement
shall be applied pro rata against the remaining scheduled installments of
principal due in respect of the Term Loans under Section 2.11.
(h) The Borrower shall deliver to the Administrative Agent, at the time of
each pre payment required under this Section 2.13, (i) a certificate signed by a
Financial Officer of the Borrower setting forth in reasonable detail the
calculation of the amount of such prepayment and (ii) to the extent practicable,
at least three days prior written notice of such prepayment. Each notice of
prepayment shall specify the prepayment date, the Type of each Loan being
prepaid and the principal amount of each Loan (or portion thereof) to be
prepaid. All pre payments of Borrowings under this Section 2.13 shall be subject
to Section 2.16, but shall otherwise be without premium or penalty.
SECTION 2.14. Reserve Requirements; Change in Circumstances. (a)
Notwithstanding any other provision of this Agreement, if any Change in Law
shall impose, modify or deem applicable any reserve, special deposit or similar
requirement against assets of, deposits with or for the account of or credit
extended by any Lender or the Issuing Bank (except any such reserve requirement
which is reflected in the Adjusted LIBO Rate) or shall impose on such Lender or
the Issuing Bank or the London interbank market any other condition affecting
this Agreement or Eurodollar Loans made by such Lender or any Letter of Credit
or participation therein, and the result of any of the foregoing shall be to
increase the cost to such Lender or the Issuing Bank of making or maintaining
any Eurodollar Loan or increase the cost to any Lender of issuing or maintaining
any Letter of Credit or purchasing or maintaining a participation therein or to
reduce the amount of any sum received or receivable by such Lender or the
Issuing Bank hereunder (whether of principal, interest or otherwise), in each
case, by an amount deemed by such Lender or the Issuing Bank to be material,
then the Borrower will pay to such Lender or the Issuing Bank, as the case may
be, upon demand in accordance with paragraph (c) below such additional amount or
amounts as will compensate such Lender or the Issuing Bank, as the case may be,
for such additional costs incurred or reduction suffered.
(b) If any Lender or the Issuing Bank shall have determined that any
Change in Law regarding capital adequacy has or would have the effect of
reducing the rate of return on such Lender's or the Issuing Bank's capital or on
the capital of such Lender's or the Issuing Bank's holding company, if any, as a
consequence of this Agreement or the Loans made or participations in Letters of
Credit purchased by such Lender pursuant hereto or the Letters of Credit issued
by the Issuing Bank pursuant hereto to a level below that which such Lender or
the Issuing Bank or such Lender's or the Issuing Bank's holding company could
have achieved but for such Change In Law (taking into consideration such
Lender's or the Issuing Bank's policies and the policies of such Lender's or the
Issuing Bank's holding company with respect to capital adequacy) by an amount
deemed by such Lender or the Issuing Bank to be material, then from time to time
in accordance with paragraph (c) below the Borrower shall pay to such Lender or
the Issuing Bank, as the case may be, such additional amount or amounts as will
compensate such Lender or the Issuing Bank or such Lender's or the Issuing
Bank's holding company for any such reduction suffered.
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(c) A certificate of a Lender or the Issuing Bank setting forth the amount
or amounts necessary to compensate such Lender or the Issuing Bank or its
holding company, as applicable, as specified in paragraph (a) or (b) above,
together with supporting documentation or computations in each case in
reasonable detail, shall be delivered to the Borrower and shall be conclusive
absent manifest error. The Borrower shall pay such Lender or the Issuing Bank
the amount shown as due on any such certificate delivered by it within 10 days
after its receipt of the same.
(d) Failure or delay on the part of any Lender or the Issuing Bank to
demand compensation for any increased costs or reduction in amounts received or
receivable or reduction in return on capital shall not constitute a waiver of
such Lender's or the Issuing Bank's right to demand such compensation; provided
that the Borrower shall not be under any obligation to compensate any Lender or
the Issuing Bank under paragraph (a) or (b) above with respect to increased
costs or reductions with respect to any period prior to the date that is 120
days prior to such request if such Lender or the Issuing Bank knew or could
reasonably have been expected to know of the circumstances giving rise to such
increased costs or reductions and of the fact that such circumstances would
result in a claim for increased compensation by reason of such increased costs
or reductions; provided further that the foregoing limitation shall not apply to
any increased costs or reductions arising out of the retroactive application of
any Change in Law within such 120-day period.
SECTION 2.15. Change in Legality. (a) Notwithstanding any other provision
of this Agreement, if, after the date hereof, any change in any law or
regulation or in the interpretation thereof by any Governmental Authority
charged with the administration or interpretation thereof shall make it unlawful
for any Lender to make or maintain any Eurodollar Loan or to give effect to its
obligations as contemplated hereby with respect to any Eurodollar Loan, then, by
written notice to the Borrower and to the Administrative Agent:
(i) such Lender may declare that Eurodollar Loans will not
thereafter (for the duration of such unlawfulness) be made by such Lender
hereunder (or be continued for additional Interest Periods and ABR Loans
will not thereafter (for such duration) be converted into Eurodollar
Loans), whereupon any request for a Eurodollar Borrowing (or to convert an
ABR Borrowing to a Eurodollar Borrowing or to continue a Eurodollar
Borrowing for an additional Interest Period) shall, as to such Lender
only, be deemed a request for an ABR Loan (or a request to continue an ABR
Loan as such or to convert a Eurodollar Loan into an ABR Loan, as the case
may be), unless such declaration shall be subsequently withdrawn (which
such Lender agrees to do as promptly as practicable after circumstances
allow); and
(ii) such Lender may require that all outstanding Eurodollar Loans
made by it be converted to ABR Loans, in which event all such Eurodollar
Loans shall be automatically converted to ABR Loans as of the effective
date of such notice as provided in paragraph (b) below.
In the event any Lender shall exercise its rights under (i) or (ii) above, all
payments and prepayments of principal that would otherwise have been applied to
repay the Eurodollar Loans that would have been made by such Lender or the
converted Eurodollar Loans of such Lender shall instead be applied to repay the
ABR Loans made by such Lender in lieu of, or resulting from the conversion of,
such Eurodollar Loans.
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(b) For purposes of this Section 2.15, a notice to the Borrower by any
Lender shall be effective as to each Eurodollar Loan made by such Lender, if
lawful, on the last day of the Interest Period then applicable to such
Eurodollar Loan; in all other cases such notice shall be effective on the date
of receipt by the Borrower.
SECTION 2.16. Indemnity. The Borrower shall indemnify each Lender against
any loss or expense (other than any loss of margin over funding cost or
anticipated profit) that such Lender may sustain or incur as a consequence of
(a) any event, other than a default by such Lender in the performance of its
obligations hereunder, which results in (i) such Lender receiving or being
deemed to receive any amount on account of the principal of any Eurodollar Loan
prior to the end of the Interest Period in effect therefor, (ii) the conversion
of any Eurodollar Loan to an ABR Loan, or the conversion of the Interest Period
with respect to any Eurodollar Loan, in each case other than on the last day of
the Interest Period in effect therefor, or (iii) any Eurodollar Loan to be made
by such Lender (including any Eurodollar Loan to be made pursuant to a
conversion or continuation under Section 2.10) not being made after notice of
such Loan shall have been given by the Borrower hereunder (any of the events
referred to in this clause (a) being called a "Breakage Event") or (b) any
default in the making of any payment or prepayment required to be made
hereunder. In the case of any Breakage Event, such loss shall include an amount
equal to the excess, as reasonably determined by such Lender, of (i) its cost of
obtaining funds for the Eurodollar Loan that is the subject of such Breakage
Event for the period from the date of such Breakage Event to the last day of the
Interest Period in effect (or that would have been in effect) for such Loan over
(ii) the amount of interest likely to be realized by such Lender in redeploying
the funds released or not utilized by reason of such Breakage Event for such
period. A certificate of any Lender in reasonable detail with supporting
calculations setting forth any amount or amounts which such Lender is entitled
to receive pursuant to this Section 2.16 shall be delivered to the Borrower and
shall be conclusive absent manifest error.
SECTION 2.17. Pro Rata Treatment. Except as provided below in this Section
2.17 with respect to Swingline Loans and as required under Section 2.15, each
Borrowing, each payment or prepayment of principal of any Borrowing, each
payment of interest on the Loans, each payment of the Commitment Fees, each
reduction of the Term Loan Commitments or the Revolving Credit Commitments and
each conversion of any Borrowing to or continuation of any Borrowing as a
Borrowing of any Type shall be allocated pro rata among the Lenders in
accordance with their respective applicable Commitments (or, if such Commitments
shall have expired or been terminated, in accordance with the respective
principal amounts of their outstanding Loans). For purposes of determining the
available Revolving Credit Commitments of the Lenders at any time, each
outstanding Swingline Loan shall be deemed to have utilized the Revolving Credit
Commitments of the Lenders (including those Lenders which shall not have made
Swingline Loans) pro rata in accordance with such respective Revolving Credit
Commitments. Each Lender agrees that in computing such Lender's portion of any
Borrowing to be made hereunder, the Administrative Agent may, in its discretion,
round each Lender's percentage of such Borrowing to the next higher or lower
whole dollar amount.
SECTION 2.18. Sharing of Setoffs. Each Lender agrees that if it shall,
through the exercise of a right of banker's lien, setoff or counterclaim against
the Borrower or any other Loan Party, or pursuant to a secured claim under
Section 506 of Title 11 of the United States Code or other security or interest
arising from, or in lieu of, such secured claim, received by such Lender under
any applicable bankruptcy, insolvency or other similar law or otherwise, or by
any other means, obtain payment (voluntary or involuntary) in respect of any
Obligation as a result of which the unpaid portion of its Obligations shall be
proportionately
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less than the unpaid portion of the Obligations of any other Lender, it shall be
deemed simultaneously to have purchased from such other Lender at face value,
and shall promptly pay to such other Lender the purchase price for, a
participation in the Obligations of such other Lender, so that the aggregate
unpaid amount of the Obligations and participations in Obligations held by each
Lender shall be in the same proportion to the aggregate unpaid amount of all
Obligations then outstanding as the amount of its Obligations prior to such
exercise of banker's lien, setoff or counterclaim or other event was to the
amount of all Obligations outstanding prior to such exercise of banker's lien,
setoff or counterclaim or other event; provided, however, that if any such
purchase or purchases or adjustments shall be made pursuant to this Section 2.18
and the payment giving rise thereto shall thereafter be recovered, such purchase
or purchases or adjustments shall be rescinded to the extent of such recovery
and the purchase price or prices or adjustment restored without interest. The
Borrower expressly consents to the foregoing arrangements and agrees that any
Lender holding a participation in an Obligation deemed to have been so purchased
may exercise any and all rights of banker's lien, setoff or counterclaim with
respect to any and all moneys owing by the Borrower to such Lender by reason
thereof as fully as if such Lender had made a Loan directly to the Borrower in
the amount of such participation.
SECTION 2.19. Payments. (a) The Borrower shall make each payment
(including principal of or interest on any Borrowing or any L/C Disbursement or
any Fees or other amounts) hereunder and under any other Loan Document not later
than 1:00 p.m., New York City time, on the date when due in immediately
available dollars, without setoff, defense or counterclaim; provided, however,
that the Borrower shall make each payment of principal of or interest on
Swingline Loans not later than 12:00 (noon), New York City time . Each such
payment (other than (i) Issuing Bank Fees, which shall be paid directly to the
Issuing Bank, and (ii) principal of and interest on Swingline Loans, which shall
be paid directly to the Swingline Lender except as otherwise provided in Section
2.22(e)) shall be made to the Administrative Agent at its offices at Eleven
Madison Avenue, New York, New York.
(b) Except as otherwise expressly provided herein, whenever any payment
(including principal of or interest on any Borrowing or any Fees or other
amounts) hereunder or under any other Loan Document shall become due, or
otherwise would occur, on a day that is not a Business Day, such payment may be
made on the next succeeding Business Day, and such extension of time shall in
such case be included in the computation of interest or Fees, if applicable.
SECTION 2.20. Taxes. (a) Any and all payments by or on account of any
obligation of the Borrower or any Loan Party hereunder or under any other Loan
Document shall be made free and clear of and without deduction for any
Indemnified Taxes or Other Taxes; provided that if the Borrower or any Loan
Party shall be required to deduct any Indemnified Taxes or Other Taxes from such
payments, then (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) the Administrative Agent or such Lender (as the
case may be) receives an amount equal to the sum it would have received had no
such deductions been made, (ii) the Borrower or such Loan Party shall make such
deductions and (iii) the Borrower or such Loan Party shall pay the full amount
deducted to the relevant Governmental Authority in accordance with applicable
law.
(b) In addition, the Borrower shall pay any Other Taxes to the relevant
Governmental Authority in accordance with applicable law.
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(c) The Borrower shall indemnify the Administrative Agent and each Lender,
within 10 days after written demand therefor, for the full amount of any
Indemnified Taxes or Other Taxes paid by the Administrative Agent or such
Lender, as the case may be, on or with respect to any payment by or on account
of any obligation of the Borrower or any Loan Party hereunder or under any other
Loan Document (including Indemnified Taxes or Other Taxes imposed or asserted on
or attributable to amounts payable under this Section) and any penalties,
interest and reasonable expenses arising therefrom or with respect thereto,
whether or not such Indemnified Taxes or Other Taxes were correctly or legally
imposed or asserted by the relevant Governmental Authority. A certificate as to
the amount of such payment or liability delivered to the Borrower by a Lender,
or by the Administrative Agent on its behalf or on behalf of a Lender, shall be
conclusive absent manifest error.
(d) As soon as practicable after any payment of Indemnified Taxes or Other
Taxes by the Borrower or any other Loan Party to a Governmental Authority, the
Borrower shall deliver to the Administrative Agent the original or a certified
copy of a receipt issued by such Governmental Authority evidencing such payment,
a copy of the return reporting such payment or other evidence of such payment
reasonably satisfactory to the Administrative Agent.
(e) Any Foreign Lender that is entitled to an exemption from or reduction
of withholding tax under the law of the jurisdiction in which the Borrower is
located, or any treaty to which such jurisdiction is a party, with respect to
payments under this Agreement shall deliver to the Borrower (with a copy to the
Administrative Agent), on or prior to the Closing Date, or in the case of a
Lender that is an assignee or transferee of an interest under this Credit
Agreement pursuant to Section 9.04 (unless the Lender was already a Lender
hereunder immediately prior to such assignment or transfer), on the date of such
assignment or transfer to such Lender, such accurate, properly completed and
executed documentation prescribed by applicable law or reasonably requested by
the Borrower as will permit such payments to be made without withholding or at a
reduced rate. In addition, each Lender agrees that from time to time after the
Closing Date, when a lapse in time or change in circumstances renders the
previous certification obsolete or inaccurate in any material respect, it will
deliver to the Borrower and the Agent new accurate, properly completed and
executed documentation prescribed by applicable law or as may be required in
order to confirm or establish the entitlement of such Lender to a continued
exemption from or reduction in United States withholding tax with respect to
payments under this Credit Agreement and any Revolving Loan, or it shall
immediately notify the Borrower and the Agent of its inability to deliver any
such documentation, in which case such Lender shall not be required to deliver
any such documentation, pursuant to this Section 2.20(e). Notwithstanding
anything to the contrary contained in Section 2.20 but subject to Section 9.04
and the immediately succeeding sentence, (x) the Borrower shall be entitled, to
the extent it is required to do so by law, to deduct or withhold income or
similar taxes imposed by the United States (or any political subdivision or
taxing authority thereof or therein) from interest, fees or other amounts
payable hereunder for the account of any Lender which is a Foreign Lender to the
extent that such Lender has not provided to the Borrower accurate, properly
completed and executed documentation that establishes a complete exemption from
such deduction or withholding and (y) the Borrower shall not be obligated
pursuant to Section 2.20 to make any additional payments to a Lender pursuant to
Section 2.20(b) or 2.20(c), as the case may be (the "Gross-Up Payments") if such
Lender has not provided to the Borrower the documentation required to be
provided to the Borrower pursuant to this Section 2.20(e). Notwithstanding
anything to the contrary contained in the preceding sentence or elsewhere in
this Section 2.20 and except as set forth in Section 9.04, the Borrower agrees
to pay additional amounts and to indemnify each Lender in the manner set
38
forth in Sections 2.20(b) and 2.20(c) (without regard to the identity of the
jurisdiction requiring the deduction or withholding) in respect of any Taxes
deducted or withheld by it as described in the immediately preceding sentence as
a result of any changes after the Closing Date in any applicable law, treaty,
governmental rule, regulation, guideline or order, or in the interpretation
thereof, relating to the deducting or withholding of such Taxes.
(f) If the Borrower pays any additional amount under this Section
2.20 to a Lender and such Lender determines in its sole discretion that it has
actually received or realized in connection therewith any refund or any
reduction of, or credit against, its Tax Liabilities in or with respect to the
taxable year in which the additional amount is paid, such Lender shall pay to
the Borrower an amount that the Lender shall, in its sole discretion, determine
is equal to the net benefit, after tax, which was obtained by the Lender in such
year as a consequence of such refund, reduction or credit.
SECTION 2.21. Assignment of Commitments Under Certain Circumstances; Duty
to Mitigate. (a) In the event (i) any Lender or the Issuing Bank delivers a
certificate requesting compensation pursuant to Section 2.14, (ii) any Lender or
the Issuing Bank delivers a notice described in Section 2.15, (iii) the Borrower
is required to pay any additional amount to any Lender or the Issuing Bank or
any Governmental Authority on account of any Lender or the Issuing Bank pursuant
to Section 2.20 or (iv) any Lender refuses to consent to any amendment, waiver
or other modification of any Loan Document requested by the Borrower that
requires the consent of a greater percentage of the Lenders than the Required
Lenders and such amendment, waiver or other modification is consented to by the
Required Lenders, the Borrower may, at its sole expense and effort (including
with respect to the processing and recordation fee referred to in Section
9.04(b)), upon notice to such Lender or the Issuing Bank and the Administrative
Agent, require such Lender or the Issuing Bank to transfer and assign, without
recourse (in accordance with and subject to the restrictions contained in
Section 9.04), all of its interests, rights and obligations under this Agreement
to an assignee that shall assume such assigned obligations (which assignee may
be another Lender, if a Lender accepts such assignment); provided that (x) such
assignment shall not conflict with any law, rule or regulation or order of any
court or other Governmental Authority having jurisdiction, (y) the Borrower
shall have received the prior written consent of the Administrative Agent (and,
if a Revolving Credit Commitment is being assigned, of the Issuing Bank and the
Swingline Lender), which consent shall not unreasonably be withheld, and (z) the
Borrower or such assignee shall have paid to the affected Lender or the Issuing
Bank in immediately available funds an amount equal to the sum of the principal
of and interest accrued to the date of such payment on the outstanding Loans or
L/C Disbursements of such Lender or the Issuing Bank, respectively, plus all
Fees and other amounts accrued for the account of such Lender or the Issuing
Bank hereunder (including any amounts under Section 2.14 and Section 2.16);
provided further that, if prior to any such transfer and assignment the
circumstances or event that resulted in such Lender's or the Issuing Bank's
claim for compensation under Section 2.14 or notice under Section 2.15 or the
amounts paid pursuant to Section 2.20, as the case may be, cease to cause such
Lender or the Issuing Bank to suffer increased costs or reductions in amounts
received or receivable or reduction in return on capital, or cease to have the
consequences specified in Section 2.15, or cease to result in amounts being
payable under Section 2.20, as the case may be (including as a result of any
action taken by such Lender or the Issuing Bank pursuant to paragraph (b)
below), or if such Lender or the Issuing Bank shall waive its right to claim
further compensation under Section 2.14 in respect of such circumstances or
event or shall withdraw its notice under Section 2.15 or shall waive its right
to further payments under Section 2.20 in respect of such circumstances or
event, as the case may be, then such Lender or the Issuing Bank shall not
thereafter be required to make any such transfer and assignment hereunder.
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(b) If (i) any Lender or the Issuing Bank shall request compensation under
Section 2.14, (ii) any Lender or the Issuing Bank delivers a notice described in
Section 2.15 or (iii) the Borrower is required to pay any additional amount to
any Lender or the Issuing Bank or any Governmental Authority on account of any
Lender or the Issuing Bank, pursuant to Section 2.20, then such Lender or the
Issuing Bank shall use reasonable efforts (which shall not require such Lender
or the Issuing Bank to incur an unreimbursed loss or unreimbursed cost or
expense or otherwise take any action inconsistent with its internal policies or
legal or regulatory restrictions or suffer any disadvantage or burden deemed by
it to be significant) (x) to file any certificate or document reasonably
requested in writing by the Borrower or (y) to assign its rights and delegate
and transfer its obligations hereunder to another of its offices, branches or
affiliates, if such filing or assignment would reduce its claims for
compensation under Section 2.14 or enable it to withdraw its notice pursuant to
Section 2.15 or would reduce amounts payable pursuant to Section 2.20, as the
case may be, in the future. The Borrower hereby agrees to pay all reasonable
costs and expenses incurred by any Lender or the Issuing Bank in connection with
any such filing or assignment, delegation and transfer.
SECTION 2.22. Swingline Loans. (a) Swingline Commitment. Subject to the
terms and conditions and relying upon the representations and warranties herein
set forth, the Swingline Lender agrees to make loans to the Borrower at any time
and from time to time on and after the Closing Date and until the earlier of the
Revolving Credit Maturity Date and the termination of the Revolving Credit
Commitments in accordance with the terms hereof, in an aggregate principal
amount at any time outstanding that will not result in (i) the aggregate
principal amount of all Swingline Loans exceeding $10,000,000 in the aggregate,
(ii) the Revolving Credit Exposure of any Lender, after giving effect to any
Swingline Loan, exceeding such Lender's Revolving Credit Commitment or (iii) the
Aggregate Revolving Credit Exposure, after giving effect to any Swingline Loan,
exceeding the lesser of (x) the Total Revolving Credit Commitment and (y) the
Borrowing Base in effect at such time. Each Swingline Loan shall be in a
principal amount that is an integral multiple of $100,000. The Swingline
Commitment may be terminated or reduced from time to time as provided herein.
Within the foregoing limits, the Borrower may borrow, pay or prepay and reborrow
Swingline Loans hereunder, subject to the terms, conditions and limitations set
forth herein.
(b) Swingline Loans. The Borrower shall notify the Swingline Lender by
fax, or by telephone (confirmed by fax), with a copy of such notice to the
Administrative Agent, not later than 12:00 (noon), New York City time, on the
day of a proposed Swingline Loan. Such notice shall be delivered on a Business
Day, shall be irrevocable and shall refer to this Agreement and shall specify
the requested date (which shall be a Business Day) and amount of such Swingline
Loan. The Swingline Lender shall make each Swingline Loan available to the
Borrower by means of a credit to the general deposit account of the Borrower
with the Swingline Lender by 3:00 p.m. on the date such Swingline Loan is so
requested. Pursuant to Section 5.01(c) of the Security Agreement, the Swingline
Lender may apply the funds on deposit in the Concentration Account (as such term
is defined in the Security Agreement) on any Business Day to repay outstanding
Swingline Loans.
(c) Prepayment. The Borrower shall have the right at any time and from
time to time to prepay any Swingline Loan, in whole or in part, upon giving
written or fax notice (or telephone notice promptly confirmed by written, or fax
notice) to the Swingline Lender and to the Administrative Agent before 1:00
p.m., New York City time on the date of prepayment at the Swingline Lender's
address for notices specified on Schedule 2.01. All principal payments of
Swingline Loans shall be accompanied by accrued interest on the principal amount
being repaid to the date of payment.
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(d) Interest. Each Swingline Loan shall be an ABR Loan and, subject to the
provisions of Section 2.07, shall bear interest as provided in Section 2.06(a).
(e) Participations. The Swingline Lender may by written notice given to
the Administrative Agent not later than 11:00 a.m., New York City time, on any
Business Day require the Revolving Credit Lenders to acquire participations on
such Business Day in all or a portion of the Swingline Loans outstanding. Such
notice shall specify the aggregate amount of Swingline Loans in which the
Revolving Credit Lenders will participate. The Administrative Agent will,
promptly upon receipt of such notice, give notice to each Revolving Credit
Lender, specifying in such notice such Lender's Pro Rata Percentage of such
Swingline Loan or Loans. In furtherance of the foregoing, each Revolving Credit
Lender hereby absolutely and unconditionally agrees, upon receipt of notice as
provided above, to pay to the Administrative Agent, for the account of the
Swingline Lender, such Revolving Credit Lender's Pro Rata Percentage of such
Swingline Loan or Loans. Each Revolving Credit Lender acknowledges and agrees
that its obligation to acquire participations in Swingline Loans pursuant to
this paragraph is absolute and unconditional and shall not be affected by any
circumstance whatsoever, including the occurrence and continuance of a Default
or an Event of Default, and that each such payment shall be made without any
offset, abatement, withholding or reduction whatsoever. Each Revolving Credit
Lender shall comply with its obligation under this paragraph by wire transfer of
immediately available funds, in the same manner as provided in Section 2.02(c)
with respect to Loans made by such Lender (and Section 2.02(c) shall apply,
mutatis mutandis, to the payment obligations of the Lenders) and the
Administrative Agent shall promptly pay to the Swingline Lender the amounts so
received by it from the Lenders. The Administrative Agent shall notify the
Borrower of any participations in any Swingline Loan acquired pursuant to this
paragraph and thereafter payments in respect of such Swingline Loan shall be
made to the Administrative Agent and not to the Swingline Lender. Any amounts
received by the Swingline Lender from the Borrower (or other party on behalf of
the Borrower) in respect of a Swingline Loan after receipt by the Swingline
Lender of the proceeds of a sale of participations therein shall be promptly
remitted to the Administrative Agent; any such amounts received by the
Administrative Agent shall be promptly remitted by the Administrative Agent to
the Lenders that shall have made their payments pursuant to this paragraph and
to the Swingline Lender, as their interests may appear. The purchase of
participations in a Swingline Loan pursuant to this paragraph shall not relieve
the Borrower (or other party liable for obligations of the Borrower) of any
default in the payment thereof.
SECTION 2.23. Letters of Credit. (a) General. The Borrower may request the
issuance of a Letter of Credit for its own account, in a form reasonably
acceptable to the Administrative Agent and the Issuing Bank, at any time and
from time to time while the Revolving Credit Commitments remain in effect. This
Section shall not be construed to impose an obligation upon the Issuing Bank to
issue any Letter of Credit that is inconsistent with the terms and conditions of
this Agreement.
(b) Notice of Issuance, Amendment, Renewal, Extension; Certain Conditions.
In order to request the issuance of a Letter of Credit (or to amend, renew or
extend an existing Letter of Credit), the Borrower shall hand deliver or fax to
the Issuing Bank and the Administrative Agent (reasonably in advance of the
requested date of issuance, amendment, renewal or extension) a notice requesting
the issuance of a Letter of Credit, or identifying the Letter of Credit to be
amended, renewed or extended, the date of issuance, amendment, renewal or
extension, the date on which such Letter of Credit is to expire (which shall
comply with paragraph (c) below), the amount of such Letter of Credit, the name
and address
41
of the beneficiary thereof and such other information as shall be necessary to
prepare such Letter of Credit. A Letter of Credit shall be issued, amended,
renewed or extended only if, and upon issuance, amendment, renewal or extension
of each Letter of Credit the Borrower shall be deemed to represent and warrant
that, after giving effect to such issuance, amendment, renewal or extension (i)
the L/C Exposure shall not exceed $10,000,000 and (ii) the Aggregate Revolving
Credit Exposure shall not exceed the lesser of (x) the Total Revolving Credit
Commitment and (y) the Borrowing Base in effect at such time.
(c) Expiration Date. Each Letter of Credit shall expire at the close of
business on the earlier of the date one year after the date of the issuance of
such Letter of Credit and the date that is five Business Days prior to the
Revolving Credit Maturity Date, unless such Letter of Credit expires by its
terms on an earlier date; provided that a Letter of Credit may provide for
automatic extension of any expiration date for additional periods of up to one
year, subject to a right on the part of the Issuing Bank to prevent any such
automatic extension from occurring by giving reasonable notice to the
beneficiary during a period satisfactory to the Administrative Agent.
(d) Participations. By the issuance of a Letter of Credit and without any
further action on the part of the Issuing Bank or the Lenders, the Issuing Bank
hereby grants to each Revolving Credit Lender, and each such Lender hereby
acquires from the applicable Issuing Bank, a participation in such Letter of
Credit equal to such Lender's Pro Rata Percentage of the aggregate amount
available to be drawn under such Letter of Credit, effective upon the issuance
of such Letter of Credit. In consideration and in furtherance of the foregoing,
each Revolving Credit Lender hereby absolutely and unconditionally agrees to pay
to the Administrative Agent, for the account of the Issuing Bank, such Lender's
Pro Rata Percentage of each L/C Disbursement made by the Issuing Bank and not
reimbursed by the Borrower (or, if applicable, another party pursuant to its
obligations under any other Loan Document) forthwith on the date due as provided
in Section 2.02(f). Each Revolving Credit Lender acknowledges and agrees that
its obligation to acquire participations pursuant to this paragraph in respect
of Letters of Credit is absolute and unconditional and shall not be affected by
any circumstance whatsoever, including the occurrence and continuance of a
Default or an Event of Default, and that each such payment shall be made without
any offset, abatement, withholding or reduction whatsoever.
(e) Reimbursement. If the Issuing Bank shall make any L/C Disbursement in
respect of a Letter of Credit, the Borrower shall pay to the Administrative
Agent an amount equal to such L/C Disbursement not later than two hours after
the Borrower shall have received notice from the Issuing Bank that payment of
such draft will be made, or, if the Borrower shall have received such notice
later than 10:00 a.m., New York City time, on any Business Day, not later than
10:00 a.m., New York City time, on the immediately following Business Day.
(f) Obligations Absolute. The Borrower's obligations to reimburse L/C
Disbursements as provided in paragraph (e) above shall be absolute,
unconditional and irrevocable, and shall be performed strictly in accordance
with the terms of this Agreement, under any and all circumstances whatsoever,
and irrespective of:
(i) any lack of validity or enforceability of any Letter of Credit
or any Loan Document, or any term or provision therein;
(ii) any amendment or waiver of or any consent to departure from all
or any of the provisions of any Letter of Credit or any Loan Document;
42
(iii) the existence of any claim, setoff, defense or other right
that the Borrower, any other party guaranteeing, or otherwise obligated
with, the Borrower, any Subsidiary or other Affiliate thereof or any other
person may at any time have against the beneficiary under any Letter of
Credit, the Issuing Bank, the Administrative Agent or any Lender or any
other person, whether in connection with this Agreement, any other Loan
Document or any other related or unrelated agreement or transaction;
(iv) any draft or other document presented under a 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;
(v) payment by the Issuing Bank under a Letter of Credit against
presentation of a draft or other document that does not comply with the
terms of such Letter of Credit; and
(vi) any other act or omission to act or delay of any kind of the
Issuing Bank, the Lenders, the Administrative Agent or any other person or
any other event or circumstance whatsoever, whether or not similar to any
of the foregoing, that might, but for the provisions of this Section,
constitute a legal or equitable discharge of the Borrower's obligations
hereunder.
Without limiting the generality of the foregoing, it is expressly
understood and agreed that the absolute and unconditional obligation of the
Borrower hereunder to reimburse L/C Disbursements will not be excused by the
gross negligence or wilful misconduct of the Issuing Bank. However, the
foregoing shall not be construed to excuse the Issuing Bank from liability to
the Borrower to the extent of any direct damages (as opposed to consequential
damages, claims in respect of which are hereby waived by the Borrower to the
extent permitted by applicable law) suffered by the Borrower that are caused by
the Issuing Bank's gross negligence or wilful misconduct in determining whether
drafts and other documents presented under a Letter of Credit comply with the
terms thereof; it is understood that the Issuing Bank 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, in
making any payment under any Letter of Credit (i) the Issuing Bank's exclusive
reliance on the documents presented to it under such Letter of Credit as to any
and all matters set forth therein, including reliance on the amount of any draft
presented under such Letter of Credit, whether or not the amount due to the
beneficiary thereunder equals the amount of such draft and whether or not any
document presented pursuant to such Letter of Credit proves to be insufficient
in any respect, if such document on its face appears to be in order, and whether
or not any other statement or any other document presented pursuant to such
Letter of Credit proves to be forged or invalid or any statement therein proves
to be inaccurate or untrue in any respect whatsoever and (ii) any noncompliance
in any immaterial respect of the documents presented under such Letter of Credit
with the terms thereof shall, in each case, be deemed not to constitute wilful
misconduct or gross negligence of the Issuing Bank.
(g) Disbursement Procedures. The Issuing Bank shall, promptly following
its receipt thereof, examine all documents purporting to represent a demand for
payment under a Letter of Credit. The Issuing Bank shall as promptly as possible
give telephonic notification, confirmed by fax, to the Administrative Agent and
the Borrower of such demand for payment and whether the Issuing Bank has made or
will make an L/C Disbursement thereunder; provided that any failure to give or
delay in giving such notice shall not relieve
43
the Borrower of its obligation to reimburse the Issuing Bank and the Revolving
Credit Lenders with respect to any such L/C Disbursement. The Administrative
Agent shall promptly give each Revolving Credit Lender notice thereof.
(h) Interim Interest. If the Issuing Bank shall make any L/C Disbursement
in respect of a Letter of Credit, then, unless the Borrower shall reimburse such
L/C Disbursement in full on such date, the unpaid amount thereof shall bear
interest for the account of the Issuing Bank, for each day from and including
the date of such L/C Disbursement, to but excluding the earlier of the date of
payment by the Borrower or the date on which interest shall commence to accrue
thereon as provided in Section 2.02(f), at the rate per annum that would apply
to such amount if such amount were an ABR Revolving Loan.
(i) Resignation or Removal of the Issuing Bank. The Issuing Bank may
resign at any time by giving 30 days' prior written notice to the Administrative
Agent, the Lenders and the Borrower, and may be removed at any time by the
Borrower by notice to the Issuing Bank, the Administrative Agent and the
Lenders. Subject to the next succeeding paragraph, upon the acceptance of any
appointment as the Issuing Bank hereunder by a Lender that shall agree to serve
as successor Issuing Bank, such successor shall succeed to and become vested
with all the interests, rights and obligations of the retiring Issuing Bank and
the retiring Issuing Bank shall be discharged from its obligations to issue
additional Letters of Credit hereunder. At the time such removal or resignation
shall become effective, the Borrower shall pay all accrued and unpaid fees
pursuant to Section 2.05(c)(ii). The acceptance of any appointment as the
Issuing Bank hereunder by a successor Lender shall be evidenced by an agreement
entered into by such successor, in a form satisfactory to the Borrower and the
Administrative Agent, and, from and after the effective date of such agreement,
(i) such successor Lender shall have all the rights and obligations of the
previous Issuing Bank under this Agreement and the other Loan Documents and (ii)
references herein and in the other Loan Documents to the term "Issuing Bank"
shall be deemed to refer to such successor or to any previous Issuing Bank, or
to such successor and all previous Issuing Banks, as the context shall require.
After the resignation or removal of the Issuing Bank hereunder, the retiring
Issuing Bank shall remain a party hereto and shall continue to have all the
rights and obligations of an Issuing Bank under this Agreement and the other
Loan Documents with respect to Letters of Credit issued by it prior to such
resignation or removal, but shall not be required to issue additional Letters of
Credit.
(j) Cash Collateralization. If any Event of Default shall occur and be
continuing, the Borrower shall, on the Business Day it receives notice from the
Administrative Agent or the Required Lenders (or, if the maturity of the Loans
has been accelerated, Revolving Credit Lenders holding participations in
outstanding Letters of Credit representing greater than 50% of the aggregate
undrawn amount of all outstanding Letters of Credit) thereof and of the amount
to be deposited, deposit in an account with the Collateral Agent, for the
benefit of the Revolving Credit Lenders, an amount in cash equal to the L/C
Exposure as of such date. Such deposit shall be held by the Collateral Agent as
collateral for the payment and performance of the Obligations. The Collateral
Agent shall have exclusive dominion and control, including the exclusive right
of withdrawal, over such account. Other than any interest earned on the
investment of such deposits in Permitted Investments, which investments shall be
made at the option and sole discretion of the Collateral Agent, such deposits
shall not bear interest. Interest or profits, if any, on such investments shall
accumulate in such account. Moneys in such account shall (i) automatically be
applied by the Administrative Agent to reimburse the Issuing Bank for L/C
Disbursements for which it has not been reimbursed, (ii) be held for the
satisfaction of the reimbursement obligations of the Borrower for the L/C
Exposure at such time and (iii) if the maturity of the Loans has
44
been accelerated (but subject to the consent of Revolving Credit Lenders holding
participations in outstanding Letters of Credit representing greater than 50% of
the aggregate undrawn amount of all outstanding Letters of Credit), be applied
to satisfy the Obligations. If the Borrower is required to provide an amount of
cash collateral hereunder as a result of the occurrence of an Event of Default,
such amount (to the extent not applied as aforesaid) shall be returned to the
Borrower within three Business Days after all Events of Default have been cured
or waived.
(k) Additional Issuing Banks. The Borrower may, at any time and from time
to time with the consent of the Administrative Agent (which consent shall not be
unreasonably withheld) and such Lender, designate one or more additional Lenders
to act as an issuing bank under the terms of this Agreement. Any Lender
designated as an issuing bank pursuant to this paragraph (k) shall be deemed (in
addition to being a Lender) to be the Issuing Bank with respect to Letters of
Credit issued or to be issued by such Lender, and all references herein and in
the other Loan Documents to the term "Issuing Bank" shall, with respect to such
Letters of Credit, be deemed to refer to such Lender in its capacity as Issuing
Bank.
ARTICLE III
Representations and Warranties
The Borrower represents and warrants to the Administrative Agent, the
Collateral Agent, the Issuing Bank and each of the Lenders that:
SECTION 3.01. Organization; Powers. The Borrower and each of the
Subsidiaries (a) is duly organized, validly existing and in good standing under
the laws of the jurisdiction of its organization, (b) has all requisite power
and authority to own its property and assets and to carry on its business as now
conducted and as proposed to be conducted, (c) is qualified to do business in,
and is in good standing in, every jurisdiction where such qualification is
required, except where the failure so to qualify could not reasonably be
expected to result in a Material Adverse Effect, and (d) has the power and
authority to execute, deliver and perform its obligations under each of the Loan
Documents and each other agreement or instrument contemplated hereby or thereby
to which it is or will be a party and, in the case of the Borrower, to borrow
hereunder.
SECTION 3.02. Authorization. The execution, delivery and performance by
(a) each of the Borrower and Sub of the Merger Agreement and (b) each Loan Party
of each of the Loan Documents and the consummation of the transactions
contemplated by the Merger Agreement and the Loan Documents (including the
borrowings hereunder) (collectively, the "Transactions") (i) have been duly
authorized by all requisite corporate and, if required, stockholder action and
(ii) will not (x) violate (A) any material provision of law, statute, rule or
regulation, or of the certificate or articles of incorporation or other
constitutive documents or by-laws of Holdings, the Borrower or any Subsidiary,
(B) any order of any Governmental Authority or (C) any provision of any
indenture or any other material agreement or other instrument to which Holdings,
the Borrower or any Subsidiary is a party or by which any of them or any of
their property is or may be bound, (y) be in conflict with, result in a breach
of or constitute (alone or with notice or lapse of time or both) a default
under, or give rise to any right to accelerate or to require the prepayment,
repurchase or redemption of any obligation under any such indenture, agreement
or other instrument or (z) result in the crea tion or imposition of any Lien
upon or with respect to any property or assets now owned or
45
hereafter acquired by Holdings, the Borrower or any Subsidiary (other than any
Lien created hereunder or under the Security Documents).
SECTION 3.03. Enforceability. This Agreement has been duly executed and
delivered by Holdings and the Borrower and constitutes, and each other Loan
Document when executed and delivered by each Loan Party thereto will constitute,
a legal, valid and binding obligation of such Loan Party enforceable against
such Loan Party in accordance with its terms except as such enforceability may
be limited by bankruptcy, insolvency, fraudulent conveyance, reorganization and
other similar laws relating to or affecting creditors' rights generally and
general equitable principles.
SECTION 3.04. Governmental Approvals; Contracts. (a) No action, consent or
approval of, registration or filing with or any other action by any Governmental
Authority is or will be required in connection with the Transactions, except for
(i) the filing of Uniform Commercial Code financing statements, filings pursuant
to the Assignment of Claims Act and filings with the United States Patent and
Trademark Office and the United States Copyright Office, (ii) such as have been
made or obtained and are in full force and effect and (iii) such actions,
consents, approvals, registrations or filings, the failure of which to make or
obtain could not reasonably be expected to result in a Material Adverse Effect.
(b) No notice of suspension, debarment of termination for default has been
received by Holdings, the Borrower or any Subsidiary and no cure notice (other
than any immaterial cure notice under any General Services Administration
contract) has been received by Holdings, the Borrower or any Subsidiary in
connection with any Government Contract or other contract pursuant to which
Holdings, the Borrower or any Subsidiary is directly or indirectly acting as a
subcontractor under or in connection with a Government Contract. All Government
Contracts that as of the date hereof constitute Material Contracts are listed on
Schedule 3.04, and documentation necessary for compliance with the Assignment of
Claims Act has been executed and delivered by the Borrower or any Subsidiary, as
applicable, with respect to each Government Contract for which Assignment of
Claims Act perfection is currently being required by the Lenders (as noted on
Schedule 3.04).
SECTION 3.05. Financial Statements. (a) The Borrower has heretofore
furnished to the Lenders its consolidated balance sheets and statements of
income, stockholder's equity and cash flows (i) as of and for the fiscal year
ended December 31, 1998, audited by and accompanied by the opinion of KPMG LLP,
independent public accountants, and (ii) as of and for the fiscal quarter and
the portion of the fiscal year ended March 31, 1999, certified by its chief
financial officer. Such financial statements present fairly in all material
respects the financial condition and results of operations and cash flows of the
Borrower and its consolidated Subsidiaries as of such dates and for such
periods. Such balance sheets and the notes thereto disclose all material
liabilities, direct or contingent, of the Borrower and its consolidated
Subsidiaries as of the dates thereof. Such financial statements were prepared in
accordance with GAAP applied on a consistent basis.
(b) The Borrower has heretofore delivered to the Lenders its unaudited pro
forma consolidated balance sheet and statements of income, stockholder's equity
and cash flows as of December 31, 1998, prepared giving effect to the
Transactions as if they had occurred, with respect to such balance sheet, on
such date and, with respect to such other financial statements, on the first day
of the 12-month period ending on such date. Such pro forma financial statements
have been prepared in good faith by the Borrower, based on the assumptions used
to prepare the pro forma financial information contained in the Confidential
Information Memorandum (which assumptions at the time made were believed
46
by the Borrower to be reasonable), were based on the best information available
to the Borrower as of the date of delivery thereof, accurately reflect all
adjustments required to be made to give effect to the Transactions and present
fairly in all material respects on a pro forma basis the estimated consolidated
financial position of the Borrower and its consolidated Subsidiaries as of such
date and for such period, assuming that the Transactions had actually occurred
at such date or at the beginning of such period, as the case may be.
SECTION 3.06. No Material Adverse Change. There has been no material
adverse change in the business, results of operations, property, condition
(financial or otherwise) or prospects of the Borrower and the Subsidiaries,
taken as a whole, since December 31, 1998.
SECTION 3.07. Title to Properties; Possession Under Leases. (a) Each of
the Borrower and the Subsidiaries has good and marketable title to, or valid
leasehold interests in, all its material properties and assets, except for minor
defects in title that do not interfere with its ability to conduct its business
as currently conducted or to utilize such properties and assets for their
intended purposes. All such material properties and assets are free and clear of
Liens, other than Liens expressly permitted by Section 6.02.
(b) Each of the Borrower and the Subsidiaries has complied with all
obligations under all material leases to which it is a party and all such leases
are in full force and effect. Each of the Borrower and the Subsidiaries enjoys
peaceful and undisturbed possession under all such material leases.
SECTION 3.08. Subsidiaries. Schedule 3.08 sets forth as of the Closing
Date a list of all Subsidiaries and the percentage ownership interest of
Holdings or the Borrower therein. The shares of capital stock or other ownership
interests so indicated on Schedule 3.08 are fully paid and non-assessable and
are owned by Holdings or the Borrower, directly or indirectly, free and clear of
all Liens (other than Liens created pursuant to the Loan Documents).
SECTION 3.09. Litigation; Compliance with Laws. Except as set forth on
Schedule 3.09, there are not any actions, suits or proceedings at law or in
equity or by or before any Governmental Authority now pending or, to the
knowledge of Holdings or the Borrower, threatened against or affecting Holdings
or the Borrower or any Subsidiary or any business, property or rights of any
such person (i) that involve any Loan Document or the Transactions or (ii) as to
which there is a reasonable possibility of an adverse determination and that, if
adversely determined, could reasonably be expected, individually or in the
aggregate, to result in a Material Adverse Effect.
SECTION 3.10. Agreements. None of Holdings, the Borrower or any of the
Subsidi aries is in default in any manner under any provision of any indenture
or other agreement or instrument evidencing Indebtedness, or any Material
Contract, where such default could reasonably be expected to result in a
Material Adverse Effect.
SECTION 3.11. Federal Reserve Regulations. (a) None of Holdings, the
Borrower or any of the Subsidiaries is engaged principally, or as one of its
important activities, in the business of extending credit for the purpose of
buying or carrying Margin Stock.
(b) No part of the proceeds of any Loan or any Letter of Credit will be
used, whether directly or indirectly, and whether immediately, incidentally or
ultimately, for any purpose that entails a violation of, or that is inconsistent
with, the provisions of the Regulations of the Board, including Regulation T, U
or X.
47
SECTION 3.12. Investment Company Act; Public Utility Holding Company Act.
None of Holdings, the Borrower or any Subsidiary is (a) an "investment company"
as defined in, or subject to regulation under, the Investment Company Act of
1940 or (b) a "holding company" as defined in, or subject to regulation under,
the Public Utility Holding Company Act of 1935.
SECTION 3.13. Use of Proceeds. The Borrower will use the proceeds of the
Loans and will request the issuance of Letters of Credit only for the purposes
specified in the preamble to this Agreement.
SECTION 3.14. Tax Returns. Each of Holdings, the Borrower and the
Subsidiaries has filed or caused to be filed all Federal, state, local and
foreign tax returns or materials required to have been filed by it and has paid
or caused to be paid all material taxes due and payable by it and all material
assessments received by it, except taxes that are being contested in good faith
by appropriate proceedings and for which Holdings, the Borrower or such
Subsidiary, as applicable, shall have set aside on its books adequate reserves.
SECTION 3.15. No Material Misstatements. None of (a) the Confidential
Information Memorandum or (b) any other information, report, financial
statement, exhibit or schedule furnished by or on behalf of Holdings or the
Borrower to the Administrative Agent or any Lender in connection with the
negotiation of any Loan Document or included therein or delivered pursuant
thereto contained, contains or will contain any material mis statement of fact
or omitted, omits or will omit to state any material fact necessary to make the
statements therein, in the light of the circumstances under which they were, are
or will be made, not misleading; provided that to the extent any such
information, report, financial statement, exhibit or schedule was based upon or
constitutes a forecast or projection, each of Holdings and the Borrower
represents only that it acted in good faith and utilized reasonable assumptions
and due care in the preparation of such information, report, financial
statement, exhibit or schedule.
SECTION 3.16. Employee Benefit Plans. (a) Each of the Borrower and its
ERISA Affiliates is in compliance in all material respects with the applicable
provisions of ERISA and the Code and the regulations and published
interpretations thereunder. No ERISA Event has occurred or is reasonably
expected to occur that, when taken together with all other such ERISA Events,
could reasonably be expected to result in material liability of the Borrower or
any of its ERISA Affiliates. The present value of all benefit liabilities under
each Plan (based on those assumptions used to fund such Plan) did not, as of the
last annual valuation date applicable thereto, exceed by more than $3,000,000
the fair market value of the assets of such Plan, and the present value of all
benefit liabilities of all underfunded Plans (based on those assumptions used to
fund each such Plan) did not, as of the last annual valuation dates applicable
thereto, exceed by more than $3,000,000 the fair market value of the assets of
all such underfunded Plans.
(b) Each Foreign Pension Plan is in compliance in all material respects
with all requirements of law applicable thereto and the respective requirements
of the governing documents for such plan except to the extent such
non-compliance could not reasonably be expected to result in a Material Adverse
Effect. With respect to each Foreign Pension Plan, none of the Borrower, its
Affiliates or any of its directors, officers, employees or agents has engaged in
a transaction that subjects the Borrower or any of its Subsidiaries, directly or
indirectly, to a material tax or civil penalty. With respect to each Foreign
Pension Plan, reserves have been established in the financial statements
furnished to the Lenders in respect of any unfunded liabilities in accordance
with applicable law and prudent business practice
48
or, where required, in accordance with ordinary accounting practices in the
jurisdiction in which such Foreign Pension Plan is maintained. The aggregate
unfunded liabilities, with respect to such Foreign Pension Plans could not
reasonably be expected to result in a Material Adverse Effect. There are no
actions, suits or claims (other than routine claims for benefits) pending or
threatened against the Borrower or any of its Affiliates with respect to any
Foreign Pension Plan that could reasonably be expected, individually or in the
aggregate, to result in a Material Adverse Effect.
SECTION 3.17. Environmental Matters. Except as set forth in Schedule 3.17:
(a) The properties owned or operated by Holdings, the Borrower and the
Subsidiaries (the "Properties") do not contain any Hazardous Materials in
amounts or concentrations which (i) constitute, or constituted a violation of,
(ii) require Remedial Action under, or (iii) could give rise to liability under,
Environmental Laws, which violations, Remedial Actions and liabilities, in the
aggregate, could reasonably be expected to result in a Material Adverse Effect;
(b) The Properties and all operations of the Borrower and the Subsidiaries
are in compliance, and in the last six years have been in compliance, with all
Environmental Laws and all necessary Environmental Permits have been obtained
and are in effect, except to the extent that such non-compliance or failure to
obtain any necessary permits, in the aggregate, could not reasonably be expected
to result in a Material Adverse Effect;
(c) There have been no Releases or threatened Releases at, from, under or
proximate to the Properties or otherwise in connection with the operations of
the Borrower or the Subsidiaries, which Releases or threatened Releases, in the
aggregate, could reasonably be expected to result in a Material Adverse Effect;
(d) None of Holdings, the Borrower or any of the Subsidiaries has received
any notice of an Environmental Claim in connection with the Properties or the
operations of the Borrower or the Subsidiaries or with regard to any person
whose liabilities for environmental matters Holdings, the Borrower or the
Subsidiaries has retained or assumed, in whole or in part, contractually, by
operation of law or otherwise, which, in the aggregate, could reasonably be
expected to result in a Material Adverse Effect, nor do Holdings, the Borrower
or the Subsidiaries have reason to believe that any such notice will be received
or is being threatened; and
(e) Hazardous Materials have not been transported from the Properties, nor
have Hazardous Materials been generated, treated, stored or disposed of at, on
or under any of the Properties in a manner that could give rise to liability
under any Environmental Law, nor have the Borrower or the Subsidiaries retained
or assumed any liability, contractually, by operation of law or otherwise, with
respect to the generation, treatment, storage or disposal of Hazardous
Materials, which transportation, generation, treatment, storage or disposal, or
retained or assumed liabilities, in the aggregate, could reasonably be expected
to result in a Material Adverse Effect.
SECTION 3.18. Insurance. Schedule 3.18 sets forth a true, complete and
correct description of all insurance maintained by the Borrower or by the
Borrower for its Subsidiaries as of the date hereof and the Closing Date. As of
each such date, such insurance is in full force and effect and all premiums have
been duly paid. The Borrower and its Subsidiaries have insurance in such amounts
and covering such risks and liabilities as are in accordance with normal
industry practice.
49
SECTION 3.19. Security Documents. (a) The Pledge Agreement is effective to
create in favor of the Collateral Agent, for the ratable benefit of the Secured
Parties, a legal, valid and enforceable security interest in the Collateral (as
defined in the Pledge Agreement) and, when the Collateral is delivered to the
Collateral Agent, the Pledge Agreement shall constitute a fully perfected first
priority Lien on, and security interest in, all right, title and interest of the
pledgors thereunder in such Collateral, in each case prior and superior in right
to any other person.
(b) The Security Agreement is effective to create in favor of the
Collateral Agent, for the ratable benefit of the Secured Parties, a legal, valid
and enforceable security interest in the Collateral (as defined in the Security
Agreement) and, when financing statements in appropriate form are filed in the
offices specified on Schedule 6 to the Perfection Certificate, the Security
Agreement shall constitute a fully perfected Lien on, and security interest in,
all right, title and interest of the grantors thereunder in such Collateral
(other than the Intellectual Property, as defined in the Security Agreement), in
each case prior and superior in right to any other person, other than with
respect to Liens expressly permitted by Section 6.02.
(c) When the Security Agreement is filed in the United States Patent and
Trademark Office and the United States Copyright Office, the Security Agreement
shall constitute a fully perfected Lien on, and security interest in, all right,
title and interest of the grantors thereunder in the Intellectual Property (as
defined in the Security Agreement), in each case prior and superior in right to
any other person (it being understood that subsequent recordings in the United
States Patent and Trademark Office and the United States Copyright Office may be
necessary to perfect a lien on registered trademarks, trademark applications and
copyrights acquired by the grantors after the date hereof).
SECTION 3.20. Location of Real Property. Schedule 3.20 lists completely
and correctly as of the Closing Date (after giving effect to the Merger) all
real property owned by the Borrower and the Subsidiaries and the addresses
thereof. The Borrower and the Subsidiaries own in fee all the real property set
forth on Schedule 3.20.
SECTION 3.21. Labor Matters. As of the date hereof and the Closing Date,
there are no strikes, lockouts or slowdowns against Holdings, the Borrower or
any Subsidiary pending or, to the knowledge of Holdings or the Borrower,
threatened. The hours worked by and payments made to employees of Holdings, the
Borrower and the Subsidiaries have not been in violation of the Fair Labor
Standards Act or any other applicable Federal, state, local or foreign law
dealing with such matters. All payments due from Holdings, the Borrower or any
Subsidiary, or for which any claim may be made against Holdings, the Borrower or
any Subsidiary, on account of wages and employee health and welfare insurance
and other benefits, have been paid or accrued as a liability on the books of
Holdings, the Borrower or such Subsidiary. The consummation of the Transactions
will not give rise to any right of termination or right of renegotiation on the
part of any union under any collective bargaining agreement to which Holdings,
the Borrower or any Subsidiary is bound.
SECTION 3.22. Solvency. Immediately after the consummation of the
Transactions to occur on the Closing Date and immediately following the making
of each Loan and after giving effect to the application of the proceeds of each
Loan, (a) the fair value of the assets of each Loan Party, at a fair valuation,
will exceed its debts and liabilities, subordinated, contingent or otherwise;
(b) the present fair saleable value of the property of each Loan Party will be
greater than the amount that will be required to pay the probable liability of
its debts and other liabilities, subordinated, contingent or otherwise, as such
debts and other liabilities
50
become absolute and matured; (c) each Loan Party will be able to pay its debts
and liabilities, subordinated, contingent or otherwise, as such debts and
liabilities become absolute and matured; and (d) each Loan Party will not have
unreasonably small capital with which to conduct the business in which it is
engaged as such business is now conducted and is proposed to be conducted
following the Closing Date.
SECTION 3.23. Year 2000. No further programming or reprogramming is
required to permit the proper functioning, in and following the year 2000, of
(a) the Borrower's and its Subsidiaries' computer systems and (b) equipment
containing embedded microchips (including systems and equipment supplied by
others or, to the Borrower's knowledge, with which the Borrower's or its
Subsidiaries' systems interface). The cost to the Borrower and its Subsidiaries
of the reasonably foreseeable consequences of the year 2000 to the Borrower and
its Subsidiaries (including reprogramming errors and the failure of others'
systems or equipment) will not result in a Material Adverse Effect. The computer
and management information systems of the Borrower and its Subsidiaries are and,
with ordinary course upgrading and maintenance, will continue for the term of
this Agreement to be, sufficient to permit the Borrower and its Subsidiaries to
conduct their business without Material Adverse Effect.
ARTICLE IV
Conditions of Lending
The obligations of the Lenders to make Loans and of the Issuing Bank to
issue Letters of Credit hereunder are subject to the satisfaction of the
following conditions:
SECTION 4.01. All Credit Events. On the date of each Borrowing, including
each Borrowing of a Swingline Loan but excluding the conversion of a Eurodollar
Borrowing to an ABR Borrowing or vice versa or the continuation or conversion of
the Interest Period of a Eurodollar Borrowing into another permitted Interest
Period, and on the date of each issuance, amendment, extension or renewal of a
Letter of Credit (each such event being called a "Credit Event"):
(a) The Administrative Agent shall have received a notice of such
Borrowing as required by Section 2.03 (or such notice shall have been deemed
given in accordance with Section 2.03) or, in the case of the issuance,
amendment, extension or renewal of a Letter of Credit, the Issuing Bank and the
Administrative Agent shall have received a notice requesting the issuance,
amendment, extension or renewal of such Letter of Credit as required by Section
2.23(b) or, in the case of the Borrowing of a Swingline Loan, the Swingline
Lender and the Administrative Agent shall have received a notice requesting such
Swingline Loan as required by Section 2.22(b).
(b) The representations and warranties set forth in Article III hereof and
in each other Loan Document shall be true and correct in all material respects
on and as of the date of such Credit Event with the same effect as though made
on and as of such date, except to the extent such representations and warranties
expressly relate to an earlier date.
(c) At the time of and immediately after such Credit Event, no Event of
Default or Default shall have occurred and be continuing.
51
(d) If, after giving effect to such Borrowing or the issuance of any
Letter of Credit, the Aggregate Revolving Credit Exposure would exceed
$110,000,000, the Administrative Agent shall have received a certificate of a
Financial Officer in form and substance satisfactory to the Administrative Agent
demonstrating that either (i) on the date of such Borrowing or upon the issuance
of any Letter of Credit, as the case may be, the Consolidated Coverage Ratio
exceeds 2.00 to 1.00 (or 2.25 to 1.00 after May 15, 2001) and the Consolidated
Leverage Ratio is less than 5.75 to 1.00 (or 5.50 to 1.00 after December 31,
2000), in each case, as calculated in accordance with Section 4.03(a) of the
Senior Subordinated Note Indenture or (ii) the Aggregate Revolving Credit
Exposure would not exceed 90% of accounts receivable of the Borrower and its
Subsidiaries as calculated in accordance with Section 4.03(b)(1) of the Senior
Subordinated Note Indenture.
Each Credit Event shall be deemed to constitute a representation and
warranty by the Borrower and Holdings on the date of such Credit Event as to the
matters specified in paragraphs (b) and (c) of this Section 4.01.
SECTION 4.02. First Credit Event. On the Closing Date:
(a) The Administrative Agent shall have received, on behalf of itself, the
Lenders and the Issuing Bank, a favorable written opinion of (i) ▇▇▇▇, Weiss,
Rifkind, ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇, counsel for Holdings and the Borrower,
substantially to the effect set forth in Exhibit H-1, (ii) ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇,
Esq., General Counsel of the Borrower, substantially to the effect set forth in
Exhibit H-2, and (iii) each local counsel listed on Schedule 4.02(a),
substantially to the effect set forth in Exhibit H-3, in each case (A) dated the
Closing Date, (B) addressed to the Issuing Bank, the Administrative Agent and
the Lenders, and (C) covering such other matters relating to the Loan Documents
and the Transactions as the Administrative Agent shall reasonably request, and
Holdings and the Borrower hereby request such counsel to deliver such opinions.
(b) All legal matters incident to this Agreement, the Borrowings and
extensions of credit hereunder and the other Loan Documents shall be reasonably
satisfactory to the Lenders, to the Issuing Bank and to the Administrative
Agent.
(c) The Administrative Agent shall have received (i) a copy of the
certificate or articles of incorporation, including all amendments thereto, of
each Loan Party, certified as of a recent date by the Secretary of State of the
state of its organization, and a certificate as to the good standing of each
Loan Party as of a recent date, from such Secretary of State; (ii) a certificate
of the Secretary or Assistant Secretary of each Loan Party dated the Closing
Date and certifying (A) that attached thereto is a true and complete copy of the
by-laws of such Loan Party as in effect on the Closing Date and at all times
since a date prior to the date of the resolutions described in clause (B) below,
(B) that attached thereto is a true and complete copy of resolutions duly
adopted by the Board of Directors of such Loan Party authorizing the execution,
delivery and performance of the Loan Documents to which such person is a party
and, in the case of the Borrower, the borrowings hereunder, and that such
resolutions have not been modified, rescinded or amended and are in full force
and effect, (C) that the certificate or articles of incorporation of such Loan
Party have not been amended since the date of the last amendment thereto shown
on the certificate of good standing furnished pursuant to clause (i) above, and
(D) as to the incumbency and specimen signature of each officer executing any
Loan Document or any other document delivered in connection herewith on behalf
of such Loan Party; (iii) a certificate of another officer as to the incumbency
and specimen signature of the Secretary or Assistant Secretary executing the
52
certificate pursuant to clause (ii) above; and (iv) such other documents as the
Lenders, the Issuing Bank or the Administrative Agent may reasonably request.
(d) The Administrative Agent shall have received a certificate, dated the
Closing Date and signed by a Financial Officer of the Borrower, confirming
compliance with the conditions precedent set forth in paragraphs (b) and (c) of
Section 4.01.
(e) The Administrative Agent shall have received all Fees and other
amounts due and payable on or prior to the Closing Date, including, to the
extent invoiced, reimbursement or payment of all out-of-pocket expenses required
to be reimbursed or paid by the Borrower hereunder or under any other Loan
Document.
(f) The Pledge Agreement shall have been duly executed by the parties
thereto and delivered to the Collateral Agent and shall be in full force and
effect, and (i) all the outstanding capital stock of the Borrower then owned by
Holdings, (ii) all the outstanding capital stock of each Domestic Subsidiary
then owned by the Borrower and each other Domestic Subsidiary and (iii) 65% of
the voting capital stock and 100% of the nonvoting capital stock (if any) of
each Foreign Subsidiary listed on Schedule 4.02(f), shall have been duly and
validly pledged thereunder to the Collateral Agent for the ratable benefit of
the Secured Parties and certificates representing such shares, accompanied by
instruments of transfer and stock powers endorsed in blank, shall be in the
actual possession of the Collateral Agent.
(g) The Security Agreement shall have been duly executed by the Loan
Parties party thereto and shall have been delivered to the Collateral Agent and
shall be in full force and effect on such date and each document (including each
Uniform Commercial Code financing statement and each Assignment of Claims Act
notice) required by law or reasonably requested by the Agents to be filed,
registered or recorded in order to create in favor of the Collateral Agent for
the benefit of the Secured Parties a valid, legal and perfected first-priority
security interest in and lien on the Collateral (subject to any Lien expressly
permitted by Section 6.02) described in such agreement shall have been delivered
to the Collateral Agent.
(h) The Agents shall have received the results of a search of the Uniform
Commercial Code filings (or equivalent filings) made with respect to the Loan
Parties in the states (or other jurisdictions) in which the chief executive
office of each such person is located, any offices of such persons in which
records have been kept relating to Accounts and the other jurisdictions in which
Uniform Commercial Code filings (or equivalent filings) are to be made pursuant
to the preceding paragraph, together with copies of the financing statements (or
similar documents) disclosed by such search, and accompanied by evidence
satisfactory to the Collateral Agent that the Liens indicated in any such
financing statement (or similar document) would be permitted under Section 6.02
or have been or will be contemporaneously released or terminated. The Agents
shall have also received all information required for the proper assignment
under the Assignment of Claims Act of all Government Contracts required to be
assigned as indicated on Schedule 3.04.
(i) The Collateral Agent shall have received a Perfection Certificate with
respect to the Loan Parties dated the Closing Date and duly executed by a
Responsible Officer of the Borrower.
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(j) Each of the Subsidiary Guarantee Agreement and the Indemnity,
Subrogation and Contribution Agreement shall have been duly executed by the
parties thereto, shall have been delivered to the Collateral Agent and shall be
in full force and effect.
(k) The Agents shall have received a Borrowing Base/Non-Default
Certificate dated the Closing Date, relating to the period ending on the last
day of the preceding month and executed by a Financial Officer of the Borrower.
(l) The Agents shall have received a copy of, or a certificate as to
coverage under, the insurance policies required by Section 5.02 and the
applicable provisions of the Security Documents, each of which shall be endorsed
or otherwise amended to include a "standard" or "New York" lender's loss payable
endorsement and to name the Collateral Agent as additional insured, in form and
substance satisfactory to the Agents.
(m) The Lenders shall have received the Borrower's unaudited consolidated
balance sheet and related statements of income, stockholders' equity and cash
flows as of and for the quarter ended March 31, 1999, and A&T's audited
consolidated balance sheet and related statements of income, stockholders'
equity and cash flows as of and for the year ended April 3, 1999.
(n) The Lenders shall be reasonably satisfied as to the amount and nature
of any environmental and employee health and safety exposures to which the
Borrower and the Subsidiaries may be subject and the plans of the Borrower with
respect thereto.
(o) The Merger shall have been consummated or shall be consummated
simultaneously with the initial Credit Event on the Closing Date, in each case
in all material respects in accordance with the terms of the relevant
documentation therefor, including the Merger Agreement and the related schedules
and attachments thereto in the form in which they were initially executed (and
without the waiver or amendment of any material terms or conditions of the
Merger Agreement, except as shall be approved by the Administrative Agent (which
approval shall not be unreasonably withheld)).
(p) There shall be no litigation or administrative proceedings,
governmental investigations or other legal or regulatory developments, actual or
threatened, that, singly or in the aggregate, will or are reasonably likely to
have a Material Adverse Effect.
(q) The Lenders shall be reasonably satisfied with all material legal, tax
and accounting matters relating to the Transactions and the other transactions
contemplated hereby, including the ability of Subsidiaries to transfer funds to
the Borrower and the withholding tax consequences thereof.
(r) All requisite Governmental Authorities and third parties shall have
approved or consented to the Transactions and the other transactions
contemplated hereby to the extent required, in each case to the extent failure
to obtain such consent or approval will or is reasonably likely to have a
Material Adverse Effect and there shall be no governmental or judicial action,
actual or threatened, that has or would have, singly or in the aggregate, a
reasonable likelihood of restraining, preventing or imposing burdensome
conditions on the Transactions or the other transactions contemplated hereby.
(s) The Lenders shall have received a certificate substantially in the
form of Exhibit L from the chief financial officer of the Borrower to the effect
that, after giving effect to the Transactions, the Borrower and the Subsidiaries
taken as a whole will not (i) be insolvent,
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(ii) be rendered insolvent by the Indebtedness incurred in connection therewith,
(iii) be left with unreasonably small capital with which to engage in its
business or (iv) have incurred debts beyond its ability to pay such debts as
they mature.
(t) All principal, premium, if any, interest, fees and other amounts due
and owing under the Existing Credit Agreements shall have been paid in full, the
commitments thereunder terminated and all guarantees and security in support
thereof released, and the Agent shall have received reasonably satisfactory
evidence thereof, and after giving effect to the Transactions and the other
transactions contemplated hereby, the Borrower and its subsidiaries shall have
outstanding no Indebtedness or preferred stock other than (i) the Loans and
Letters of Credit hereunder and (ii) the Indebtedness listed on Schedule 6.01.
(u) After giving pro forma effect to the Transactions, the Leverage Ratio
shall not exceed 5.50 to 1.00.
(v) The Equity Contribution shall have been made, and the proceeds of the
Senior Subordinated Notes shall have been released from escrow and, together
with the Equity Contribution, shall have been used as described in the preamble
to this Agreement.
(w) All the representations and warranties contained in the Merger
Agreement shall be true and correct in all material respects without giving
effect to any waiver thereof (except for waivers granted with the Administrative
Agent's approval, such approval not to be unreasonably withheld).
ARTICLE V
Affirmative Covenants
The Borrower covenants and agrees with each Lender that so long as this
Agreement shall remain in effect and until the Commitments have been terminated
and the principal of and interest on each Loan, all Fees and all other expenses
or amounts payable under any Loan Document shall have been paid in full and all
Letters of Credit have been canceled or have expired and all amounts drawn
thereunder have been reimbursed in full, unless the Required Lenders shall
otherwise consent in writing, the Borrower will, and will cause each of the
Subsidiaries to:
SECTION 5.01. Existence; Businesses and Properties. (a) Do or cause to be
done all things necessary to preserve, renew and keep in full force and effect
its legal existence, except as otherwise expressly permitted under Section 6.05.
(b) Do or cause to be done all things necessary to obtain, preserve,
renew, extend and keep in full force and effect the rights, licenses, permits,
franchises, authorizations, patents, copyrights, trademarks and trade names
material to the conduct of its business; maintain and operate such business in
substantially the manner in which it is presently conducted and operated; comply
in all material respects with all applicable laws, rules, regulations, decrees
and orders of any Governmental Authority, whether now in effect or hereafter
enacted; and at all times maintain and preserve all property material to the
conduct of such business and keep such property in good repair, working order
and condition and from time to time make, or cause to be made, all needful and
proper repairs, renewals, additions, improvements and
55
replacements thereto necessary in order that the business carried on in
connection therewith may be properly conducted at all times.
SECTION 5.02. Insurance. (a) Keep its insurable properties adequately
insured at all times by financially sound and reputable insurers; maintain such
other insurance, to such extent and against such risks, including fire and other
risks insured against by extended coverage, as is customary with companies in
the same or similar businesses operating in the same or similar locations,
including public liability insurance against claims for personal injury or death
or property damage occurring upon, in, about or in connection with the use of
any properties owned, occupied or controlled by it; and maintain such other
insurance as may be required by law.
(b) Cause all such policies covering any Collateral to be endorsed or
otherwise amended to include a "standard" or "New York" lender's loss payable
endorsement, in form and substance reasonably satisfactory to the Administrative
Agent and the Collateral Agent, which endorsement shall provide that, from and
after the Closing Date, if the insurance carrier shall have received written
notice from the Administrative Agent or the Collateral Agent of the occurrence
of an Event of Default, the insurance carrier shall pay all proceeds otherwise
payable to the Borrower or the Loan Parties under such policies directly to the
Collateral Agent; cause all such policies to provide that neither the Borrower,
the Administrative Agent, the Collateral Agent nor any other party shall be a
coinsurer thereunder and to contain a "Replacement Cost Endorsement", without
any deduction for depreciation, and such other provisions as the Administrative
Agent or the Collateral Agent may reasonably require from time to time to
protect their interests; deliver original or certified copies of all such
policies to the Collateral Agent; cause each such policy to provide that it
shall not be canceled, modified or not renewed (i) by reason of nonpayment of
premium upon not less than 10 days' prior written notice thereof by the insurer
to the Administrative Agent and the Collateral Agent (giving the Administrative
Agent and the Collateral Agent the right to cure defaults in the payment of
premiums) or (ii) for any other reason upon not less than 30 days' prior written
notice thereof by the insurer to the Administrative Agent and the Collateral
Agent; deliver to the Administrative Agent and the Collateral Agent, prior to
the cancelation, modification or nonrenewal of any such policy of insurance, a
copy of a renewal or replacement policy (or other evidence of renewal of a
policy previously delivered to the Administrative Agent and the Collateral
Agent) together with evidence satisfactory to the Administrative Agent and the
Collateral Agent of payment of the premium therefor.
(c) Notify the Administrative Agent and the Collateral Agent immediately
whenever any separate insurance concurrent in form or contributing in the event
of loss with that required to be maintained under this Section 5.02 is taken out
by the Borrower; and promptly deliver to the Administrative Agent and the
Collateral Agent a duplicate original copy of such policy or policies.
SECTION 5.03. Obligations and Taxes. Pay its material Indebtedness and
other obligations promptly and in accordance with their terms and pay and
discharge promptly when due all material taxes, assessments and governmental
charges or levies imposed upon it or upon its income or profits or in respect of
its property, before the same shall become delinquent or in default, as well as
all lawful claims for labor, materials and supplies or otherwise that, if
unpaid, might give rise to a Lien upon such properties or any part thereof;
provided, however, that (a) such payment and discharge shall not be required
with respect to any such tax, assessment, charge, levy or claim so long as the
validity or amount thereof shall be contested in good faith by appropriate
proceedings and the Borrower shall have set
56
aside on its books adequate reserves with respect thereto in accordance with
GAAP and such contest operates to suspend collection of the contested
obligation, tax, assessment or charge and enforcement of a Lien and (b) failure
to pay any Indebtedness shall not be a breach of this covenant unless such
failure would give rise to an Event of Default under paragraph (f) of Article
VII.
SECTION 5.04. Financial Statements, Reports, etc. In the case of the
Borrower, furnish to the Administrative Agent, the Collateral Agent and each
Lender:
(a) within 90 days after the end of each fiscal year, its
consolidated balance sheet and related statements of income, stockholders'
equity and cash flows showing the financial condition of the Borrower and
its consolidated Subsidiaries as of the close of such fiscal year and the
results of its operations and the operations of such Subsidiaries during
such year, all audited by KPMG LLP or other independent public accountants
of recognized national standing and accompanied by an opinion of such
accountants (which shall not be qualified in any material respect) to the
effect that such consolidated financial statements fairly present the
financial condition and results of operations of the Borrower and its
consolidated Subsidiaries on a consolidated basis in accordance with GAAP;
(b) within 45 days after the end of each of the first three fiscal
quarters of each fiscal year, its consolidated balance sheet and related
statements of income, stockholders' equity and cash flows showing the
financial condition of the Borrower and its consolidated Subsidiaries as
of the close of such fiscal quarter and the results of its operations and
the operations of such Subsidiaries during such fiscal quarter and the
then elapsed portion of the fiscal year, all certified by one of its
Financial Officers as fairly presenting in all material respects the
financial condition and results of operations of the Borrower and its
consolidated Subsidiaries on a consolidated basis in accordance with GAAP,
subject to normal year-end audit adjustments;
(c) within 30 days after the end of each of the first 11 fiscal
months of each fiscal year, its consolidated balance sheet and related
statements of income, stockholder's equity and cash flows showing the
financial condition of the Borrower and its consolidated Subsidiaries as
of the close of such fiscal month and the results of its operations and
the operations of such Subsidiaries during such fiscal month and the then
elapsed portion of such fiscal year, all certified by one of its Financial
Officers as fairly presenting in all material respects the financial
condition and results of operations of the Borrower and its consolidated
Subsidiaries on a consolidated basis in accordance with GAAP, subject to
normal year-end audit adjustments;
(d) at the time of delivery of the financial statements referred to
in paragraph (a), (b) or (c) above, the unaudited consolidating balance
sheet and related statements of income and cash flows, showing the
financial position of the Borrower and each of its Subsidiaries as of the
close of, and the results of operations of the Borrower and each of its
Subsidiaries during, the relevant period referred to in paragraph (a), (b)
or (c) above, as the case may be, all certified by one of its Financial
Officers as fairly presenting in all material respects the financial
condition and results of operations of the Borrower and each of its
Subsidiaries in accordance with GAAP (except for consolidation), subject
in the case of monthly and quarterly reports, to normal year-end audit
adjustments;
57
(e) within 45 days after the end of each fiscal year, consolidated
and consolidating projections of revenues, expenditures and results of
operations and cash positions of the Borrower and each Subsidiary as of
the end of each month in the forthcoming year, together with a statement
of assumptions and estimates upon which such projections are based, all in
detail reasonably satisfactory to the Administrative Agent;
(f) within 90 days after the end of each fiscal year, projections of
backlog and rolloff of the Borrower and each Subsidiary as of the end of
each month in the forthcoming year, together with a statement of
assumptions and estimates upon which such projections are based, all in
detail reasonably satisfactory to the Administrative Agent;
(g) concurrently with any delivery of financial statements under
paragraph (a) or (b) above, a certificate in the form of Exhibit I (a
"Compliance Certificate") of (i) the accounting firm (in the case of
paragraph (a)) or Financial Officer (in the case of paragraph (b)) opining
on or certifying such statements (which certificate, when furnished by an
accounting firm, may be limited to accounting matters and disclaim
responsibility for legal interpretations) (A) certifying that no Event of
Default or Default has occurred or, if such an Event of Default or Default
has occurred, specifying the nature and extent thereof and any corrective
action taken or proposed to be taken with respect thereto and (B) setting
forth computations in detail reasonably satisfactory to the Agents
demonstrating compliance with the covenants contained in Sections 6.08 (in
the case of paragraph (a)), 6.09, 6.10, 6.11, 6.12 and 6.13, and (ii) the
Financial Officer in the case of paragraph (a) or (b) setting forth
compliance with the covenants contained in Sections 6.01(c), 6.01(f),
6.01(g), 6.01(h), 6.01(i), 6.01(j), 6.01(k), 6.04(d), 6.04(h), 6.04(k),
6.04(p), 6.05(b), 6.06 and 6.07(d), and, in the case of a certificate
delivered with the financial statements required by paragraph (a) above,
setting forth the Borrower's calculation of Excess Cash Flow;
(h) within 37 days after the end of each calendar month a
certificate in the form of Exhibit J (a "Borrowing Base/Non-Default
Certificate") showing the Borrowing Base as of the close of business on
the last day of such calendar month, each such Certificate to be certified
as complete and correct on behalf of the Borrower by a Financial Officer
of the Borrower;
(i) promptly upon their becoming available, and in any event within
30 days following the end of each calendar month, (i) a monthly report, in
form and detail reasonably satisfactory to the Agents, setting forth the
current billed accounts receivable agings reports, as well as a detailed
subcontractor invoice report, of the Borrower and each Subsidiary
Guarantor as of the end of the preceding calendar month, and (ii) a
contract status backlog report of the Borrower and each Subsidiary
Guarantor prepared as of the last day of the calendar month most recently
ended;
(j) commencing on December 31, 1999, for the fiscal quarter then
ended, and thereafter within 6 weeks following the end of each calendar
quarter, a quarterly report, in form and detail reasonably satisfactory to
the Agents, setting forth unbilled active accounts relating to Material
Contracts of the Borrower as of the end of such calendar quarter;
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(k) promptly after the same become publicly available, copies of all
periodic and other reports, final proxy statements and, upon notice of
filing to the Administrative Agent and upon the request of the
Administrative Agent, other materials filed by the Borrower or any
Subsidiary with the Securities and Exchange Commission, or any
Governmental Authority succeeding to any or all of the functions of said
Commission, or with any national securities exchange, or distributed to
its shareholders, as the case may be, and all press releases;
(l) promptly after the receipt thereof by Holdings, the Borrower or
any of their respective Subsidiaries, a copy of any "management letter" in
final form (or if such final letter has not been delivered to Holdings,
the Borrower or any of their respective Subsidiaries by the date that is 8
months after the Borrower's fiscal year end, the then current draft of any
"management letter") received by any such person from its certified public
accountants and the management's responses thereto;
(m) each year, at the time of delivery of annual financial
statements with respect to the preceding fiscal year pursuant to clause
(a) above, the Borrower shall deliver to the Agents a certificate of a
Financial Officer of the Borrower (i) setting forth the information
required pursuant to Section 2 of the Perfection Certificate or confirming
that there has been no change in such information since the date of the
Perfection Certificate delivered on the Closing Date or the date of the
most recent certificate delivered pursuant to this Section and (ii)
certifying that all Uniform Commercial Code financing statements
(including fixture filings, as applicable) or other appropriate filings,
recordings or registrations, including all refilings, rerecordings and
reregistrations, containing a description of the Collateral have been
filed of record in each governmental, municipal or other appropriate
office in each jurisdiction identified pursuant to clause (i) above to the
extent necessary to protect and perfect the security interests under the
Security Documents for a period of not less than 18 months after the date
of such certificate (except as noted therein with respect to any
continuation statements to be filed within such period);
(n) within 45 days after the end of the first and third fiscal
quarters of the Borrower, a certificate of a Financial Officer of the
Borrower listing all new Government Contracts since the date of the last
Perfection Certificate which constitute Material Contracts and which are
required by this Agreement to be assigned to the Collateral Agent, on
behalf of the Lenders, in accordance with the Assignment of Claims Act;
and
(o) promptly, from time to time, subject to any restrictions
requiring confidentiality or secrecy, such other information regarding the
operations, business affairs and financial condition of Holdings, the
Borrower or any Subsidiary, or compliance with the terms of any Loan
Document, as the Administrative Agent or any Lender may reasonably
request.
SECTION 5.05. Litigation and Other Notices. Furnish to the Administrative
Agent, the Issuing Bank and each Lender prompt written notice of the following:
(a) any Event of Default or Default, specifying the nature and
extent thereof and the corrective action (if any) taken or proposed to be
taken with respect thereto;
(b) the filing or commencement of, or any threat or notice of
intention of any person to file or commence, any action, suit or
proceeding, whether at law or in
59
equity or by or before any Governmental Authority, against the Borrower or
any Affiliate thereof that could reasonably be expected to result in a
Material Adverse Effect; and
(c) any development that has resulted in, or could reasonably be
expected to result in, a Material Adverse Effect.
SECTION 5.06. Employee Benefits. (a) Comply in all material respects with
the applicable provisions of ERISA and the Code and (b) furnish to the
Administrative Agent (i) as soon as possible after, and in any event within 10
days after any Responsible Officer of the Borrower or any ERISA Affiliate knows
or has reason to know that, any ERISA Event has occurred that, alone or together
with any other ERISA Event could reasonably be expected to result in liability
of the Borrower in an aggregate amount exceeding $1,000,000, a statement of a
Financial Officer of the Borrower setting forth details as to such ERISA Event
and the action, if any, that the Borrower proposes to take with respect thereto.
SECTION 5.07. Maintaining Records; Access to Properties and Inspections.
Keep proper books of record and account in which full, true and correct entries
in conformity with GAAP and all requirements of law are made of all dealings and
transactions in relation to its business and activities. Each Loan Party will,
and will cause each of its Subsidiaries to, subject to any restrictions
requiring confidentiality or secrecy, permit any representatives designated by
the Agents or any Lender to visit and inspect the financial records and the
properties of Holdings, the Borrower or any Subsidiary at reasonable times and
as often as reasonably requested and to make extracts from and copies of such
financial records, and permit any representatives designated by the Agents or
any Lender to discuss the affairs, finances and condition of Holdings, the
Borrower or any Subsidiary with the officers thereof and independent accountants
therefor.
SECTION 5.08. Use of Proceeds. Use the proceeds of the Loans and request
the issuance of Letters of Credit only for the purposes set forth in the
preamble to this Agreement.
SECTION 5.09. Compliance with Environmental Laws. Comply, and cause all
lessees and other persons occupying its Properties to comply, in all material
respects with all Environmental Laws and Environmental Permits applicable to its
operations and Properties; obtain and renew all material Environmental Permits
necessary for its operations and Properties; and conduct any Remedial Action in
accordance with Environmental Laws; provided, however, that none of the Borrower
or any of the Subsidiaries shall be required to undertake any Remedial Action to
the extent that its obligation to do so is being contested in good faith and by
proper proceedings and appropriate reserves are being maintained with respect to
such circumstances.
SECTION 5.10. Preparation of Environmental Reports. If a Default caused by
reason of a breach of Section 3.17 or 5.09 shall have occurred and be
continuing, at the request of the Required Lenders through the Administrative
Agent, provide to the Lenders within 45 days after such request, at the expense
of the Borrower, an environmental site assessment report for the Properties
which are the subject of such Default prepared by an environmental consulting
firm acceptable to the Administrative Agent and indicating the presence or
absence of Hazardous Materials and the estimated cost of any compliance or
Remedial Action in connection with such Properties.
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SECTION 5.11. Audits. (a) From time to time upon the request of the
Collateral Agent or the Required Lenders through the Administrative Agent, but
unless an Event of Default has occurred and is continuing no more frequently
than two times in any 12-month period, and prior to each material Permitted
Acquisition, permit the Collateral Agent or the Lenders or professionals
(including investment bankers, consultants, accountants, lawyers and appraisers)
retained by the Collateral Agent or the Lenders to conduct evaluations and
appraisals of (i) the Borrower's practices in the computation of the Borrowing
Base and (ii) the assets included in the Borrowing Base, and pay the reasonable
fees and expenses of such professionals.
(b) In connection with any evaluation and appraisal relating to the
computation of the Borrowing Base, agree to maintain such additional reserves
(for purposes of computing the Borrowing Base) in respect of the Accounts
included in the Borrowing Base and make such other adjustments to its parameters
for including Accounts in the Borrowing Base as the Collateral Agent or the
Required Lenders through the Administrative Agent shall require based upon the
results of any such evaluation and appraisal.
SECTION 5.12. Further Assurances. Execute any and all further documents,
financing statements, agreements and instruments, and take all further action
(including filing Uniform Commercial Code and other financing statements,
mortgages and deeds of trust and preparing all documentation relating to filings
under the Assignment of Claims Act) that may be required under applicable law,
or that the Required Lenders, the Administrative Agent or the Collateral Agent
may reasonably request, in order to effectuate the transactions contemplated by
the Loan Documents and in order to grant, preserve, protect and perfect the
validity and first priority of the security interests created or intended to be
created by the Security Documents. The Borrower will cause any subsequently
acquired or organized Domestic Subsidiary (other than any Inactive Subsidiary)
or any Domestic Subsidiary that ceases to be an Inactive Subsidiary to execute a
Subsidiary Guarantee Agreement, Indemnity, Subrogation and Contribution
Agreement and each applicable Security Document in favor of the Collateral
Agent. In addition, from time to time, the Borrower will, at its cost and
expense, promptly secure the Obligations by pledging or creating, or causing to
be pledged or created, perfected security interests with respect to such of its
assets and properties as either Agent or the Required Lenders shall designate
(it being understood that it is the intent of the parties that the Obligations
shall be secured by substantially all the assets of the Borrower and its
Subsidiaries (including real and other properties acquired subsequent to the
Closing Date)). Such security interests and Liens will be created under the
Security Documents and other security agreements, mortgages, deeds of trust and
other instruments and documents in form and substance reasonably satisfactory to
the Collateral Agent, and the Borrower shall deliver or cause to be delivered to
the Lenders all such instruments and documents (including legal opinions, title
insurance policies and lien searches) as the Collateral Agent shall reasonably
request to evidence compliance with this Section. The Borrower agrees to provide
such evidence as the Collateral Agent shall reasonably request as to the
perfection and priority status of each such security interest and Lien. In
furtherance of the foregoing, the Borrower will give prompt notice to the Agents
of the acquisition by the Borrower or any Domestic Subsidiary of any real
property (or any interest in real property) having a value in excess of
$750,000.
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ARTICLE VI
Negative Covenants
The Borrower covenants and agrees with each Lender that, so long as this
Agreement shall remain in effect and until the Commitments have been terminated
and the principal of and interest on each Loan, all Fees and all other expenses
or amounts payable under any Loan Document have been paid in full and all
Letters of Credit have been canceled or have expired and all amounts drawn
thereunder have been reimbursed in full, unless the Required Lenders shall
otherwise consent in writing, the Borrower will not, nor will it cause or permit
any of the Subsidiaries to:
SECTION 6.01. Indebtedness. Incur, create, assume or permit to exist any
Indebtedness, except:
(a) Indebtedness for borrowed money existing on the date hereof and
set forth in Schedule 6.01, and any extensions, renewals or replacements
of such Indebtedness to the extent the principal amount of such
Indebtedness is not increased, the weighted average life to maturity of
such Indebtedness is not decreased, such Indebtedness, if subordinated to
the Obligations, remains so subordinated on terms not less favorable to
the Lenders and the original obligors in respect of such Indebtedness
remain the only obligors thereon;
(b) Indebtedness created hereunder and under the other Loan
Documents;
(c) Indebtedness evidenced by Capital Lease Obligations, or secured
pursuant to Section 6.02(h), in each case so long as (i) the related
Capital Expenditure is permitted by Section 6.08 and (ii) the aggregate
principal amount of all Indebtedness permitted to be outstanding under
this paragraph (c) shall not exceed $7,500,000;
(d) Indebtedness in favor of a Lender (or an Affiliate thereof)
under one or more Hedging Agreements approved by the Administrative Agent
(such approval not to be unreasonably withheld);
(e) intercompany Indebtedness of the Borrower and its Subsidiaries
to the extent permitted by Sections 6.04(f) and (h);
(f) Indebtedness with respect to any surety bonds required in the
ordinary course of business of the Borrower and the Subsidiaries, provided
that such Indebtedness shall not at any time exceed $750,000 in the
aggregate;
(g) Indebtedness of Foreign Subsidiaries in an aggregate principal
amount not to exceed $7,500,000 at any time outstanding; and
(h) unsecured Indebtedness of the Borrower incurred in connection
with a Permitted Acquisition subordinated to the Obligations on terms and
conditions no less favorable to the Lenders than those contained in
Exhibit K in an aggregate principal amount not to exceed $4,000,000 at any
time outstanding;
(i) other unsecured Indebtedness of the Borrower and the
Subsidiaries in an aggregate principal amount not to exceed $2,500,000 at
any time outstanding;
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(j) Indebtedness to Mellon in connection with purchase cards issued
by Mellon in an aggregate amount not to exceed $500,000 at any time
outstanding; and
(k) Indebtedness of any Subsidiary that exists at the time such
person becomes a Subsidiary and that was not incurred in contemplation of
or in connection with the acquisition by the Borrower or a Subsidiary of
such person in an aggregate principal amount not to exceed $4,000,000 at
any time outstanding.
SECTION 6.02. Liens. Create, incur, assume or permit to exist any Lien on
any property or assets (including stock or other securities of any person,
including any Subsidiary) now owned or hereafter acquired by it or on any income
or revenues or rights in respect of any thereof, except:
(a) Liens on property or assets of the Borrower and its Subsidiaries
existing on the date hereof and set forth in Schedule 6.02; provided that
such Liens shall secure only those obligations which they secure on the
date hereof;
(b) any Lien created under the Loan Documents;
(c) Liens for taxes not yet due or which are being contested in
compliance with Section 5.03;
(d) carriers', warehousemen's, mechanics', materialmen's,
repairmen's or other like Liens arising in the ordinary course of business
and securing obligations that are not due and payable or which are being
contested in compliance with Section 5.03;
(e) Liens (other than any Lien imposed by ERISA), pledges and
deposits made in the ordinary course of business in compliance with
workmen's compen sation, unemployment insurance and other social security
laws or regulations;
(f) deposits to secure the performance of bids, trade contracts
(other than for Indebtedness), leases (other than Capital Lease
Obligations), statutory obligations, surety and appeal bonds, performance
bonds and other obligations of a like nature incurred in the ordinary
course of business;
(g) zoning restrictions, easements, rights-of-way, restrictions on
use of real property and other similar encumbrances incurred in the
ordinary course of business which, in the aggregate, are not substantial
in amount and do not materially detract from the value of the property
subject thereto or interfere with the ordinary conduct of the business of
the Borrower or any of its Subsidiaries;
(h) purchase money security interests in real property, improvements
thereto or equipment hereafter acquired (or, in the case of improvements,
constructed) by the Borrower or any Subsidiary; provided that (i) such
security interests secure Indebtedness permitted by Section 6.01, (ii)
such security interests are incurred, and the Indebtedness secured thereby
is created, within 90 days after such acquisition (or construction), (iii)
the Indebtedness secured thereby does not exceed 100% of the lesser of the
cost or the fair market value of such real property, improvements or
equipment at the time of such acquisition (or construction) and (iv) such
security interests do not apply to any other property or assets of the
Borrower or any Subsidiary;
63
(i) Liens on assets of Foreign Subsidiaries; provided that (i) such
Liens do not extend to, or encumber, assets of the Borrower or any of its
Domestic Subsidiaries and (ii) such Liens secure only Indebtedness
incurred by such Foreign Subsidiaries pursuant to Section 6.01(g);
(j) Liens that are contractual rights of setoff (i) relating to the
establishment of depository relations with any Lender or any bank with
which the Borrower may maintain accounts in accordance with Section 6.19
and which are not given in connection with the issuance of Indebtedness or
(ii) pertaining to pooled deposit and/or sweep accounts of the Borrower or
any Subsidiary with any Lender to permit satisfaction of overdraft or
similar obligations incurred in the ordinary course of business of the
Borrower and the Subsidiaries;
(k) judgment liens securing judgments that have not resulted in an
Event of Default under paragraph (i) of Article VII; and
(l) any Lien existing on any property or asset of any person that
exists at the time such person becomes a Subsidiary and that secured
Indebtedness permitted by Section 6.01(k); provided that (i) such Lien was
not created in contemplation of or in connection with such acquisition and
(ii) such Lien does not apply to any property or assets of the Borrower or
any other Subsidiary.
SECTION 6.03. Sale and Lease-Back Transactions. Enter into any
arrangement, directly or indirectly, with any person whereby it shall sell or
transfer any property, real or personal, used or useful in its business, whether
now owned or hereafter acquired, and thereafter rent or lease such property or
other property which it intends to use for substantially the same purpose or
purposes as the property being sold or transferred unless (a) the sale of such
property is permitted by Section 6.05 and (b) the Capital Lease Obligations
arising therefrom are permitted by Section 6.01(c).
SECTION 6.04. Investments, Loans and Advances. Purchase, hold or acquire
any Equity Interests, evidences of indebtedness or other securities of, make or
permit to exist any loans or advances to, or make or permit to exist any
investment or any other interest in, any other person, except:
(a) investments by the Borrower existing on the date hereof in the
Equity Interests of the Subsidiaries and additional investments in the
Equity Interests of domestic Subsidiary Guarantors;
(b) Permitted Investments;
(c) Accounts owing to the Borrower or any of its Subsidiaries
arising from sales of inventory under usual and customary terms in the
ordinary course of business;
(d) advances to officers and employees of the Borrower or any of its
Subsidiaries to meet expenses incurred by such officers and employees in
the ordinary course of business, in an aggregate amount not to exceed
$500,000 at any time outstanding;
(e) securities of any customer of the Borrower or any Subsidiary
received in lieu of cash payment, if the Borrower reasonably deems such
customer to be in a
64
reorganization or unable to make a timely cash payment on Indebtedness of
such customer owing to it, provided that the Borrower or such Subsidiary,
as the case may be, has paid no new consideration (other than forgiveness
of Indebtedness) therefor;
(f) any Subsidiary may make intercompany loans to the Borrower or
any Subsidiary Guarantor and the Borrower may make intercompany loans and
advances to any Subsidiary Guarantor; provided that any promissory notes
evidencing such intercompany loans shall be pledged (and delivered) by the
Borrower or the respective Domestic Subsidiary Guarantor that is the
lender of such intercompany loan as Collateral pursuant to the Pledge
Agreement; provided further that (i) neither the Borrower nor any Domestic
Subsidiaries may make loans to any Foreign Subsidiaries of the Borrower
pursuant to this paragraph (f) and (ii) any loans made by any Foreign
Subsidiaries to the Borrower or any of its Domestic Subsidiaries pursuant
to this paragraph (f) shall be subordinated to the obligations of the Loan
Parties pursuant to subordination provisions in substantially the form of
Exhibit K;
(g) the Borrower may establish Subsidiaries to the extent permitted
by Section 6.15;
(h) the Borrower and its Domestic wholly owned Subsidiaries may make
loans and advances to, or other investments in, Foreign Subsidiaries of
the Borrower so long as the aggregate amount of any loans, advances or
other investments at any time outstanding (determined without regard to
any write-downs or write-offs thereof) pursuant to this paragraph (h)
shall not exceed $4,000,000;
(i) the Borrower may acquire all or substantially all the assets of
a person or line of business of such person, or not less than 80% of the
Equity Interests of a person (referred to herein as the "Acquired
Entity"); provided that (i) the Acquired Entity shall be a going concern
and shall be in a similar line of business as that of the Borrower and its
Subsidiaries as conducted during the current and most recent calendar
year; (ii) at the time of such transaction (A) both before and after
giving effect thereto, no Event of Default or Default shall have occurred
and be continuing or shall exist; (B) the Borrower would be in compliance
with the covenants set forth in Sections 6.09, 6.10, 6.11, 6.12 and 6.13
as of the most recently completed period of four consecutive fiscal
quarters ending prior to such transaction for which the financial
statements and certificates required by Section 5.04(a) or 5.04(b) have
been delivered or for which comparable financial statements have been
filed with the Securities and Exchange Commission, after giving pro forma
effect to such transaction and to any other event occurring after such
period as to which pro forma recalculation is appropriate (including any
other transaction described in this Section 6.04(i) occurring after such
period) as if such transaction had occurred as of the first day of such
period; (C) based on projections of the Borrower after giving pro forma
effect to such transaction and such other events or transactions, the
Borrower would be in compliance with the covenants set forth in Sections
6.09, 6.10, 6.11, 6.12 and 6.13 for each of the four succeeding calendar
quarters; (D) after giving effect to such acquisition, there must be at
least $10,000,000 of unused and available Revolving Credit Commitments;
and (E) if the total consideration for the acquisition exceeds
$35,000,000, the Required Lenders shall have approved the acquisition;
(iii) the Acquired Entity shall have had a positive EBITDA for the
12-month period immediately preceding the transaction; (iv) the Borrower
shall assume no Indebtedness in connection with such acquisition, except
as permitted by Section 6.01; (v) the Acquired Entity shall not be subject
to any material pending
65
litigation or material contingent liabilities (any acquisition of an
Acquired Entity meeting all the criteria of this Section 6.04(i) being
referred to herein as a "Permitted Acquisition") and (vi) if the Acquired
Entity would not constitute a wholly owned Subsidiary, each holder of an
Equity Interest therein (other than the Borrower or any wholly owned
Subsidiary) shall have executed and delivered to the Collateral Agent an
acknowledgement, waiver and consent substantially the form of Exhibit M.
All pro forma calculations required to be made pursuant to this Section
6.04(i) shall (i) include only those adjustments that (A) except with
respect to the projections referred to in clause (C) of the preceding
sentence, would be permitted or required by Regulation S-X, and (B) are
based on reasonably detailed written assumptions reasonably acceptable to
the Administrative Agent and (ii) be certified to by a Financial Officer
as having been prepared in good faith based upon reasonable assumptions;
(j) the Borrower may enter into Hedging Agreements to the extent
permitted in Section 6.01(d);
(k) the Borrower or any Subsidiary Guarantor may acquire Margin
Stock of entities in a similar line of business as that of the Borrower
and its Subsidiaries as conducted during the current and most recent
calendar year; provided, however, that (i) the Borrower or any Subsidiary
Guarantor must notify the Agents promptly after any such acquisition, (ii)
after giving effect to such acquisition, there must be at least
$10,000,000 of unused and available Revolving Credit Commitments and (iii)
the Borrower and the Subsidiaries shall not hold Margin Stock with a cost
basis in excess of $25,000,000 in the aggregate at any time (any Margin
Stock acquired and held by the Borrower or any Subsidiary Guarantor in
accordance with this Section 6.04(k) being referred to herein as "Approved
Margin Stock");
(l) Holdings, the Borrower and the Subsidiaries may consummate the
Transactions;
(m) investments existing on the date hereof and set forth on
Schedule 6.04;
(n) investments consisting of non-cash proceeds of Asset Sales for
which the consideration consists of at least 75% cash as required under
Section 6.05;
(o) the Borrower may make loans or advances permitted by clauses
(ii) and (iii) of the first proviso of Section 6.06(a); and
(p) other investments, loans and advances (other than investments in
and loans and advances to Foreign Subsidiaries) in an aggregate amount
(valued at cost or outstanding principal amount, as the case may be) not
greater than $4,000,000 at any time outstanding.
SECTION 6.05. Mergers, Consolidations, Sales of Assets and Acquisitions.
(a) Merge into or consolidate with any other person, or permit any other person
to merge into or consolidate with it, or sell, transfer, lease or otherwise
dispose of (in one transaction or in a series of transactions) all or any
substantial part of the assets of the Borrower (whether now owned or hereafter
acquired) or less than all the Equity Interests of any Subsidiary, or purchase,
lease or otherwise acquire (in one transaction or a series of transactions) all
or any substantial part of the assets of any other person, except that (i) the
Borrower and any Subsidiary may purchase and sell inventory in the ordinary
course of business, (ii) the
66
Borrower or any wholly owned Subsidiary may make Permitted Acquisitions and
(iii) if at the time thereof and immediately after giving effect thereto no
Event of Default or Default shall have occurred and be continuing (x) any wholly
owned Subsidiary may merge into the Borrower in a transaction in which the
Borrower is the surviving corporation and (y) any wholly owned Subsidiary may
merge into or consolidate with any other wholly owned Subsidiary (or, in order
to consummate a Permitted Acquisition, any other person) in a transaction in
which the surviving entity is a wholly owned Subsidiary and (except in the case
of Permitted Acquisitions) no person other than the Borrower or a wholly owned
Subsidiary receives any consideration, provided that if any such merger
described in this clause (y) shall involve a Domestic Subsidiary, the surviving
entity of such merger shall be a Domestic Subsidiary.
(b) Engage in any Asset Sale otherwise permitted under paragraph (a) above
unless (i) such Asset Sale is for consideration at least 75% of which is cash
(provided that such 75% requirement shall not apply to any Asset Sale
constituting the sale of a business unit if the cash portion of the
consideration received therefor is no less than an amount equal to the product
of (A) six and (B) the amount of EBITDA for the preceding fiscal year directly
attributable to the assets included in such Asset Sale), (ii) such consideration
is at least equal to the fair market value of the assets being sold,
transferred, leased or disposed of and (iii) except with respect to a sale by
the Borrower of all the Equity Interests or all or substantially all the assets
of IMC, the fair market value of all assets sold, transferred, leased or
disposed of pursuant to this paragraph (b) shall not exceed (i) $5,000,000 in
any fiscal year or (ii) $10,000,000 in the aggregate.
SECTION 6.06. Dividends and Distributions; Restrictions on Ability of
Subsidiaries to Pay Dividends. (a) Declare or pay, directly or indirectly, any
dividend or make any other distribution (by reduction of capital or otherwise),
whether in cash, property, securities or a combination thereof, with respect to
any of its Equity Interests or directly or indirectly redeem, purchase, retire
or otherwise acquire for value (or permit any Subsidiary to purchase or acquire)
any of its Equity Interests or set aside any amount for any such purpose;
provided, however, that (i) any Subsidiary may declare and pay dividends or make
other distributions ratably to the holders of its Equity Interests, (ii) so long
as no Event of Default or Default shall have occurred and be continuing or would
result therefrom, the Borrower may, or the Borrower may make distributions to
Holdings so that Holdings may, repurchase its Equity Interests owned by
employees of the Borrower or make payments to employees of the Borrower or any
of its Subsidiaries, in each case upon termination of employment in connection
with the exercise of stock options, stock appreciation rights or similar equity
incentives or equity based incentives pursuant to incentive plans or in
connection with the death or Disability of such employees in an aggregate amount
not to exceed $5,000,000 in any fiscal year (of which not more than $3,000,000
may be used for payments not related to death or Disability) and (iii) so long
as, in the case of clause (w) and (x) only, no Event of Default or Default shall
have occurred and be continuing or would result therefrom, the Borrower may
declare and pay cash dividends or make loans or advances to Holdings (w) in an
amount required by Holdings to be paid as interest under the Seller Purchase
Money Note and the Investor Notes, (x) in an aggregate amount not to exceed
$3,650,000 required by Holdings to be paid as principal under the Seller
Purchase Money Note, (y) in an amount not to exceed $250,000 in any fiscal year,
to the extent necessary to pay general corporate and overhead expenses incurred
by Holdings in the ordinary course of business and (z) in an amount necessary to
make Tax Payments directly attributable to (or arising as a result of) the
operations of the Borrower and its Subsidiaries; provided, however, that (A) the
amount of such dividends shall not exceed the amount that the Borrower and its
Subsidiaries would be required to pay in respect of Federal, State and
67
local taxes were the Borrower to pay such taxes as a stand-alone taxpayer and
(B) such dividends pursuant to this clause (z) are used by Holdings for such
purposes within 20 days of the receipt of such dividends.
(b) Permit its Subsidiaries to, directly or indirectly, create or
otherwise cause or suffer to exist or become effective any encumbrance or
restriction on the ability of any such Subsidiary to (i) pay any dividends or
make any other distributions on its Equity Interests or (ii) make or repay any
loans or advances to the Borrower or the parent of such Subsidiary except (v)
for such encumbrances or restrictions existing under or by reason of (A)
applicable law, (B) this Agreement and the other Loan Documents, (C) the Senior
Subordinated Note Documents or (D) with respect to Foreign Subsidiaries only,
Indebtedness of such Foreign Subsidiaries permitted to be incurred hereunder,
(w) customary provisions restricting subletting or assignment of any lease
governing a leasehold interest of the Borrower or a Subsidiary of the Borrower,
(x) customary provisions restricting assignment of any agreement entered into by
the Borrower or a Subsidiary in the ordinary course of business, (y) any holder
of a Lien permitted by Section 6.02 may restrict the transfer of the asset or
assets subject thereto and (z) subordination provisions in favor of the Lenders
and required by Section 6.04(f).
SECTION 6.07. Transactions with Affiliates. Except for transactions by or
among Loan Parties, sell or transfer any property or assets to, or purchase or
acquire any property or assets from, or otherwise engage in any other
transactions with, any of its Affiliates, except that:
(a) the Borrower or any Subsidiary may engage in any of the
foregoing transactions in the ordinary course of business at prices and on
terms and conditions not less favorable to the Borrower or such Subsidiary
than could be obtained on an arm's-length basis from unrelated third
parties;
(b) dividends may be paid to the extent provided in Section 6.06;
(c) loans may be made and other transactions may be entered into
between and among the Borrower, Holdings, the Subsidiaries and their
respective Affiliates to the extent permitted by Sections 6.01 and 6.04;
and
(d) so long as no Event of Default or Default shall have occurred
and be continuing or would result therefrom, (i) customary fees may be
paid to non-officer directors of the Borrower in an aggregate amount not
to exceed $250,000 in any fiscal year; (ii) business management fees may
be paid to ▇▇▇▇▇▇-▇▇▇▇▇▇ Capital, Inc. or any of its Affiliates (and such
other reasonable and customary fees may be paid to ▇▇▇▇▇▇-▇▇▇▇▇▇ Capital,
Inc. or such Affiliates as shall be approved by the Board of Directors of
the Borrower for any future advisory services actually rendered by
▇▇▇▇▇▇-▇▇▇▇▇▇ Capital, Inc. or such Affiliates), in an aggregate amount
not to exceed $1,000,000 in any fiscal year; provided, however, that the
amount of such fees actually paid in any fiscal year does not exceed an
amount equal to the sum of (A) in the event the Interest Coverage Ratio on
the date of the proposed payment is greater than 2.0:1.0 but less than or
equal to 2.25:1.0, $500,000, plus (B) in the event the Interest Coverage
Ratio on the date of any proposed payment exceeds 2.25:1.0, an additional
$500,000, in each case together with the amount of unpaid management fees
accrued in any prior fiscal year that could have been paid in such prior
fiscal year had the Interest Coverage Ratio applicable to clause (A) or
(B) on the date of such proposed payment been in effect on the date of
accrual of such prior year's fee,
68
and (iii) an advisory fee in respect of the Merger may be paid to
▇▇▇▇▇▇-▇▇▇▇▇▇ Capital, Inc. or any of its Affiliates on the Closing Date
in an amount not to exceed the lesser of $1,150,000 or 1% of the total
acquisition cost of the Merger.
SECTION 6.08. Capital Expenditures. Make any Capital Expenditures, except
that (a) during the period (in each case, taken as one accounting period) from
January 1, 1999, through and including December 31, 1999, the Borrower and its
Subsidiaries may make Capital Expenditures in an aggregate amount not to exceed
$6,000,000 and (b) during each fiscal year thereafter (in each case, taken as
one accounting period), the Borrower and its Subsidiaries may make Capital
Expenditures in an aggregate amount not to exceed 1.25% of the consolidated net
sales of the Borrower and its consolidated Subsidiaries for the preceding fiscal
year, as shown on the consolidated financial statements for such year delivered
pursuant to Section 5.04(a) after giving pro forma effect to Permitted
Acquisitions consummated in such preceding fiscal year as if such Permitted
Acquisitions had occurred as of the first day of such fiscal year.
SECTION 6.09. Interest Coverage Ratio. Permit the Interest Coverage Ratio
for any period of four consecutive fiscal quarters, in each case taken as one
accounting period, ending on a date or during any period set forth below to be
less than the amount set forth opposite such date or period below:
Date or Period Ratio
-------------- -----
September 30, 1999 through September 30, 2000 1.65:1.0
December 31, 2000 1.75:1.0
March 31, 2001 through December 31, 2001 2.00:1.0
March 31, 2002 through December 31, 2002 2.25:1.0
March 31, 2003 through December 31, 2003 2.50:1.0
March 31, 2004 and thereafter 3.00:1.0
SECTION 6.10. Fixed Charge Coverage Ratio. Permit the Fixed Charge
Coverage Ratio for any period of four consecutive fiscal quarters, in each case
taken as one accounting period, ending during any period set forth below to be
less than the amount set forth opposite such period below:
Period Ratio
------ -----
September 30, 1999 through December 31, 2001 1.0:1.0
March 31, 2002 and thereafter 1.05:1.0
SECTION 6.11. Maximum Leverage Ratio. Permit the Leverage Ratio at any
time during a period set forth below to be greater than the ratio set forth
opposite such period below:
Period Ratio
------ -----
September 30, 1999 through December 31, 1999 5.75:1.0
January 1, 2000 through December 31, 2000 5.50:1.0
January 1, 2001 through December 31, 2001 5.25:1.0
January 1, 2002 through December 31, 2002 5.00:1.0
January 1, 2003 through December 31, 2003 4.75:1.0
January 1, 2004 and thereafter 4.50:1.0
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SECTION 6.12. Senior Leverage Ratio. Permit the Senior Leverage Ratio at
any time during a period set forth below to be greater than the ratio set forth
opposite such period below:
Period Ratio
------ -----
September 30, 1999 through December 31, 2000 3.75:1.0
January 1, 2001 through December 31, 2001 3.50:1.0
January 1, 2002 and thereafter 3.25:1.0
SECTION 6.13. Minimum EBITDA. Without giving effect to any Permitted
Acquisitions completed in the relevant period, permit EBITDA for any period of
four consecutive fiscal quarters ending on or before December 31, 2001, in each
case taken as one accounting period, ended on the last day of any fiscal quarter
set forth below to be less than the amount set forth opposite such fiscal
quarter below:
Fiscal Quarter EBITDA
-------------- ------
September 30, 1999 through December 31, 1999 $30,000,000
March 31, 2000 through December 31, 2000 $33,000,000
March 31, 2001 through December 31, 2001 $37,000,000
SECTION 6.14. Limitation on Modifications of Indebtedness; Modifications
of Certificate of Incorporation, By-laws and Certain Other Agreements, etc. (a)
Amend or modify, or permit the amendment or modification of, any provision of
existing Indebtedness or of any agreement (including any purchase agreement,
indenture, loan agreement or security agreement) relating thereto other than any
amendments or modifications to Indebtedness which do not in any way materially
adversely affect the interests of the Lenders, (b) make (or give any notice in
respect of) any voluntary or optional payment or prepayment on or redemption or
acquisition for value of, or any prepayment or redemption as a result of any
asset sale, change of control or similar event of, any Senior Subordinated
Notes, (c) amend or modify, or permit the amendment or modification of, the
Merger Agreement or any of the operating agreements entered into in connection
therewith or any tax sharing agreement, in each case except for amendments or
modifications which are not in any way adverse in any material respect to the
interests of the Lenders, (d) amend, modify or change its Certificate of
Incorporation (including by the filing or modification of any certificate of
designation) or By-laws, or any agreement entered into by it, with respect to
its Equity Interests (including any shareholders' agreement), or enter into any
new agreement with respect to its Equity Interests, other than any amendments,
modifications or changes pursuant to this clause (d) or any such new agreements
pursuant to this clause (d) which do not in any way materially adversely affect
the interests of the Lenders; provided that nothing in this clause (d) shall
prevent the Borrower or any of its Subsidiaries from amending its Certificate of
Incorporation or By-laws to provide indemnification to any officer or director
of the Borrower or any such Subsidiary to the maximum extent permitted by the
law of its jurisdiction of incorporation or (e) amend, modify or change, or
permit the amendment, modification or change of, the charter, by-laws or other
organizational documents of each of Anteon VDS Foreign Enterprises LLC and
Anteon VDS Foreign Investments LLC, each a Delaware limited liability company
and wholly owned subsidiary of the Borrower, to permit such companies to engage
in any activity other than owning all the outstanding shares of capital stock of
Yuhan Hoeysa Anteon VDS-Korea.
70
SECTION 6.15. Limitation on Creation of Subsidiaries. Establish or create
any additional Subsidiaries; provided that the Borrower may establish or create
one or more Subsidiaries of the Borrower so long as (a) at least 80% of the
Equity Interests of such Subsidiary is owned by the Borrower or a wholly owned
Subsidiary, (b) 100% of the Equity Interests so owned by Borrower or such
Subsidiary of any new Subsidiary (except that not more than 65% of the voting
Equity Interests of any Foreign Subsidiary owned by a Loan Party shall be
required to be so pledged) is upon the creation or establishment of any such new
Subsidiary pledged and delivered to the Collateral Agent for the benefit of the
Secured Parties under the Pledge Agreement and (c) upon the creation or
establishment of any such new Domestic Subsidiary such Domestic Subsidiary
becomes a party to the applicable Security Documents in accordance with Section
5.12 and the other Loan Documents (and if such new Domestic Subsidiary is not a
wholly owned Subsidiary of Borrower, each owner of any minority Equity Interest
in such new Domestic Subsidiary shall have consented to such new Domestic
Subsidiary becoming party to the applicable Security Documents and other Loan
Documents and executed an acknowledgment, waiver and consent substantially in
the form of Exhibit M).
SECTION 6.16. Business. Engage (directly or indirectly) in any business
other than the business in which the Borrower and its Subsidiaries are engaged
on the Closing Date and other businesses reasonably related thereto.
SECTION 6.17. Designated Senior Indebtedness. Designate any indebtedness
as "Designated Senior Indebtedness" for purposes of the Senior Subordinated Note
Indenture unless the Required Lenders specifically consent thereto in writing.
SECTION 6.18. Fiscal Year. With respect the Borrower, change its fiscal
year end to a date other than December 31.
SECTION 6.19. Maintenance of Accounts. With respect to the Borrower and
the Domestic Subsidiaries, maintain any bank account, other than payroll and
▇▇▇▇▇ cash accounts, with any financial institution that is not a Lender.
ARTICLE VII
Events of Default
In case of the happening of any of the following events ("Events of
Default"):
(a) any representation or warranty made or deemed made in or in connection
with any Loan Document or the borrowings or issuances of Letters of Credit
hereunder, or any representation, warranty, statement or information contained
in any report, certificate, financial statement or other instrument furnished in
connection with or pursuant to any Loan Document, shall prove to have been false
or misleading in any material respect when so made, deemed made or furnished;
(b) default shall be made in the payment of any principal of any Loan or
the reimbursement with respect to any L/C Disbursement when and as the same
shall become due and payable, whether at the due date thereof or at a date fixed
for prepayment thereof or by acceleration thereof or otherwise;
71
(c) default shall be made in the payment of any interest on any Loan or
any Fee or L/C Disbursement or any other amount (other than an amount referred
to in (b) above) due under any Loan Document, when and as the same shall become
due and payable, and such default shall continue unremedied for a period of five
Business Days;
(d) default shall be made in the due observance or performance by the
Borrower or any Subsidiary of any covenant, condition or agreement contained in
Section 5.01(a) insofar as it relates to the existence of the Borrower, 5.05 or
5.08 or in Article VI;
(e) default shall be made in the due observance or performance by
Holdings, the Borrower or any Subsidiary of any covenant, condition or agreement
contained in any Loan Document (other than those specified in (b), (c) or (d)
above) and such default shall continue unremedied for a period of 20 days after
notice thereof from the Administrative Agent or any Lender to the Borrower;
(f) Holdings, the Borrower or any Subsidiary shall (i) fail to pay any
principal or interest, regardless of amount, due in respect of any one or more
items of Indebtedness in a principal amount in excess of $3,000,000 in the
aggregate, when and as the same shall become due and payable, or (ii) fail to
observe or perform any other term, covenant, condition or agreement contained in
any agreement or instrument evidencing or governing any such Indebtedness if the
effect of any failure referred to in this clause (ii) is to cause, or to permit
the holder or holders of such Indebtedness or a trustee on its or their behalf
(with or without the giving of notice, the lapse of time or both) to cause, such
Indebtedness to become due prior to its stated maturity;
(g) an involuntary proceeding shall be commenced or an involuntary
petition shall be filed in a court of competent jurisdiction seeking (i) relief
in respect of Holdings, the Borrower or any Subsidiary, or of a substantial part
of the property or assets of Holdings, the Borrower or a Subsidiary, under Title
11 of the United States Code, as now constituted or hereafter amended, or any
other Federal, state or foreign bankruptcy, insolvency, receivership or similar
law, (ii) the appointment of a receiver, trustee, custodian, sequestrator,
conservator or similar official for Holdings, the Borrower or any Subsidiary or
for a substantial part of the property or assets of Holdings, the Borrower or a
Subsidiary or (iii) the winding-up or liquidation of Holdings, the Borrower or
any Subsidiary; and such proceeding or petition shall continue undismissed for
60 days or an order or decree approving or ordering any of the foregoing shall
be entered;
(h) Holdings, the Borrower or any Subsidiary shall (i) voluntarily
commence any proceeding or file any petition seeking relief under Title 11 of
the United States Code, as now constituted or hereafter amended, or any other
Federal, state or foreign bankruptcy, insolvency, receivership or similar law,
(ii) consent to the institution of, or fail to contest in a timely and
appropriate manner, any proceeding or the filing of any petition described in
(g) above, (iii) apply for or consent to the appointment of a receiver, trustee,
custodian, sequestrator, conservator or similar official for Holdings, the
Borrower or any Subsidiary or for a substantial part of the property or assets
of Holdings, the Borrower or any Subsidiary, (iv) file an answer admitting the
material allegations of a petition filed against it in any such proceeding, (v)
make a general assignment for the benefit of creditors, (vi) become unable,
admit in writing its inability or fail generally to pay its debts as they become
due or (vii) take any action for the purpose of effecting any of the foregoing;
(i) one or more judgments for the payment of money in an aggregate amount
in excess of $5,000,000 shall be rendered against Holdings, the Borrower, any
Subsidiary or
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any combination thereof and the same shall remain undischarged for a period of
30 consecutive days during which execution shall not be effectively stayed, or
any action shall be legally taken by a judgment creditor to levy upon assets or
properties of Holdings, the Borrower or any Subsidiary to enforce any such
judgment;
(j) an ERISA Event shall have occurred that, in the opinion of the
Required Lenders, when taken together with all other such ERISA Events, could
reasonably be expected to result in liability of the Borrower and its ERISA
Affiliates in an aggregate amount exceeding $5,000,000;
(k) any security interest purported to be created by any Security Document
shall cease to be, or shall be asserted by the Borrower or any other Loan Party
not to be, a valid, perfected, first priority (except as otherwise expressly
provided in this Agreement or such Security Document) security interest in the
securities, assets or properties covered thereby, except to the extent that any
such loss of perfection or priority results from the failure of the Collateral
Agent to maintain possession of certificates representing securities pledged
under the Pledge Agreement and except to the extent that such loss is covered by
a lender's title insurance policy and the related insurer promptly after such
loss shall have acknowledged in writing that such loss is covered by such title
insurance policy;
(l) any of the Obligations shall cease to constitute "Senior Indebtedness"
under and as defined in the Senior Subordinated Note Indenture;
(m) there shall have occurred a Change in Control; or
(n) (i) A notice of debarment, notice of suspension or notice of
termination for default shall have been issued under any Government Contract;
(ii) the Borrower is barred or suspended from contracting with any part of the
Government; (iii) a Government investigation shall have resulted in a criminal
or civil liability in excess of $5,000,000; (iv) the actual termination of any
Material Contract due to alleged fraud, wilful misconduct, neglect, default or
any other wrongdoing; or (v) a cure notice (other than any immaterial cure
notice under any General Services Administration contract) issued under any
Government Contract shall remain uncured (subject to expiration of extensions
that may have been received) beyond (A) the expiration of the time period
available to the Borrower pursuant to such Government Contract and/or such cure
notice, to cure the noticed default, or (B) the date on which the other
contracting party is entitled to exercise its rights and remedies under the
Government Contract as a consequence of such default;
then, and in every such event (other than an event with respect to the Borrower
described in paragraph (g) or (h) above), and at any time thereafter during the
continuance of such event, the Administrative Agent may, and at the request of
the Required Lenders shall, by notice to the Borrower, take either or both of
the following actions, at the same or different times: (i) terminate forthwith
the Commitments and (ii) declare the Loans then outstanding to be forthwith due
and payable in whole or in part, whereupon the principal of the Loans so
declared to be due and payable, together with accrued interest thereon and any
unpaid accrued Fees and all other liabilities of the Borrower accrued hereunder
and under any other Loan Document, shall become forthwith due and payable,
without presentment, demand, protest or any other notice of any kind, all of
which are hereby expressly waived by the Borrower, anything contained herein or
in any other Loan Document to the contrary notwithstanding; and in any event
with respect to the Borrower described in paragraph (g) or (h) above, the
Commitments shall automatically terminate and the principal of the Loans then
outstanding, together with accrued interest thereon and any unpaid accrued Fees
and all
73
other liabilities of the Borrower accrued hereunder and under any other Loan
Document, shall automatically become due and payable, without presentment,
demand, protest or any other notice of any kind, all of which are hereby
expressly waived by the Borrower, anything contained herein or in any other Loan
Document to the contrary notwithstanding.
ARTICLE VIII
The Administrative Agent and the Collateral Agent
In order to expedite the transactions contemplated by this Agreement,
Credit Suisse First Boston is hereby appointed to act as Administrative Agent
and Mellon Bank, N.A. is hereby appointed to act as Collateral Agent, each on
behalf of the Lenders and the Issuing Bank. Each of the Lenders and each
assignee of any such Lender, hereby irrevocably authorizes the Agents to take
such actions on behalf of such Lender or assignee or the Issuing Bank and to
exercise such powers as are specifically delegated to the Agents by the terms
and provisions hereof and of the other Loan Documents, together with such
actions and powers as are reasonably incidental thereto. The Administrative
Agent is hereby expressly authorized by the Lenders and the Issuing Bank,
without hereby limiting any implied authority, (a) to receive on behalf of the
Lenders and the Issuing Bank all payments of principal of and interest on the
Loans, all payments in respect of L/C Disbursements and all other amounts due to
the Lenders hereunder, and promptly to distribute to each Lender or the Issuing
Bank its proper share of each payment so received; (b) to give notice on behalf
of each of the Lenders to the Borrower of any Event of Default specified in this
Agreement of which the Administrative Agent has actual knowledge acquired in
connection with its agency hereunder; and (c) to distribute to each Lender
copies of all notices, financial statements and other materials delivered by the
Borrower or any other Loan Party pursuant to this Agreement or the other Loan
Documents as received by the Administrative Agent. Without limiting the
generality of the foregoing, the Agents are hereby expressly authorized to
execute any and all documents (including releases) with respect to the
Collateral and the rights of the Secured Parties with respect thereto, as
contemplated by and in accordance with the provisions of this Agreement and the
Security Documents.
Neither the Agents nor any of their respective directors, officers,
employees or agents shall be liable as such for any action taken or omitted by
any of them except for its or his own gross negligence or wilful misconduct, or
be responsible for any statement, warranty or representation herein or the
contents of any document delivered in connection herewith, or be required to
ascertain or to make any inquiry concerning the performance or observance by the
Borrower or any other Loan Party of any of the terms, conditions, covenants or
agreements contained in any Loan Document. The Agents shall not be responsible
to the Lenders for the due execution, genuineness, validity, enforceability or
effectiveness of this Agreement or any other Loan Documents, instruments or
agreements. The Agents shall in all cases be fully protected in acting, or
refraining from acting, in accordance with written instructions signed by the
Required Lenders and, except as otherwise specifically provided herein, such
instructions and any action or inaction pursuant thereto shall be binding on all
the Lenders. Each Agent shall, in the absence of knowledge to the contrary, be
entitled to rely on any instrument or document believed by it in good faith to
be genuine and correct and to have been signed or sent by the proper person or
persons. Neither the Agents nor any of their respective directors, officers,
employees or agents shall have any responsibility to the Borrower or any other
Loan Party on account of the failure of or delay in performance or breach by any
Lender or the Issuing Bank of any of its obligations hereunder or to any Lender
or the Issuing Bank on account of the failure of or delay in performance or
breach by
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any other Lender or the Issuing Bank or the Borrower or any other Loan Party of
any of their respective obligations hereunder or under any other Loan Document
or in connection herewith or therewith. Each of the Agents may execute any and
all duties hereunder by or through agents or employees and shall be entitled to
rely upon the advice of legal counsel selected by it with respect to all matters
arising hereunder and shall not be liable for any action taken or suffered in
good faith by it in accordance with the advice of such counsel.
The Lenders hereby acknowledge that neither Agent shall be under any duty
to take any discretionary action permitted to be taken by it pursuant to the
provisions of this Agree ment unless it shall be requested in writing to do so
by the Required Lenders.
Subject to the appointment and acceptance of a successor Agent as provided
below, either Agent may resign at any time by notifying the Lenders and the
Borrower. Upon any such resignation, the Required Lenders shall have the right
(with the consent of the Borrower, not to be unreasonably withheld) to appoint a
successor. If no successor shall have been so appointed by the Required Lenders
and shall have accepted such appointment within 30 days after the retiring Agent
gives notice of its resignation, then the retiring Agent may, on behalf of the
Lenders, appoint a successor Agent (with the consent of the Borrower, not to be
unreasonably withheld) which shall be a bank with an office in New York, New
York, having a combined capital and surplus of at least $500,000,000 or an
Affiliate of any such bank. Upon the acceptance of any appointment as Agent
hereunder by a successor bank, such successor shall succeed to and become vested
with all the rights, powers, privileges and duties of the retiring Agent and the
retiring Agent shall be discharged from its duties and obligations hereunder.
After the Agent's resignation hereunder, the provisions of this Article and
Section 9.05 shall continue in effect for its benefit in respect of any actions
taken or omitted to be taken by it while it was acting as Agent.
With respect to the Loans made by it hereunder, each Agent in its
individual capacity and not as Agent shall have the same rights and powers as
any other Lender and may exercise the same as though it were not an Agent, and
the Agents and their Affiliates may accept deposits from, lend money to and
generally engage in any kind of business with Holdings, the Borrower or any
Subsidiary or other Affiliate thereof as if it were not an Agent.
Each Lender agrees (a) to reimburse the Agents, on demand, in the amount
of its pro rata share (based on the aggregate amount of its outstanding Term
Loans and Revolving Credit Commitments hereunder) of any expenses incurred for
the benefit of the Lenders by the Agents, including counsel fees and
compensation of agents and employees paid for services rendered on behalf of the
Lenders, that shall not have been reimbursed by the Borrower and (b) to
indemnify and hold harmless each Agent and any of its directors, officers,
employees or agents, on demand, in the amount of such pro rata share, from and
against any and all liabilities, taxes, obligations, losses, damages, penalties,
actions, judgments, suits, costs, expenses or disbursements of any kind or
nature whatsoever that may be imposed on, incurred by or asserted against it in
its capacity as Agent or any of them in any way relating to or arising out of
this Agreement or any other Loan Document or any action taken or omitted by it
or any of them under this Agreement or any other Loan Document, to the extent
the same shall not have been reimbursed by the Borrower or any other Loan Party,
provided that no Lender shall be liable to an Agent or any such other
indemnified person for any portion of such liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, costs, expenses or disbursements
are determined by a court of competent jurisdiction by final and nonappealable
judgment to have resulted from the gross negligence or wilful misconduct of such
Agent or any of its directors, officers, employees
75
or agents. Each Revolving Credit Lender agrees to reimburse the Issuing Bank and
its directors, employees and agents, in each case, to the same extent and
subject to the same limitations as provided above for the Agents.
Each Lender acknowledges that it has, independently and without reliance
upon the Agents or any other Lender and based on such documents and information
as it has deemed appropriate, made its own credit analysis and decision to enter
into this Agreement. Each Lender also acknowledges that it will, independently
and without reliance upon the Agents or any other Lender and based on such
documents and information as it shall from time to time deem appropriate,
continue to make its own decisions in taking or not taking action under or based
upon this Agreement or any other Loan Document, any related agreement or any
document furnished hereunder or thereunder. Each of the parties hereto
acknowledges and agrees that neither the Syndication Agent nor the Documentation
Agent shall have any duties, responsibilities, obligations or liabilities, as
such, hereunder or under the other Loan Documents.
ARTICLE IX
Miscellaneous
SECTION 9.01. Notices. Notices and other communications provided for
herein shall be in writing and shall be delivered by hand or overnight courier
service, mailed by certified or registered mail or sent by fax, as follows:
(a) if to the Borrower or Holdings, to it at ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇,
▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇, Attention of ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇,
Esq. (Fax No. (▇▇▇) ▇▇▇-▇▇▇▇), with a copy to ▇▇▇▇, Weiss, Rifkind,
▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇, 1285 Avenue of the Americas, New York, New York
10019-6064, Attention of ▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Esq. (Fax No. (▇▇▇) ▇▇▇-▇▇▇▇);
(b) if to the Administrative Agent, to Credit Suisse First Boston,
Eleven Madison Avenue, New York, New York 10010, Attention of ▇▇▇▇▇ ▇▇▇▇
(Fax No. (▇▇▇) ▇▇▇-▇▇▇▇, with a copy to Credit Suisse First Boston, at
Eleven ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Attention of ▇▇▇▇▇▇▇
▇▇▇▇▇▇ (Fax No. (▇▇▇) ▇▇▇-▇▇▇▇);
(c) if to the Collateral Agent, to Mellon Bank, N.A., 1901 Research
Blvd., Room 201-0320, ▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇, Attention of ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇ (Fax No. (▇▇▇) ▇▇▇-▇▇▇▇); and
(d) if to a Lender, to it at its address (or fax number) set forth
on Schedule 2.01 or in the Assignment and Acceptance pursuant to which
such Lender shall have become a party hereto.
All notices and other communications given to any party hereto in accordance
with the provisions of this Agreement shall be deemed to have been given on the
date of receipt if delivered by hand or overnight courier service or sent by fax
or on the date five Business Days after dispatch by certified or registered mail
if mailed, in each case delivered, sent or mailed (properly addressed) to such
party as provided in this Section 9.01 or in accordance with the latest
unrevoked direction from such party given in accordance with this
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Section 9.01. Any party may change its address for Notices by giving notice of
such change to each party in accordance with this Section 9.01
SECTION 9.02. Survival of Agreement. All covenants, agreements,
representations and warranties made by the Borrower or Holdings herein and in
the certificates or other instruments prepared or delivered in connection with
or pursuant to this Agreement or any other Loan Document shall be considered to
have been relied upon by the Lenders and the Issuing Bank and shall survive the
making by the Lenders of the Loans and the issuance of Letters of Credit by the
Issuing Bank, regardless of any investigation made by the Lenders or the Issuing
Bank or on their behalf, and shall continue in full force and effect as long as
the principal of or any accrued interest on any Loan or any Fee or any other
amount payable under this Agreement or any other Loan Document is outstanding
and unpaid or any Letter of Credit is outstanding and so long as the Commitments
have not been terminated. The provisions of Sections 2.14, 2.16, 2.20 and 9.05
shall remain operative and in full force and effect regardless of the expiration
of the term of this Agreement, the consummation of the transactions contemplated
hereby, the repayment of any of the Loans, the expiration of the Commitments,
the expiration of any Letter of Credit, the invalidity or unenforceability of
any term or provision of this Agreement or any other Loan Document, or any
investigation made by or on behalf of the Administrative Agent, the Collateral
Agent, any Lender or the Issuing Bank.
SECTION 9.03. Binding Effect. This Agreement shall become effective when
it shall have been executed by the Borrower, Holdings and the Administrative
Agent and when the Administrative Agent shall have received counterparts hereof
which, when taken together, bear the signatures of each of the other parties
hereto, and thereafter shall be binding upon and inure to the benefit of the
parties hereto and their respective permitted successors and assigns.
SECTION 9.04. Successors and Assigns. (a) Whenever in this Agreement any
of the parties hereto is referred to, such reference shall be deemed to include
the permitted successors and assigns of such party; and all covenants, promises
and agreements by or on behalf of the Borrower, Holdings, the Administrative
Agent, the Issuing Bank or the Lenders that are contained in this Agreement
shall bind and inure to the benefit of their respective successors and assigns.
(b) Each Lender may assign to one or more assignees all or a portion of
its interests, rights and obligations under this Agreement (including all or a
portion of its Commitments and the Loans at the time owing to it); provided,
however, that (i) except in the case of an assignment to a Lender or an
Affiliate or Related Fund of such Lender, (x) the Borrower and the
Administrative Agent (and, in the case of any assignment of a Revolving Credit
Commitment, the Issuing Bank and the Swingline Lender) must give their prior
written consent to such assignment (which consent shall not be unreasonably
withheld or delayed); provided, however, that the consent of the Borrower shall
not be required to any such assignment during the continuance of any Event of
Default described in subsection (g) or (h) of Article VII, and (y) the amount of
the Commitment of the assigning Lender subject to each such assignment
(determined as of the date the Assignment and Acceptance with respect to such
assignment is delivered to the Administrative Agent) shall not be less than
$2,500,000 (or, if less, the entire remaining amount of such Lender's
Commitment) or such lesser amount as the Borrower and the Administrative Agent
may from time to time agree (such agreement to be conclusively evidenced by the
execution of the related Assignment and Acceptance by all the parties thereto),
(ii) the parties to each such assignment shall execute and deliver to the
Administrative Agent an Assignment and Acceptance, together
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(except in the case of any assignment to an Affiliate or a Related Fund) with a
processing and recordation fee of $3,500 and (iii) the assignee, if it shall not
be a Lender, shall deliver to the Administrative Agent an Administrative
Questionnaire. Upon acceptance and recording pursuant to paragraph (e) of this
Section 9.04, from and after the effective date specified in each Assignment and
Acceptance, (A) the assignee thereunder shall be a party hereto and, to the
extent of the interest assigned by such Assignment and Acceptance, have the
rights and obligations of a Lender under this Agreement and (B) the assigning
Lender thereunder shall, to the extent of the interest assigned by such
Assignment and Acceptance, be released from its obligations under this Agreement
(and, in the case of an Assignment and Acceptance covering all or the remaining
portion of an 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 Sections 2.14, 2.16, 2.20 and 9.05, as well as to any Fees
accrued for its account and not yet paid).
(c) By executing and delivering an Assignment and Acceptance, the
assigning Lender thereunder and the assignee thereunder shall be deemed to
confirm to and agree with each other and the other parties hereto as follows:
(i) such assigning Lender warrants that it is the legal and beneficial owner of
the interest being assigned thereby free and clear of any adverse claim and that
its Term Loan Commitment and Revolving Credit Commitment, and the outstanding
balances of its Term Loans and Revolving Loans, in each case without giving
effect to assignments thereof which have not become effective, are as set forth
in such Assignment and Acceptance, (ii) except as set forth in (i) above, such
assigning Lender makes no representation or warranty and assumes no
responsibility with respect to any statements, warranties or representations
made in or in connection with this Agreement, or the execution, legality,
validity, enforceability, genuineness, sufficiency or value of this Agreement,
any other Loan Document or any other instrument or document furnished pursuant
hereto, or the financial condition of the Borrower or any Subsidiary or the
performance or observance by the Borrower or any Subsidiary of any of its
obligations under this Agreement, any other Loan Document or any other
instrument or document furnished pursuant hereto; (iii) such assignee represents
and warrants that it is legally authorized to enter into such Assignment and
Acceptance; (iv) such assignee confirms that it has received a copy of this
Agreement, together with copies of the most recent financial statements referred
to in Section 3.05(a) or delivered pursuant to Section 5.04 and such other
documents and information as it has deemed appropriate to make its own credit
analysis and decision to enter into such Assignment and Acceptance; (v) such
assignee will independently and without reliance upon the Administrative Agent,
the Collateral Agent, such assigning Lender or any other Lender and based on
such documents and information as it shall deem appropriate at the time,
continue to make its own credit decisions in taking or not taking action under
this Agreement; (vi) such assignee appoints and authorizes the Administrative
Agent and the Collateral Agent to take such action as agent on its behalf and to
exercise such powers under this Agreement as are delegated to the Administrative
Agent and the Collateral Agent, respectively, by the terms hereof, together with
such powers as are reasonably incidental thereto; and (vii) such assignee agrees
that it will perform in accordance with their terms all the obligations which by
the terms of this Agreement are required to be performed by it as a Lender.
(d) The Administrative Agent, acting for this purpose as an agent of the
Borrower, shall maintain at one of its offices in The City of New York a copy of
each Assignment and Acceptance delivered to it and a register for the
recordation of the names and addresses of the Lenders, and the Commitment of,
and principal amount of the Loans 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, the Issuing Bank,
78
the Collateral 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, the Issuing Bank,
the Collateral Agent and any Lender, at any reasonable time and from time to
time upon reasonable prior notice.
(e) Upon its receipt of a duly completed Assignment and Acceptance
executed by an assigning Lender and an assignee, an Administrative Questionnaire
completed in respect of the assignee (unless the assignee shall already be a
Lender hereunder), the processing and recordation fee referred to in paragraph
(b) above and, if required, the written consent of the Borrower, the Swingline
Lender, the Issuing Bank and the Administrative Agent to such assignment, the
Administrative Agent shall (i) accept such Assignment and Acceptance, (ii)
record the information contained therein in the Register and (iii) give prompt
notice thereof to the Lenders and the Issuing Bank. No assignment shall be
effective unless it has been recorded in the Register as provided in this
paragraph (e).
(f) Each Lender may without the consent of the Borrower, the Swingline
Lender, the Issuing Bank or the Administrative Agent sell participations to one
or more banks or other entities in all or a portion of its rights and
obligations under this Agreement (including all or a portion of its Commitment
and the Loans owing to it); provided, however, 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, (iii) the participating banks or other entities shall be
entitled to the benefit of the cost protection provisions contained in Sections
2.14, 2.16 and 2.20 and shall be bound by the confidentiality provisions
contained in Section 9.16 to the same extent as if they were Lenders and (iv)
the Borrower, the Administrative Agent, the Issuing Bank and the Lenders shall
continue to deal solely and directly with such Lender in connection with such
Lender's rights and obligations under this Agreement, and such Lender shall
retain the sole right to enforce the obligations of the Borrower relating to the
Loans or L/C Disbursements and to approve any amendment, modification or waiver
of any provision of this Agreement (other than amendments, modifications or
waivers decreasing any fees payable hereunder or the amount of principal of or
the rate at which interest is payable on the Loans, extending any scheduled
principal payment date or date fixed for the payment of interest on the Loans,
increasing or extending the Commitments or releasing all or substantially all
the Guarantors or the Collateral). All amounts payable by the Borrower to any
Lender hereunder in respect of any Loan and the applicability of the cost
protection provisions contained in Section 2.14, 2.16 and 2.20 shall be
determined as if such Lender had not sold or agreed to sell any participation in
such Loan, and as if such Lender were funding the participated portion of such
Loan the same way that it is funding the portion of such Loan in which no
participation has been sold.
(g) Any Lender or participant may, in connection with any assignment or
participation or proposed assignment or participation pursuant to this Section
9.04, disclose to the assignee or participant or proposed assignee or
participant any information relating to the Borrower furnished to such Lender by
or on behalf of the Borrower; provided that, prior to any such disclosure of
information designated by the Borrower as confidential, each such assignee or
participant or proposed assignee or participant shall execute an agreement
whereby such assignee or participant shall agree (subject to customary
exceptions) to preserve the confidentiality of such confidential information on
terms no less restrictive than those applicable to the Lenders pursuant to
Section 9.16.
79
(h) Any Lender may at any time assign all or any portion of its rights
under this Agreement to secure extensions of credit to such Lender or in support
of obligations owed by such Lender; provided that no such assignment shall
release a Lender from any of its obligations hereunder or substitute any such
assignee for such Lender as a party hereto.
(i) Notwithstanding anything to the contrary contained herein, any Lender
(a "Granting Lender") may grant to a special purpose funding vehicle (an "SPC"),
identified as such in writing from time to time by the Granting Lender to the
Administrative Agent and the Borrower, the option to provide to the Borrower all
or any part of any Loan that such Granting Lender would otherwise be obligated
to make to the Borrower pursuant to this Agreement; provided that (i) nothing
herein shall constitute a commitment by any SPC to make any Loan and (ii) if an
SPC elects not to exercise such option or otherwise fails to provide all or any
part of such Loan, the Granting Lender shall be obligated to make such Loan
pursuant to the terms hereof. The making of a Loan by an SPC hereunder shall
utilize the Commitment of the Granting Lender to the same extent, and as if,
such Loan were made by such Granting Lender. Each party hereto hereby agrees
that no SPC shall be liable for any indemnity or similar payment obligation
under this Agreement (all liability for which shall remain with the Granting
Lender). In furtherance of the foregoing, each party hereto hereby agrees (which
agreement shall survive the termination of this Agreement) that, prior to the
date that is one year and one day after the payment in full of all outstanding
commercial paper or other senior indebtedness of any SPC, it will not institute
against, or join any other person in instituting against, such SPC any
bankruptcy, reorganization, arrangement, insolvency or liquidation proceedings
under the laws of the United States or any State thereof. In addition,
notwithstanding anything to the contrary contained in this Section 9.04, any SPC
may (i) with notice to, but without the prior written consent of, the Borrower
and the Administrative Agent and without paying any processing fee therefore,
assign all or a portion of its interests in any Loans to the Granting Lender or
to any financial institutions (consented to by the Borrower and Administrative
Agent) providing liquidity and/or credit support to or for the account of such
SPC to support the funding or maintenance of Loans and (ii) disclose on a
confidential basis any non-public information relating to its Loans to any
rating agency, commercial paper dealer or provider of any surety, guarantee or
credit or liquidity enhancement to such SPC.
(j) Neither Holdings nor the Borrower shall assign or delegate any of its
rights or duties hereunder without the prior written consent of the
Administrative Agent, the Issuing Bank and each Lender, and any attempted
assignment without such consent shall be null and void.
(k) In the event that Standard & Poor's Ratings Group, ▇▇▇▇▇'▇ Investors
Service, Inc., and ▇▇▇▇▇▇▇▇'▇ BankWatch (or InsuranceWatch Ratings Service, in
the case of Lenders that are insurance companies (or Best's Insurance Reports,
if such insurance company is not rated by Insurance Watch Ratings Service))
shall, after the date that any Lender becomes a Revolving Credit Lender,
downgrade the long-term certificate deposit ratings of such Lender, and the
resulting ratings shall be below BBB-, Baa3 and C (or BB, in the case of a
Lender that is an insurance company (or B, in the case of an insurance company
not rated by InsuranceWatch Ratings Service)), then the Issuing Bank shall have
the right, but not the obligation, at its own expense, upon notice to such
Lender and the Administrative Agent, to replace (or to request the Borrower to
use its reasonable efforts to replace) such Lender with an assignee (in
accordance with and subject to the restrictions contained in paragraph (b)
above), and such Lender hereby agrees to transfer and assign without recourse
(in accordance with and subject to the restrictions contained in paragraph (b)
above) all its interests, rights and obligations in respect of its Revolving
Credit
80
Commitment to such assignee; provided, however, that (i) no such assignment
shall conflict with any law, rule and regulation or order of any Governmental
Authority and (ii) the Issuing Bank or such assignee, as the case may be, shall
pay to such Lender in immediately available funds on the date of such assignment
the principal of and interest accrued to the date of payment on the Loans made
by such Lender hereunder and all other amounts accrued for such Lender's account
or owed to it hereunder.
SECTION 9.05. Expenses; Indemnity. (a) The Borrower and Holdings agree,
jointly and severally, to pay all out-of-pocket expenses incurred by the
Administrative Agent, the Collateral Agent, the Issuing Bank and the Swingline
Lender in connection with the syndication of the credit facilities provided for
herein and the preparation and administration of this Agreement and the other
Loan Documents or in connection with any amendments, modifications or waivers of
the provisions hereof or thereof (whether or not the transactions hereby or
thereby contemplated shall be consummated) or incurred by the Administrative
Agent, the Collateral Agent or any Lender in connection with the enforcement or
protection of its rights in connection with this Agreement and the other Loan
Documents or in connection with the Loans made or Letters of Credit issued
hereunder, including the fees, charges and disbursements of Cravath, Swaine &
▇▇▇▇▇, counsel for the Administrative Agent, and, in connection with any such
enforcement or protection, the fees, charges and disbursements of any other
counsel for the Administrative Agent, the Collateral Agent or any Lender.
(b) The Borrower and Holdings agree, jointly and severally, to indemnify
the Administrative Agent, the Collateral Agent, each Lender and the Issuing
Bank, each Affiliate of any of the foregoing persons and each of their
respective directors, officers, trustees, employees and agents (each such person
being called an "Indemnitee") against, and to hold each Indemnitee harmless
from, any and all losses, claims, damages, liabilities and related expenses,
including reasonable counsel fees, charges and disbursements, incurred by or
asserted against any Indemnitee arising out of, in any way connected with, or as
a result of (i) the execution or delivery of this Agreement or any other Loan
Document or any agreement or instrument contemplated thereby, the performance by
the parties thereto of their respective obligations thereunder or the
consummation of the Transactions and the other transactions contemplated
thereby, (ii) the use of the proceeds of the Loans or issuance of Letters of
Credit, (iii) any claim, litigation, investigation or proceeding relating to any
of the foregoing, whether or not any Indemnitee is a party thereto, or (iv) any
actual or alleged presence or Release of Hazardous Materials on any property
owned or operated by the Borrower or any of the Subsidiaries, or any
Environmental Claim related in any way to the Borrower or the Subsidiaries;
provided that such indemnity shall not, as to any Indemnitee, be available to
the extent that such losses, claims, damages, liabilities or related expenses
are determined by a court of competent jurisdiction by final and nonappealable
judgment to have resulted from the gross negligence or wilful misconduct of such
Indemnitee.
(c) The provisions of this Section 9.05 shall remain operative and in full
force and effect regardless of the expiration of the term of this Agreement, the
consummation of the transactions contemplated hereby, the repayment of any of
the Loans, the expiration of the Commitments, the expiration of any Letter of
Credit, the invalidity or unenforceability of any term or provision of this
Agreement or any other Loan Document, or any investigation made by or on behalf
of the Administrative Agent, the Collateral Agent, any Lender or the Issuing
Bank. All amounts due under this Section 9.05 shall be payable on written demand
therefor.
SECTION 9.06. Right of Setoff. If an Event of Default shall have occurred
and be continuing, each Lender is hereby authorized at any time and from time to
time, except to
81
the extent prohibited by law, to set off and apply any and all deposits (general
or special, time or demand, provisional or final) at any time held and other
indebtedness at any time owing by such Lender to or for the credit or the
account of the Borrower or Holdings against any of and all the obligations of
the Borrower or Holdings now or hereafter existing under this Agreement and
other Loan Documents held by such Lender, irrespective of whether or not such
Lender shall have made any demand under this Agreement or such other Loan
Document and although such obligations may be unmatured. The rights of each
Lender under this Section 9.06 are in addition to other rights and remedies
(including other rights of setoff) which such Lender may have.
SECTION 9.07. Applicable Law. THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS
(OTHER THAN LETTERS OF CREDIT AND AS EXPRESSLY SET FORTH IN OTHER LOAN
DOCUMENTS) SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE LAWS OF THE
STATE OF NEW YORK. EACH LETTER OF CREDIT SHALL BE GOVERNED BY, AND SHALL BE
CONSTRUED IN ACCORDANCE WITH, THE LAWS OR RULES DESIGNATED IN SUCH LETTER OF
CREDIT, OR IF NO SUCH LAWS OR RULES ARE DESIGNATED, THE UNIFORM CUSTOMS AND
PRACTICE FOR DOCUMENTARY CREDITS (1993 REVISION), INTERNATIONAL CHAMBER OF
COMMERCE, PUBLICATION NO. 500 (THE "UNIFORM CUSTOMS") AND, AS TO MATTERS NOT
GOVERNED BY THE UNIFORM CUSTOMS, THE LAWS OF THE STATE OF NEW YORK.
SECTION 9.08. Waivers; Amendment. (a) No failure or delay of the
Administrative Agent, the Collateral Agent, any Lender or the Issuing Bank in
exercising any power or right hereunder or under any other Loan Document shall
operate as a waiver thereof, nor shall any single or partial exercise of any
such right or power, or any abandonment or discontinuance of steps to enforce
such a right or power, preclude any other or further exercise thereof or the
exercise of any other right or power. The rights and remedies of the
Administrative Agent, the Collateral Agent, the Issuing Bank and the Lenders
hereunder and under the other Loan Documents are cumulative and are not
exclusive of any rights or remedies that they would otherwise have. No waiver of
any provision of this Agreement or any other Loan Document or consent to any
departure by the Borrower or any other Loan Party therefrom shall in any event
be effective unless the same shall be permitted by paragraph (b) below, and then
such waiver or consent shall be effective only in the specific instance and for
the purpose for which given. No notice or demand on the Borrower or Holdings in
any case shall entitle the Borrower or Holdings to any other or further notice
or demand in similar or other circumstances.
(b) Neither this Agreement nor any provision hereof may be waived, amended
or modified except pursuant to an agreement or agreements in writing entered
into by the Borrower, Holdings and the Required Lenders; provided, however, that
no such agreement shall (i) decrease the principal amount of, or extend the
maturity of or any scheduled principal payment date or date for the payment of
any interest on any Loan or any date for reimbursement of an L/C Disbursement,
or waive or excuse any such payment or any part thereof, or decrease the rate of
interest on any Loan or L/C Disbursement, without the prior written consent of
each Lender affected thereby, (ii) decrease other than on a pro rata basis or
increase or extend the Commitment or decrease or extend the date for payment of
the Commitment Fees of any Lender without the prior written consent of such
Lender, (iii) amend or modify the pro rata requirements of Section 2.17, the
provisions of Section 9.04(i), the provisions of this Section, the definition of
the term "Required Lenders" or release any Guarantor (other than pursuant to a
permitted sale or liquidation of a Subsidiary Guarantor) or all or any
substantial part of the Collateral, without the prior written
82
consent of each Lender, (iv) amend or modify the protections afforded to an SPC
pursuant to the provisions of Section 9.04(i) without the written consent of
such SPC or (v) increase the advance rates set forth in the definition of the
term "Borrowing Base" in Section 1.01 or change the definition of the term
"Eligible Billed Borrowing Base Receivables", "Eligible Unbilled Borrowing Base
Receivables" or "Eligible Margin Stock Amount" without the prior written consent
of the Supermajority Lenders; provided further that no such agreement shall
amend, modify or otherwise affect the rights or duties of the Administrative
Agent, the Collateral Agent, the Issuing Bank or the Swingline Lender hereunder
or under any other Loan Document without the prior written consent of the
Administrative Agent, the Collateral Agent, the Issuing Bank or the Swingline
Lender, respectively. Notwithstanding the foregoing, if the Borrower shall
request the release of any Collateral to be sold as part of any Asset Sale
permitted under Section 6.05 and shall deliver to the Collateral Agent a
certificate to the effect that such Asset Sale and the disposition of the
proceeds thereof will comply with the terms of this Agreement, the Collateral
Agent, if satisfied that the applicable certificate is correct, shall and is
hereby authorized to, without the consent of any Lender, execute and deliver all
such instruments as may be required to effect the release of such Collateral.
SECTION 9.09. Interest Rate Limitation. Notwithstanding anything herein to
the contrary, if at any time the interest rate applicable to any Loan or
participation in any L/C Disbursement, together with all fees, charges and other
amounts which are treated as interest on such Loan or participation in such L/C
Disbursement under applicable law (collectively the "Charges"), shall exceed the
maximum lawful rate (the "Maximum Rate") which may be contracted for, charged,
taken, received or reserved by the Lender holding such Loan or participation in
accordance with applicable law, the rate of interest payable in respect of such
Loan or participation hereunder, together with all Charges payable in respect
thereof, shall be limited to the Maximum Rate and, to the extent lawful, the
interest and Charges that would have been payable in respect of such Loan or
participation but were not payable as a result of the operation of this Section
9.09 shall be cumulated and the interest and Charges payable to such Lender in
respect of other Loans or participations or periods shall be increased (but not
above the Maximum Rate therefor) until such cumulated amount, together with
interest thereon at the Federal Funds Effective Rate to the date of repayment,
shall have been received by such Lender.
SECTION 9.10. Entire Agreement. This Agreement, the Fee Letter and the
other Loan Documents constitute the entire contract between the parties relative
to the subject matter hereof. Any other previous agreement among the parties
with respect to the subject matter hereof is superseded by this Agreement and
the other Loan Documents. Nothing in this Agreement or in the other Loan
Documents, expressed or implied, is intended to confer upon any party other than
the parties hereto and thereto any rights, remedies, obligations or liabilities
under or by reason of this Agreement or the other Loan Documents.
SECTION 9.11. WAIVER OF JURY TRIAL. EACH PARTY HERETO HEREBY WAIVES, TO
THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL
BY JURY IN RESPECT OF ANY LITIGATION DIRECTLY OR INDIRECTLY ARISING OUT OF,
UNDER OR IN CONNECTION WITH THIS AGREEMENT OR ANY OF THE OTHER LOAN DOCUMENTS.
EACH PARTY HERETO (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY
OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD
NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND (B)
ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER
INTO THIS AGREEMENT AND THE OTHER LOAN
83
DOCUMENTS, AS APPLICABLE, BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND
CERTIFICATIONS IN THIS SECTION 9.11.
SECTION 9.12. Severability. In the event any one or more of the provisions
contained in this Agreement or in any other Loan Document should be held
invalid, illegal or unenforceable in any respect, the validity, legality and
enforceability of the remaining provisions contained herein and therein shall
not in any way be affected or impaired thereby (it being understood that the
invalidity of a particular provision in a particular jurisdiction shall not in
and of itself affect the validity of such provision in any other jurisdiction).
The parties shall endeavor in good-faith negotiations to replace the invalid,
illegal or unenforce able provisions with valid provisions the economic effect
of which comes as close as possible to that of the invalid, illegal or
unenforceable provisions.
SECTION 9.13. Counterparts. This Agreement may be executed in counterparts
(and by different parties hereto on different counterparts), each of which shall
constitute an original but all of which when taken together shall constitute a
single contract, and shall become effective as provided in Section 9.03.
Delivery of an executed signature page to this Agreement by facsimile
transmission shall be as effective as delivery of a manually signed counterpart
of this Agreement.
SECTION 9.14. Headings. Article and Section headings and the Table of
Contents used herein are for convenience of reference only, are not part of this
Agreement and are not to affect the construction of, or to be taken into
consideration in interpreting, this Agreement.
SECTION 9.15. Jurisdiction; Consent to Service of Process. (a) Each of
Holdings and the Borrower hereby irrevocably and unconditionally submits, for
itself and its property, to the nonexclusive jurisdiction of any New York State
court or Federal court of the United States of America sitting in the Borough of
Manhattan in New York City, and any appellate court from any thereof, in any
action or proceeding arising out of or relating to this Agreement or the other
Loan Documents, or for recognition or enforcement of any judgment, and each of
the parties hereto hereby irrevocably and unconditionally agrees that all claims
in respect of any such action or proceeding may be heard and determined in such
New York State or, to the extent permitted by law, in such Federal court. Each
of the parties hereto agrees that a final judgment in any such action or
proceeding shall be conclusive and may be enforced in other jurisdictions by
suit on the judgment or in any other manner provided by law. Nothing in this
Agreement shall affect any right that the Administrative Agent, the Collateral
Agent, the Issuing Bank or any Lender may otherwise have to bring any action or
proceeding relating to this Agreement or the other Loan Documents against the
Borrower, Holdings or their respective properties in the courts of any
jurisdiction.
(b) Each of Holdings and the Borrower hereby irrevocably and
unconditionally waives, to the fullest extent it may legally and effectively do
so, any objection which it may now or hereafter have to the laying of venue of
any suit, action or proceeding arising out of or relating to this Agreement or
the other Loan Documents in any such New York State or Federal court. Each of
the parties hereto hereby irrevocably waives, to the fullest extent permitted by
law, the defense of an inconvenient forum to the maintenance of such action or
proceeding in any such court.
(c) Each party to this Agreement irrevocably consents to service of
process in the manner provided for notices in Section 9.01. Nothing in this
Agreement will affect the right of any party to this Agreement to serve process
in any other manner permitted by law.
84
SECTION 9.16. Confidentiality. The Administrative Agent, the Collateral
Agent, the Issuing Bank and each of the Lenders agrees to keep confidential (and
to use its reasonable best efforts to cause its respective agents and
representatives to keep confidential) the Information (as defined below) and all
copies thereof, extracts therefrom and analyses or other materials based
thereon, except that the Administrative Agent, the Collateral Agent, the Issuing
Bank or any Lender shall be permitted to disclose Information (a) to such of its
respective officers, directors, employees, agents, affiliates and
representatives as need to know such Information, (b) to a potential assignee or
participant of such Lender or any direct or indirect contractual counterparty in
any swap agreement relating to the Loans or such potential assignee's or
participant's or counterparty's advisors who need to know such Information
(provided that any such potential assignee or participant or counterparty shall,
and shall use its reasonable best efforts to cause its advisors to, keep
confidential all such Information on the terms set forth in this Section 9.16),
(c) to the extent requested by any regulatory authority, (d) to the extent
otherwise required by applicable laws and regulations or by any subpoena or
similar legal process, (e) in connection with any suit, action or proceeding
relating to the enforcement of its rights hereunder or under the other Loan
Documents or (f) to the extent such Information (i) becomes publicly available
other than as a result of a breach of this Section 9.16 or (ii) becomes
available to the Administrative Agent, the Issuing Bank, any Lender or the
Collateral Agent on a nonconfidential basis from a source other than the
Borrower or Holdings. For the purposes of this Section, "Information" shall mean
all financial statements, certificates, reports, agreements and information
(including all analyses, compilations and studies prepared by the Administrative
Agent, the Collateral Agent, the Issuing Bank or any Lender based on any of the
foregoing) that are received from the Borrower or Holdings and related to the
Borrower or Holdings, any shareholder of the Borrower or Holdings or any
employee, customer or supplier of the Borrower or Holdings, other than any of
the foregoing that were available to the Administrative Agent, the Collateral
Agent, the Issuing Bank or any Lender on a nonconfidential basis prior to its
disclosure thereto by the Borrower or Holdings, and which are in the case of
Information provided after the date hereof, clearly identified at the time of
delivery as confidential or of such a nature that a prudent person would expect
such Information to be confidential. The provisions of this Section 9.16 shall
remain operative and in full force and effect regardless of the expiration and
term of this Agreement.
85
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed by their respective authorized officers as of the day and year
first above written.
ANTEON CORPORATION,
by _________________________
Name:
Title:
86
CREDIT SUISSE FIRST BOSTON,
individually and as Administrative Agent and
Issuing Bank,
by _________________________
Name:
Title:
by: ________________________
Name:
Title:
87
MELLON BANK, N.A., individually and as
Collateral Agent, Swingline Lender and
Syndication Agent,
by _________________________
Name:
Title
▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇, ▇▇▇ ▇▇▇▇ and/or Cayman
Islands Branches, individually and as
Documentation Agent,
by _________________________
Name:
Title:
by _________________________
Name:
Title:
▇▇
▇▇▇ ▇▇▇▇ ▇▇ ▇▇▇▇ ▇▇▇▇▇▇,
by _________________________
Name:
Title:
90
BANK POLSKA KASA OPIEKI S.A.,
PEKAO S.A. GROUP, New York Branch,
by _________________________
Name:
Title:
91
FLEET NATIONAL BANK,
by _________________________
Name:
Title:
92
GREEN TREE FINANCIAL SERVICING
CORP.,
by _________________________
Name:
Title:
93
IBM CREDIT CORPORATION,
by _________________________
Name:
Title:
94
TRANSAMERICA BUSINESS CREDIT
CORPORATION,
by _________________________
Name:
Title: