EXECUTION COPY
Exhibit 10.14
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CREDIT AGREEMENT
dated as of April 16, 1999
by and among
CONDOR TECHNOLOGY SOLUTIONS, INC.,
the Subsidiary Borrowers referenced herein,
as Borrowers,
the Lenders referred to herein,
and
FIRST UNION NATIONAL BANK,
as Issuing Lender, Collateral Agent and Administrative Agent, and
FIRST UNION COMMERCIAL CORPORATION,
as Swingline Lender and Lender
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TABLE OF CONTENTS
ARTICLE I DEFINITIONS............................................................................................1
SECTION 1.1 DEFINITIONS........................................................................1
SECTION 1.2 GENERAL...........................................................................15
SECTION 1.3 OTHER DEFINITIONS AND PROVISIONS..................................................16
ARTICLE II REVOLVING CREDIT FACILITY............................................................................16
SECTION 2.1 REVOLVING CREDIT LOANS............................................................16
SECTION 2.2 SWINGLINE LOANS...................................................................16
SECTION 2.3 PROCEDURE FOR ADVANCES OF REVOLVING CREDIT AND SWINGLINE LOANS....................18
SECTION 2.4 REPAYMENT OF LOANS................................................................19
SECTION 2.5 NOTES.............................................................................19
SECTION 2.6 PERMANENT REDUCTION OF REVOLVING CREDIT FACILITY..................................20
SECTION 2.7 TERMINATION OF REVOLVING CREDIT FACILITY..........................................20
SECTION 2.8 USE OF PROCEEDS...................................................................21
ARTICLE III LETTER OF CREDIT FACILITY...........................................................................21
SECTION 3.1 L/C COMMITMENT....................................................................21
SECTION 3.2 PROCEDURE FOR ISSUANCE OF LETTERS OF CREDIT.......................................21
SECTION 3.3 COMMISSIONS AND OTHER CHARGES.....................................................22
SECTION 3.4 L/C PARTICIPATIONS................................................................22
SECTION 3.5 REIMBURSEMENT OBLIGATION OF THE BORROWERS.........................................23
SECTION 3.6 OBLIGATIONS ABSOLUTE..............................................................24
SECTION 3.7 EFFECT OF APPLICATION.............................................................24
SECTION 3.8 LETTERS OF CREDIT ISSUED PURSUANT TO THE EXISTING FACILITY........................24
ARTICLE IV TERM LOAN FACILITY...................................................................................25
SECTION 4.1 TERM LOAN.........................................................................25
SECTION 4.2 PROCEDURE FOR ADVANCE OF TERM LOAN................................................25
SECTION 4.3 REPAYMENT OF TERM LOAN............................................................25
SECTION 4.4 OPTIONAL PREPAYMENT OF TERM LOAN..................................................26
SECTION 4.5 TERM NOTES........................................................................26
ARTICLE V GENERAL LOAN PROVISIONS...............................................................................26
SECTION 5.1 INTEREST..........................................................................26
SECTION 5.2 NOTICE AND MANNER OF CONVERSION OR CONTINUATION OF LOANS..........................29
SECTION 5.3 FEES..............................................................................29
SECTION 5.4 MANNER OF PAYMENT.................................................................30
SECTION 5.5 CREDITING OF PAYMENTS AND PROCEEDS................................................30
SECTION 5.6 ADJUSTMENTS.......................................................................31
SECTION 5.7 NATURE OF OBLIGATIONS OF LENDERS REGARDING EXTENSIONS OF CREDIT; ASSUMPTION BY THE
ADMINISTRATIVE AGENT..............................................................31
SECTION 5.8 CHANGED CIRCUMSTANCES.............................................................32
SECTION 5.9 INDEMNITY.........................................................................34
SECTION 5.10 CAPITAL REQUIREMENTS..............................................................34
SECTION 5.11 TAXES.............................................................................34
SECTION 5.12 SECURITY..........................................................................36
SECTION 5.13 JOINT AND SEVERAL LIABILITY; CONTRIBUTION.........................................36
SECTION 5.14 MITIGATION OF OBLIGATIONS; REPLACEMENT OF LENDERS.................................37
ARTICLE VI CLOSING; CONDITIONS OF CLOSING AND BORROWING.........................................................37
SECTION 6.1 CLOSING...........................................................................37
SECTION 6.2 CONDITIONS TO CLOSING AND INITIAL EXTENSIONS OF CREDIT............................38
SECTION 6.3 CONDITIONS TO ALL EXTENSIONS OF CREDIT............................................41
ARTICLE VII REPRESENTATIONS AND WARRANTIES OF THE BORROWERS.....................................................41
SECTION 7.1 REPRESENTATIONS AND WARRANTIES....................................................41
SECTION 7.2 SURVIVAL OF REPRESENTATIONS AND WARRANTIES, ETC...................................47
ARTICLE VIII FINANCIAL INFORMATION AND NOTICES..................................................................48
SECTION 8.1 FINANCIAL STATEMENTS AND PROJECTIONS..............................................48
SECTION 8.2 OFFICER'S COMPLIANCE CERTIFICATE..................................................49
SECTION 8.3 ACCOUNTANTS'CERTIFICATE...........................................................49
SECTION 8.4 OTHER REPORTS.....................................................................49
SECTION 8.5 NOTICE OF LITIGATION AND OTHER MATTERS............................................50
SECTION 8.6 ACCURACY OF INFORMATION...........................................................50
ARTICLE IX AFFIRMATIVE COVENANTS................................................................................51
SECTION 9.1 PRESERVATION OF CORPORATE EXISTENCE AND RELATED MATTERS...........................51
SECTION 9.2 MAINTENANCE OF PROPERTY...........................................................51
SECTION 9.3 INSURANCE.........................................................................51
SECTION 9.4 ACCOUNTING METHODS AND FINANCIAL RECORDS..........................................51
SECTION 9.5 PAYMENT AND PERFORMANCE OF OBLIGATIONS............................................51
SECTION 9.6 COMPLIANCE WITH LAWS AND APPROVALS................................................52
SECTION 9.7 ENVIRONMENTAL LAWS................................................................52
SECTION 9.8 COMPLIANCE WITH ERISA.............................................................52
SECTION 9.9 COMPLIANCE WITH AGREEMENTS........................................................53
SECTION 9.10 CONDUCT OF BUSINESS...............................................................53
SECTION 9.11 VISITS AND INSPECTIONS............................................................53
SECTION 9.12 ADDITIONAL SUBSIDIARIES...........................................................53
SECTION 9.13 YEAR 2000 COMPATIBILITY...........................................................53
SECTION 9.14 FURTHER ASSURANCES................................................................53
ARTICLE X FINANCIAL COVENANTS...................................................................................54
SECTION 10.1 LEVERAGE RATIO....................................................................54
SECTION 10.2 INTEREST COVERAGE RATIO...........................................................54
SECTION 10.3 LIMITATIONS ON CAPITAL EXPENDITURES...............................................54
SECTION 10.4 MINIMUM NET WORTH.................................................................54
SECTION 10.5 MINIMUM PRO FORMA EBITDA..........................................................54
ARTICLE XI NEGATIVE COVENANTS...................................................................................55
SECTION 11.1 LIMITATIONS ON DEBT...............................................................55
SECTION 11.2 LIMITATIONS ON GUARANTY OBLIGATIONS...............................................56
SECTION 11.3 LIMITATIONS ON LIENS..............................................................56
SECTION 11.4 LIMITATIONS ON LOANS, ADVANCES, INVESTMENTS AND ACQUISITIONS......................57
SECTION 11.5 LIMITATIONS ON MERGERS AND LIQUIDATION............................................58
SECTION 11.6 LIMITATIONS ON SALE OF ASSETS.....................................................59
SECTION 11.7 LIMITATIONS ON DIVIDENDS AND DISTRIBUTIONS........................................59
SECTION 11.8 LIMITATIONS ON EXCHANGE AND ISSUANCE OF CAPITAL STOCK.............................59
SECTION 11.9 TRANSACTIONS WITH AFFILIATES......................................................60
SECTION 11.10 CERTAIN ACCOUNTING CHANGES; ORGANIZATIONAL DOCUMENTS..............................60
SECTION 11.11 AMENDMENTS; PAYMENTS AND PREPAYMENTS OF SUBORDINATED DEBT.........................60
SECTION 11.12 RESTRICTIVE AGREEMENTS............................................................60
SECTION 11.13 OWNERSHIP OF SUBSIDIARIES; LIMITATIONS ON THE COMPANY AND ITS SUBSIDIARIES........61
SECTION 11.14 IMPAIRMENT OF SECURITY INTERESTS..................................................61
ARTICLE XII DEFAULT AND REMEDIES................................................................................61
SECTION 12.1 EVENTS OF DEFAULT.................................................................61
SECTION 12.2 REMEDIES..........................................................................64
SECTION 12.3 RIGHTS AND REMEDIES CUMULATIVE; NON-WAIVER; ETC...................................65
ARTICLE XIII THE ADMINISTRATIVE AGENT AND THE COLLATERAL AGENT..................................................65
SECTION 13.1 APPOINTMENT.......................................................................65
SECTION 13.2 DELEGATION OF DUTIES..............................................................65
SECTION 13.3 EXCULPATORY PROVISIONS............................................................65
SECTION 13.4 RELIANCE BY THE AGENTS............................................................66
SECTION 13.5 NOTICE OF DEFAULT.................................................................66
SECTION 13.6 NON-RELIANCE ON THE AGENTS AND OTHER LENDERS......................................67
SECTION 13.7 INDEMNIFICATION...................................................................67
SECTION 13.8 THE AGENTS IN THEIR INDIVIDUAL CAPACITY...........................................68
SECTION 13.9 RESIGNATION OF THE AGENTS; SUCCESSOR AGENTS.......................................68
ARTICLE XIV MISCELLANEOUS.......................................................................................68
SECTION 14.1 NOTICES...........................................................................68
SECTION 14.2 EXPENSES; INDEMNITY...............................................................69
SECTION 14.3 SET-OFF...........................................................................70
SECTION 14.4 GOVERNING LAW.....................................................................70
SECTION 14.5 CONSENT TO JURISDICTION...........................................................70
SECTION 14.6 BINDING ARBITRATION; WAIVER OF JURY TRIAL.........................................71
SECTION 14.7 REVERSAL OF PAYMENTS..............................................................72
SECTION 14.8 INJUNCTIVE RELIEF; PUNITIVE DAMAGES...............................................72
SECTION 14.9 ACCOUNTING MATTERS................................................................72
SECTION 14.10 SUCCESSORS AND ASSIGNS; PARTICIPATIONS............................................73
SECTION 14.11 AMENDMENTS, WAIVERS AND CONSENTS..................................................76
SECTION 14.12 PERFORMANCE OF DUTIES.............................................................77
SECTION 14.13 ALL POWERS COUPLED WITH INTEREST..................................................77
SECTION 14.14 SURVIVAL OF INDEMNITIES...........................................................77
SECTION 14.15 TITLES AND CAPTIONS...............................................................77
SECTION 14.16 SEVERABILITY OF PROVISIONS........................................................77
SECTION 14.17 COUNTERPARTS......................................................................77
SECTION 14.18 TERM OF AGREEMENT.................................................................77
SECTION 14.19 INCONSISTENCIES WITH OTHER DOCUMENTS; INDEPENDENT EFFECT OF COVENANTS.............78
SECTION 14.20 COMPANY AS AGENT FOR SUBSIDIARY BORROWERS.........................................78
EXHIBITS
Exhibit A-1 - Form of Revolving Credit Note
Exhibit A-2 - Form of Swingline Note
Exhibit A-3 - Form of Term Note
Exhibit B - Form of Notice of Borrowing
Exhibit C - Form of Notice of Account Designation
Exhibit D - Form of Notice of Prepayment
Exhibit E - Form of Notice of Conversion/Continuation
Exhibit F - Form of Officer's Compliance Certificate
Exhibit G - Form of Assignment and Acceptance
Exhibit H - Form of Collateral Agreement
Exhibit I - Form of Joinder Agreement
Exhibit J - Form of Intercompany Note
SCHEDULES
Schedule 1 - Lenders and Commitments
Schedule 7.1(a) - Jurisdictions of Organization and Qualification
Schedule 7.1(b) - Subsidiaries and Capitalization
Schedule 7.1(i) - ERISA Plans
Schedule 7.1(l) - Material Contracts
Schedule 7.1(m) - Labor and Collective Bargaining Agreements
Schedule 7.1(t) - Debt and Guaranty Obligations
Schedule 7.1(u) - Litigation
Schedule 11.3 - Existing Liens
Schedule 11.4 - Existing Loans, Advances and Investments
Schedule 11.9 - Transactions with Affiliates
CREDIT AGREEMENT dated as of the 16th day of April, 1999, by and among
CONDOR TECHNOLOGY SOLUTIONS, INC., a Delaware corporation (the "COMPANY"), each
of the Subsidiaries of the Company listed on the signature pages hereto and each
additional Subsidiary of the Company which hereafter becomes a Borrower pursuant
to SECTION 9.12 (collectively, the "SUBSIDIARY BORROWERS"; together with the
Company being herein collectively referenced as the "BORROWERS"), the Lenders
who are or may become a party to this Agreement, and FIRST UNION NATIONAL BANK,
as Collateral Agent and Administrative Agent for the Lenders and as Issuing
Lender and FIRST UNION COMMERCIAL CORPORATION, as Swingline Lender and Lender.
STATEMENT OF PURPOSE
The Borrowers have requested, and the Lenders have agreed, to extend
certain credit facilities to the Borrowers on the terms and conditions of this
Agreement.
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged by the parties hereto, such parties
hereby agree as follows:
ARTICLE I
DEFINITIONS
SECTION 1.1 DEFINITIONS. The following terms when used in this
Agreement shall have the meanings assigned to them below:
"ACQUIRED EBITDA" means, for any period, Pro Forma EBITDA LESS EBITDA.
"ADMINISTRATIVE AGENT" means First Union in its capacity as
administrative agent hereunder, and any successor thereto appointed pursuant to
SECTION 13.9.
"ADMINISTRATIVE AGENT'S OFFICE" means the office of the Administrative
Agent specified in or determined in accordance with the provisions of SECTION
14.1(c).
"AFFILIATE" means, with respect to any Person, any other Person (other
than a Subsidiary) which directly or indirectly through one or more
intermediaries, controls, or is controlled by, or is under common control with,
such first Person or any of its Subsidiaries. The term "CONTROL" means (a) the
power to vote five percent (5%) or more of the securities or other equity
interests of a Person having ordinary voting power, or (b) the possession,
directly or indirectly, of any other power to direct or cause the direction of
the management and policies of a Person, whether through ownership of voting
securities, by contract or otherwise.
"AGENTS" means the collective reference to the Administrative Agent and
the Collateral
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Agent.
"AGGREGATE COMMITMENT" means the aggregate amount of the Lenders'
Revolving Credit Commitments and Term Loan Commitments hereunder, as such amount
may be reduced or modified at any time or from time to time pursuant to the
terms hereof. On the Closing Date, the Aggregate Commitment shall be One Hundred
Million Dollars ($100,000,000).
"AGREEMENT" means this Credit Agreement, as amended, restated,
supplemented or otherwise modified from time to time.
"APPLICABLE LAW" means all applicable provisions of constitutions,
laws, statutes, ordinances, rules, treaties, regulations, permits, licenses,
approvals, interpretations and orders of courts or Governmental Authorities and
all orders and decrees of all courts and arbitrators.
"APPLICABLE MARGIN" has the meaning assigned thereto in SECTION 5.1(c).
"APPLICATION" means an application, in the form specified by the
Issuing Lender from time to time, requesting the Issuing Lender to issue a
Letter of Credit.
"ARBITRATION RULES" has the meaning assigned thereto in SECTION 14.6.
"ASSIGNMENT AND ACCEPTANCE" shall have the meaning assigned thereto in
SECTION 14.10.
"AVERAGE UTILIZATION" means, for any fiscal quarter, the sum of the
average aggregate amount of Revolving Credit Loans and L/C Obligations
outstanding during each of the three (3) calendar months (calculated for each
such month on the basis of actual daily outstandings) comprising such fiscal
quarter divided by three (3).
"BASE RATE" means, at any time, the higher of (a) the Prime Rate and
(b) the sum of (i) the Federal Funds Rate and (ii) 1/2 of 1%; each change in the
Base Rate shall take effect simultaneously with the corresponding change or
changes in the Prime Rate or the Federal Funds Rate.
"BASE RATE LOAN" means any Loan bearing interest at a rate based upon
the Base Rate as provided in SECTION 5.1(a).
"BORROWERS" has the meaning assigned to such term in the preamble.
"BUSINESS DAY" means (a) for all purposes other than as set forth in
clause (b) below, any day other than a Saturday, Sunday or legal holiday on
which banks in Charlotte, North Carolina and New York, New York, are open for
the conduct of their commercial banking business, and (b) with respect to all
notices and determinations in connection with, and payments of principal and
interest on, any LIBOR Rate Loan, any day that is a Business Day described in
clause (a) and that is also a day for trading by and between banks in Dollar
deposits in the London
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interbank market.
"CAPITAL ASSET" means, with respect to the Borrowers and their
Subsidiaries, any asset that should, in accordance with GAAP, be classified and
accounted for as a capital asset on a Consolidated balance sheet of the
Borrowers.
"CAPITAL EXPENDITURES" means, with respect to the Borrowers and their
Subsidiaries for any period, the aggregate cost of all Capital Assets acquired
by the Borrowers during such period determined on a Consolidated basis in
accordance with GAAP; PROVIDED, that Capital Expenditures shall not include the
purchase price paid in connection with a Permitted Acquisition, or expenditures
for the repair, restoration or replacement of any asset that was damaged or
destroyed, in an amount equal to any insurance proceeds received in connection
with such damage or destruction.
"CAPITAL LEASE" means, with respect to the Borrowers, any lease of any
property that should, in accordance with GAAP, be classified and accounted for
as a capital lease on a Consolidated balance sheet of the Borrowers.
"CHANGE IN CONTROL" has the meaning assigned thereto in SECTION
12.1(i).
"CLOSING DATE" means the date of this Agreement or such later Business
Day upon which each condition described in SECTION 6.2 shall be satisfied or
waived in all respects in a manner acceptable to the Administrative Agent, in
its sole discretion.
"CODE" means the Internal Revenue Code of 1986, and the rules and
regulations thereunder, each as amended, supplemented or otherwise modified.
"COLLATERAL" means any and all property or assets, whether real,
personal or otherwise, described in or covered by the Security Documents as
security for the Obligations and shall include, but not be limited to, all
"COLLATERAL" as described in any Security Documents.
"COLLATERAL AGREEMENT" means the Collateral Agreement of even date
executed by the Borrowers and their Subsidiaries in favor of the Collateral
Agent for the benefit of the Agents and the Lenders in substantially the form of
EXHIBIT H, as amended, restated, supplemented or otherwise modified from time to
time.
"COLLATERAL AGENT" means First Union in its capacity as collateral
agent hereunder, and any successor thereto appointed pursuant to SECTION 13.9.
"COMMITMENT" means, as to any Lender, the sum of such Lender's
Revolving Credit Commitment and Term Loan Commitment as set forth opposite such
Lender's name on SCHEDULE 1, as the same may be reduced or modified at any time
or from time to time pursuant to the terms hereof.
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"COMMITMENT FEE RATE" has the meaning set forth in SECTION 5.3.
"COMPANY" has the meaning assigned to such term in the preamble.
"CONSOLIDATED" means, when used with reference to financial statements
or financial statement items of the Borrowers and their Subsidiaries, such
statements or items on a consolidated basis in accordance with applicable
principles of consolidation under GAAP.
"CREDIT FACILITY" means the collective reference to the Revolving
Credit Facility, the Term Loan Facility and the L/C Facility.
"DEBT" means, with respect to the Borrowers at any date and without
duplication, the sum of the following calculated in accordance with GAAP: (a)
all liabilities, obligations and indebtedness including, but not limited to,
obligations evidenced by bonds, debentures, notes or other similar instruments
of any such Person, but excluding intercompany indebtedness (b) all obligations
to pay the deferred purchase price of property or services of any such Person,
except trade payables arising in the ordinary course of business not more than
ninety (90) days past due (c) all obligations of any such Person as lessee under
Capital Leases, (d) the total cash amount of all earn out obligations at such
time the conditions precedent to such obligation are met and the obligation is
deemed earned, (e) all Debt of any other Person secured by a Lien on any asset
of any such Person, (f) all Guaranty Obligations of any such Person, (g) all
obligations, contingent or otherwise, of any such Person relative to the face
amount of letters of credit, whether or not drawn, including without limitation
any Reimbursement Obligation, and banker's acceptances issued for the account of
any such Person, (h) all obligations of any such Person to redeem, repurchase,
exchange, defease or otherwise make payments in respect of capital stock or
other securities of such Person and (i) all obligations incurred by any such
Person pursuant to Hedging Agreements.
"DEFAULT" means any of the events specified in SECTION 12.1 which with
the passing of time, the giving of notice or any other condition, would
constitute an Event of Default.
"DOLLARS" OR "$" means, unless otherwise qualified, dollars in lawful
currency of the United States.
"EBITDA" means, for any period, the sum of the following determined on
a Consolidated basis, without duplication, for the Borrowers and their
Subsidiaries in accordance with GAAP: (a) Net Income for such period PLUS (b)
the sum of the following to the extent deducted in determining Net Income: (i)
income, franchise and other taxes, (ii) Interest Expense, (iii) amortization,
depreciation and other non-cash charges, (iv) extraordinary losses LESS (c)
interest income and any extraordinary gains which were included in determining
Net Income.
"ELIGIBLE ASSIGNEE" means, with respect to any assignment of the
rights, interest and obligations of a Lender hereunder, a Person that is at the
time of such assignment (a) a commercial bank organized under the laws of the
United States or any state thereof, having
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combined capital and surplus in excess of $500,000,000, (b) a commercial bank
organized under the laws of any other country that is a member of the
Organization of Economic Cooperation and Development, or a political subdivision
of any such country, having combined capital and surplus in excess of
$500,000,000, (c) a finance company, insurance company or other financial
institution which in the ordinary course of business extends credit of the type
extended hereunder and that has total assets in excess of $1,000,000,000, (d)
already a Lender hereunder (whether as an original party to this Agreement or as
the assignee of another Lender), (e) the successor (whether by transfer of
assets, merger or otherwise) to all or substantially all of the commercial
lending business of the assigning Lender, or (f) any other Person that has been
approved in writing as an Eligible Assignee by the Borrowers and the
Administrative Agent.
"EMPLOYEE BENEFIT PLAN" means any employee benefit plan within the
meaning of Section 3(3) of ERISA which (a) is maintained for employees of the
Borrowers or any ERISA Affiliate or (b) has at any time within the preceding six
years been maintained for the employees of the Borrowers or any current or
former ERISA Affiliate.
"ENVIRONMENTAL LAWS" means any and all federal, state and local laws,
statutes, ordinances, rules, regulations, permits, licenses, approvals,
interpretations and orders of courts or Governmental Authorities, relating to
the protection of human health or the environment, including, but not limited
to, requirements pertaining to the manufacture, processing, distribution, use,
treatment, storage, disposal, transportation, handling, reporting, licensing,
permitting, investigation or remediation of Hazardous Materials.
"ERISA" means the Employee Retirement Income Security Act of 1974 and
the rules and regulations thereunder, each as amended, supplemented or otherwise
modified.
"ERISA AFFILIATE" means any Person who together with the Borrowers are
treated as a single employer within the meaning of Section 414(b), (c), (m) or
(o) of the Code or Section 4001(b) of ERISA.
"EURODOLLAR RESERVE PERCENTAGE" means, for any day, the percentage
(expressed as a decimal and rounded upwards, if necessary, to the next higher
1/100th of 1%) which is in effect for such day as prescribed by the Federal
Reserve Board (or any successor) for determining the maximum reserve requirement
(including without limitation any basic, supplemental or emergency reserves) in
respect of eurocurrency liabilities or any similar category of liabilities for a
member bank of the Federal Reserve System in New York City.
"EVENT OF DEFAULT" means any of the events specified in SECTION 12.1,
provided that any requirement for passing of time, giving of notice, or any
other condition, has been satisfied.
"EXISTING FACILITY" means collectively, (i) that certain Business Loan
and Security Agreement dated as of April 15, 1998 by and among First Union
Commercial Corporation, the Company and certain Subsidiaries of the Company, as
amended and (ii) that certain Loan Agreement dated August 10, 1998 by and
between First Union and Titan Technologies Group,
5
LLC.
"EXTENSIONS OF CREDIT" means, as to any Lender at any time, an amount
equal to the sum of (a): (i) the aggregate principal amount of all Revolving
Credit Loans made by such Lender then outstanding, (ii) such Lender's Revolving
Credit Commitment Percentage of the L/C Obligations then outstanding, (iii) such
Lender's Revolving Credit Commitment Percentage of the Swingline Loans then
outstanding and (iv) the aggregate principal amount of all Term Loans made by
such Lender then outstanding; or (b) the making of any Loan or participation in
any Letter of Credit, as the context requires.
"FDIC" means the Federal Deposit Insurance Corporation, or any
successor thereto.
"FEDERAL FUNDS RATE" means, the rate per annum (rounded upwards, if
necessary, to the next higher 1/100th of 1%) representing the daily effective
federal funds rate as quoted by the Administrative Agent and confirmed in
Federal Reserve Board Statistical Release H.15 (519) or any successor or
substitute publication selected by the Administrative Agent. If, for any reason,
such rate is not available, then "FEDERAL FUNDS RATE" shall mean a daily rate
which is determined, in the opinion of the Administrative Agent, to be the rate
at which federal funds are being offered for sale in the national federal funds
market at 9:00 a.m. (Charlotte time). Rates for weekends or holidays shall be
the same as the rate for the most immediate preceding Business Day.
"FEDERAL GOVERNMENTAL AUTHORITY" means any nation and any government or
any Person exercising executive, legislative, regulatory or administrative
functions of or pertaining to government, and any corporation or other entity
owned or controlled, through stock or capital ownership or otherwise, by any of
the foregoing.
"FIRST UNION" means First Union National Bank, a national banking
association, and its successors.
"FISCAL YEAR" means the fiscal year of the Borrowers ending on December
31.
"FOREIGN SUBSIDIARY" has the meaning ascribed to such term in the
Collateral Agreement.
"GAAP" means generally accepted accounting principles, as recognized by
the American Institute of Certified Public Accountants and the Financial
Accounting Standards Board, consistently applied and maintained on a consistent
basis for the Borrowers and their Subsidiaries throughout the period indicated
and consistent with the prior financial practice of the Borrowers and their
Subsidiaries.
"GOVERNMENTAL APPROVALS" means all authorizations, consents, approvals,
licenses and exemptions of, registrations and filings with, and reports to, all
Governmental Authorities.
"GOVERNMENTAL AUTHORITY" means the collective reference to the Federal
Governmental Authority and the State Governmental Authority.
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"GOVERNMENT CONTRACT" means any contract between any Grantor (as such
term is defined in the Guarantee and Collateral Agreement) and any agency,
department or instrumentality of the United States or any state, municipal or
local Governmental Authority in the United States where such Grantor is the
prime contractor, as the same may be amended, restated, supplemented or
otherwise modified and which involves monetary liability of or to any such
Person in an amount in excess of $500,000 per annum.
"GUARANTY OBLIGATION" means, with respect to the Borrowers and their
Subsidiaries, without duplication, any obligation, contingent or otherwise, of
any such Person pursuant to which such Person has directly or indirectly
guaranteed any Debt or other obligation of any other Person or of itself with
respect to any reimbursement obligation or other contingent obligation incurred
in connection with a performance of tenders, statutory obligation, bid, lease,
government contract or performance and return-of-money bonds and, without
limiting the generality of the foregoing, any obligation, direct or indirect,
contingent or otherwise, of any such Person (a) to purchase or pay (or advance
or supply funds for the purchase or payment of) such Debt or other obligation
(whether arising by virtue of partnership arrangements, by agreement to keep
well, to purchase assets, goods, securities or services, to take-or-pay, or to
maintain financial statement condition or otherwise) or (b) entered into for the
purpose of assuring in any other manner the obligee of such Debt or other
obligation of the payment thereof or to protect such obligee against loss in
respect thereof (in whole or in part); PROVIDED, that the term Guaranty
Obligation shall not include endorsements for collection or deposit in the
ordinary course of business.
"HAZARDOUS MATERIALS" means any substances or materials (a) which are
or become defined as hazardous wastes, hazardous substances, pollutants,
contaminants, chemical substances or mixtures or toxic substances under any
Applicable Law, (b) which are toxic, explosive, corrosive, flammable,
infectious, radioactive, carcinogenic, mutagenic or otherwise harmful to human
health or the environment and are or become regulated by any Governmental
Authority, (c) the presence of which require investigation or remediation under
any Applicable Law, (d) the discharge or emission or release of which requires a
permit or license under any Applicable Law or other Governmental Approval, (e)
which are deemed to constitute a nuisance, a trespass or pose a health or safety
hazard to persons or neighboring properties, (f) which consist of underground or
aboveground storage tanks, whether empty, filled or partially filled with any
substance, or (g) which contain, without limitation, asbestos, polychlorinated
biphenyls, urea formaldehyde foam insulation, petroleum hydrocarbons, petroleum
derived substances or waste, crude oil, nuclear fuel, natural gas or synthetic
gas.
"HEDGING AGREEMENT" means any agreement with respect to an interest
rate swap, collar, cap, floor or a forward rate agreement or other agreement
regarding the hedging of interest rate risk exposure executed in connection with
hedging the interest rate exposure of the Borrowers, and any confirming letter
executed pursuant to such hedging agreement, all as amended, restated or
otherwise modified.
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"IMMATERIAL SUBSIDIARY" means any Wholly-Owned Subsidiary of a Borrower
the aggregate book value of the total assets of which do not exceed $3,000,000,
as reflected on the financial statements for such period delivered in accordance
with SECTION 8.1 or SECTION 8.2, as the case may be; PROVIDED, HOWEVER, that
notwithstanding the foregoing, the aggregate EBITDA of all such Immaterial
Subsidiaries shall not at any time exceed five percent (5%) of EBITDA, as
reflected on the financial statements most recently delivered in accordance with
SECTION 8.1 or SECTION 8.2, as the case may be.
"INTERCOMPANY NOTES" means the promissory notes of the Immaterial
Subsidiaries in substantially the form of EXHIBIT J, as amended, restated,
supplemented or otherwise modified from time to time.
"INTEREST EXPENSE" means, for any period, total interest expense
(including, without limitation, interest expense attributable to capital leases)
determined on a consolidated basis, without duplication, for the Borrowers and
their Subsidiaries in accordance with GAAP.
"INTEREST PERIOD" shall have the meaning assigned thereto in SECTION
5.1(b).
"ISPA98" means the International Standby Practices (1998 Revision,
effective January 1, 1999), International Chamber of Commerce Publication No.
590.
"ISSUING LENDER" means First Union, in its capacity as issuer of any
Letter of Credit, or any successor thereto.
"L/C COMMITMENT" means the lesser of (a) Fifteen Million Dollars
($15,000,000) and (b) the Revolving Credit Commitment.
"L/C FACILITY" means the letter of credit facility established pursuant
to ARTICLE III.
"L/C OBLIGATIONS" means at any time, an amount equal to the sum of (a)
the aggregate undrawn and unexpired amount of the then outstanding Letters of
Credit and (b) the aggregate amount of drawings under Letters of Credit which
have not then been reimbursed pursuant to SECTION 3.5.
"L/C PARTICIPANTS" means the collective reference to all the Lenders
other than the Issuing Lender.
"LENDER" means each Person executing this Agreement as a Lender set
forth on the signature pages hereto and each Person that hereafter becomes a
party to this Agreement as a Lender pursuant to SECTION 14.10.
"LENDING OFFICE" means, with respect to any Lender, the office of such
Lender maintaining such Lender's Revolving Credit Commitment Percentage or Term
Loan Commitment Percentage, as applicable, of the Extensions of Credit.
8
"LETTERS OF CREDIT" shall have the meaning assigned thereto in SECTION
3.1.
"LEVERAGE RATIO" has the meaning assigned to such term in SECTION 10.1.
"LIBOR" means the rate of interest per annum determined on the basis of
the rate for deposits in Dollars in minimum amounts of at least $5,000,000 for a
period equal to the applicable Interest Period which appears on the Dow ▇▇▇▇▇
Market Screen 3750 at approximately 11:00 a.m. (London time) two (2) Business
Days prior to the first day of the applicable Interest Period. If, for any
reason, such rate does not appear on Dow ▇▇▇▇▇ Market Screen 3750, then "LIBOR"
shall be determined by the Administrative Agent to be the arithmetic average of
the rate per annum at which deposits in Dollars in minimum amounts of at least
$5,000,000 are offered by first class banks in the London interbank market to
the Administrative Agent at approximately 11:00 a.m. (London time) two (2)
Business Days prior to the first day of the applicable Interest Period for a
period equal to such Interest Period.
"LIBOR RATE" means a rate per annum (rounded upwards, if necessary, to
the next higher 1/100th of 1%) determined by the Administrative Agent pursuant
to the following formula:
LIBOR Rate = LIBOR
-----
1.00-Eurodollar Reserve Percentage
"LIBOR RATE LOAN" means any Loan bearing interest at a rate based upon
the LIBOR Rate as provided in SECTION 5.1(a).
"LIEN" means, with respect to any asset, any mortgage, lien, pledge,
charge, security interest or encumbrance of any kind in respect of such asset.
For the purposes of this Agreement, a Person shall be deemed to own subject to a
Lien any asset which it has acquired or holds subject to the interest of a
vendor or lessor under any conditional sale agreement, Capital Lease or other
title retention agreement relating to such asset.
"LOANS" means the collective reference to the Revolving Credit Loans,
the Term Loans and the Swingline Loans and "LOAN" means any of such Loans.
"LOAN DOCUMENTS" means, collectively, this Agreement, the Notes, the
Applications, any Hedging Agreement with any Lender (which such Hedging
Agreement is permitted or required hereunder), the Security Documents, the Side
Letter and each other document, instrument, certificate and agreement executed
and delivered by the Borrowers or their counsel in connection with this
Agreement or otherwise referred to herein or contemplated hereby, all as may be
amended, restated or otherwise modified.
"MATERIAL ADVERSE EFFECT" means, with respect to the Borrowers and
their Subsidiaries, a material adverse effect on the properties, business,
prospects, operations or condition (financial or otherwise) of any such Person
or the ability of any such Person to perform its obligations
9
under the Loan Documents or Material Contracts, in each case to which it is a
party.
"MATERIAL CONTRACT" means (a) any Government Contract, or (b) any other
contract or other agreement, written or oral, of any Borrower involving monetary
liability of or to any such Person in an amount in excess of $500,000 per annum,
or (c) any other contract or agreement, written or oral, of any Borrower the
failure to comply with which could reasonably be expected to have a Material
Adverse Effect.
"MATERIAL SUBSIDIARY" means (i) each Subsidiary of Systems executing
this Agreement on the Closing Date and (ii) any Subsidiary of a Borrower which
is not an Immaterial Subsidiary.
"MINIMUM COMPLIANCE LEVEL" has the meaning assigned to such term in
SECTION 10.4.
"MULTIEMPLOYER PLAN" means a "multiemployer plan" as defined in Section
4001(a)(3) of ERISA to which a Borrower or any ERISA Affiliate is making, or is
accruing an obligation to make, contributions within the preceding six years.
"NET CASH PROCEEDS" means, as applicable, (a) with respect to any sale
or other disposition of assets, the gross cash proceeds received by the
Borrowers from such sale LESS the sum of (i) all income taxes and other taxes
assessed by a Governmental Authority as a result of such sale and any other fees
and expenses incurred in connection therewith and (ii) the principal amount of,
premium, if any, and interest on any Debt secured by a Lien on the asset (or a
portion thereof) sold, which Debt is required to be repaid in connection with
such sale, (b) with respect to any offering of capital stock or issuance of
Debt, the gross cash proceeds received by the Borrowers therefrom LESS all
legal, underwriting and other fees and expenses incurred in connection therewith
and (c) with respect to any payment under an insurance policy or in connection
with a condemnation proceeding, the amount of cash proceeds received by the
Borrowers from an insurance company or Governmental Authority, as applicable,
net of all expenses of collection.
"NET INCOME" means, with respect to the Borrowers and their
Subsidiaries for any period, on a Consolidated basis, the net income (or loss)
thereof for such period determined with out duplication in accordance with GAAP;
PROVIDED, that there shall be excluded from net income (or loss) the income (or
loss) of any other Person (other than any Wholly-Owned Subsidiary) in which any
Borrower has an ownership interest unless received by such Borrower.
"NET WORTH" means, as of any date, the total of all amounts which
would, in accordance with GAAP, be included on a Consolidated balance sheet of
the Borrowers and their Subsidiaries as of such date as (a) the par or stated
value of all outstanding capital stock of Borrowers and their Subsidiaries, (b)
paid-in capital or capital surplus relating to such capital stock and (c) any
retained earnings or earned surplus, less any accumulated deficit.
"NOTES" means the collective reference to the Revolving Credit Notes,
the Term Notes and Swingline Note and "NOTE" means any of such Notes.
10
"NOTICE OF ACCOUNT DESIGNATION" shall have the meaning assigned thereto
in SECTION 2.3(b).
"NOTICE OF BORROWING" shall have the meaning assigned thereto in
SECTION 2.3(a).
"NOTICE OF CONVERSION/CONTINUATION" shall have the meaning assigned
thereto in SECTION 5.2.
"NOTICE OF PREPAYMENT" shall have the meaning assigned thereto in
SECTION 2.4(c).
"OBLIGATIONS" means, in each case, whether now in existence or
hereafter arising: (a) the principal of and interest on (including interest
accruing after the filing of any bankruptcy or similar petition) the Loans, (b)
the L/C Obligations, (c) all payment and other obligations owing by the
Borrowers to any Lender or the Administrative Agent under any Hedging Agreement
with any Lender (which such Hedging Agreement is permitted or required
hereunder), and (d) all other fees and commissions (including attorney's fees),
charges, indebtedness, loans, liabilities, financial accommodations,
obligations, covenants and duties owing by the Borrowers to the Lenders or the
Administrative Agent, of every kind, nature and description, direct or indirect,
absolute or contingent, due or to become due, contractual or tortious,
liquidated or unliquidated, and whether or not evidenced by any note, in each
case under or in respect of this Agreement, any Note, any Letter of Credit or
any of the other Loan Documents.
"OFFICER'S COMPLIANCE CERTIFICATE" shall have the meaning assigned
thereto in SECTION 8.2.
"OTHER TAXES" shall have the meaning assigned thereto in SECTION
5.11(b).
"PBGC" means the Pension Benefit Guaranty Corporation or any successor
agency.
"PENSION PLAN" means any Employee Benefit Plan, other than a
Multiemployer Plan, which is subject to the provisions of Title IV of ERISA or
Section 412 of the Code and which (a) is maintained for employees of the
Borrowers or any ERISA Affiliates or (b) has at any time within the preceding
six years been maintained for the employees of the Borrowers or any of their
current or former ERISA Affiliates.
"PERMITTED ACQUISITIONS" means those acquisitions permitted pursuant to
SECTION 11.4(c) or otherwise consented to by the Required Lenders.
"PERMITTED LIENS" has the meaning assigned to such term in the
Collateral Agreement.
"PERSON" means an individual, corporation, limited liability company,
partnership, association, trust, business trust, joint venture, joint stock
company, pool, syndicate, sole proprietorship, unincorporated organization,
Governmental Authority or any other form of entity
11
or group thereof.
"PRIME RATE" means, at any time, the rate of interest per annum
publicly announced from time to time by First Union as its prime rate. Each
change in the Prime Rate shall be effective as of the opening of business on the
day such change in the Prime Rate occurs. The parties hereto acknowledge that
the rate announced publicly by First Union as its Prime Rate is an index or base
rate and shall not necessarily be its lowest or best rate charged to its
customers or other banks.
"PRO FORMA EBITDA" means EBITDA as adjusted in a manner reasonably
satisfactory to the Administrative Agent, consistent with SEC pro forma rules
including adjustments of nonrecurring and non cash charges, to take into account
on a PRO FORMA basis, as of the first day of any calculation period, the effect
of any acquisition consummated, or asset sold, during such period.
"REAL PROPERTY SECURITY DOCUMENTS" means any landlord agreement,
landlord consent, collateral assignment of lease, fee mortgagee consent or
agreement, landlord estoppels, and any other agreement or writing pursuant to
which any Borrower or Subsidiary grants a security interest in any real property
interest securing the Obligations.
"REGISTER" shall have the meaning assigned thereto in SECTION 14.10(d).
"REIMBURSEMENT OBLIGATION" means the obligation of the Borrowers to
reimburse the Issuing Lender pursuant to SECTION 3.5 for amounts drawn under
Letters of Credit.
"REQUIRED LENDERS" means, at any date, any combination of Lenders (i)
whose Revolving Credit Commitment Percentages and Term Loan Commitment
Percentages aggregate at least sixty-six and two-thirds percent (66%) of
the Aggregate Commitment or, if the Commitments have been terminated, any
combination of Lenders holding at least sixty-six and two-thirds percent
(66 2/3%) of the aggregate Extensions of Credit and (ii) at least one (1)
such Lender is the holder of a Term Loan Commitment or, if the Term Loan
Commitment has been terminated, is the holder of an outstanding Term Loan.
"RESPONSIBLE OFFICER" means any of the following: the chief executive
officer or chief financial officer of each Borrower or any other officer of such
Borrower reasonably acceptable to the Administrative Agent.
"REVOLVING CREDIT COMMITMENT" means (a) as to any Lender, the
obligation of such Lender to make Revolving Credit Loans to the account of the
Borrowers hereunder in an aggregate principal amount at any time outstanding not
to exceed the amount set forth opposite such Lender's name on SCHEDULE 1 hereto
as such amount may be reduced or modified at any time or from time to time
pursuant to the terms hereof and (b) as to all Lenders, the aggregate commitment
of all Lenders to make Revolving Credit Loans, as such amount may be reduced at
any time or from time to time pursuant to the terms hereof. The Revolving Credit
Commitment
12
of all Lenders on the Closing Date shall be Seventy-Five Million Dollars
($75,000,000).
"REVOLVING CREDIT COMMITMENT PERCENTAGE" means, as to the Revolving
Credit Commitment, at any time the ratio of (a) the amount of the Revolving
Credit Commitment, if any, of such Lender to (b) the aggregate Revolving Credit
Commitments of all Lenders.
"REVOLVING CREDIT FACILITY" means the revolving credit facility
established pursuant to ARTICLE II.
"REVOLVING CREDIT LOANS" means any revolving loan made to the Borrowers
pursuant to SECTION 2.1, and all such revolving loans collectively as the
context requires.
"REVOLVING CREDIT NOTES" means the collective reference to the
Revolving Credit Notes made by the Borrowers payable to the order of each
Lender, substantially in the form of EXHIBIT A-1 hereto, evidencing the
Revolving Credit Facility, and any amendments and modifications thereto, any
substitutes therefor, and any replacements, restatements, renewals or extension
thereof, in whole or in part; "REVOLVING CREDIT NOTE" means any of such
Revolving Credit Notes.
"REVOLVING CREDIT TERMINATION DATE" means the earliest of the dates
referred to in SECTION 2.7.
"SECURITY DOCUMENTS" means the collective reference to the Collateral
Agreement, the Real Property Security Documents and each other agreement or
writing pursuant to which the Borrowers and, as applicable, their Subsidiaries
purport to pledge or grant a security interest in any property or assets
securing the Obligations or any such Person purports to guaranty the payment
and/or performance of the Obligations.
"SIDE LETTER" that certain letter agreement by and between the Company
on behalf of itself and the other Borrowers and the Administration Agent dated
April 16, 1999.
"SOLVENT" means, as to the Borrowers and their Subsidiaries on a
particular date, that any such Person (a) has capital sufficient to carry on its
business and transactions and all business and transactions in which it is about
to engage and is able to pay its debts as they mature, (b) owns property having
a value, both at fair valuation and at present fair saleable value, greater than
the amount required to pay its probable liabilities (including contingencies),
and (c) does not believe that it will incur debts or liabilities beyond its
ability to pay such debts or liabilities as they mature.
"STATE GOVERNMENTAL AUTHORITY" means any province, state, or political
subdivision thereof, and any government of such Person exercising executive,
legislative, regulatory or administrative functions of or pertaining to
government, and any corporation or other entity owned or controlled, through
stock or capital ownership or otherwise, by any of the foregoing.
"SUBORDINATED DEBT" means the collective reference to Debt on SCHEDULE
6.1(t)
13
designated as Subordinated Debt and any other Debt of the Borrowers and
their Subsidiaries subordinated in right and time of payment to the Obligations
on terms satisfactory to the Required Lenders.
"SUBSIDIARY" means as to any Person, any corporation, partnership,
limited liability company or other entity of which more than fifty percent (50%)
of the outstanding capital stock or other ownership interests having ordinary
voting power to elect a majority of the board of directors or other managers of
such corporation, partnership, limited liability company or other entity is at
the time, directly or indirectly, owned by or the management is otherwise
controlled by such Person (irrespective of whether, at the time, capital stock
or other ownership interests of any other class or classes of such corporation,
partnership, limited liability company or other entity shall have or might have
voting power by reason of the happening of any contingency). Unless otherwise
qualified references to "SUBSIDIARY" or "SUBSIDIARIES" herein shall refer to
those of the Borrowers.
"SUBSIDIARY BORROWERS" means Systems and all Subsidiaries of Systems
which are signatories to this Agreement on the Closing Date together with any
Subsidiary which becomes a Borrower pursuant to SECTION 9.12 after the Closing
Date.
"SUBSTANTIALLY SIMILAR LINE OF BUSINESS" means any business which is
involved in one or more of the following activities: (i) strategic planning,
(ii) management consulting, (iii) strategic marketing communications, (iv)
development, integration and installation of informational technology systems,
(v) contract, staffing, recruiting, and training, (vi) continuing education,
(vii) desktop and system maintenance and support, and (viii) procurement of
computer hardware and software.
"SWINGLINE COMMITMENT" means the lesser of (a) Five Million Dollars
($5,000,000) and (b) the Revolving Credit Commitment.
"SWINGLINE LENDER" means First Union Commercial Corporation in its
capacity as swingline lender hereunder.
"SWINGLINE LOAN" has the meaning assigned to such term in SECTION 2.2.
"SWINGLINE MATURITY DATE" means the first to occur of (a) the
resignation of First Union as Administrative Agent in accordance with SECTION
13.9, and (b) the Revolving Credit Termination Date.
"SWINGLINE NOTE" means the Swingline Note made by the Borrowers payable
to the order of the Swingline Lender, substantially in the form of EXHIBIT A-2
hereto, evidencing the Swingline Loans, and any amendments and modifications
thereto, any substitutes therefor, and any replacements, restatements, renewals
or extension thereof, in whole or in part.
"SYSTEMS" means Condor System Solutions, Inc., a Delaware corporation.
14
"TAXES" shall have the meaning assigned thereto in SECTION 5.11(a).
"TERM LOANS" shall mean the term loans to be made to the Borrowers by
the Lenders pursuant to SECTION 4.1.
"TERM LOAN COMMITMENT" means (a) as to any Lender, the obligation of
such Lender to make the Term Loans to the account of the Borrowers hereunder in
an aggregate principal amount not to exceed the amount set forth opposite such
Lender's name on SCHEDULE 1 hereto, as such amount may be reduced or modified at
any time or from time to time pursuant to the terms hereof and (b) as to all
Lenders, the aggregate commitment to make Term Loans. The Term Loan Commitment
of all Lenders as of the Closing Date shall be Twenty-Five Million Dollars
($25,000,000).
"TERM LOAN COMMITMENT PERCENTAGE" means, as to any Lender, (a) prior to
making the Term Loans, the ratio of (i) the Term Loan Commitment, if any of such
Lender to (ii) the aggregate Term Loan Commitments of all Lenders, and (b) after
the making of the Term Loans, the ratio of (i) the outstanding principal balance
of the Term Loans of such Lender to (ii) the aggregate outstanding principal
balance of the Term Loans of all Lenders.
"TERM LOAN FACILITY" shall mean the term loan facility established
pursuant to ARTICLE IV.
"TERM LOAN MATURITY DATE" means the first to occur of (a) that date
which is five (5) years from the Closing Date, and (b) the date of termination
by the Administrative Agent on behalf of the Lenders pursuant to SECTION
12.2(a).
"TERM NOTES" means the Term Notes made by the Borrowers payable to the
order of each of the Lenders, substantially in the form of EXHIBIT A-3 hereto,
evidencing the Debt incurred by the Borrowers pursuant to the Term Loan
Facility, and any amendments, modifications and supplements thereto, any
substitute therefor, and any replacement, restatements, renewals or extensions
thereof, in whole or in part.
"TERMINATION EVENT" means: (a) a "REPORTABLE EVENT" described in
Section 4043 of ERISA, or (b) the withdrawal of the Borrowers or any ERISA
Affiliate from a Pension Plan during a plan year in which it was a "substantial
employer" as defined in Section 4001(a)(2) of ERISA, or (c) the termination of a
Pension Plan, the filing of a notice of intent to terminate a Pension Plan or
the treatment of a Pension Plan amendment as a termination under Section 4041 of
ERISA, or (d) the institution of proceedings to terminate, or the appointment of
a trustee with respect to, any Pension Plan by the PBGC, or (e) any other event
or condition which would constitute grounds under Section 4042(a) of ERISA for
the termination of, or the appointment of a trustee to administer, any Pension
Plan, or (f) the partial or complete withdrawal of the Borrowers or any ERISA
Affiliate from a Multiemployer Plan, or (g) the imposition of a Lien pursuant to
Section 412 of the Code or Section 302 of ERISA, or (h) any event or condition
which results in the reorganization or insolvency of a Multiemployer Plan under
Sections 4241
15
or 4245 of ERISA, or (i) any event or condition which results in the termination
of a Multiemployer Plan under Section 4041A of ERISA or the institution by PBGC
of proceedings to terminate a Multiemployer Plan under Section 4042 of ERISA.
"TOTAL DEBT" means, as of any date of determination with respect to the
Borrowers and their Subsidiaries on a Consolidated basis without duplication,
the sum of all Debt of the Borrowers and their Subsidiaries.
"UNIFORM CUSTOMS" the Uniform Customs and Practice for Documentary
Credits (1993 Revision, effective January 1, 1994), International Chamber of
Commerce Publication No. 500.
"UCC" means the Uniform Commercial Code as in effect in the State of
New York, as amended, restated or otherwise modified.
"UNITED STATES" means the United States of America.
"WHOLLY-OWNED" means, with respect to a Subsidiary, that all of the
shares of capital stock or other ownership interests of such Subsidiary are,
directly or indirectly, owned or controlled by one or more of the Borrowers
and/or one or more of their Wholly-Owned Subsidiaries.
SECTION 1.2 GENERAL. Unless otherwise specified, a reference in this
Agreement to a particular section, subsection, Schedule or Exhibit is a
reference to that section, subsection, Schedule or Exhibit of this Agreement.
Wherever from the context it appears appropriate, each term stated in either the
singular or plural shall include the singular and plural, and pronouns stated in
the masculine, feminine or neuter gender shall include the masculine, the
feminine and the neuter. Any reference herein to "Charlotte time" shall refer to
the applicable time of day in Charlotte, North Carolina.
SECTION 1.3 OTHER DEFINITIONS AND PROVISIONS.
(a) USE OF CAPITALIZED TERMS. Unless otherwise defined therein, all
capitalized terms defined in this Agreement shall have the defined meanings when
used in this Agreement, the Notes and the other Loan Documents or any
certificate, report or other document made or delivered pursuant to this
Agreement.
(b) MISCELLANEOUS. The words "hereof", "herein" and "hereunder" and
words of similar import when used in this Agreement shall refer to this
Agreement as a whole and not to any particular provision of this Agreement.
16
ARTICLE II
REVOLVING CREDIT FACILITY
SECTION 2.1 REVOLVING CREDIT LOANS. Subject to the terms and conditions
of this Agreement, each Lender severally agrees to make Revolving Credit Loans
to the Borrowers from time to time from the Closing Date through the Revolving
Credit Termination Date as requested by any Borrower in accordance with the
terms of SECTION 2.3; PROVIDED, that (a) the aggregate principal amount of all
outstanding Revolving Credit Loans (after giving effect to any amount requested)
shall not exceed the Revolving Credit Commitment LESS the sum of all outstanding
Swingline Loans and L/C Obligations and (b) the principal amount of outstanding
Revolving Credit Loans from any Lender to the Borrowers shall not at any time
exceed such Lender's Revolving Credit Commitment LESS such Lender's Revolving
Credit Commitment Percentage of outstanding L/C Obligations. Each Revolving
Credit Loan by a Lender shall be in a principal amount equal to such Lender's
Revolving Credit Commitment Percentage of the aggregate principal amount of
Revolving Credit Loans requested on such occasion. Subject to the terms and
conditions hereof, the Borrowers may borrow, repay and reborrow Revolving Credit
Loans hereunder until the Revolving Credit Termination Date.
SECTION 2.2 SWINGLINE LOANS.
(a) AVAILABILITY. Subject to the terms and conditions of this
Agreement, the Swingline Lender agrees to make certain revolving credit loans in
Dollars ("SWINGLINE LOANS") to the Borrowers from time to time from the Closing
Date through, but not including, the Swingline Maturity Date; PROVIDED, that the
aggregate principal amount of all outstanding Swingline Loans (after giving
effect to any amount requested), shall not exceed the lesser of (i) the
Revolving Credit Commitment less the sum of all outstanding Revolving Credit
Loans and the L/C Obligations and (ii) the Swingline Commitment.
(b) REFUNDING.
(i) Swingline Loans shall be refunded by the Lenders on demand
by the Swingline Lender. Such refundings shall be made by the Lenders in
accordance with their respective Revolving Credit Commitment Percentages and
shall thereafter be reflected as Revolving Credit Loans of the Lenders on the
books and records of the Administrative Agent. Each Lender shall fund its
respective Revolving Credit Commitment Percentage of Revolving Credit Loans as
required to repay Swingline Loans outstanding to the Swingline Lender upon
demand by the Swingline Lender but in no event later than 2:00 p.m. (Charlotte
time) on the next succeeding Business Day after such demand is made. No Lender's
obligation to fund its respective Revolving Credit Commitment Percentage of a
Swingline Loan shall be affected by any other Lender's failure to fund its
Revolving Credit Commitment Percentage of a Swingline Loan, nor shall any
Lender's Revolving Credit Commitment Percentage be increased as a result of any
such failure of any other Lender to fund its Revolving Credit Commitment
Percentage.
(ii) The Borrowers shall pay to the Swingline Lender on demand
the amount
17
of such Swingline Loans to the extent amounts received from the Lenders are not
sufficient to repay in full the outstanding Swingline Loans requested or
required to be refunded. In addition, the Borrowers hereby authorize the
Administrative Agent to charge any account maintained with the Swingline Lender
(up to the amount available therein) in order to immediately pay the Swingline
Lender the amount of such Swingline Loans to the extent amounts received from
the Lenders are not sufficient to repay in full the outstanding Swingline Loans
requested or required to be refunded. If any portion of any such amount paid to
the Swingline Lender shall be recovered by or on behalf of the Borrowers from
the Swingline Lender in bankruptcy or otherwise, the loss of the amount so
recovered shall be ratably shared among all the Lenders in accordance with their
respective Revolving Credit Commitment Percentages (unless the amounts so
recovered by or on behalf of the Borrowers pertain to a Swingline Loan extended
after the occurrence and during the continuance of an Event of Default of which
the Administrative Agent has received actual notice and which such Event of
Default has not been waived by the Required Lenders or the Lenders, as
applicable).
(iii) Each Lender acknowledges and agrees that its obligation
to refund Swingline Loans in accordance with the terms of this SECTION 2.2 is
absolute and unconditional and shall not be affected by any circumstance
whatsoever, including, without limitation, non-satisfaction of the conditions
set forth in ARTICLE VI. Further, each Lender agrees and acknowledges that if
prior to the refunding of any outstanding Swingline Loans pursuant to this
SECTION 2.2, one of the events described in SECTION 12.1(j) or (k) shall have
occurred, each Lender will, on the date the applicable Revolving Credit Loan
would have been made, purchase an undivided participating interest in the
Swingline Loan to be refunded in an amount equal to its Revolving Credit
Commitment Percentage of the aggregate amount of such Swingline Loan. Each
Lender will immediately transfer to the Swingline Lender, in immediately
available funds, the amount of its participation and upon receipt thereof the
Swingline Lender will deliver to such Lender a certificate evidencing such
participation dated the date of receipt of such funds and for such amount.
Whenever, at any time after the Swingline Lender has received from any Lender
such Lender's participating interest in a Swingline Loan, the Swingline Lender
receives any payment on account thereof, the Swingline Lender will distribute to
such Lender its participating interest in such amount (appropriately adjusted,
in the case of interest payments, to reflect the period of time during which
such Lender's participating interest was outstanding and funded).
SECTION 2.3 PROCEDURE FOR ADVANCES OF REVOLVING CREDIT AND SWINGLINE
LOANS.
(a) REQUESTS FOR BORROWING. The Borrowers shall give the Administrative
Agent irrevocable prior written notice in the form attached hereto as EXHIBIT B
(a "NOTICE OF BORROWING") not later than 11:00 a.m. (Charlotte time) (i) on the
same Business Day as each Base Rate Loan and each Swingline Loan and (ii) at
least three (3) Business Days before each LIBOR Rate Loan, of its intention to
borrow, specifying (A) the date of such borrowing, which shall be a Business
Day, (B) the amount of such borrowing, which shall be (x) with respect to Base
Rate Loans in an aggregate principal amount of $3,000,000 or a whole multiple of
$1,000,000 in excess thereof, (y) with respect to LIBOR Rate Loans in an
aggregate principal
18
amount of $3,000,000 or a whole multiple of $1,000,000 in excess thereof and (z)
with respect to Swingline Loans in an aggregate principal amount of $500,000 or
a whole multiple of $100,000 in excess thereof, (C) whether such Loan is to be a
Revolving Credit Loan, (D) in the case of a Revolving Credit Loan whether the
Loans are to be LIBOR Rate Loans or Base Rate Loans, and (E) in the case of a
LIBOR Rate Loan, the duration of the Interest Period applicable thereto. Notices
received after 11:00 a.m. (Charlotte time) shall be deemed received on the next
Business Day. The Administrative Agent shall promptly notify the Lenders of each
Notice of Borrowing.
(b) DISBURSEMENT OF REVOLVING CREDIT AND SWINGLINE LOANS. Not later
than 2:00 p.m. (Charlotte time) on the proposed borrowing date, (i) each Lender
will make available to the Administrative Agent, for the account of the
Borrowers, at the office of the Administrative Agent in funds immediately
available to the Administrative Agent, such Lender's Revolving Credit Commitment
Percentage of the Revolving Credit Loans to be made on such borrowing date and
(ii) the Swingline Lender will make available to the Administrative Agent, for
the account of the Borrowers, at the office of the Administrative Agent in funds
immediately available to the Administrative Agent, the Swingline Loans to be
made on such borrowing date. The Borrowers hereby irrevocably authorize the
Administrative Agent to disburse the proceeds of each borrowing requested
pursuant to this SECTION 2.2 in immediately available funds by crediting or
wiring such proceeds to the deposit account of the Borrowers identified in the
most recent notice substantially in the form of EXHIBIT C hereto (a "NOTICE OF
ACCOUNT DESIGNATION") delivered by the Borrowers to the Administrative Agent or
may be otherwise agreed upon by the Borrowers and the Administrative Agent from
time to time. Subject to SECTION 5.7, the Administrative Agent shall not be
obligated to disburse the portion of the proceeds of any Revolving Credit Loan
requested pursuant to this SECTION 2.3 to the extent that any Lender has not
made available to the Administrative Agent its Revolving Credit Commitment
Percentage of such Loan. Revolving Credit Loans to be made for the purpose of
refunding Swingline Loans shall be made by the Lenders as provided in SECTION
2.2(b).
SECTION 2.4 REPAYMENT OF LOANS.
(a) REPAYMENT ON REVOLVING CREDIT TERMINATION DATE. The Borrowers shall
repay the outstanding principal amount of (i) all Revolving Credit Loans in full
on the Revolving Credit Termination Date, and (ii) all Swingline Loans in
accordance with SECTION 2.2(b), together, in each case, with all accrued but
unpaid interest thereon.
(b) MANDATORY REPAYMENT OF EXCESS LOANS. If at any time the sum of (i)
the aggregate principal amount of all Revolving Credit Loans outstanding at such
time, PLUS (ii) the aggregate principal amount of Swingline Loans outstanding at
such time PLUS (iii) the aggregate principal amount of L/C Obligations
outstanding at such time exceeds the Revolving Credit Commitment, the Borrowers
shall repay immediately upon notice from the Administrative Agent, by payment to
the Administrative Agent for the account of the Lenders, Revolving Credit Loans,
Swingline Loans, furnishing cash collateral reasonably satisfactory to the
Administrative Agent and/or repay the L/C Obligations in an amount equal to such
excess with each such
19
repayment applied FIRST to the principal amount of outstanding Swingline Loans,
SECOND to the principal amount of outstanding Revolving Credit Loans and THIRD
to the principal amount of the L/C Obligations. Such cash collateral shall be
applied in accordance with SECTION 12.2(b). Each such repayment shall be
accompanied by any amount required to be paid pursuant to SECTION 5.9.
(c) OPTIONAL REPAYMENTS. The Borrowers may at any time and from time to
time repay the Loans, in whole or in part, upon at least three (3) Business
Days' irrevocable notice to the Administrative Agent with respect to LIBOR Rate
Loans and one (1) Business Day irrevocable notice with respect to Base Rate
Loans and Swingline Loans, in the form attached hereto as EXHIBIT D (a "NOTICE
OF PREPAYMENT") specifying the date and amount of repayment and whether the
repayment is of LIBOR Rate Loans, Base Rate Loans, Swingline Loans or a
combination thereof, and, if of a combination thereof, the amount allocable to
each. Upon receipt of such notice, the Administrative Agent shall promptly
notify each Lender. If any such notice is given, the amount specified in such
notice shall be due and payable on the date set forth in such notice. Partial
repayments shall be in an aggregate amount of $3,000,000 or a whole multiple of
$1,000,000 in excess thereof with respect to Base Rate Loans, $3,000,000 or a
whole multiple of $1,000,000 in excess thereof with respect to LIBOR Rate Loans
and $500,000 or a whole multiple of $100,000 in excess thereof with respect to
Swingline Loans. Each such repayment shall be accompanied by any amount required
to be paid pursuant to SECTION 5.9.
(d) LIMITATION ON REPAYMENT OF LIBOR RATE LOANS. The Borrowers may not
repay any LIBOR Rate Loan on any day other than on the last day of the Interest
Period applicable thereto unless such repayment is accompanied by any amount
required to be paid pursuant to SECTION 4.9.
SECTION 2.5 NOTES.
(a) REVOLVING CREDIT NOTES. Each Lender's Revolving Credit Loans and
the obligation of the Borrowers to repay such Revolving Credit Loans shall be
evidenced by a separate Revolving Credit Note executed by the Borrowers payable
to the order of such Lender representing the Borrowers' obligation to pay such
Lender's Commitment or, if less, the aggregate unpaid principal amount of all
Revolving Credit Loans made and to be made by such Lender to the Borrowers
hereunder, PLUS interest and all other fees, charges and other amounts due
thereon. Each Revolving Credit Note shall be dated the date hereof and shall
bear interest on the unpaid principal amount thereof at the applicable interest
rate per annum specified in SECTION 5.1.
(b) SWINGLINE NOTE. The Swingline Loans and the obligations of the
Borrowers to repay such Swingline Loans shall be evidenced by a Swingline Note
executed by the Borrowers payable to the order of the Swingline Lender
representing the Borrowers' obligation to pay the Swingline Lender's Swingline
Commitment or, if less, the aggregate unpaid principal amount of all Swingline
Loans made by the Swingline Lender to the Borrowers hereunder, PLUS interest on
such principal amounts and all other fees, charges and other amounts due
thereon. The Swingline
20
Note shall be dated the date hereof and shall bear interest on the unpaid
principal amount thereof at the applicable interest rate per annum specified in
SECTION 5.1.
SECTION 2.6 PERMANENT REDUCTION OF REVOLVING CREDIT FACILITY.
(a) VOLUNTARY REDUCTION. The Borrowers shall have the right at any time
and from time to time, upon at least five (5) Business Days prior written notice
to the Administrative Agent, to permanently reduce, without premium or penalty,
(i) the entire Revolving Credit Commitment at any time or (ii) portions of the
Revolving Credit Commitment, from time to time, in an aggregate principal amount
not less than $3,000,000 or any whole multiple of $1,000,000 in excess thereof.
(b) Each permanent reduction permitted or required pursuant to this
SECTION 2.6 shall be accompanied by a payment of principal sufficient to reduce
the aggregate outstanding Extensions of Credit of the Lenders after such
reduction to the Revolving Credit Commitment as so reduced and if the Revolving
Credit Commitment as so reduced is less than the aggregate amount of all
outstanding Letters of Credit, the Borrowers shall be required to deposit in a
cash collateral account opened by the Administrative Agent an amount equal to
the aggregate then undrawn and unexpired amount of such Letters of Credit. Any
reduction of the Revolving Credit Commitment to zero shall be accompanied by
payment of all outstanding Obligations (and furnishing of cash collateral
satisfactory to the Administrative Agent for all L/C Obligations) and shall
result in the termination of the Revolving Credit Commitments and Revolving
Credit Facility. Such cash collateral shall be applied in accordance with
SECTION 12.2(b). If the reduction of the Revolving Credit Commitment requires
the repayment of any LIBOR Rate Loan, such repayment shall be accompanied by any
amount required to be paid pursuant to SECTION 5.9.
SECTION 2.7 TERMINATION OF REVOLVING CREDIT FACILITY. The Revolving
Credit Facility shall terminate on the earliest of (a) that date which is three
(3) years from the Closing Date, (b) the date of termination by the Borrowers
pursuant to SECTION 2.6(a), and (c) the date of termination by the
Administrative Agent on behalf of the Lenders pursuant to SECTION 12.2(a).
SECTION 2.8 USE OF PROCEEDS. The Borrowers shall use the proceeds of
the Extensions of Credit (a) to finance Permitted Acquisitions, (b) to refinance
certain existing indebtedness including, without limitation, the Existing
Facility, and (c) for working capital and general corporate requirements of the
Borrowers and their Subsidiaries, including the payment of certain fees and
expenses incurred in connection with the transactions.
ARTICLE III
LETTER OF CREDIT FACILITY
21
SECTION 3.1 L/C COMMITMENT. Subject to the terms and conditions hereof,
the Issuing Lender, in reliance on the agreements of the other Lenders set forth
in SECTION 3.4(a), agrees to issue standby letters of credit ("LETTERS OF
CREDIT") for the account of the Borrowers on any Business Day from the Closing
Date through but not including the Revolving Credit Termination Date in such
form as may be approved from time to time by the Issuing Lender; PROVIDED, that
the Issuing Lender shall have no obligation to issue any Letter of Credit if,
after giving effect to such issuance, (a) the L/C Obligations would exceed the
L/C Commitment or (b) the aggregate principal amount of outstanding Revolving
Credit Loans, PLUS the aggregate principal amount of outstanding Swingline
Loans, PLUS the aggregate amount of the L/C Obligations would exceed the
Revolving Credit Commitment. Each Letter of Credit shall (i) be denominated in
Dollars in a minimum amount of $1,000,000, (ii) be a standby letter of credit
issued to support obligations of any Borrower, contingent or otherwise, incurred
in the ordinary course of business, (iii) have an original expiry date of, or
prior to that date which is one (1) year from the date of issuance, (iv) as
originally issued or extended, have an expiry date on, or prior to the Revolving
Credit Termination Date and (v) be subject to the Uniform Customs and/or ISPA98,
as applicable in the sole discretion of the Issuing Lender, and, to the extent
not inconsistent therewith, the laws of the State of New York. The Issuing
Lender shall not at any time be obligated to issue any Letter of Credit
hereunder if such issuance would conflict with, or cause the Issuing Lender or
any L/C Participant to exceed any limits imposed by, any Applicable Law.
References herein to "ISSUE" and derivations thereof with respect to Letters of
Credit shall also include extensions or modifications of any existing Letters of
Credit, unless the context otherwise requires.
SECTION 3.2 PROCEDURE FOR ISSUANCE OF LETTERS OF CREDIT. The Borrowers
may from time to time request that the Issuing Lender issue a Letter of Credit
by delivering to the Issuing Lender at the Administrative Agent's Office an
Application therefor, completed to the satisfaction of the Issuing Lender, and
such other certificates, documents and other papers and information as the
Issuing Lender may request. Upon receipt of any Application, the Issuing Lender
shall process such Application and the certificates, documents and other papers
and information delivered to it in connection therewith in accordance with its
customary procedures and shall, subject to SECTION 3.1 and ARTICLE VI hereof,
promptly issue the Letter of Credit requested thereby (but in no event shall the
Issuing Lender be required to issue any Letter of Credit earlier than three (3)
Business Days after its receipt of the Application therefor and all such other
certificates, documents and other papers and information relating thereto) by
issuing the original of such Letter of Credit to the beneficiary thereof or as
otherwise may be agreed by the Issuing Lender and such Borrowers. The Issuing
Lender shall promptly furnish to such Borrower a copy of such Letter of Credit
and promptly notify each Lender of the issuance and upon request by any Lender,
furnish to such Lender a copy of such Letter of Credit and the amount of such
Lender's L/C Participation therein.
SECTION 3.3 COMMISSIONS AND OTHER CHARGES.
(a) The Borrowers shall pay to the Administrative Agent, for the
account of the
22
Issuing Lender and the L/C Participants, a letter of credit commission with
respect to each Letter of Credit in an amount equal to the Applicable Margin
then in effect for LIBOR Rate Loans on a per annum basis on the face amount of
such Letter of Credit. Such commission shall be payable quarterly in arrears on
the last Business Day of each calendar quarter and on the Revolving Credit
Termination Date.
(b) In addition to the foregoing commission, the Borrowers shall pay
the Issuing Lender an issuance fee of 0.125% per annum on the face amount of
each Letter of Credit, payable quarterly in arrears on the last Business Day of
each calendar quarter and on the Revolving Credit Termination Date.
(c) In addition to the fees set forth in SECTIONS 3.3(a) and (b), the
Borrowers promise to pay to or reimburse the Issuing Lender, for its own account
without sharing by the other Lenders, for such normal and customary costs and
expenses as are incurred or charged by the Issuing Lender in Issuing, effecting
payment under, amending or otherwise administering any Letter of Credit.
(d) The Administrative Agent shall, promptly following its receipt
thereof, distribute to the Issuing Lender and the L/C Participants all
commissions received by the Administrative Agent in accordance with their
respective Revolving Credit Commitment Percentages.
SECTION 3.4 L/C PARTICIPATIONS.
(a) The Issuing Lender irrevocably agrees to grant and hereby grants to
each L/C Participant, and, to induce the Issuing Lender to issue Letters of
Credit hereunder, each L/C Participant irrevocably agrees to accept and purchase
and hereby accepts and purchases from the Issuing Lender, on the terms and
conditions hereinafter stated, for such L/C Participant's own account and risk
an undivided interest equal to such L/C Participant's Revolving Credit
Commitment Percentage in the Issuing Lender's obligations and rights under each
Letter of Credit issued hereunder and the amount of each draft paid by the
Issuing Lender thereunder. Each L/C Participant unconditionally and irrevocably
agrees with the Issuing Lender that, if a draft is paid under any Letter of
Credit for which the Issuing Lender is not reimbursed in full by the Borrowers
in accordance with the terms of this Agreement, such L/C Participant shall pay
to the Issuing Lender upon demand at the Issuing Lender's address for notices
specified herein an amount equal to such L/C Participant's Revolving Credit
Commitment Percentage of the amount of such draft, or any part thereof, which is
not so reimbursed.
(b) Upon becoming aware of any amount required to be paid by any L/C
Participant to the Issuing Lender pursuant to SECTION 3.4(a) in respect of any
unreimbursed portion of any payment made by the Issuing Lender under any Letter
of Credit, the Issuing Lender shall notify each L/C Participant of the amount
and due date of such required payment and such L/C Participant shall pay to the
Issuing Lender the amount specified on the applicable due date. If any such
amount is paid to the Issuing Lender after the date such payment is due, such
L/C
23
Participant shall pay to the Issuing Lender on demand, in addition to such
amount, the product of (i) such amount, TIMES (ii) the daily average Federal
Funds Rate as determined by the Administrative Agent during the period from and
including the date such payment is due to the date on which such payment is
immediately available to the Issuing Lender, TIMES (iii) a fraction the
numerator of which is the number of days that elapse during such period and the
denominator of which is 360. A certificate of the Issuing Lender with respect to
any amounts owing under this SECTION 3.4(b) shall be conclusive in the absence
of manifest error. With respect to payment to the Issuing Lender of the
unreimbursed amounts described in this SECTION 3.4(b), if the L/C Participants
receive notice that any such payment is due (A) prior to 1:00 p.m. (Charlotte
time) on any Business Day, such payment shall be due that Business Day, and (B)
after 1:00 p.m. (Charlotte time) on any Business Day, such payment shall be due
on the following Business Day.
(c) Whenever, at any time after the Issuing Lender has made payment
under any Letter of Credit and has received from any L/C Participant its
Revolving Credit Commitment Percentage of such payment in accordance with this
SECTION 3.4, the Issuing Lender receives any payment related to such Letter of
Credit (whether directly from the Borrowers or otherwise) or any payment of
interest on account thereof, the Issuing Lender will distribute to such L/C
Participant its PRO RATA share thereof; PROVIDED, that in the event that any
such payment received by the Issuing Lender shall be required to be returned by
the Issuing Lender, such L/C Participant shall return to the Issuing Lender the
portion thereof previously distributed by the Issuing Lender to it.
SECTION 3.5 REIMBURSEMENT OBLIGATION OF THE BORROWERS. In the event of
any drawing under any Letter of Credit, the Borrowers agree to reimburse (either
with the proceeds of a Revolving Credit Loan obtained as provided herein or with
funds from other sources), in same day funds, the Issuing Lender on each date on
which the Issuing Lender notifies the Borrowers of the date and amount of a
draft paid under any Letter of Credit for the amount of (a) such draft so paid
and (b) any taxes, fees, charges or other costs or expenses incurred by the
Issuing Lender in connection with such payment. Unless the Borrowers shall
immediately notify the Issuing Lender that the Borrowers intend to reimburse the
Issuing Lender for such drawing from other sources of funds, the Borrowers shall
be deemed to have timely given a Notice of Borrowing to the Administrative Agent
requesting that the Lenders make a Base Rate Loan on such date in the amount of
(a) such draft so paid and (b) any taxes, fees, charges or other costs or
expenses incurred by the Issuing Lender in connection with such payment,
regardless of whether or not the conditions precedent specified in ARTICLE VI
have been satisfied, and the Lenders shall make Base Rate Loans in such amount,
the proceeds of which shall be applied to reimburse the Issuing Lender for the
amount of the related drawing and costs and expenses. If the Borrowers shall
fail to reimburse the Issuing Lender as provided above, the unreimbursed amount
of such drawing shall bear interest at the rate which would be payable on any
outstanding Base Rate Loans which were then overdue from the date such amounts
become payable (whether at stated maturity, by acceleration or otherwise) until
payment in full.
SECTION 3.6 OBLIGATIONS ABSOLUTE. The Borrowers' obligations under this
Article III (including without limitation the
24
Reimbursement Obligation) shall be absolute and unconditional under any and all
circumstances and irrespective of any set-off, counterclaim or defense to
payment which the Borrowers may have or have had against the Issuing Lender or
any beneficiary of a Letter of Credit. The Borrowers also agree with the Issuing
Lender that the Issuing Lender shall not be responsible for, and the Borrowers'
Reimbursement Obligation under SECTION 3.5 shall not be affected by, among other
things, the validity or genuineness of documents or of any endorsements thereon,
even though such documents shall in fact prove to be invalid, fraudulent or
forged, or any dispute between or among the Borrowers and any beneficiary of any
Letter of Credit or any other party to which such Letter of Credit may be
transferred or any claims whatsoever of a Borrower against any beneficiary of
such Letter of Credit or any such transferee. The Issuing Lender shall not be
liable for any error, omission, interruption or delay in transmission, dispatch
or delivery of any message or advice, however transmitted, in connection with
any Letter of Credit, except for errors or omissions caused by the Issuing
Lender's gross negligence or willful misconduct. The Borrowers agree that any
action taken or omitted by the Issuing Lender under or in connection with any
Letter of Credit or the related drafts or documents, if done in the absence of
gross negligence or willful misconduct and in accordance with the standards of
care specified in the Uniform Customs and, to the extent not inconsistent
therewith, the UCC shall be binding on the Borrowers and shall not result in any
liability of the Issuing Lender to the Borrowers. The responsibility of the
Issuing Lender to the Borrowers in connection with any draft presented for
payment under any Letter of Credit shall, in addition to any payment obligation
expressly provided for in such Letter of Credit, be limited to determining that
the documents (including each draft) delivered under such Letter of Credit in
connection with such presentment are in conformity with such Letter of Credit.
SECTION 3.7 EFFECT OF APPLICATION. To the extent that any provision of
any Application related to any Letter of Credit is inconsistent with the
provisions of this Article III, the provisions of this Article III shall apply.
SECTION 3.8 LETTERS OF CREDIT ISSUED PURSUANT TO THE EXISTING FACILITY.
The Borrowers, the Administrative Agent and each Lender agree that on the
Closing Date each letter of credit issued by First Union Commercial Corporation
pursuant to the terms of the Existing Facility shall, notwithstanding the
provision of SECTION 3.1 (i) or SECTION 3.2, be deemed to be a Letter of Credit
issued under and pursuant to and shall be subject to the terms of this Agreement
as if originally issued pursuant to the terms of this Agreement.
ARTICLE IV
TERM LOAN FACILITY
SECTION 4.1 TERM LOAN. Subject to the terms and conditions of this
Agreement, each Lender severally agrees to make a Term Loan to the Borrowers on
the Closing Date. The Term Loan shall be funded by each Lender in a principal
amount equal to such Lender's Term Loan Commitment Percentage of the aggregate
principal amount of the Term Loans made on the Closing Date, which aggregate
25
principal amount shall equal the total Term Loan Commitment.
SECTION 4.2 PROCEDURE FOR ADVANCE OF TERM LOAN. The Borrowers shall
give the Administrative Agent an irrevocable Notice of Borrowing prior to 10:00
a.m. (Charlotte time) on the Closing Date requesting that the Lenders make the
Term Loans as a Base Rate Loan on such date. Upon receipt of such Notice of
Borrowing from the Borrowers, the Administrative Agent shall promptly notify
each Lender thereof. Not later than 2:00 p.m. (Charlotte time) on the Closing
Date, each Lender will make available to the Administrative Agent for the
account of the Borrowers, at the office of the Administrative Agent in
immediately available funds, the amount of such Term Loan to be made by such
Lender on such borrowing date. The Borrowers hereby irrevocably authorize the
Administrative Agent to disburse the proceeds of the Term Loan in immediately
available funds by wire transfer to such Person or Persons as may be designated
by the Borrowers.
SECTION 4.3 REPAYMENT OF TERM LOAN. The Borrowers shall repay the
aggregate outstanding principal amount of the Term Loan in consecutive quarterly
installments on the last Business Day of each fiscal quarter commencing with the
fiscal quarter ending June 1999 as set forth below:
-------------------------- ----------------- -----------------------
PRINCIPAL TERM LOAN
INSTALLMENT COMMITMENT
FISCAL QUARTER ($) ($)
-------------------------- ----------------- -----------------------
-------------------------- ----------------- -----------------------
June 1999 62,500 24,937,500
-------------------------- ----------------- -----------------------
-------------------------- ----------------- -----------------------
September 1999 62,500 24,875,000
-------------------------- ----------------- -----------------------
-------------------------- ----------------- -----------------------
December 1999 62,500 24,812,500
-------------------------- ----------------- -----------------------
-------------------------- ----------------- -----------------------
March 2000 62,500 24,750,000
-------------------------- ----------------- -----------------------
-------------------------- ----------------- -----------------------
June 2000 62,500 24,687,500
-------------------------- ----------------- -----------------------
-------------------------- ----------------- -----------------------
September 2000 62,500 24,625,000
-------------------------- ----------------- -----------------------
-------------------------- ----------------- -----------------------
December 2000 62,500 24,562,500
-------------------------- ----------------- -----------------------
-------------------------- ----------------- -----------------------
March 2001 62,500 24,500,000
-------------------------- ----------------- -----------------------
-------------------------- ----------------- -----------------------
June 2001 62,500 24,437,500
-------------------------- ----------------- -----------------------
-------------------------- ----------------- -----------------------
September 2001 62,500 24,375,000
-------------------------- ----------------- -----------------------
-------------------------- ----------------- -----------------------
December 2001 62,500 24,312,500
-------------------------- ----------------- -----------------------
-------------------------- ----------------- -----------------------
March 2002 62,500 24,250,000
-------------------------- ----------------- -----------------------
-------------------------- ----------------- -----------------------
June 2002 62,500 24,187,500
-------------------------- ----------------- -----------------------
-------------------------- ----------------- -----------------------
September 2002 62,500 24,125,000
-------------------------- ----------------- -----------------------
-------------------------- ----------------- -----------------------
December 2002 62,500 24,062,500
-------------------------- ----------------- -----------------------
-------------------------- ----------------- -----------------------
March 2003 62,500 24,000,000
-------------------------- ----------------- -----------------------
-------------------------- ----------------- -----------------------
June 2003 6,000,000 18,000,000
-------------------------- ----------------- -----------------------
-------------------------- ----------------- -----------------------
September 2003 6,000,000 12,000,000
-------------------------- ----------------- -----------------------
-------------------------- ----------------- -----------------------
December 2003 6,000,000 6,000,000
-------------------------- ----------------- -----------------------
-------------------------- ----------------- -----------------------
March 2004 6,000,000 -0-
-------------------------- ----------------- -----------------------
26
If not sooner paid, the Term Loan shall be paid in full, together with accrued
interest and all other fees, charges and amounts due thereon, on the Term Loan
Maturity Date.
SECTION 4.4 OPTIONAL PREPAYMENT OF TERM LOAN. The Borrowers shall have
the right at any time and from time to time, upon delivery to the Administrative
Agent of a Notice of Prepayment at least three (3) Business Days prior to any
repayment, to prepay the Term Loan in whole or in part without premium or
penalty except as provided in SECTION 5.9. Each optional prepayment of the Term
Loan hereunder shall be in an aggregate principal amount of at least $3,000,000
or any whole multiple of $1,000,000 in excess thereof and shall be applied to
the outstanding principal installments of the Term Loan in inverse order of
maturity thereof. Amounts prepaid under the Term Loan pursuant to this SECTION
4.4 may not be reborrowed and will constitute a permanent reduction in such Term
Loan Commitment.
SECTION 4.5 TERM NOTES. Each Lender's Term Loan and the obligation of
the Borrowers to repay such Term Loan shall be evidenced by a separate Term Note
executed by the Borrowers payable to the order of such Lender representing the
Borrowers' obligation to pay such Term Loan, PLUS interest and all other fees,
charges and other amounts due thereon. Each Term Note shall bear interest on the
unpaid principal amount thereof at the applicable interest rate per annum
specified in SECTION 5.1.
ARTICLE V
GENERAL LOAN PROVISIONS
SECTION 5.1 INTEREST.
(a) INTEREST RATE OPTIONS. Subject to the provisions of this SECTION
5.1, at the election of the Borrowers, the aggregate principal balance of (i)
the Revolving Credit Loans shall bear interest at (A) the Base Rate PLUS the
Applicable Margin as set forth in SECTION 5.1(c), or (b) the LIBOR Rate PLUS the
Applicable Margin as set forth in SECTION 5.1(c); PROVIDED that the LIBOR Rate
shall not be available until three (3) Business Days after the Closing Date
unless the Borrowers and the Administrative Agent have executed an
indemnification agreement in form and substance satisfactory to the
Administrative Agent, (ii) any Swingline Loan shall bear interest at the Base
Rate PLUS the Applicable Margin as set forth in SECTION 5.1(c); and (iii) the
Term Loans shall bear interest at (A) the Base Rate PLUS one and one half
percent (1.5%), or (B) the LIBOR Rate PLUS three percent (3%); provided that the
LIBOR Rate shall not be available until three (3) Business Days after the
Closing Date unless the Borrowers and the Administrative Agent have executed an
indemnification agreement in form and substance satisfactory to the
Administrative Agent. The Borrowers shall select the rate of interest and
Interest Period, if any, applicable to any Loan at the time a Notice of
Borrowing is given pursuant to SECTION 2.3 or at the time a Notice of
Conversion/Continuation is given pursuant to SECTION 5.2. Each Loan or portion
thereof bearing interest based on the Base Rate shall be a "BASE RATE LOAN",
each Loan
27
or portion thereof bearing interest based on the LIBOR Rate shall be a "LIBOR
RATE LOAN." Any Loan or any portion thereof as to which the Borrowers have not
duly specified an interest rate as provided herein shall be deemed a Base Rate
Loan.
(b) INTEREST PERIODS. In connection with each LIBOR Rate Loan, the
Company, by giving notice at the times described in SECTION 5.1(a), shall elect
an interest period (each, an "INTEREST PERIOD") to be applicable to such Loan,
which Interest Period shall be a period of one (1), two (2), three (3), or six
(6) months with respect to each LIBOR Rate Loan; PROVIDED that:
(i) the Interest Period shall commence on the date of advance
of or conversion to any LIBOR Rate Loan and, in the case of immediately
successive Interest Periods, each successive Interest Period shall commence on
the date on which the next preceding Interest Period expires;
(ii) if any Interest Period would otherwise expire on a day
that is not a Business Day, such Interest Period shall expire on the next
succeeding Business Day; PROVIDED, that if any Interest Period with respect to a
LIBOR Rate Loan would otherwise expire on a day that is not a Business Day but
is a day of the month after which no further Business Day occurs in such month,
such Interest Period shall expire on the next preceding Business Day;
(iii) any Interest Period with respect to a LIBOR Rate Loan
that begins on the last Business Day of a calendar month (or on a day for which
there is no numerically corresponding day in the calendar month at the end of
such Interest Period) shall end on the last Business Day of the relevant
calendar month at the end of such Interest Period;
(iv) no Interest Period shall extend beyond (i) with respect
to a Revolving Credit Loan, the Revolving Credit Termination Date or, (ii) with
respect to a Term Loan, the Term Loan Maturity Date; and
(v) there shall be no more than five (5) Interest Periods in
effect at any time.
(c) APPLICABLE MARGIN. The Applicable Margin provided for in SECTION
5.1(a) with respect to the Loans (excluding the Term Loans) (the "APPLICABLE
MARGIN") shall (i) for the period commencing on the Closing Date through the
receipt by the Administrative Agent of the Officer's Compliance Certificate for
the fiscal quarter ending June 30, 1999, be at a level not lower than Level II
and (ii) for each quarter thereafter be determined by reference to the Leverage
Ratio as of the end of the fiscal quarter immediately preceding the delivery of
the applicable Officer's Compliance Certificate as follows:
------------------------------- ---------------------------------------- ---------------------------------------------
Level Leverage Ratio Applicable Margin Per Annum
------------------------------- ---------------------------------------- ---------------------------------------------
------------------------------- ---------------------------------------- ----------------------- ---------------------
Base Rate + LIBOR Rate +
------------------------------- ---------------------------------------- ----------------------- ---------------------
------------------------------- ---------------------------------------- ----------------------- ---------------------
Level I Greater than or equal to 3.0 to 1.0 1.500% 2.750%
------------------------------- ---------------------------------------- ----------------------- ---------------------
------------------------------- ---------------------------------------- ----------------------- ---------------------
Level II Greater than or equal to 2.5 to 1.0 but 1.250% 2.500%
Less than 3.0 to 1.0
------------------------------- ---------------------------------------- ----------------------- ---------------------
------------------------------- ---------------------------------------- ----------------------- ---------------------
Level III Greater than or equal to 2.0 to 1.0 but 1.00% 2.250%
Less than 2.5 to 1.0
------------------------------- ---------------------------------------- ----------------------- ---------------------
28
------------------------------- ---------------------------------------- ----------------------- ---------------------
Level IV Greater than or equal to 1.5 to 1.0 but 0.750% 2.000%
Less than 2.0 to 1.0
------------------------------- ---------------------------------------- ----------------------- ---------------------
------------------------------- ---------------------------------------- ----------------------- ---------------------
Level V Less than 1.5 to 1.0 0.500% 1.750%
------------------------------- ---------------------------------------- ----------------------- ---------------------
Adjustments, if any, in the Applicable Margin shall be made by the
Administrative Agent on the tenth (10th) Business Day after receipt by the
Administrative Agent of (i) quarterly financial statements for the Borrowers and
their Subsidiaries and the accompanying Officer's Compliance Certificate setting
forth the Leverage Ratio of the Borrowers as of the most recent fiscal quarter
end or (ii) written evidence of compliance with SECTION 11.4(c)(ix). Subject to
SECTION 5.1(d), in the event the Borrowers fail to deliver such financial
statements and certificate within the time required by SECTION 8.2(c), the
Applicable Margin shall be the highest Applicable Margin set forth above until
the delivery of such financial statements and certificate.
(d) DEFAULT RATE. Subject to SECTION 12.2 and SECTION 12.3, at the
discretion of the Administrative Agent and Required Lenders, upon the occurrence
and during the continuance of an Event of Default, (i) the Borrowers shall no
longer have the option to request LIBOR Rate Loans or Swingline Loans, (ii) all
outstanding LIBOR Rate Loans shall bear interest at a rate per annum of two
percent (2%) in excess of the rate then applicable to LIBOR Rate Loans, as
applicable, until the end of the applicable Interest Period and thereafter at a
rate equal to two percent (2%) in excess of the rate then applicable to Base
Rate Loans, and (iii) all outstanding Base Rate Loans and any fees owing
hereunder or under any other Loan Document shall bear interest at a rate per
annum equal to two percent (2%) in excess of the rate then applicable to Base
Rate Loans. Interest shall continue to accrue on the Notes after the filing by
or against the Borrowers of any petition seeking any relief in bankruptcy or
under any act or law pertaining to insolvency or debtor relief, whether state,
federal or foreign.
(e) INTEREST PAYMENT AND COMPUTATION. Interest on each Base Rate Loan
shall be payable in arrears on the last Business Day of each calendar quarter
commencing March 31, 1999; and interest on each LIBOR Rate Loan shall be payable
on the last day of each Interest Period applicable thereto, and if such Interest
Period extends over three (3) months, at the end of each three (3) month
interval during such Interest Period. Interest on LIBOR Rate Loans and all fees
payable hereunder shall be computed on the basis of a 360-day year and assessed
for the actual number of days elapsed and interest on Base Rate Loans shall be
computed on the basis of a 365/66-day year and assessed for the actual number of
days elapsed.
(f) MAXIMUM RATE. In no contingency or event whatsoever shall the
aggregate of all amounts deemed interest hereunder or under any of the Notes
charged or collected pursuant to the terms of this Agreement or pursuant to any
of the Notes exceed the highest rate permissible under any Applicable Law which
a court of competent jurisdiction shall, in a final determination, deem
applicable hereto. In the event that such a court determines that the Lenders
have charged or received interest hereunder in excess of the highest applicable
rate, the rate in effect hereunder shall automatically be reduced to the maximum
rate permitted by Applicable Law and the Lenders shall at the Administrative
Agent's option (i) promptly refund to the Borrowers any interest received by
Lenders in excess of the maximum lawful rate or (ii) shall apply such excess to
the principal balance of the Obligations. It is the intent hereof that the
Borrowers not pay or
29
contract to pay, and that neither the Administrative Agent nor any Lender
receive or contract to receive, directly or indirectly in any manner whatsoever,
interest in excess of that which may be paid by the Borrowers under Applicable
Law.
SECTION 5.2 NOTICE AND MANNER OF CONVERSION OR CONTINUATION OF LOANS.
Provided that no Event of Default has occurred and is then continuing, the
Borrowers shall have the option to (a) convert at any time following the third
Business Day after the Closing Date all or any portion of its outstanding Base
Rate Loans (other than Swingline Loans) in a principal amount equal to
$3,000,000 or any whole multiple of $1,000,000 in excess thereof into one or
more LIBOR Rate Loans and (b) upon the expiration of any Interest Period, (i)
convert all or any part of its outstanding LIBOR Rate Loans in a principal
amount equal to $3,000,000 or a whole multiple of $1,000,000 in excess thereof
into Base Rate Loans or (ii) continue such LIBOR Rate Loans as LIBOR Rate Loans.
Whenever the Borrowers desire to convert or continue Loans as provided above,
the Borrowers shall give the Administrative Agent irrevocable prior written
notice in the form attached as EXHIBIT E (a "NOTICE OF CONVERSION/
CONTINUATION") not later than 11:00 a.m. (Charlotte time) three (3) Business
Days before the day on which a proposed conversion or continuation of such Loan
is to be effective specifying (A) the principal amount of the Loans to be
converted or continued, and, in the case of any LIBOR Rate Loan to be converted
or continued, the last day of the Interest Period therefor, (B) the effective
date of such conversion or continuation (which shall be a Business Day), (C) the
principal amount of such Loans to be converted or continued, and (D) the
Interest Period to be applicable to such converted or continued LIBOR Rate Loan.
The Administrative Agent shall promptly notify the Lenders of such Notice of
Conversion/Continuation.
SECTION 5.3 FEES.
(a) COMMITMENT FEE. Commencing on the Closing Date, the Borrowers shall
pay to the Administrative Agent, for the account of the Lenders, a
non-refundable commitment fee on the average daily amount of the Revolving
Credit Commitment LESS the outstanding principal balance of all Revolving Credit
Loans and L/C Obligations, at a rate per annum equal to the product of (i) the
Commitment Fee Rate and (ii) the average daily amount of the Revolving Credit
Commitment LESS the outstanding principal balance of all Revolving Credit Loans
and L/C Obligations. The "COMMITMENT FEE RATE" shall be the rate per annum set
forth below opposite the Average Utilization as of the most recent calendar
quarter end.
-------------------------------------------------- ------------------------------------------
AVERAGE UTILIZATION COMMITMENT FEE RATE
-------------------------------------------------- ------------------------------------------
-------------------------------------------------- ------------------------------------------
Less than $18,750,000 0.750%
-------------------------------------------------- ------------------------------------------
-------------------------------------------------- ------------------------------------------
Equal to or greater than $18,750,000, but less 0.625%
than $37,500,000
-------------------------------------------------- ------------------------------------------
-------------------------------------------------- ------------------------------------------
Greater than or equal to $37,500,000 0.500%
-------------------------------------------------- ------------------------------------------
The amount of outstanding Swingline Loans shall not be considered usage of the
Revolving Credit Commitment for the purpose of calculating such commitment fee.
The commitment
30
fee shall be payable in arrears on the last Business Day of each calendar
quarter during the term of this Agreement commencing March 31, 1999, and on the
Revolving Credit Termination Date. Such commitment fee shall be distributed by
the Administrative Agent to the Lenders PRO RATA in accordance with the Lenders'
respective Revolving Credit Commitment Percentages.
(b) ADMINISTRATIVE AGENT'S AND OTHER FEES. In order to compensate the
Administrative Agent for structuring and syndicating the Loans and for its
obligations hereunder, the Company agrees to pay to the Administrative Agent,
for its account, the fees set forth in the separate fee letter agreement
executed by the Company and First Union Commercial Corporation dated December
16, 1998.
SECTION 5.4 MANNER OF PAYMENT. Each payment by the Borrowers on account
of the principal of or interest on the Loans or of any fee, commission or other
amounts (including the Reimbursement Obligation) payable to the Lenders under
this Agreement or any Note shall be made not later than 1:00 p.m. (Charlotte
time) on the date specified for payment under this Agreement to the
Administrative Agent at the Administrative Agent's Office for the account of the
Lenders (other than as set forth below) PRO RATA in accordance with their
respective Revolving Credit Commitment Percentages or Term Loan Commitment
Percentages, as applicable, (except as specified below), in Dollars, in
immediately available funds and shall be made without any set-off, counterclaim
or deduction whatsoever. Any payment received after such time but before 2:00
p.m. (Charlotte time) on such day shall be deemed a payment on such date for the
purposes of SECTION 12.1, but for all other purposes shall be deemed to have
been made on the next succeeding Business Day. Any payment received after 2:00
p.m. (Charlotte time) shall be deemed to have been made on the next succeeding
Business Day for all purposes. Upon receipt by the Administrative Agent of each
such payment, the Administrative Agent shall distribute to each Lender at its
address for notices set forth herein its PRO RATA share of such payment in
accordance with such Lender's Revolving Credit Commitment Percentage or Term
Loan Commitment Percentage, as applicable, (except as specified below) and shall
wire advice of the amount of such credit to each Lender. Each payment to the
Administrative Agent of the Issuing Lender's fees or L/C Participants'
commissions shall be made in like manner, but for the account of the Issuing
Lender or the L/C Participants, as the case may be. Each payment to the
Administrative Agent of Administrative Agent's fees or expenses shall be made
for the account of the Administrative Agent and any amount payable to any Lender
under SECTIONS 5.8, 5.9, 5.10, 5.11 or 14.2 shall be paid to the Administrative
Agent for the account of the applicable Lender. Subject to SECTION 5.1(b)(ii) in
any payment under this Agreement or any Note shall be specified to be made upon
a day which is not a Business Day, it shall be made on the next succeeding day
which is a Business Day and such extension of time shall in such case be
included in computing any interest if payable along with such payment.
SECTION 5.5 CREDITING OF PAYMENTS AND PROCEEDS. In the event that the
Borrowers shall fail to pay any of the Obligations when due and the Obligations
have been accelerated pursuant to SECTION 12.2, all payments received by the
Lenders upon the Notes and the other Obligations and all net proceeds from the
enforcement of the
31
Obligations shall be applied first to all expenses then due and payable by the
Borrowers hereunder, then to all indemnity obligations then due and payable by
the Borrowers hereunder, then to all Administrative Agent's and Issuing Lender's
fees then due and payable, then to all commitment and other fees and commissions
then due and payable, then to accrued and unpaid interest on the Swingline Note
to the Swingline Lender, then to the principal amount outstanding under the
Swingline Note to the Swingline Lender, then to accrued and unpaid interest on
all other Notes, the Reimbursement Obligation and any termination payments due
in respect of a Hedging Agreement with any Lender (which such Hedging Agreement
is permitted or required hereunder) (PRO RATA in accordance with all such
amounts due), then to the principal amount of all other Notes and Reimbursement
Obligation (PRO RATA in accordance with all such amounts due) and then to the
cash collateral account described in SECTION 12.2(b) to the extent of any L/C
Obligations then outstanding, in that order.
SECTION 5.6 ADJUSTMENTS. If any Lender (a "BENEFITED LENDER") shall at
any time receive any payment of all or part of the Obligations owing to it, or
interest thereon, or if any Lender shall at any time receive any collateral in
respect to the Obligations owing to it (whether voluntarily or involuntarily, by
set-off or otherwise) in a greater proportion than any such payment to and
Collateral received by any other Lender, if any, in respect of the Obligations
owing to such other Lender, or interest thereon, such Benefited Lender shall
purchase for cash from the other Lenders such portion of each such other
Lender's Extensions of Credit, or shall provide such other Lenders with the
benefits of any such collateral, or the proceeds thereof, as shall be necessary
to cause such Benefited Lender to share the excess payment or benefits of such
Collateral or proceeds ratably with each of the Lenders; PROVIDED, that if all
or any portion of such excess payment or benefits is thereafter recovered from
such Benefited Lender, such purchase shall be rescinded, and the purchase price
and benefits returned to the extent of such recovery, but without interest. The
Borrowers agree that each Lender so purchasing a portion of another Lender's
Extensions of Credit may exercise all rights of payment (including, without
limitation, rights of set-off) with respect to such portion as fully as if such
Lender were the direct holder of such portion.
SECTION 5.7 NATURE OF OBLIGATIONS OF LENDERS REGARDING EXTENSIONS OF
CREDIT; ASSUMPTION BY THE ADMINISTRATIVE AGENT. The obligations of the Lenders
under this Agreement to make the Loans and issue or participate in Letters of
Credit are several and are not joint or joint and several. Unless the
Administrative Agent shall have received notice from a Lender prior to a
proposed borrowing date that such Lender will not make available to the
Administrative Agent such Lender's ratable portion of the amount to be borrowed
on such date (which notice shall not release such Lender of its obligations
hereunder), the Administrative Agent may assume that such Lender has made such
portion available to the Administrative Agent on the proposed borrowing date in
accordance with SECTION 2.3(b) and the Administrative Agent may, in reliance
upon such assumption, make available to the Borrowers on such date a
corresponding amount. If such amount is made available to the Administrative
Agent on a date after such borrowing date, such Lender shall pay to the
Administrative Agent on demand an amount, until paid, equal to the product of
(a) the amount not made available by such Lender in accordance with the terms
hereof, TIMES (b)
32
the daily average Federal Funds Rate during such period as determined by the
Administrative Agent, TIMES (c) a fraction the numerator of which is the number
of days that elapse from and including such borrowing date to the date on which
such amount not made available by such Lender in accordance with the terms
hereof shall have become immediately available to the Administrative Agent and
the denominator of which is 360. A certificate of the Administrative Agent with
respect to any amounts owing under this SECTION 5.7 shall be conclusive, absent
manifest error. If such Lender's Revolving Credit Commitment Percentage or Term
Loan Commitment Percentage, as applicable, of such borrowing is not made
available to the Administrative Agent by such Lender within three (3) Business
Days of such borrowing date, the Administrative Agent shall be entitled to
recover such amount made available by the Administrative Agent with interest
thereon at the rate per annum applicable to Base Rate Loans hereunder, on
demand, from the Borrowers. The failure of any Lender to make available its
Revolving Credit Commitment Percentage or Term Loan Commitment Percentage, as
applicable, of any Loan requested by any Borrower shall not relieve it or any
other Lender of its obligation, if any, hereunder to make its Revolving Credit
Commitment Percentage or Term Loan Commitment Percentage, as applicable, of such
Loan available on the borrowing date, but no Lender shall be responsible for the
failure of any other Lender to make its Revolving Credit Commitment Percentage
or Term Loan Commitment Percentage, as applicable, of such Loan available on the
borrowing date.
SECTION 5.8 CHANGED CIRCUMSTANCES.
(a) CIRCUMSTANCES AFFECTING LIBOR RATE AVAILABILITY . If with respect
to any Interest Period the Administrative Agent or any Lender (after
consultation with Administrative Agent) shall determine that, by reason of
circumstances affecting the foreign exchange and interbank markets generally,
deposits in eurodollars, in the applicable amounts are not being quoted via Dow
▇▇▇▇▇ Market Screen 3750 or offered to the Administrative Agent or such Lender
for such Interest Period, then the Administrative Agent shall forthwith give
notice thereof to the Borrowers. Thereafter, until the Administrative Agent
notifies the Borrowers that such circumstances no longer exist, the obligation
of the Lenders to make LIBOR Rate Loans and the right of the Borrowers to
convert any Loan to or continue any Loan as a LIBOR Rate Loan shall be
suspended, and the Borrowers shall repay in full (or cause to be repaid in full)
the then outstanding principal amount of each such LIBOR Rate Loans together
with accrued interest thereon, on the last day of the then current Interest
Period applicable to such LIBOR Rate Loan or convert the then outstanding
principal amount of each such LIBOR Rate Loan to a Base Rate Loan as of the last
day of such Interest Period.
(b) LAWS AFFECTING LIBOR RATE AVAILABILITY. If, after the date hereof,
the introduction of, or any change in, any Applicable Law or any change in the
interpretation or administration thereof by any Governmental Authority, central
bank or comparable agency charged with the interpretation or administration
thereof, or compliance by any Lender (or any of their respective Lending
Offices) with any request or directive (whether or not having the force of law)
of any such Authority, central bank or comparable agency, shall make it unlawful
or impossible for any of the Lenders (or any of their respective Lending
Offices) to honor its
33
obligations hereunder to make or maintain any LIBOR Rate Loan, such Lender shall
promptly give notice thereof to the Administrative Agent and the Administrative
Agent shall promptly give notice to the Borrowers and the other Lenders.
Thereafter, until the Administrative Agent notifies the Borrowers that such
circumstances no longer exist, (i) the obligations of the Lenders to make LIBOR
Rate Loans and the right of the Borrowers to convert any Loan or continue any
Loan as a LIBOR Rate Loan shall be suspended and thereafter the Borrowers may
select only Base Rate Loans hereunder, and (ii) if any of the Lenders may not
lawfully continue to maintain a LIBOR Rate Loan to the end of the then current
Interest Period applicable thereto as a LIBOR Rate Loan, the applicable LIBOR
Rate Loan shall immediately be converted to a Base Rate Loan for the remainder
of such Interest Period.
(c) INCREASED COSTS. If, after the date hereof, the introduction of, or
any change in, any Applicable Law, or in the interpretation or administration
thereof by any Governmental Authority, central bank or comparable agency charged
with the interpretation or administration thereof, or compliance by any of the
Lenders (or any of their respective Lending Offices) with any request or
directive (whether or not having the force of law) of such Authority, central
bank or comparable agency:
(i) shall subject any of the Lenders (or any of their
respective Lending Offices) to any tax, duty or other charge with respect to any
Note, Letter of Credit or Application or shall change the basis of taxation of
payments to any of the Lenders (or any of their respective Lending Offices) of
the principal of or interest on any Note, Letter of Credit or Application or any
other amounts due under this Agreement in respect thereof (except for changes in
the rate of tax on the overall net income of any of the Lenders or any of their
respective Lending Offices imposed by the jurisdiction in which such Lender is
organized or is or should be qualified to do business or such Lending Office is
located); or
(ii) shall impose, modify or deem applicable any reserve
(including, without limitation, any imposed by the Board of Governors of the
Federal Reserve System), special deposit, insurance or capital or similar
requirement against assets of, deposits with or for the account of, or credit
extended by any of the Lenders (or any of their respective Lending Offices) or
shall impose on any of the Lenders (or any of their respective Lending Offices)
or the foreign exchange and interbank markets any other condition affecting any
Note; and the result of any of the foregoing is to increase the costs to any of
the Lenders of maintaining any LIBOR Rate Loan or issuing or participating in
Letters of Credit or to reduce the yield or amount of any sum received or
receivable by any of the Lenders under this Agreement or under the Notes in
respect of a LIBOR Rate Loan or Letter of Credit or Application, then such
Lender shall promptly notify the Administrative Agent, and the Administrative
Agent shall promptly notify the Borrowers of such fact and demand compensation
therefor and, within fifteen (15) days after such notice by the Administrative
Agent, the Borrowers shall pay to such Lender such additional amount or amounts
as will compensate such Lender or Lenders for such increased cost or reduction.
The Administrative Agent will promptly notify the Borrowers of any event of
which it has knowledge which will entitle such Lender to compensation pursuant
to this SECTION 5.8(c); PROVIDED, that the Administrative Agent shall incur no
liability whatsoever to the Lenders or the Borrowers in the
34
event it fails to do so. The amount of such compensation shall be determined, in
the applicable Lender's sole discretion, based upon the assumption that such
Lender funded its Revolving Credit Commitment Percentage or Term Loan Commitment
Percentage, as applicable, of the LIBOR Rate Loans in the London interbank
market and using any reasonable attribution or averaging methods which such
Lender deems appropriate and practical. A certificate of such Lender setting
forth the basis for determining such amount or amounts necessary to compensate
such Lender shall be forwarded to the Borrowers through the Administrative Agent
and shall be conclusively presumed to be correct save for manifest error.
SECTION 5.9 INDEMNITY. The Borrowers hereby indemnify each of the
Lenders against any loss or expense which may arise or be attributable to each
Lender's obtaining, liquidating or employing deposits or other funds acquired to
effect, fund or maintain any Loan (a) as a consequence of any failure by the
Borrowers to make any payment when due of any amount due hereunder in connection
with a LIBOR Rate Loan, (b) due to any failure of the Borrowers to borrow on a
date specified therefor in a Notice of Borrowing or Notice of
Continuation/Conversion or (c) due to any payment, prepayment or conversion of
any LIBOR Rate Loan on a date other than the last day of the Interest Period
therefor. The amount of such loss or expense shall be determined, in the
applicable Lender's sole discretion, based upon the assumption that such Lender
funded its Revolving Credit Commitment Percentage or Term Loan Commitment
Percentage, as applicable, of the LIBOR Rate Loans in the London interbank
market and using any reasonable attribution or averaging methods which such
Lender deems appropriate and practical. A certificate of such Lender setting
forth the basis for determining such amount or amounts necessary to compensate
such Lender shall be forwarded to the Borrowers through the Administrative Agent
and shall be conclusively presumed to be correct save for manifest error.
SECTION 5.10 CAPITAL REQUIREMENTS. If either (a) the introduction of,
or any change in, or in the interpretation of, any Applicable Law or (b)
compliance with any guideline or request from any central bank or comparable
agency or other Governmental Authority (whether or not having the force of law),
has or would have the effect of reducing the rate of return on the capital of,
or has affected or would affect the amount of capital required to be maintained
by, any Lender or any corporation controlling such Lender as a consequence of,
or with reference to the Commitments and other commitments of this type, below
the rate which the Lender or such other corporation could have achieved but for
such introduction, change or compliance, then within five (5) Business Days
after written demand by any such Lender, the Borrowers shall pay to such Lender
from time to time as specified by such Lender additional amounts sufficient to
compensate such Lender or other corporation for such reduction. A certificate as
to such amounts submitted to the Borrowers and the Administrative Agent by such
Lender, shall, in the absence of manifest error, be presumed to be correct and
binding for all purposes.
SECTION 5.11 TAXES.
35
(a) PAYMENTS FREE AND CLEAR. Any and all payments by the Borrowers
hereunder or under the Notes or the Letters of Credit shall be made free and
clear of and without deduction for any and all present or future taxes, levies,
imposts, deductions, charges or withholding, and all liabilities with respect
thereto excluding, (i) in the case of each Lender and the Administrative Agent,
income and franchise taxes imposed by the jurisdiction under the laws of which
such Lender or the Administrative Agent (as the case may be) is organized or is
or should be qualified to do business or any political subdivision thereof and
(ii) in the case of each Lender, income and franchise taxes imposed by the
jurisdiction of such Lender's Lending Office or any political subdivision
thereof (all such non-excluded taxes, levies, imposts, deductions, charges,
withholdings and liabilities being hereinafter referred to as "TAXES"). If the
Borrowers shall be required by law to deduct any Taxes from or in respect of any
sum payable hereunder or under any Note or Letter of Credit to any Lender or the
Administrative Agent, (A) the sum payable shall be increased as may be necessary
so that after making all required deductions (including deductions applicable to
additional sums payable under this SECTION 5.11) such Lender or the
Administrative Agent (as the case may be) receives an amount equal to the amount
such party would have received had no such deductions been made, (B) the
Borrowers shall make such deductions, (C) the Borrowers shall pay the full
amount deducted to the relevant taxing authority or other authority in
accordance with applicable law, and (D) the Borrowers shall deliver to the
Administrative Agent evidence of such payment to the relevant taxing authority
or other authority in the manner provided in SECTION 5.11(d).
(b) STAMP AND OTHER TAXES. In addition, the Borrowers shall pay any
present or future stamp, registration, recordation or documentary taxes or any
other similar fees or charges or excise or property taxes, levies of the United
States or any state or political subdivision thereof or any applicable foreign
jurisdiction which arise from any payment made hereunder or from the execution,
delivery or registration of, or otherwise with respect to, this Agreement, the
Loans, the Letters of Credit, the other Loan Documents, or the perfection of any
rights or security interest in respect thereto (hereinafter referred to as
"OTHER TAXES").
(c) INDEMNITY. The Borrowers shall indemnify each Lender and the
Administrative Agent for the full amount of Taxes and Other Taxes (including,
without limitation, any Taxes and Other Taxes imposed by any jurisdiction on
amounts payable under this SECTION 5.11) paid by such Lender or the
Administrative Agent (as the case may be) and any liability (including
penalties, interest and expenses) arising therefrom or with respect thereto,
whether or not such Taxes or Other Taxes were correctly or legally asserted.
Such indemnification shall be made within thirty (30) days from the date such
Lender or the Administrative Agent (as the case may be) makes written demand
therefor.
(d) EVIDENCE OF PAYMENT. Within thirty (30) days after the date of any
payment of Taxes or Other Taxes, the Borrowers shall furnish to the
Administrative Agent, at its address referred to in SECTION 14.1, the original
or a certified copy of a receipt evidencing payment thereof or other evidence of
payment satisfactory to the Administrative Agent.
(e) DELIVERY OF TAX FORMS. Each Lender organized under the laws of a
jurisdiction
36
other than the United States or any state thereof shall deliver to the
Borrowers, with a copy to the Administrative Agent, on the Closing Date or
concurrently with the delivery of the relevant Assignment and Acceptance, as
applicable, (i) two United States Internal Revenue Service Forms 4224 or Forms
1001, as applicable (or successor forms) properly completed and certifying in
each case that such Lender is entitled to a complete exemption from withholding
or deduction for or on account of any United States federal income taxes, and
(ii) an Internal Revenue Service Form W-8 or W-9, or successor applicable form,
as the case may be, to establish an exemption from United States backup
withholding taxes. Each such Lender further agrees to deliver to the Borrowers,
with a copy to the Administrative Agent, a Form 1001 or 4224 and Form W-8 or W-9
or successor applicable forms or manner of certification, as the case may be, on
or before the date that any such form expires or becomes obsolete or after the
occurrence of any event requiring a change in the most recent form previously
delivered by it to the Borrowers, certifying in the case of a Form 1001 or 4224
that such Lender is entitled to receive payments under this Agreement without
deduction or withholding of any United States federal income taxes (unless in
any such case an event (including without limitation any change in treaty, law
or regulation) has occurred prior to the date on which any such delivery would
otherwise be required which renders such forms inapplicable or the exemption to
which such forms relate unavailable and such Lender notifies the Borrowers and
the Administrative Agent that it is not entitled to receive payments without
deduction or withholding of United States federal income taxes) and, in the case
of a Form W-8 or W-9, establishing an exemption from United States backup
withholding tax.
(f) SURVIVAL. Without prejudice to the survival of any other agreement
of the Borrowers hereunder, the agreements and obligations of the Borrowers
contained in this SECTION 5.11 shall survive the payment in full of the
Obligations and the termination of the Commitments.
SECTION 5.12 SECURITY. The Obligations of the Borrowers shall be
secured as provided in the Security Documents.
SECTION 5.13 JOINT AND SEVERAL LIABILITY; CONTRIBUTION.
(a) The Obligations of the Borrowers under this Agreement and the Notes
shall be joint and several.
(b) To the extent any Borrower is required, by reason of its
Obligations hereunder, to pay to the Administrative Agent and the Lenders an
amount greater than the amount of Loans actually made available to or for the
account of such Borrower, such Borrower shall have an enforceable right of
contribution against the remaining Borrowers, and the remaining Borrowers shall
be jointly and severally liable, for repayment of the full amount of such excess
payment. Subject only to the subordination provided in the following subsection
(e), such Borrower further shall be subrogated to any and all rights of the
Administrative Agent and the Lenders against the remaining Borrowers to the
extent of such excess payment.
37
(c) To the extent that any Borrower would, but for the operation of
this SECTION 5.13 and by reason of its Obligations hereunder or its obligations
to other Subsidiaries under this SECTION 5.13, be rendered insolvent for any
purpose under Applicable Law, each Borrower hereby agrees to indemnify such
Borrower in an amount at least equal to the amount necessary to prevent such
Borrower from having been rendered insolvent by reason of the incurring of any
such obligations.
(d) To the extent that any Borrower would, but for the operation of
this SECTION 5.13, be rendered insolvent under any Applicable Law by reason of
its incurring of obligations to any other Borrower under the foregoing
subsections (b) and (c) above, such Borrower shall, in turn, have rights of
contribution and indemnity, to the full extent provided in the foregoing
subsections (b) and (c) above, against the remaining Borrowers, such that all
Obligations of all of the Borrowers hereunder and under this SECTION 5.13 shall
be allocated in a manner such that no Borrower shall be rendered insolvent for
any purpose under Applicable Law by reason of its incurring of such obligations.
(e) The rights of any Borrower to contribution, subrogation and
indemnity under this SECTION 5.13 or under Applicable Law shall in all events
and all respects be subject and subordinate to the rights of the Administrative
Agent and the Lenders under this Agreement and subject to the prior full, final
and indefeasible payment to the Administrative Agent and the Lenders of all
Obligations and no such right may be exercised until all of such Obligations
have been fully, finally and indefeasibly paid and such payments are in no event
subject to avoidance under Title 11 of the United States Code or any other
Applicable Law.
SECTION 5.14 MITIGATION OF OBLIGATIONS; REPLACEMENT OF LENDERS.
(a) DESIGNATION OF A DIFFERENT LENDING OFFICE. If any Lender requests
compensation or if a Borrower is required to pay any additional amount to any
Lender or any Governmental Authority for the account of any Lender pursuant to
SECTION 5.8 or SECTION 5.10, then such Lender shall use reasonable efforts to
designate a different Lending Office for funding or booking its Loans hereunder
or to assign its rights and obligations hereunder to another of its offices,
branches or affiliates, if, in the judgment of such Lender, such designation or
assignment (i) would eliminate or reduce amounts payable pursuant to SECTION 5.8
or SECTION 5.10, as the case may be, in the future and (ii) would not subject
such Lender to any unreimbursed cost or expense and would not otherwise be
disadvantageous to such Lender. The Borrowers hereby agree to pay all reasonable
costs and expenses incurred by any Lender in connection with any such
designation or assignment.
(b) REPLACEMENT OF LENDERS. If any Lender requests compensation or if a
Borrower is required to pay any additional amount to any Lender or any
Governmental Authority for the account of any Lender pursuant to SECTION 5.8 or
SECTION 5.10, or if any Lender defaults in its obligation to fund Loans
hereunder, then such Borrower may, at its sole expense and effort, upon notice
to such Lender and the Administrative Agent, require such Lender to assign and
delegate,
38
without recourse (in accordance with and subject to the restrictions contained
in SECTION 12.10), all its interests, rights and obligations under this
Agreement to an assignee that shall assume such obligations (which assignee may
be another Lender, if a Lender accepts such assignment). A Lender shall not be
required to make any such assignment and delegation if, prior thereto, as a
result of a waiver by such Lender or otherwise, the circumstances entitling such
Borrower to require such assignment and delegation cease to apply.
ARTICLE VI
CLOSING; CONDITIONS OF CLOSING AND BORROWING
SECTION 6.1 CLOSING. The closing shall take place at the offices of
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇, L.L.P. at 10:00 a.m. on April 16, 1999, or
on such other date and at such other place as the parties hereto shall mutually
agree.
SECTION 6.2 CONDITIONS TO CLOSING AND INITIAL EXTENSIONS OF CREDIT. The
obligation of the Lenders to close this Agreement and to make the initial
Extensions of Credit is subject to the satisfaction of each of the following
conditions:
(a) EXECUTED LOAN DOCUMENTS. This Agreement, the Revolving Credit
Notes, the Term Notes, the Swingline Note, the Collateral Agreement, the Side
Letter and the other Security Documents shall have been duly authorized,
executed and delivered to the Administrative Agent or the Collateral Agent, as
applicable, by the parties thereto, shall be in full force and effect and no
default shall exist thereunder, and the Borrowers shall have delivered original
counterparts thereof to the Administrative Agent.
(b) CLOSING CERTIFICATES; ETC.
(i) OFFICER'S CERTIFICATE OF THE BORROWERS. The Administrative
Agent shall have received a certificate from a Responsible Officer of each
Borrower, in form and substance satisfactory to the Administrative Agent, to the
effect that all representations and warranties of the Borrowers contained in
this Agreement and the other Loan Documents are true, correct and complete; that
the Borrowers are not in violation of any of the covenants contained in this
Agreement and the other Loan Documents; that, after giving effect to the
transactions contemplated by this Agreement, no Default or Event of Default has
occurred and is continuing; and that the Borrowers have satisfied each of the
closing conditions.
(ii) CERTIFICATE OF SECRETARY OF THE BORROWERS. The
Administrative Agent shall have received a certificate of the secretary or
assistant secretary of each Borrower certifying as to the incumbency and
genuineness of the signature of each officer of such Borrower executing Loan
Documents to which it is a party and certifying that attached thereto is a true,
correct and complete copy of (A) the articles of incorporation of such Borrower
and all amendments thereto, certified as of a recent date by the appropriate
Governmental Authority in its jurisdiction of
39
incorporation, (B) the bylaws of such Borrower as in effect on the date of such
certifications, (C) resolutions duly adopted by the Board of Directors of such
Borrower authorizing the borrowings contemplated hereunder and the execution,
delivery and performance of this Agreement and the other Loan Documents to which
it is a party, and (D) each certificate required to be delivered pursuant to
SECTION 6.2(b)(iii).
(iii) CERTIFICATES OF GOOD STANDING. To the extent requested
by the Administrative Agent, the Administrative Agent shall have received
long-form certificates as of a recent date of the good standing of each Borrower
under the laws of its jurisdiction of organization and each other jurisdiction
where such Borrower is qualified to do business and, if separately available, a
certificate of the relevant taxing authorities of such jurisdictions certifying
that such Person has filed required tax returns and owes no delinquent taxes.
(iv) OPINIONS OF COUNSEL. The Administrative Agent shall have
received favorable opinions of counsel to the Borrowers and their Subsidiaries
addressed to the Administrative Agent and the Lenders with respect to the
Borrowers, the Loan Documents and such other matters as the Lenders shall
request.
(v) TAX FORMS. The Administrative Agent shall have received
copies of the United States Internal Revenue Service forms required by SECTION
5.11(e).
(c) COLLATERAL.
(i) FILINGS AND RECORDINGS. All filings and recordations that
are necessary to perfect the security interests of the Lenders in the collateral
described in the Security Documents shall have been received by the Collateral
Agent and the Collateral Agent shall have received evidence satisfactory to the
Administrative Agent that upon such filings and recordations such security
interests constitute valid and perfected first priority Liens therein.
(ii) PLEDGED COLLATERAL. The Collateral Agent shall have
received (A) original stock certificates or other certificates evidencing the
capital stock or other ownership interests pledged pursuant to the Collateral
Agreement, together with an undated stock power for each such certificate duly
executed in blank by the registered owner thereof and (B) as applicable, each
original promissory note pledged pursuant to the Collateral Agreement.
(iii) LIEN SEARCH. The Collateral Agent shall have received
the results of a Lien search (including a search as to judgments, pending
litigation and tax matters) made against the Borrowers under the Uniform
Commercial Code (or applicable judicial docket) as in effect in any state in
which any of its assets are located, indicating among other things that its
assets are free and clear of any Lien except for Liens permitted hereunder.
(iv) HAZARD AND LIABILITY INSURANCE. The Collateral Agent
shall have received certificates of insurance designating the Collateral Agent
as loss payee and additional insured and in form and substance reasonably
satisfactory to the Collateral Agent.
40
(d) CONSENTS; DEFAULTS.
(i) GOVERNMENTAL AND THIRD PARTY APPROVALS. The Borrowers
shall have obtained all necessary approvals, authorizations and consents of any
Person and of all Governmental Authorities and courts having jurisdiction with
respect to the transactions contemplated by this Agreement and the other Loan
Documents.
(ii) NO INJUNCTION, ETC. No action, proceeding, investigation,
regulation or legislation shall have been instituted, threatened or proposed
before any Governmental Authority to enjoin, restrain, or prohibit, or to obtain
substantial damages in respect of, or which is related to or arises out of this
Agreement or the other Loan Documents or the consummation of the transactions
contemplated hereby or thereby, or which, in the Administrative Agent's sole
discretion, would make it inadvisable to consummate the transactions
contemplated by this Agreement and such other Loan Documents.
(iii) NO EVENT OF DEFAULT. No Default or Event of Default
shall have occurred and be continuing.
(e) FINANCIAL MATTERS.
(i) FINANCIAL STATEMENTS. The Administrative Agent shall have
received the most recent audited Consolidated financial statements of the
Borrowers and their Subsidiaries, all in form and substance satisfactory to the
Administrative Agent.
(ii) FINANCIAL CONDITION CERTIFICATE. The Borrowers shall have
delivered to the Administrative Agent a certificate, in form and substance
satisfactory to the Administrative Agent, and certified as accurate by a
Responsible Officer of the Company on behalf of itself and the other Borrowers,
that (A) the Borrowers and their Subsidiaries are each Solvent, (B) the
Borrowers' payables are current and not past due, (C) attached thereto is a PRO
FORMA balance sheet of the Borrowers and their Subsidiaries setting forth on a
PRO forma basis the financial condition of the Borrowers and their Subsidiaries
on a Consolidated basis as of December 31, 1998, reflecting a PRO FORMA basis
the effect of the transactions contemplated herein, including all fees and
expenses in connection therewith, and evidencing compliance on a PRO FORMA basis
with the covenants contained in Articles X and XI, and (D) attached thereto are
the financial projections previously delivered to the Administrative Agent
representing the good faith opinions of the Borrowers and senior management
thereof as to the projected results contained therein.
(iii) PAYMENT AT CLOSING; FEE LETTERS. The Borrowers shall
have paid the fees set forth or referenced in SECTION 5.3 and any other accrued
and unpaid fees or commissions due hereunder (including, without limitation,
legal fees and expenses) to the Administrative Agent and Lenders, and to any
other Person such amount as may be due thereto in connection with the
transactions contemplated hereby, including all taxes, fees and other charges in
connection with the execution, delivery, recording, filing and registration of
any of the Loan Documents. The
41
Administrative Agent shall have received duly authorized and executed copies of
the fee letter agreement referred to in SECTION 5.3(b).
(f) MISCELLANEOUS.
(i) NOTICE OF BORROWING. The Administrative Agent shall have
received a Notice of Borrowing from the Borrowers in accordance with SECTION
2.3(a) and SECTION 4.2, and a Notice of Account Designation specifying the
account or accounts to which the proceeds of any Loans made after the Closing
Date are to be disbursed.
(ii) PROCEEDINGS AND DOCUMENTS. All opinions, certificates and
other instruments and all proceedings in connection with the transactions
contemplated by this Agreement shall be satisfactory in form and substance to
the Administrative Agent. The Lenders shall have received copies of all other
instruments and other evidence as any Lender may reasonably request, with
respect to the transactions contemplated by this Agreement and the taking of all
actions in connection therewith.
(iii) EXISTING FACILITY. The Existing Facility shall be repaid
in full and terminated and all collateral security therefor shall be released,
and the Administrative Agent shall have received a pay-off letter in form and
substance satisfactory to it evidencing such repayment, termination,
reconveyance and release.
(iv) DUE DILIGENCE AND OTHER DOCUMENTS. The Borrowers shall
have delivered to the Administrative Agent such other documents, certificates
and opinions as the Administrative Agent may reasonably request.
SECTION 6.3 CONDITIONS TO ALL EXTENSIONS OF CREDIT. The obligations of
the Lenders to make any Extension of Credit is subject to the satisfaction of
the following conditions precedent on the relevant borrowing or issue date, as
applicable:
(a) CONTINUATION OF REPRESENTATIONS AND WARRANTIES. The representations
and warranties contained in ARTICLE VII shall be true and correct on and as of
such borrowing or issuance date with the same effect as if made on and as of
such date; except for any representation and warranty made as of an earlier
date, which representation and warranty shall remain true and correct as of such
earlier date.
(b) NO EXISTING DEFAULT. No Default or Event of Default shall have
occurred and be continuing hereunder (i) on the borrowing date with respect to
such Loan or after giving effect to the Loans to be made on such date or (ii) on
the issue date with respect to such Letter of Credit or after giving affect to
such Letters of Credit on such date.
(c) OFFICER'S COMPLIANCE CERTIFICATE; ADDITIONAL DOCUMENTS. The
Administrative Agent shall have received the current Officer's Compliance
Certificate and each additional document, instrument, legal opinion or other
item of information reasonably requested by it.
42
ARTICLE VII
REPRESENTATIONS AND WARRANTIES OF THE BORROWERS
SECTION 7.1 REPRESENTATIONS AND WARRANTIES. To induce the
Administrative Agent and Lenders to enter into this Agreement and to induce the
Lenders to make Extensions of Credit, the Borrowers and their Subsidiaries
hereby represent and warrant to the Agents and Lenders both before and after
giving effect to the transactions contemplated hereunder that:
(a) ORGANIZATION; POWER; QUALIFICATION. Each of the Borrowers and each
of their respective Subsidiaries is a corporation duly organized, validly
existing and in good standing under the laws of the jurisdiction of its
incorporation or formation, has the corporate power and authority to own its
properties and to carry on its business as now being and hereafter proposed to
be conducted and is duly qualified and authorized to do business in each
jurisdiction in which the character of its properties or the nature of its
business requires such qualification and authorization. The jurisdictions in
which the Borrowers and their Subsidiaries are organized and qualified to do
business as of the Closing Date are listed on SCHEDULE 7.1(a).
(b) OWNERSHIP. Each of the Borrowers and their Subsidiaries as of the
Closing Date is listed on SCHEDULE 7.1(b). As of the Closing Date, the
capitalization of the Borrowers and their Subsidiaries consists of the number of
shares, authorized, issued and outstanding, of such classes and series, with or
without par value, described on SCHEDULE 7.1(b). All outstanding shares have
been duly authorized and validly issued and are fully paid and nonassessable.
The shareholders of the Borrowers and their Subsidiaries and the number of
shares owned by each as of the Closing Date are described on SCHEDULE 7.1(b). As
of the Closing Date, there are no outstanding stock purchase warrants,
subscriptions, options, securities, instruments or other rights of any type or
nature whatsoever, which are convertible into, exchangeable for or otherwise
provide for or permit the issuance of capital stock of the Borrowers and their
Subsidiaries, except as described on SCHEDULE 7.1(b).
(c) AUTHORIZATION OF AGREEMENT, LOAN DOCUMENTS AND BORROWING. Each of
the Borrowers has the right, power and authority and has taken all necessary
corporate and other action to authorize the execution, delivery and performance
of this Agreement and each of the other Loan Documents to which it is a party in
accordance with their respective terms. This Agreement and each of the other
Loan Documents have been duly executed and delivered by the duly authorized
officers of the Borrowers party thereto, and each such document constitutes the
legal, valid and binding obligation of the Borrowers party thereto, enforceable
in accordance with its terms, except as such enforcement may be limited by
bankruptcy, insolvency, reorganization, moratorium or similar state or federal
debtor relief laws from time to time in effect which affect the enforcement of
creditors' rights in general and the availability of equitable remedies.
(d) COMPLIANCE OF AGREEMENT, LOAN DOCUMENTS AND BORROWING WITH LAWS,
ETC. The
43
execution, delivery and performance by each Borrower of the Loan Documents to
which it is a party, in accordance with their respective terms, the borrowings
hereunder and the transactions contemplated hereby do not and will not, by the
passing of time, the giving of notice or otherwise, (i) require any Governmental
Approval or violate any Applicable Law relating to the Borrowers, (ii) conflict
with, result in a breach of or constitute a default under the articles of
incorporation, bylaws or other organizational documents of the Borrowers or any
indenture, agreement or other instrument to which any Borrower is a party or by
which any of its properties may be bound or any Governmental Approval relating
to such Person, or (iii) result in or require the creation or imposition of any
Lien upon or with respect to any property now owned or hereafter acquired by
such Person other than Liens arising under the Loan Documents.
(e) COMPLIANCE WITH LAW; GOVERNMENTAL APPROVALS. Except to the extent
the failure to obtain such approval or comply with any Applicable Law would not
reasonably be expected to have a Material Adverse Effect, each of the Borrowers
and each of their respective Subsidiaries (i) has all Governmental Approvals
required by any Applicable Law for it to conduct its business, each of which is
in full force and effect, is final and not subject to review on appeal and is
not the subject of any pending or, to the best of its knowledge, threatened
attack by direct or collateral proceeding, and (ii) is in compliance with each
Governmental Approval applicable to it and in compliance with all other
Applicable Laws relating to it or any of its respective properties.
(f) TAX RETURNS AND PAYMENTS. Each of the Borrowers and each of their
respective Subsidiaries has duly filed or caused to be filed all federal, state,
local and other tax returns required by Applicable Law to be filed, and has
paid, or made adequate provision for the payment of, all federal, state, local
and other taxes, assessments and governmental charges or levies upon it and its
property, income, profits and assets which are due and payable, except where the
failure to do so would not reasonably be expected to have a Material Adverse
Effect. No Governmental Authority has asserted any Lien or other claim against
any Borrower or Subsidiary with respect to unpaid taxes which has not been
discharged or resolved. The charges, accruals and reserves on the books of the
Borrowers and their Subsidiaries in respect of federal, state, local and other
taxes for all Fiscal Years and portions thereof since the organization of the
Borrowers and their Subsidiaries are in the judgment of the Borrowers adequate,
and the Borrowers do not anticipate any additional taxes or assessments for any
of such years.
(g) INTELLECTUAL PROPERTY MATTERS. Each of the Borrowers and each of
their respective Subsidiaries owns or possesses rights to use all franchises,
licenses, copyrights, copyright applications, patents, patent rights or
licenses, patent applications, trademarks, trademark rights, trade names, trade
name rights, copyrights and rights with respect to the foregoing which are
required to conduct its business. No event has occurred which permits, or after
notice or lapse of time or both would permit, the revocation or termination of
any such rights, and no Borrower is liable to any Person for infringement under
Applicable Law with respect to any such rights as a result of its business
operations, except where such event, revocation or termination would not
reasonably be expected to have a Material Adverse Effect.
(h) ENVIRONMENTAL MATTERS.
44
(i) The properties owned, leased or operated by the Borrowers
and their Subsidiaries now or in the past do not contain, and to their knowledge
have not previously contained, any Hazardous Materials in amounts or
concentrations which (A) constitute or constituted a violation of applicable
Environmental Laws or (B) could give rise to liability under applicable
Environmental Laws;
(ii) The Borrowers, each Subsidiary and such properties and
all operations conducted in connection therewith are in compliance, and have
been in compliance, with all applicable Environmental Laws, except where the
failure to so comply would not reasonably be expected to have a Material Adverse
Effect, and there is no contamination at, under or about such properties or such
operations which could interfere with the continued operation of such properties
or impair the fair saleable value thereof;
(iii) Neither the Borrowers nor any Subsidiary has received
any notice of violation, alleged violation, non-compliance, liability or
potential liability regarding environmental matters, Hazardous Materials, or
compliance with Environmental Laws which would reasonably be expected to have a
Material Adverse Effect, nor do the Borrowers or any Subsidiary have knowledge
or reason to believe that any such notice will be received or is being
threatened;
(iv) Hazardous Materials have not been transported or disposed
of to or from the properties owned, leased or operated by the Borrowers and
their Subsidiaries in violation of, or in a manner or to a location which could
give rise to liability under, Environmental Laws, nor have any Hazardous
Materials been generated, treated, stored or disposed of at, on or under any of
such properties in violation of, or in a manner that could give rise to
liability under, any applicable Environmental Laws which would reasonably be
expected to have a Material Adverse Effect;
(v) No judicial proceedings or governmental or administrative
action is pending, or, to the knowledge of the Borrowers, threatened, under any
Environmental Law to which the Borrowers or any Subsidiary is or will be named
as a party, nor are there any consent decrees or other decrees, consent orders,
administrative orders or other orders, or other administrative or judicial
requirements outstanding under any Environmental Law with respect to Borrowers,
any Subsidiary or such properties or operations; and
(vi) There has been no release, or to the best of the
Borrowers' knowledge, threat of release, of Hazardous Materials at or from
properties owned, leased or operated by the Borrowers or any Subsidiary, now or
in the past, in violation of or in amounts or in a manner that could give rise
to liability under Environmental Laws.
(i) ERISA.
(i) As of the Closing Date, neither the Borrowers nor any
ERISA Affiliate
45
maintains or contributes to, or has any obligation under, any Employee Benefit
Plans other than those identified on SCHEDULE 7.1(i);
(ii) the Borrowers and each ERISA Affiliate are in compliance
with all applicable provisions of ERISA and the regulations and published
interpretations thereunder with respect to all Employee Benefit Plans except for
any required amendments for which the remedial amendment period as defined in
Section 401(b) of the Code has not yet expired. Each Employee Benefit Plan that
is intended to be qualified under Section 401(a) of the Code has been determined
by the Internal Revenue Service to be so qualified, and each trust related to
such plan has been determined to be exempt under Section 501(a) of the Code. No
liability has been incurred by the Borrowers or any ERISA Affiliate which
remains unsatisfied for any taxes or penalties with respect to any Employee
Benefit Plan or any Multiemployer Plan;
(iii) No Pension Plan has been terminated, nor has any
accumulated funding deficiency (as defined in Section 412 of the Code) been
incurred (without regard to any waiver granted under Section 412 of the Code),
nor has any funding waiver from the Internal Revenue Service been received or
requested with respect to any Pension Plan, nor have the Borrowers or any ERISA
Affiliate failed to make any contributions or to pay any amounts due and owing
as required by Section 412 of the Code, Section 302 of ERISA or the terms of any
Pension Plan prior to the due dates of such contributions under Section 412 of
the Code or Section 302 of ERISA, nor has there been any event requiring any
disclosure under Section 4041(c)(3)(C) or 4063(a) of ERISA with respect to any
Pension Plan;
(iv) Neither the Borrowers nor any ERISA Affiliate has: (A)
engaged in a nonexempt prohibited transaction described in Section 406 of the
ERISA or Section 4975 of the Code, (B) incurred any liability to the PBGC which
remains outstanding other than the payment of premiums and there are no premium
payments which are due and unpaid, (C) failed to make a required contribution or
payment to a Multiemployer Plan, or (D) failed to make a required installment or
other required payment under Section 412 of the Code;
(v) No Termination Event has occurred or is reasonably
expected to occur; and
(vi) No proceeding, claim, lawsuit and/or investigation is
existing or, to the best knowledge of the Borrowers after due inquiry,
threatened concerning or involving any (A) employee welfare benefit plan (as
defined in Section 3(1) of ERISA) currently maintained or contributed to by the
Borrowers or any ERISA Affiliate, (B) Pension Plan or (C) Multiemployer Plan.
(j) MARGIN STOCK. No Borrower is engaged principally, or as one of its
activities, in the business of extending credit for the purpose of "purchasing"
or "carrying" any "margin stock" (as each such term is defined or used in
Regulation U of the Board of Governors of the Federal Reserve System). No part
of the proceeds of any of the Loans or Letters of Credit will be used for
purchasing or carrying margin stock or for any purpose which violates, or which
would
46
be inconsistent with, the provisions of Regulation T, U or X of such Board of
Governors.
(k) GOVERNMENT REGULATION. No Borrower is an "investment company" or a
company "controlled" by an "investment company" (as each such term is defined or
used in the Investment Company Act of 1940, as amended) and no Borrower is, or
after giving effect to any Extension of Credit will be, subject to regulation
under the Public Utility Holding Company Act of 1935 or the Interstate Commerce
Act, each as amended, or any other Applicable Law which limits its ability to
incur or consummate the transactions contemplated hereby.
(l) MATERIAL CONTRACTS. SCHEDULE 7.1(l) sets forth a complete and
accurate list of all Material Contracts of the Borrowers and their Subsidiaries
in effect as of the Closing Date not listed on any other Schedule hereto; other
than as set forth in SCHEDULE 7.1(l), each such Material Contract is, and after
giving effect to the consummation of the transactions contemplated by the Loan
Documents will be, in full force and effect in accordance with the terms thereof
except where the failure thereto would not reasonably be expected to have a
Material Adverse Effect. The Borrowers have delivered or caused their
Subsidiaries to deliver to the Administrative Agent a true and complete copy of
each Material Contract required to be listed on SCHEDULE 7.1(l) or any other
Schedule hereto.
(m) EMPLOYEE RELATIONS. Each of the Borrowers and each of their
respective Subsidiaries has a stable work force in place and is not, as of the
Closing Date, party to any collective bargaining agreement nor has any labor
union been recognized as the representative of its employees except as set forth
on SCHEDULE 7.1(m). No Borrower knows of any pending, threatened or contemplated
strikes, work stoppage or other collective labor disputes involving its
employees.
(n) BURDENSOME PROVISIONS. No Borrower is a party to any indenture,
agreement, lease or other instrument, or subject to any corporate or partnership
restriction, Governmental Approval or Applicable Law which is so unusual or
burdensome as in the foreseeable future could be reasonably expected to have a
Material Adverse Effect. The Borrowers and their Subsidiaries do not presently
anticipate that future expenditures needed to meet the provisions of any
statutes, orders, rules or regulations of a Governmental Authority will be so
burdensome as to have a Material Adverse Effect.
(o) FINANCIAL STATEMENTS. The (i) Consolidated balance sheets of the
Borrowers and their Subsidiaries as of December 31, 1997, and the related
statements of income and retained earnings and cash flows for the Fiscal Year
then ended and (ii) unaudited Consolidated balance sheet of the Borrowers and
their Subsidiaries as of September 30, 1998, and related unaudited interim
statements of revenue and retained earnings, copies of which have been furnished
to the Administrative Agent and each Lender, are true and accurate in all
material respects, and are not misleading in any material respect and fairly
present the assets, liabilities and financial position of the Borrowers and
their Subsidiaries as at such dates, and the results of the operations and
changes of financial position for the periods then ended. All such financial
statements, including the related schedules and notes thereto, have been
prepared in accordance with GAAP. The
47
Borrowers and their Subsidiaries have no Debt, obligation or other unusual
forward or long-term commitment which is not fairly reflected in the foregoing
financial statements or in the notes thereto.
(p) NO MATERIAL ADVERSE CHANGE. Since December 31, 1998, there has been
no material adverse change in the properties, business, operations or condition
(financial or otherwise) of the Borrowers and their Subsidiaries and no event
has occurred or condition arisen that could reasonably be expected to have a
Material Adverse Effect.
(q) SOLVENCY. As of the Closing Date and after giving effect to each
Extension of Credit made hereunder, each of the Borrowers and each of their
respective Subsidiaries will be Solvent.
(r) TITLES TO PROPERTIES. Each of the Borrowers and each of their
respective Subsidiaries has such title to the real property owned by it as is
necessary or desirable to the conduct of its business and valid and legal title
to all of its personal property and assets, including, but not limited to, those
reflected on the balance sheets of the Borrowers and their Subsidiaries
delivered pursuant to SECTION 7.1(o), except those which have been disposed of
by the Borrowers and their Subsidiaries subsequent to such date which
dispositions have been in the ordinary course of business or as otherwise
expressly permitted hereunder.
(s) LIENS. None of the properties and assets of the Borrowers and their
Subsidiaries is subject to any Lien, except Liens permitted pursuant to SECTION
11.3. No financing statement under the Uniform Commercial Code of any state
which names any Borrower or any Subsidiary or any of their respective trade
names or divisions as debtor and which has not been terminated, has been filed
in any state or other jurisdiction and no Borrower has signed any such financing
statement or any security agreement authorizing any secured party thereunder to
file any such financing statement, except to perfect those Liens permitted by
SECTION 11.3.
(t) DEBT AND GUARANTY OBLIGATIONS. SCHEDULE 7.1(t) is a complete and
correct listing of all Debt and Guaranty Obligations of the Borrowers and their
Subsidiaries as of the Closing Date in excess of $1,000,000. The Borrowers and
their Subsidiaries have performed and are in compliance with all of the terms of
such Debt and Guaranty Obligations and all instruments and agreements relating
thereto, and no default or event of default, or event or condition which with
notice or lapse of time or both would constitute such a default or event of
default on the part of the Borrowers and their Subsidiaries exists with respect
to any such Debt or Guaranty Obligation.
(u) LITIGATION. Except for matters existing on the Closing Date and set
forth on SCHEDULE 7.1(u), there are no actions, suits or proceedings pending
nor, to the knowledge of the Borrowers and their Subsidiaries, threatened
against or in any other way relating adversely to or affecting the Borrowers,
their Subsidiaries, or any of their respective properties in any court or before
any arbitrator of any kind or before or by any Governmental Authority which
involves the possibility of any judgment or liability not fully covered by
insurance and which could
48
reasonably be expected to have a Material Adverse Effect.
(v) ABSENCE OF DEFAULTS. No event has occurred or is continuing which
constitutes a Default or an Event of Default, or which constitutes, or which
with the passing of time or giving of notice or both would constitute, a default
or event of default by the Borrowers and their Subsidiaries under any Material
Contract or a violation of any judgment, decree or order to which any Borrower
or Subsidiary is a party or by which the Borrowers, their Subsidiaries, or any
of their respective properties may be bound or which would require the Borrowers
or their Subsidiaries to make any payment thereunder prior to the scheduled
maturity date therefor.
(w) ACCURACY AND COMPLETENESS OF INFORMATION. All written information,
reports and other papers and data produced by or on behalf of the Borrowers and
their Subsidiaries and furnished to the Lenders (except for projections) were,
at the time the same were so furnished, complete and correct in all respects to
the extent necessary to give the recipient a true and accurate knowledge of the
subject matter. No document furnished or written statement made to the
Administrative Agent or the Lenders by the Borrowers and their Subsidiaries in
connection with the negotiation, preparation or execution of this Agreement or
any of the Loan Documents contains or will contain any untrue statement of a
fact material to the creditworthiness of the Borrowers and their Subsidiaries or
omits or will omit to state a fact necessary in order to make the statements
contained therein not misleading. The Borrowers and their Subsidiaries are not
aware of any facts which they have not disclosed in writing to the
Administrative Agent having a Material Adverse Effect, or insofar as the
Borrowers and their Subsidiaries can now foresee, could reasonably be expected
to have a Material Adverse Effect.
SECTION 7.2 SURVIVAL OF REPRESENTATIONS AND WARRANTIES, ETC. All
representations and warranties set forth in this Article VII and all
representations and warranties contained in any certificate, or any of the Loan
Documents (including but not limited to any such representation or warranty made
in or in connection with any amendment thereto) shall constitute representations
and warranties made under this Agreement. All representations and warranties
made under this Agreement shall be made or deemed to be made at and as of the
Closing Date, shall survive the Closing Date and shall not be waived by the
execution and delivery of this Agreement, any investigation made by or on behalf
of the Lenders or any borrowing hereunder.
ARTICLE VIII
FINANCIAL INFORMATION AND NOTICES
Until all the Obligations have been paid and satisfied in full and the
Commitments terminated, unless consent has been obtained in the manner set forth
in SECTION 14.11, the Borrowers will furnish or cause to be furnished to the
Administrative Agent and to the Lenders at their respective addresses as set
forth on SCHEDULE 1, or such other office as may be designated by the
Administrative Agent and Lenders from time to time:
49
SECTION 8.1 FINANCIAL STATEMENTS AND PROJECTIONS.
(a) QUARTERLY FINANCIAL STATEMENTS. As soon as practicable and in any
event within forty-five (45) days after the end of the first three (3) fiscal
quarters on each Fiscal Year, an unaudited Consolidated balance sheet of the
Borrowers and their Subsidiaries as of the close of such fiscal quarter and
unaudited Consolidated statements of income, and cash flows for the fiscal
quarter then ended and that portion of the Fiscal Year then ended, including the
notes thereto, all in reasonable detail setting forth in comparative form the
corresponding figures for the preceding Fiscal Year and prepared by the
Borrowers and their Subsidiaries in accordance with GAAP and SEC quarterly
requirements and, if applicable, containing disclosure of the effect on the
financial position or results of operations of any change in the application of
accounting principles and practices during the period, and certified by the
chief financial officer of the Company to present fairly in all material
respects the financial condition of the Borrowers and their Subsidiaries as of
their respective dates and the results of operations of the Borrowers and their
Subsidiaries for the respective periods then ended, subject to normal year-end
adjustments.
(b) ANNUAL FINANCIAL STATEMENTS. As soon as practicable and in any
event within one hundred twenty (120) days after the end of each Fiscal Year,
audited Consolidated and consolidating balance sheets of the Borrowers and their
Subsidiaries as of the close of such Fiscal Year and audited Consolidated and
consolidating statements of income, Consolidated statements of stockholder's
equity and Consolidated statements of cash flows for the Fiscal Year then ended,
including the notes thereto, all in reasonable detail setting forth in
comparative form the corresponding figures for the preceding Fiscal Year and
audited by a nationally recognized public accounting firm in accordance with
GAAP and, if applicable, containing disclosure of the effect on the financial
position or results of operation of any change in the application of accounting
principles and practices during the year, and accompanied by a report thereon by
such certified public accountants that is not qualified with respect to scope
limitations imposed by the Borrowers and their Subsidiaries or with respect to
accounting principles followed by the Borrowers and their Subsidiaries not in
accordance with GAAP.
(c) ANNUAL BUSINESS PLAN AND FINANCIAL PROJECTIONS. As soon as
practicable and in any event within forty-five (45) days prior to the beginning
of each Fiscal Year, a business plan of the Borrowers and their Subsidiaries for
the ensuing four (4) fiscal quarters, such plan to be prepared in accordance
with GAAP and to include, on a quarterly basis, the following, on a Consolidated
basis,: a projected income statement, statement of cash flows and balance sheet
and a report containing management's discussion and analysis of such
projections, accompanied by a certificate from the chief financial officers of
the Company on behalf of itself and the other Borrowers to the effect that, to
the best of such officers' knowledge, such projections are good faith estimates
of the financial condition and operations of the Borrowers and their
Subsidiaries for such four (4) quarter period.
SECTION 8.2 OFFICER'S COMPLIANCE CERTIFICATE.
50
At each time financial statements are delivered pursuant to SECTIONS 8.1 (a) or
(b) and at such other times as the Administrative Agent shall reasonably
request, a certificate of the chief financial officer or the treasurer of the
Company on behalf of itself and the other Borrowers in the form of EXHIBIT F
attached hereto (an "OFFICER'S COMPLIANCE CERTIFICATE").
SECTION 8.3 ACCOUNTANTS' CERTIFICATE. At each time financial statements
are delivered pursuant to SECTION 8.1(b), a certificate of the independent
public accountants certifying such financial statements addressed to the
Administrative Agent for the benefit of the Lenders:
(a) stating that in making the examination necessary for the
certification of such financial statements, they obtained no knowledge of any
Default or Event of Default or, if such is not the case, specifying such Default
or Event of Default and its nature and period of existence; and
(b) including the calculations prepared by such accountants required to
establish whether or not the Borrowers and their Subsidiaries are in compliance
with the financial covenants set forth in Article X as at the end of each
respective period.
SECTION 8.4 OTHER REPORTS.
(a) Promptly upon receipt thereof, copies of all reports, if any,
submitted to the Borrowers and their Subsidiaries or its Board of Directors by
its independent public accountants in connection with their auditing function,
including, without limitation, any management report and any management
responses thereto; and
(b) Such other information regarding the operations, business affairs
and financial condition of the Borrowers or any of their Subsidiaries as the
Administrative Agent or any Lender may reasonably request including, without
limitation, copies of Forms 10-Q and 10-K and any other annual or periodic
reports required to be delivered to a shareholder pursuant to the Securities
Exchange Act of 1934.
SECTION 8.5 NOTICE OF LITIGATION AND OTHER MATTERS. Prompt (but in no
event later than ten (10) days after an officer of the Borrowers obtains
knowledge thereof) telephonic and written notice of:
(a) the commencement of all proceedings and investigations by or before
any Governmental Authority and all actions and proceedings in any court or
before any arbitrator against or involving the Borrowers and their Subsidiaries
or any of their respective properties, assets or businesses;
(b) any notice of any violation received by the Borrowers and their
Subsidiaries from any Governmental Authority including, without limitation, any
notice of violation of
51
Environmental Laws which in any such case could reasonably be expected to have a
Material Adverse Effect;
(c) any labor controversy that has resulted in, or threatens to result
in, a strike or other work action against the Borrowers and their Subsidiaries;
(d) any attachment, judgment, lien, levy or order exceeding $1,000,000
that may be assessed against or threatened against the Borrowers and their
Subsidiaries;
(e) any Default or Event of Default, or any event which constitutes or
which with the passing of time or giving of notice or both would constitute a
default or event of default under any Material Contract to which the Borrowers
and their Subsidiaries is a party or by which the Borrowers and their
Subsidiaries or any of their respective properties may be bound;
(f) (i) any unfavorable determination letter from the Internal Revenue
Service regarding the qualification of an Employee Benefit Plan under Section
401(a) of the Code (along with a copy thereof), (ii) all notices received by the
Borrowers or any ERISA Affiliate of the PBGC's intent to terminate any Pension
Plan or to have a trustee appointed to administer any Pension Plan, (iii) all
notices received by any Borrowers or any ERISA Affiliate from a Multiemployer
Plan sponsor concerning the imposition or amount of withdrawal liability
pursuant to Section 4202 of ERISA and (iv) the Borrowers obtaining knowledge or
reason to know that the Borrowers or any ERISA Affiliate has filed or intends to
file a notice of intent to terminate any Pension Plan under a distress
termination within the meaning of Section 4041(c) of ERISA; and
(g) any event which makes any of the representations set forth in
SECTION 7.1 inaccurate in any respect.
SECTION 8.6 ACCURACY OF INFORMATION. All written information, reports,
statements and other papers and data furnished by or on behalf of the Borrowers
to the Administrative Agent or any Lender (other than financial forecasts)
whether pursuant to this Article VIII or any other provision of this Agreement,
or any of the Security Documents, shall be, at the time the same is so
furnished, complete and correct in all material respects to the extent necessary
to give the Administrative Agent or any Lender complete, true and accurate
knowledge of the subject matter based on the Borrowers' knowledge thereof.
ARTICLE IX
AFFIRMATIVE COVENANTS
Until all of the Obligations have been paid and satisfied in full and
the Commitments terminated, unless consent has been obtained in the manner
provided for in SECTION 14.11 each of the Borrowers will:
52
SECTION 9.1 PRESERVATION OF CORPORATE EXISTENCE AND RELATED MATTERS.
Except as permitted by SECTION 11.5, preserve and maintain its separate
corporate existence and all rights, franchises, licenses and privileges
necessary to the conduct of its business, and qualify and remain qualified as a
foreign corporation and authorized to do business in each jurisdiction in which
the failure to so qualify would have a Material Adverse Effect.
SECTION 9.2 MAINTENANCE OF PROPERTY. In addition to the requirements of
any of the Security Documents and, except where the failure to do so would not
reasonably be expected to have a Material Adverse Effect, protect and preserve
all properties useful in and material to its business, including copyrights,
patents, trade names and trademarks; maintain in good working order and
condition all buildings, equipment and other tangible real and personal
property; and from time to time make or cause to be made all renewals,
replacements and additions to such property necessary for the conduct of its
business, so that the business carried on in connection therewith may be
properly and advantageously conducted at all times.
SECTION 9.3 INSURANCE. Maintain insurance with financially sound and
reputable insurance companies against such risks and in such amounts as are
customarily maintained by similar businesses and as may be required by
Applicable Law and as are required by any Security Documents, and on the Closing
Date and from time to time thereafter deliver to the Administrative Agent upon
its request a detailed list of the insurance then in effect, stating the names
of the insurance companies, the amounts and rates of the insurance, the dates of
the expiration thereof and the properties and risks covered thereby.
SECTION 9.4 ACCOUNTING METHODS AND FINANCIAL RECORDS. Maintain a system
of accounting, and keep such books, records and accounts (which shall be true
and complete in all material respects) as may be required or as may be necessary
to permit the preparation of financial statements in accordance with GAAP and in
compliance with the regulations of any Governmental Authority having
jurisdiction over it or any of its properties.
SECTION 9.5 PAYMENT AND PERFORMANCE OF OBLIGATIONS. Pay and perform all
Obligations under this Agreement and the other Loan Documents, and pay or
perform (a) all taxes, assessments and other governmental charges that may be
levied or assessed upon it or any of its property, and (b) all other
indebtedness, obligations and liabilities in accordance with customary trade
practices; PROVIDED, that any Borrower may contest any item described in clauses
(a) or (b) of this SECTION 9.5 in good faith so long as adequate reserves are
maintained with respect thereto in accordance with GAAP.
SECTION 9.6 COMPLIANCE WITH LAWS AND APPROVALS. Observe and remain in
compliance with all Applicable Laws and maintain in full force and effect all
Governmental Approvals, in each case applicable to the conduct of its business
except where the failure to so comply would not reasonably be expected to have a
Material Adverse
53
Effect.
SECTION 9.7 ENVIRONMENTAL LAWS. In addition to and without limiting the
generality of SECTION 9.6 and to the extent that the failure to so comply would
not reasonably be expected to have a Material Adverse Effect, (a) comply with,
and ensure such compliance by all tenants and subtenants with all applicable
Environmental Laws and obtain and comply with and maintain, and ensure that all
tenants and subtenants obtain and comply with and maintain, any and all
licenses, approvals, notifications, registrations or permits required by
applicable Environmental Laws, (b) conduct and complete all investigations,
studies, sampling and testing, and all remedial, removal and other actions
required under Environmental Laws, and promptly comply with all lawful orders
and directives of any Governmental Authority regarding Environmental Laws, and
(c) defend, indemnify and hold harmless the Administrative Agent and the
Lenders, and their respective parents, Subsidiaries, Affiliates, employees,
agents, officers and directors, from and against any claims, demands, penalties,
fines, liabilities, settlements, damages, costs and expenses of whatever kind or
nature known or unknown, contingent or otherwise, arising out of, or in any way
relating to the presence of Hazardous Materials, or the violation of,
noncompliance with or liability under any Environmental Laws applicable to the
operations of the Borrowers or such Subsidiary, or any orders, requirements or
demands of Governmental Authorities related thereto, including, without
limitation, reasonable attorney's and consultant's fees, investigation and
laboratory fees, response costs, court costs and litigation expenses, except to
the extent that any of the foregoing directly result from the gross negligence
or willful misconduct of the party seeking indemnification therefor.
SECTION 9.8 COMPLIANCE WITH ERISA. In addition to and without limiting
the generality of SECTION 9.6, (a) comply with all applicable provisions of
ERISA and the regulations and published interpretations thereunder with respect
to all Employee Benefit Plans, (b) not take any action or fail to take action
the result of which could be a liability to the PBGC or to a Multiemployer Plan,
(c) not participate in any prohibited transaction that could result in any civil
penalty under ERISA or tax under the Code, (d) operate each Employee Benefit
Plan in such a manner that will not incur any tax liability under Section 4980B
of the Code or any liability to any qualified beneficiary as defined in Section
4980B of the Code and (e) furnish to the Administrative Agent upon the
Administrative Agent's request such additional information about any Employee
Benefit Plan as may be reasonably requested by the Administrative Agent.
SECTION 9.9 COMPLIANCE WITH AGREEMENTS. Comply in all respects with
each term, condition and provision of all leases, agreements and other
instruments entered into in the conduct of its business including, without
limitation, any Material Contract; PROVIDED, that any Borrower may contest any
such lease, agreement or other instrument in good faith through applicable
proceedings so long as adequate reserves are maintained in accordance with GAAP.
SECTION 9.10 CONDUCT OF BUSINESS.
54
Engage only in businesses in substantially the same fields as the businesses
conducted on the Closing Date.
SECTION 9.11 VISITS AND INSPECTIONS. Permit representatives of the
Administrative Agent, the Collateral Agent or any Lender, from time to time, to
visit and inspect its properties; inspect, audit and make extracts from its
books, records and files, including, but not limited to, management letters
prepared by independent accountants; and discuss with its principal officers,
and its independent accountants, its business, assets, liabilities, financial
condition, results of operations and business prospects.
SECTION 9.12 ADDITIONAL SUBSIDIARIES. Within ten (10) days after any
Subsidiary of the Company or of any other Borrower, which is created or acquired
after the Closing Date, becomes a Material Subsidiary, cause to be executed and
delivered to the Administrative Agent (a) a duly executed joinder agreement in
substantially the form of EXHIBIT I, (b) a duly executed Collateral Agreement or
supplement thereto, with such changes as the Administrative Agent may reasonably
request, such that all of the assets, capital stock or other equity interests of
such Subsidiary are pledged to the Administrative Agent for the ratable benefit
of itself and the Lenders and (c) favorable legal opinions addressed to the
Administrative Agent and Lenders in form and substance satisfactory thereto with
respect to such Collateral Agreement and such other documents and closing
certificates as may be requested by the Administrative Agent.
SECTION 9.13 YEAR 2000 COMPATIBILITY. Take all actions reasonably
necessary to assure that Borrowers and their Subsidiaries' computer based
systems are able to operate and effectively process data which includes dates on
and after January 1, 2000. At the request of the Administrative Agent, the
Borrowers and their Subsidiaries shall provide reasonable assurances
satisfactory to the Administrative Agent of the Borrowers and their
Subsidiaries' Year 2000 compatibility.
SECTION 9.14 FURTHER ASSURANCES. Make, execute and deliver all such
additional and further acts, things, deeds and instruments as the Administrative
Agent or any Lender may reasonably require to document and consummate the
transactions contemplated hereby and to vest completely in and insure the
Administrative Agent and the Lenders their respective rights under this
Agreement, the Notes, the Letters of Credit and the other Loan Documents.
ARTICLE X
FINANCIAL COVENANTS
Until all of the Obligations have been paid and satisfied in full and
the Commitments terminated, unless consent has been obtained in the manner set
forth in SECTION 14.11, the Borrowers and their Subsidiaries on a Consolidated
basis will not:
55
SECTION 10.1 LEVERAGE RATIO. As of any fiscal quarter end, permit the
ratio of (a) Total Debt on such date TO (b) Pro Forma EBITDA for the period of
four (4) consecutive fiscal quarters ending on or immediately prior to such date
to exceed the corresponding ratio set forth below (the "LEVERAGE RATIO"):
From and Including To and Including Ratio
------------------ ---------------- -----
Closing Date March 31, 2000 3.25 to 1.00
April 1, 2000 March 31, 2001 3.00 to 1.00
April 1, 2001 all times thereafter 2.75 to 1.00
SECTION 10.2 INTEREST COVERAGE RATIO. As of any fiscal quarter end,
permit the ratio of (a) EBITDA for the period of four (4) consecutive fiscal
quarters ending on or immediately prior to such date to (b) Interest Expense for
the period of four (4) consecutive fiscal quarters ending on or immediately
prior to such date to be less than 3.0 to 1.0.
SECTION 10.3 LIMITATIONS ON CAPITAL EXPENDITURES. Permit Capital
Expenditures in the aggregate in any Fiscal Year to exceed the corresponding
number set forth below:
Fiscal Year 1999 $ 8,000,000
Fiscal Year 2000 $ 10,000,000
Fiscal Year 2001 $ 12,000,000
SECTION 10.4 MINIMUM NET WORTH. Permit Net Worth as of the last day of
any fiscal quarter of the Borrowers and their Subsidiaries commencing after
Fiscal Year 1998, to be less than the "MINIMUM COMPLIANCE LEVEL." The Minimum
Compliance Level shall be the actual Net Worth as of December 31, 1998; and
shall be increased as of the last day of each fiscal quarter of the Borrowers
and their Subsidiaries ending after December 31, 1998, by an amount equal to (i)
50% of Net Income (if positive) for such fiscal quarter and (ii) 75% of the Net
Cash Proceeds of any equity issuance occurring after the December 31, 1998. The
foregoing increases in the Minimum Compliance Level shall be made to reflect
negative Net Income for such period.
SECTION 10.5 MINIMUM PRO FORMA EBITDA . As of any fiscal quarter end,
permit Pro Forma EBITDA for the period of four (4) consecutive fiscal quarters
ending on or immediately prior to such date to be less than the sum of (x) 85%
of Acquired EBITDA for the period commencing on the Closing Date and at all
times thereafter through the applicable fiscal quarter end and (y) the amount
set forth below which corresponds to such fiscal quarter:
------------------------- ---------------------- ----------------------- ---------------------- ----------------------
FISCAL YEAR ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇ QUARTER
----------- ----------- ----------- ----------- -----------
------------------------- ---------------------- ----------------------- ---------------------- ----------------------
------------------------- ---------------------- ----------------------- ---------------------- ----------------------
1999 26,000,000 29,000,000 32,000,000 34,000,000
------------------------- ---------------------- ----------------------- ---------------------- ----------------------
56
------------------------- ---------------------- ----------------------- ---------------------- ----------------------
2000 35,000,000 36,000,000 38,000,000 40,000,000
------------------------- ---------------------- ----------------------- ---------------------- ----------------------
------------------------- ---------------------- ----------------------- ---------------------- ----------------------
2001 and thereafter 40,000,000 40,000,000 40,000,000 40,000,000
------------------------- ---------------------- ----------------------- ---------------------- ----------------------
ARTICLE XI
NEGATIVE COVENANTS
Until all of the Obligations have been paid and satisfied in full and
the Commitments terminated, unless consent has been obtained in the manner set
forth in SECTION 14.11, the Borrowers have not and will not permit their
Subsidiaries to:
SECTION 11.1 LIMITATIONS ON DEBT. Create, incur, assume or suffer to
exist any Debt except:
(a) the Obligations;
(b) Debt incurred in connection with a Hedging Agreement with a
counterparty and upon terms and conditions (including interest rate) reasonably
satisfactory to the Administrative Agent;
(c) Subordinated Debt in an aggregate amount not to exceed $10,000,000
on any date of determination;
(d) Debt existing on the Closing Date and not otherwise permitted under
this SECTION 11.1, as set forth on SCHEDULE 7.1(t) and the renewal and
refinancing (but not the increase in the aggregate principal amount thereof)
thereof;
(e) Debt of the Borrowers and their Subsidiaries incurred in connection
with Capitalized Leases in an aggregate amount not to exceed $3,000,000 on any
date of determination;
(f) purchase money Debt of the Borrowers and their Subsidiaries in an
aggregate amount not to exceed $2,000,000 on any date of determination;
(g) Debt consisting of Guaranty Obligations permitted by SECTION 11.2;
(h) Debt evidenced by Intercompany Notes to the extent permitted
pursuant to SECTION 11.4(d); and
(i) Debt consisting of loans and advances to the extent permitted by
SECTION 11.4(e);
PROVIDED, that no agreement or instrument with respect to Debt permitted to be
incurred by this SECTION 11.1 shall restrict, limit or otherwise encumber (by
covenant or otherwise) the ability of
57
any Subsidiary of the Borrowers to make any payment to the Borrowers or any of
their Subsidiaries (in the form of dividends, intercompany advances or
otherwise) for the purpose of enabling the Borrowers to pay the Obligations.
SECTION 11.2 LIMITATIONS ON GUARANTY OBLIGATIONS. Create, incur, assume
or suffer to exist any Guaranty Obligations except (i) Guaranty Obligations in
favor of the Administrative Agent for the benefit of the Administrative Agent
and the Lenders and (ii) Guaranty Obligations incurred in connection with
performance of tenders, statutory obligations, bids, leases, government
contracts, or performance and return-of-money bonds in an aggregate amount not
to exceed $5,000,000.
SECTION 11.3 LIMITATIONS ON LIENS. Create, incur, assume or suffer to
exist, any Lien on or with respect to any of its assets or properties (including
without limitation shares of capital stock or other ownership interests), real
or personal, whether now owned or hereafter acquired, except:
(a) Liens for taxes, assessments and other governmental charges or
levies (excluding any Lien imposed pursuant to any of the provisions of ERISA or
Environmental Laws) not yet due or as to which the period of grace (not to
exceed thirty (30) days), if any, related thereto has not expired or which are
being contested in good faith and by appropriate proceedings if adequate
reserves are maintained to the extent required by GAAP;
(b) the claims of materialmen, mechanics, carriers, warehousemen,
processors or landlords for labor, materials, supplies or rentals incurred in
the ordinary course of business, (i) which are not overdue for a period of more
than thirty (30) days or (ii) which are being contested in good faith and by
appropriate proceedings;
(c) Liens consisting of deposits or pledges made in the ordinary course
of business in connection with, or to secure payment of, obligations under
workers' compensation, unemployment insurance or similar legislation or
obligations under customer service contracts;
(d) Liens constituting encumbrances in the nature of zoning
restrictions, easements and rights or restrictions of record on the use of real
property, which in the aggregate are not substantial in amount and which do not,
in any case, detract from the value of such property or impair the use thereof
in the ordinary conduct of business;
(e) Liens in favor of the Administrative Agent for the benefit of the
Administrative Agent and the Lenders;
(f) Liens not otherwise permitted by this SECTION 11.3 and in existence
on the Closing Date and described on SCHEDULE 11.3;
(g) Liens securing Debt permitted under SECTION 11.1(f); PROVIDED that
(i) such Liens shall be created substantially simultaneously with the
acquisition of the related asset, (ii) such
58
Liens do not at any time encumber any property other than the property financed
by such Debt, (iii) the amount of Debt secured thereby is not increased and (iv)
the principal amount of Debt secured by any such Lien shall at no time exceed
one hundred percent (100%) of the original purchase price of such property at
the time it was acquired; and
(h) Liens to secure or incurred in connection with the performance of
tenders, statutory obligations, bids, leases, government contracts, or
performance and return-of-money bonds in an aggregate amount not to exceed
$5,000,000.
SECTION 11.4 LIMITATIONS ON LOANS, ADVANCES, INVESTMENTS AND
ACQUISITIONS. Purchase, own, invest in or otherwise acquire, directly or
indirectly, any capital stock, interests in any partnership or joint venture
(including without limitation the creation or capitalization of any Subsidiary),
evidence of Debt or other obligation or security, substantially all or a portion
of the business or assets of any other Person or any other investment or
interest whatsoever in any other Person, or make or permit to exist, directly or
indirectly, any loans, advances or extensions of credit to, or any investment in
cash or by delivery of property in, any Person except:
(a) investments not otherwise permitted by this SECTION 11.4 in
Subsidiaries existing on the Closing Date and the other existing loans, advances
and investments not otherwise permitted by this SECTION 11.4 described on
SCHEDULE 11.4; provided that there shall be no investment in Foreign
Subsidiaries except as disclosed on Schedule 11.4 unless otherwise consented to
by the Required Lenders.
(b) investments in (i) marketable direct obligations issued or
unconditionally guaranteed by the United States of America or any agency thereof
maturing within 120 days from the date of acquisition thereof, (ii) commercial
paper maturing no more than 120 days from the date of creation thereof and
currently having the highest rating obtainable from either Standard & Poor's
Ratings Services, a division of The ▇▇▇▇▇▇-▇▇▇▇ Companies, Inc. or ▇▇▇▇▇'▇
Investors Service, Inc., (iii) certificates of deposit maturing no more than 120
days from the date of creation thereof issued by commercial banks incorporated
under the laws of the United States of America, each having combined capital,
surplus and undivided profits of not less than $500,000,000 and having a rating
of "A" or better by a nationally recognized rating agency; PROVIDED, that the
aggregate amount invested in such certificates of deposit shall not at any time
exceed $5,000,000 for any one such certificate of deposit and $10,000,000 for
any one such bank, or (iv) time deposits maturing no more than 30 days from the
date of creation thereof with commercial banks or savings banks or savings and
loan associations each having membership either in the FDIC or the deposits of
which are insured by the FDIC and in amounts not exceeding the maximum amounts
of insurance thereunder;
(c) acquisitions of all or substantially all of the business or line of
business (whether by acquisition of capital stock, other equity interest, assets
or any combination thereof) in an aggregate amount not to exceed, over the term
of the Credit Facilities $40,000,000 in total cash consideration (including, the
gross amount of potential cash payments associated with any earn out obligation
incurred in connection with such acquisition); PROVIDED that the following
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conditions are met: (i) the entity to be acquired is a going concern; (ii) the
entity to be acquired is in a Substantially Similar Line of Business; (iii) the
Company on behalf of itself and the other Borrowers shall have delivered written
evidence to the Administrative Agent that the acquisition does not have a
negative impact on Pro Forma EBITDA of the Borrowers and their Subsidiaries
taken as a whole for the four (4) consecutive fiscal quarter period ending on or
immediately prior to the date of such proposed acquisition; (iv) a Borrower is
the surviving, controlling corporation upon the consummation of any such
acquisition; (v) the Required Lenders shall have previously consented in writing
to any single acquisition or series of related acquisitions having total cash
consideration in excess of $40,000,000; (vi) the Company on behalf of itself and
the other Borrowers shall have delivered evidence in form and substance
satisfactory to the Administrative Agent that the board of directors of the
entity or entities to be acquired have approved such proposed acquisition; (vii)
the entity to be acquired is not subject to material pending litigation which
could reasonably be expected to have a Material Adverse Effect; (viii) no
Default and no Event of Default has occurred and is continuing or would result
from the consummation of such proposed acquisition, (ix) the Company on behalf
of itself and the other Borrowers shall have delivered to the Administrative
Agent written evidence of compliance on a PRO FORMA basis with the financial
covenants set forth in Article X, (x) the Borrowers shall have delivered to the
Administrative Agent written evidence that the Leverage Ratio (after giving PRO
FORMA effect to the proposed acquisition) will not exceed (I) 3.00 to 1.00 for
the period commencing on the Closing Date through ▇▇▇▇▇ ▇▇, ▇▇▇▇, (▇▇) 2.75 to
1.00 for the period commencing April 1, 2000 through March 31, 2001, and (III)
2.50 to 1.00 for the period commencing April 1, 2001 and at all times
thereafter, and (xi) the total aggregate consideration for any acquisition or
series of related acquisitions (including, without limitation, all cash
payments, Debt and other obligations assumed, earn out payments, seller
financing or equity issued, actual liabilities assumed and potential future
liabilities assumed as reasonably valued by the Borrowers and their Subsidiaries
and recorded on the balance sheet of the Borrowers and their Subsidiaries) shall
not exceed (I) $20,000,000 (of which the total cash consideration paid shall not
exceed $10,000,000) if the Leverage Ratio is greater than or equal to 2.00 to
1.00 and (II) $45,000,000 (of which the total cash consideration paid shall not
exceed $20,000,000) if the Leverage Ratio is less than 2.00 to 1.00;
(d) without duplication, intercompany loans made after the Closing Date
by Systems to Immaterial Subsidiaries; PROVIDED, that (i) each such intercompany
loan is evidenced by an Intercompany Note pledged and delivered to the
Collateral Agent pursuant to the Collateral Agreement, (ii) any such
intercompany loan shall be permitted only so long as such Person remains an
Immaterial Subsidiary and (iii) the aggregate principal amount of all such
intercompany loans shall at no time exceed $2,000,000; and
(e) without duplication and after the Closing Date, intercompany loans
or advances made by Condor or Systems to another Borrower; provided that any
such intercompany loan or advance is characterized as a loan on the financial
statements of such borrower and lender.
SECTION 11.5 LIMITATIONS ON MERGERS AND LIQUIDATION. Merge, consolidate
or enter into any similar combination with any other Person or liquidate,
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wind-up or dissolve itself (or suffer any liquidation or dissolution) except:
(a) any Wholly-Owned Subsidiary of the Company may merge with any other
Wholly-Owned Subsidiary of the Company or System;
(b) any Wholly-Owned Subsidiary may merge into the Person such
Wholly-Owned Subsidiary was formed to acquire in connection with an acquisition
permitted by SECTION 11.4(c); and
(c) any Wholly-Owned Subsidiary of the Company may wind-up into a
Borrower or any other Wholly-Owned Subsidiary of the Company or System.
SECTION 11.6 LIMITATIONS ON SALE OF ASSETS. Convey, sell, lease,
assign, transfer or otherwise dispose of any of its property, business or assets
(including, without limitation, the sale of any receivables and leasehold
interests and any sale-leaseback or similar transaction), whether now owned or
hereafter acquired except:
(a) the sale of inventory in the ordinary course of business;
(b) the sale of obsolete assets no longer used or usable in the
business of the Borrowers or any of their Subsidiaries;
(c) the transfer of assets to a Borrower or any Wholly-Owned Subsidiary
of the Company or System pursuant to SECTION 11.5(c);
(d) the sale or discount without recourse of accounts receivable
arising in the ordinary course of business in connection with the compromise or
collection thereof; and
(e) the sale or other disposition of assets in the ordinary course of
business not otherwise permitted pursuant to this SECTION 11.6 in an aggregate
amount not to exceed $5,000,000.
SECTION 11.7 LIMITATIONS ON DIVIDENDS AND DISTRIBUTIONS. Declare or pay
any dividends upon any of its capital stock; purchase, redeem, retire or
otherwise acquire, directly or indirectly, any shares of its capital stock, or
make any distribution of cash, property or assets among the holders of shares of
its capital stock, or make any change in its capital structure that could
reasonably be expected to have a Material Adverse Effect; PROVIDED that:
(a) a Borrower or any Wholly-Owned Subsidiary may pay dividends in
shares of its own capital stock; and
(b) any Wholly-Owned Subsidiary may pay cash dividends to the
Borrowers.
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SECTION 11.8 LIMITATIONS ON EXCHANGE AND ISSUANCE OF CAPITAL STOCK.
Issue, sell or otherwise dispose of any class or series of capital stock that,
by its terms or by the terms of any security into which it is convertible or
exchangeable, is, or upon the happening of an event or passing of time would be,
(a) convertible or exchangeable into Debt or (b) required to be redeemed or
repurchased, including at the option of the holder, in whole or in part, or has,
or upon the happening of an event or passing of time would have, a redemption or
similar payment due; PROVIDED, that, any Borrower may issue its own capital
stock in connection with (i) any Permitted Acquisition, (ii) stock options
granted to key employees of any Borrower (including, without limitation,
prospective employees, consultants, directors, prospective directors or any
other persons eligible for stock options pursuant to the Company's 1997
Long-Term Incentive Plan, as amended in November 1997), and (iii) earn outs (in
form and substance reasonably satisfactory to the Administrative Agent and the
Required Lenders) incurred in connection with a Permitted Acquisition.
SECTION 11.9 TRANSACTIONS WITH AFFILIATES. Directly or indirectly (a)
make any loan (other than an intercompany loan permitted pursuant to the terms
of SECTION 11.4(d) or (e)) or advance to, or purchase or assume any note or
other obligation to or from, any of its officers, directors, shareholders or
other Affiliates, or to or from any member of the immediate family of any of its
officers, directors, shareholders or other Affiliates, or subcontract any
operations to any of its Affiliates, or (b) enter into, or be a party to, any
other transaction with any of its Affiliates, except (i) (A) pursuant to the
reasonable requirements of its business and upon fair and reasonable terms which
are no less favorable to it than it would obtain in a comparable arm's length
transaction with a Person not its Affiliate and (B) with respect to any
transaction in excess of $1,000,000, that are fully disclosed to and approved in
writing by the Required Lenders prior to the consummation thereof and (ii) those
agreements existing on the Closing Date, not otherwise permitted under this
SECTION 11.9 and set forth on SCHEDULE 11.9 hereto.
SECTION 11.10 CERTAIN ACCOUNTING CHANGES; ORGANIZATIONAL DOCUMENTS. (a)
Change its Fiscal Year end, or make any change in its accounting treatment and
reporting practices except as required by GAAP or (b) amend, modify or change
its articles of incorporation (or corporate charter or other similar
organizational document) in any respect or amend, modify or change its bylaws
(or other similar document) in any manner adverse in any respect to the rights
or interests of the Lenders.
SECTION 11.11 AMENDMENTS; PAYMENTS AND PREPAYMENTS OF SUBORDINATED
DEBT. Amend or modify (or permit the modification or amendment of) any of the
terms or provisions of any Subordinated Debt, or cancel or forgive, make any
voluntary or optional payment or prepayment on, or redeem or acquire for value
(including without limitation by way of depositing with any trustee with respect
thereto money or securities before due for the purpose of paying when due) any
Subordinated Debt.
SECTION 11.12 RESTRICTIVE AGREEMENTS. Enter into any Debt which
contains any negative pledge on assets or any covenants more
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restrictive than the provisions of Articles IX, X and XI, or which restricts,
limits or otherwise encumbers its ability to incur Liens on or with respect to
any of its assets or properties other than the assets or properties securing
such Debt. Enter into any amendment or modification or waiver that is adverse in
any respect to the Lenders to any Material Contract in effect on the Closing
Date. Notwithstanding the preceding, without duplication, and with respect to
any agreement existing on the Closing Date which contains an earn out
obligation, waive, modify, supplement or amend any of the terms agreements,
covenants or conditions applicable to such earn out without the approval of all
the Lenders.
SECTION 11.13 OWNERSHIP OF SUBSIDIARIES; LIMITATIONS ON THE COMPANY AND
ITS SUBSIDIARIES. The Company will not permit any Person (other than a Borrower
or a Wholly-Owned Subsidiary of a Borrower) to own any capital stock of any
Subsidiary of a Borrower or any Borrower.
SECTION 11.14 IMPAIRMENT OF SECURITY INTERESTS. No Borrower will take
or omit to take any action, which action or omission might or would have the
result of materially impairing the security interests in favor of the Collateral
Agent on behalf of the Agents and the Lenders with respect to the Collateral and
no Borrower will grant to any Person (other than the Collateral Agent pursuant
to the Security Documents) any interest whatsoever in the Collateral, except for
Permitted Liens.
ARTICLE XII
DEFAULT AND REMEDIES
SECTION 12.1 EVENTS OF DEFAULT. Each of the following shall constitute
an Event of Default, whatever the reason for such event and whether it shall be
voluntary or involuntary or be effected by operation of law or pursuant to any
judgment or order of any court or any order, rule or regulation of any
Governmental Authority or otherwise:
(a) DEFAULT IN PAYMENT OF PRINCIPAL OF LOANS AND REIMBURSEMENT
OBLIGATIONS. The Borrowers shall default in any payment of principal of any
Loan, Note or Reimbursement Obligation when and as due (whether at maturity, by
reason of acceleration or otherwise).
(b) OTHER PAYMENT DEFAULT. The Borrowers shall default in the payment
when and as due (whether at maturity, by reason of acceleration or otherwise) of
interest on any Loan, Note or Reimbursement Obligation or the payment of any
other Obligation, and such default shall continue unremedied for five (5)
Business Days.
(c) MISREPRESENTATION. Any representation or warranty made or deemed to
be made by the Borrowers or any of their Subsidiaries under this Agreement, any
Loan Document or any amendment hereto or thereto, shall at any
63
time prove to have been incorrect or misleading in any material respect when
made or deemed made.
(d) DEFAULT IN PERFORMANCE OF CERTAIN COVENANTS. The Borrowers shall
default in the performance or observance of any covenant or agreement contained
in SECTIONS 2.8, 8.1, 8.2, 8.5(e) or 9.12 or Articles X or XI of this Agreement.
(e) DEFAULT IN PERFORMANCE OF OTHER COVENANTS AND CONDITIONS. (i) The
Borrowers or any Subsidiary shall default in the performance or observance of
any term, covenant, condition or agreement contained in this Agreement (other
than as specifically provided for otherwise in this SECTION 12.1) or any other
Loan Document and such default shall continue for a period of thirty (30) days
after the earlier of (A) the date on which written notice thereof has been given
to the Borrowers by the Administrative Agent or (B) the date on which any
Responsible Officer of any Borrower first learns of such default or (ii) any
Loan Document shall fail to be in full force and effect or to give the
Administrative Agent or the Collateral Agent, as the case may be, or any other
secured party the Liens, rights, power and privileges purported to be created
thereby.
(f) [RESERVED]
(g) DEBT CROSS-DEFAULT. The Borrowers or any of their Subsidiaries
shall (i) default in the payment of any Debt (other than the Notes or any
Reimbursement Obligation) the aggregate outstanding amount of which Debt is in
excess of $1,000,000 beyond the period of grace if any, provided in the
instrument or agreement under which such Debt was created, or (ii) default in
the observance or performance of any other agreement or condition relating to
any Debt (other than the Notes or any Reimbursement Obligation) the aggregate
outstanding amount of which Debt is in excess of $1,000,000 or contained in any
instrument or agreement evidencing, securing or relating thereto or any other
event shall occur or condition exist, the effect of which default or other event
or condition is to cause, or to permit the holder or holders of such Debt (or a
trustee or agent on behalf of such holder or holders) to cause, with the giving
of notice if required, any such Debt to become due prior to its stated maturity
(any applicable grace period having expired).
(h) OTHER CROSS-DEFAULTS. The Borrowers or any of their Subsidiaries
shall default in the payment when due, or in the performance or observance, of
any material obligation or material condition of any Material Contract unless,
but only as long as, the existence of any such default is being contested by the
Borrowers or such Subsidiary in good faith by appropriate proceedings and
adequate reserves in respect thereof have been established on the books of the
Borrowers or such Subsidiary to the extent required by GAAP.
(i) CHANGE IN CONTROL. Any person or group of persons (within the
meaning of Section 13(d) of the Securities Exchange Act of 1934, as amended)
shall obtain ownership or control in one or more series of transactions of more
than thirty-five percent (35.0%) of the common stock or thirty-five percent
(35.0%) of the voting power of the Borrowers entitled to vote in the election of
members of the board of directors of the Borrowers or there shall have occurred
under any indenture or other instrument evidencing any Debt in excess of
$1,000,000
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any "CHANGE IN CONTROL" (as defined in such indenture or other evidence of Debt)
obligating the Borrowers to repurchase, redeem or repay all or any part of the
Debt or capital stock provided for therein (any such event, a "CHANGE IN
CONTROL").
(j) VOLUNTARY BANKRUPTCY PROCEEDING. The Borrowers or any Subsidiary
shall (i) commence a voluntary case under the federal bankruptcy laws (as now or
hereafter in effect), (ii) file a petition seeking to take advantage of any
other laws, domestic or foreign, relating to bankruptcy, insolvency,
reorganization, winding up or composition for adjustment of debts, (iii) consent
to or fail to contest in a timely and appropriate manner any petition filed
against it in an involuntary case under such bankruptcy laws or other laws, (iv)
apply for or consent to, or fail to contest in a timely and appropriate manner,
the appointment of, or the taking of possession by, a receiver, custodian,
trustee, or liquidator of itself or of a substantial part of its property,
domestic or foreign, (v) admit in writing its inability to pay its debts as they
become due, (vi) make a general assignment for the benefit of creditors, or
(vii) take any corporate action for the purpose of authorizing any of the
foregoing.
(k) INVOLUNTARY BANKRUPTCY PROCEEDING. A case or other proceeding shall
be commenced against the Borrowers or any Subsidiary in any court of competent
jurisdiction seeking (i) relief under the federal bankruptcy laws (as now or
hereafter in effect) or under any other laws, domestic or foreign, relating to
bankruptcy, insolvency, reorganization, winding up or adjustment of debts, or
(ii) the appointment of a trustee, receiver, custodian, liquidator or the like
for the Borrowers or any Subsidiary or for all or any substantial part of their
respective assets, domestic or foreign, and such case or proceeding shall
continue without dismissal or stay for a period of sixty (60) consecutive days,
or an order granting the relief requested in such case or proceeding (including,
but not limited to, an order for relief under such federal bankruptcy laws)
shall be entered.
(l) TERMINATION EVENT. The occurrence of any of the following events:
(i) the Borrowers or any ERISA Affiliate fails to make full payment when due of
all amounts which, under the provisions of any Pension Plan or Section 412 of
the Code, the Borrowers or any ERISA Affiliate is required to pay as
contributions thereto, (ii) an accumulated funding deficiency in excess of
$100,000 occurs or exists, whether or not waived, with respect to any Pension
Plan, (iii) a Termination Event or (iv) the Borrowers or any ERISA Affiliate as
employers under one or more Multiemployer Plan makes a complete or partial
withdrawal from any such Multiemployer Plan and the plan sponsor of such
Multiemployer Plans notifies such withdrawing employer that such employer has
incurred a withdrawal liability requiring payments in an amount exceeding
$100,000.
(m) JUDGMENT. A judgment or order for the payment of money which causes
the aggregate amount of all such judgments to exceed $1,000,000 in any Fiscal
Year shall be entered against the Borrowers or any of their Subsidiaries by any
court and such judgment or order shall continue without discharge or stay for a
period of thirty (30) days.
(n) DEBARMENT AND/OR SUSPENSION WITH A GOVERNMENTAL AUTHORITY. (i) The
debarment
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or suspension of any Borrower from contracting with (A) any Federal Governmental
Authority or (B) any State Governmental Authority to the extent it would
reasonably be expected to have a Material Adverse Effect; (ii) the issuance of a
notice of debarment or suspension to any Borrower (excluding any notice from a
State Governmental Authority to the extent that debarment or suspension of such
Borrower by such State Governmental Authority would not reasonably be expected
to have a Material Adverse Effect); (iii) a notice of termination or the actual
termination of any Government Contract shall have been issued to or received by
any Borrower (other than a termination for convenience approved by the
Administrative Agent) (except to the extent that such notice of termination or
termination of a Governmental Contract with a State Governmental Authority would
not reasonably be expected to have a Material Adverse Effect); (iv) an
investigation or inquiry by a Federal Governmental Authority relating to any
Borrower shall have been commenced in connection with (A) any Borrower's
activities, which investigation could reasonably result in criminal or civil
liability, suspension, debarment or any other adverse administrative action
arising by reason of alleged fraud, willful misconduct, neglect, default or
other wrongdoing; or (B) any Government Contract with a Federal Governmental
Authority; or (v) to the extent it would reasonably be expected to have a
Material Adverse Effect, an investigation or inquiry by a State Governmental
Authority relating to any Borrower shall have been commenced in connection with
(A) any Borrower's activities, which investigation could reasonably result in
criminal or civil liability, suspension, debarment or any other adverse
administrative action arising by reason of alleged fraud, willful misconduct,
neglect, default or other wrongdoing; or (B) any Government Contract with a
State Governmental Authority.
SECTION 12.2 REMEDIES. Upon the occurrence of an Event of Default, with
the consent of the Required Lenders, the Administrative Agent may, or upon the
request of the Required Lenders, the Administrative Agent shall, by notice to
the Borrowers:
(a) ACCELERATION; TERMINATION OF FACILITIES. Declare the principal of
and interest on the Loans, the Notes and the Reimbursement Obligations at the
time outstanding, and all other amounts owed to the Lenders and to the
Administrative Agent under this Agreement or any of the other Loan Documents
(other than any Hedging Agreement) (including, without limitation, all L/C
Obligations, whether or not the beneficiaries of the then outstanding Letters of
Credit shall have presented the documents required thereunder) and all other
Obligations (other than obligations owing under any Hedging Agreement), to be
forthwith due and payable, whereupon the same shall immediately become due and
payable without presentment, demand, protest or other notice of any kind, all of
which are expressly waived, anything in this Agreement or the other Loan
Documents to the contrary notwithstanding, and terminate the Credit Facility and
any right of the Borrowers to request borrowings or Letters of Credit
thereunder; PROVIDED, that upon the occurrence of an Event of Default specified
in SECTION 12.1(j) or (k), the Credit Facility shall be automatically terminated
and all Obligations (other than obligations owing under any Hedging Agreement)
shall automatically become due and payable.
(b) LETTERS OF CREDIT. With respect to all Letters of Credit with
respect to which presentment for honor shall not have occurred at the time of an
acceleration pursuant to the
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preceding paragraph, require the Borrowers at such time to deposit in a cash
collateral account opened by the Administrative Agent an amount equal to the
aggregate then undrawn and unexpired amount of such Letters of Credit. Amounts
held in such cash collateral account shall be applied by the Administrative
Agent to the payment of drafts drawn under such Letters of Credit, and the
unused portion thereof after all such Letters of Credit shall have expired or
been fully drawn upon, if any, shall be applied to repay the other Obligations.
After all such Letters of Credit shall have expired or been fully drawn upon,
the Reimbursement Obligation shall have been satisfied and all other Obligations
shall have been paid in full, the balance, if any, in such cash collateral
account shall be returned to the Borrowers.
(c) RIGHTS OF COLLECTION. Exercise on behalf of the Lenders all of its
other rights and remedies under this Agreement, the other Loan Documents and
Applicable Law, in order to satisfy all of the Borrowers' Obligations.
SECTION 12.3 RIGHTS AND REMEDIES CUMULATIVE; NON-WAIVER; ETC. The
enumeration of the rights and remedies of the Administrative Agent and the
Lenders set forth in this Agreement is not intended to be exhaustive and the
exercise by the Administrative Agent and the Lenders of any right or remedy
shall not preclude the exercise of any other rights or remedies, all of which
shall be cumulative, and shall be in addition to any other right or remedy given
hereunder or under the Loan Documents or that may now or hereafter exist in law
or in equity or by suit or otherwise. No delay or failure to take action on the
part of the Administrative Agent or any Lender in exercising any right, power or
privilege shall operate as a waiver thereof, nor shall any single or partial
exercise of any such right, power or privilege preclude other or further
exercise thereof or the exercise of any other right, power or privilege or shall
be construed to be a waiver of any Event of Default. No course of dealing
between the Borrowers, the Administrative Agent and the Lenders or their
respective agents or employees shall be effective to change, modify or discharge
any provision of this Agreement or any of the other Loan Documents or to
constitute a waiver of any Event of Default.
ARTICLE XIII
THE ADMINISTRATIVE AGENT AND THE COLLATERAL AGENT
SECTION 13.1 APPOINTMENT. Each of the Lenders hereby irrevocably
designates and appoints First Union as Administrative Agent and Collateral Agent
of such Lender under this Agreement and the other Loan Documents for the term
hereof and each such Lender irrevocably authorizes First Union as Administrative
Agent and Collateral Agent for such Lender, to take such action on its behalf
under the provisions of this Agreement and the other Loan Documents and to
exercise such powers and perform such duties as are expressly delegated to the
Administrative Agent by the terms of this Agreement and such other Loan
Documents, together with such other powers as are reasonably incidental thereto.
Notwithstanding any provision to the contrary elsewhere in this Agreement or
such other Loan Documents, the Administrative Agent shall not have any duties or
responsibilities, except those expressly set forth herein and therein, or any
fiduciary relationship
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with any Lender, and no implied covenants, functions, responsibilities, duties,
obligations or liabilities shall be read into this Agreement or the other Loan
Documents or otherwise exist against the Administrative Agent. Any reference to
the Administrative Agent or Collateral Agent, as applicable, in this Article
XIII shall be deemed to refer to the Administrative Agent solely in its capacity
as Administrative Agent or Collateral Agent, as applicable, and not in its
capacity as a Lender.
SECTION 13.2 DELEGATION OF DUTIES. The Agents may execute any of their
respective duties under this Agreement and the other Loan Documents by or
through agents or attorneys-in-fact and shall be entitled to advice of counsel
concerning all matters pertaining to such duties. The Administrative Agent shall
not be responsible for the negligence or misconduct of any agents or
attorneys-in-fact selected by such Agent with reasonable care.
SECTION 13.3 EXCULPATORY PROVISIONS. Neither the Administrative Agent
nor any of its officers, directors, employees, agents, attorneys-in-fact,
Subsidiaries or Affiliates shall be (a) liable for any action lawfully taken or
omitted to be taken by it or such Person under or in connection with this
Agreement or the other Loan Documents (except for actions occasioned solely by
its or such Person's own gross negligence or willful misconduct), or (b)
responsible in any manner to any of the Lenders for any recitals, statements,
representations or warranties made by the Borrowers or any of their Subsidiaries
or any officer thereof contained in this Agreement or the other Loan Documents
or in any certificate, report, statement or other document referred to or
provided for in, or received by the Administrative Agent under or in connection
with, this Agreement or the other Loan Documents or for the value, validity,
effectiveness, genuineness, enforceability or sufficiency of this Agreement or
the other Loan Documents or for any failure of the Borrowers or any of their
Subsidiaries to perform their obligations hereunder or thereunder. The
Administrative Agent shall not be under any obligation to any Lender to
ascertain or to inquire as to the observance or performance of any of the
agreements contained in, or conditions of, this Agreement, or to inspect the
properties, books or records of the Borrowers or any of their Subsidiaries.
SECTION 13.4 RELIANCE BY THE AGENTS. The Agents shall be entitled to
rely, and shall be fully protected in relying, upon any note, writing,
resolution, notice, consent, certificate, affidavit, letter, cablegram,
telegram, telecopy, telex or teletype message, statement, order or other
document or conversation believed by it to be genuine and correct and to have
been signed, sent or made by the proper Person or Persons and upon advice and
statements of legal counsel (including, without limitation, counsel to the
Borrowers), independent accountants and other experts selected by such Agent.
The Agents may deem and treat the payee of any Note as the owner thereof for all
purposes unless such Note shall have been transferred in accordance with hereof.
The Agents shall be fully justified in failing or refusing to take any action
under this Agreement and the other Loan Documents unless it shall first receive
such advice or concurrence of the Required Lenders (or, when expressly required
hereby or by the relevant other Loan Documents, all the Lenders) as it deems
appropriate or it shall first be indemnified to its satisfaction by the Lenders
against any and all liability and
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expense which may be incurred by it by reason of taking or continuing to take
any such action except for its own gross negligence or willful misconduct. The
Agents shall in all cases be fully protected in acting, or in refraining from
acting, under this Agreement and the Notes in accordance with a request of the
Required Lenders (or, when expressly required hereby, all the Lenders), and such
request and any action taken or failure to act pursuant thereto shall be binding
upon all the Lenders and all future holders of the Notes.
SECTION 13.5 NOTICE OF DEFAULT. No Agent shall be deemed to have
knowledge or notice of the occurrence of any Default or Event of Default
hereunder unless it has received notice from a Lender or the Borrowers referring
to this Agreement, describing such Default or Event of Default and stating that
such notice is a "NOTICE OF DEFAULT." In the event that any Agent receives such
a notice, it shall promptly give notice thereof to the Lenders. The
Administrative Agent shall take such action with respect to such Default or
Event of Default as shall be reasonably directed by the Required Lenders;
PROVIDED that unless and until such Agent shall have received such directions,
the Administrative Agent may (but shall not be obligated to) take such action,
or refrain from taking such action, with respect to such Default or Event of
Default as it shall deem advisable in the best interests of the Lenders, EXCEPT
to the extent that other provisions of this Agreement expressly require that any
such action be taken or not be taken only with the consent and authorization or
the request of the Lenders or Required Lenders, as applicable.
SECTION 13.6 NON-RELIANCE ON THE AGENTS AND OTHER LENDERS. Each Lender
expressly acknowledges that neither Agent nor any of such Agent's officers,
directors, employees, agents, attorneys-in-fact, Subsidiaries or Affiliates has
made any representations or warranties to it and that no act by any Agent
hereinafter taken, including any review of the affairs of the Borrowers or any
of their Subsidiaries, shall be deemed to constitute any representation or
warranty by such Agent to any Lender. Each Lender represents to the
Administrative Agent that it has, independently and without reliance upon any
Agent or any other Lender, and based on such documents and information as it has
deemed appropriate, made its own appraisal of and investigation into the
business, operations, property, financial and other condition and
creditworthiness of the Borrowers and their Subsidiaries and made its own
decision to make its Loans and issue or participate in Letter of Credit
hereunder and enter into this Agreement. Each Lender also represents that it
will, independently and without reliance upon the Administrative Agent or any
other Lender, and based on such documents and information as it shall deem
appropriate at the time, continue to make its own credit analysis, appraisals
and decisions in taking or not taking action under this Agreement and the other
Loan Documents, and to make such investigation as it deems necessary to inform
itself as to the business, operations, property, financial and other condition
and creditworthiness of the Borrowers and their Subsidiaries. Except for
notices, reports and other documents expressly required to be furnished to the
Lenders by the Agents hereunder or by the other Loan Documents, the Agents shall
not have any duty or responsibility to provide any Lender with any credit or
other information concerning the business, operations, property, financial and
other condition or creditworthiness of the Borrowers or any of their
Subsidiaries which may come into the possession of any Agent or any of its
respective officers, directors, employees, agents, attorneys-
69
in-fact, Subsidiaries or Affiliates.
SECTION 13.7 INDEMNIFICATION. The Lenders agree to indemnify the
Administrative Agent and in its respective capacity as such and (to the extent
not reimbursed by the Borrowers and without limiting the obligation of the
Borrowers to do so), ratably according to the respective amounts of their
Revolving Credit Commitment Percentages and Term Loan Commitment Percentages, as
applicable, from and against any and all liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, costs, expenses or disbursements
of any kind whatsoever which may at any time (including, without limitation, at
any time following the payment of the Notes or any Reimbursement Obligation) be
imposed on, incurred by or asserted against the Administrative Agent in any way
relating to or arising out of this Agreement or the other Loan Documents, or any
documents contemplated by or referred to herein or therein or the transactions
contemplated hereby or thereby or any action taken or omitted by the
Administrative Agent under or in connection with any of the foregoing; PROVIDED
that no Lender shall be liable for the payment of any portion of such
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
costs, expenses or disbursements resulting solely from the Administrative
Agent's bad faith, gross negligence or willful misconduct. The agreements in
this SECTION 13.7 shall survive the payment of the Notes, any Reimbursement
Obligation and all other amounts payable hereunder and the termination of this
Agreement.
SECTION 13.8 THE AGENTS IN THEIR INDIVIDUAL CAPACITY. Each Agent and
its respective Subsidiaries and Affiliates may make loans to, accept deposits
from and generally engage in any kind of business with the Borrowers as though
such Agent were not an Agent hereunder. With respect to any Loans made or
renewed by it and any Note issued to it and with respect to any Letter of Credit
issued by it or participated in by it, such Agent shall have the same rights and
powers under this Agreement and the other Loan Documents as any Lender and may
exercise the same as though it were not an Agent, and the terms "LENDER" and
"LENDERS" shall include such Agent in its individual capacity.
SECTION 13.9 RESIGNATION OF THE AGENTS; SUCCESSOR AGENTS. Subject to
the appointment and acceptance of a successor as provided below, any Agent may
resign at any time by giving notice thereof to the Lenders and the Borrowers.
Upon any such resignation, the Required Lenders shall, with the consent of the
Company on behalf of itself and the other Borrowers, so long as no Default or
Event of Default has occurred and is continuing, have the right to appoint a
successor Agent, which successor shall have minimum capital and surplus of at
least $500,000,000. If no successor Agent shall have been so appointed by the
Required Lenders and shall have accepted such appointment within thirty (30)
days after such Agent's giving of notice of resignation, then such Agent may, on
behalf of the Lenders, appoint a successor Agent, which successor shall have
minimum capital and surplus of at least $500,000,000. Upon the acceptance of any
appointment as Agent hereunder by a successor Agent, such successor Agent shall
thereupon succeed to and become vested with all rights, powers, privileges and
duties of the retiring Agent, and the retiring Agent shall be discharged from
its duties and obligations hereunder. After any retiring Agent's resignation
hereunder as
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Agent, the provisions of this SECTION 13.9 shall continue in effect for its
benefit in respect of any actions taken or omitted to be taken by it while it
was acting as Agent.
ARTICLE XIV
MISCELLANEOUS
SECTION 14.1 NOTICES.
(a) METHOD OF COMMUNICATION. Except as otherwise provided in this
Agreement, all notices and communications hereunder shall be in writing, or by
telephone subsequently confirmed in writing. Any notice shall be effective if
delivered by hand delivery or sent via telecopy, recognized overnight courier
service or certified mail, return receipt requested, and shall be presumed to be
received by a party hereto (i) on the date of delivery if delivered by hand or
sent by telecopy, (ii) on the next Business Day if sent by recognized overnight
courier service and (iii) on the third Business Day following the date sent by
certified mail, return receipt requested. A telephonic notice to the
Administrative Agent as understood by the Administrative Agent will be deemed to
be the controlling and proper notice in the event of a discrepancy with or
failure to receive a confirming written notice.
(b) ADDRESSES FOR NOTICES. Notices to any party shall be sent to it at
the following addresses, or any other address as to which all the other parties
are notified in writing.
If to the Borrowers: Condor Technology Solutions, Inc.
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇. ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Telephone No.: ▇▇▇-▇▇▇-▇▇▇▇
Telecopy No.: 410-266-8400
With copies to: ▇▇▇▇▇▇, ▇▇▇▇▇ & ▇▇▇▇▇▇▇, LLP
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Esq.
Telephone No.: ▇▇▇-▇▇▇-▇▇▇▇
Telecopy No.: ▇▇▇-▇▇▇-▇▇▇▇
If to First Union as First Union National Bank
Administrative Agent One First Union Center, TW-4
or as Collateral Agent: ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: Syndication Agency Services
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Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy No.: (▇▇▇) ▇▇▇-▇▇▇▇
If to any Lender: To the Address set forth on SCHEDULE 1 hereto
(c) ADMINISTRATIVE AGENT'S OFFICE. The Administrative Agent hereby
designates its office located at the address set forth above, or any subsequent
office which shall have been specified for such purpose by written notice to the
Borrowers and Lenders, as the Administrative Agent's Office referred to herein,
to which payments due are to be made and at which Loans will be disbursed and
Letters of Credit issued.
SECTION 14.2 EXPENSES; INDEMNITY. The Borrowers will (a) pay all
out-of-pocket expenses of the Agent in connection with (i) the preparation,
execution and delivery of this Agreement and each other Loan Document, whenever
the same shall be executed and delivered, including without limitation all
out-of-pocket syndication and due diligence expenses and reasonable fees and
disbursements of counsel for the Agents and (ii) the preparation, execution and
delivery of any waiver, amendment or consent by the Agents or the Lenders
relating to this Agreement or any other Loan Document, including without
limitation reasonable fees and disbursements of counsel for the Agents, (b) pay
all reasonable out-of-pocket expenses of the Agents and each Lender actually
incurred in connection with the administration and enforcement of any rights and
remedies of the Agents and Lenders under the Credit Facility, including
consulting with appraisers, accountants, engineers, attorneys and other Persons
concerning the nature, scope or value of any right or remedy of the
Administrative Agent or any Lender hereunder or under any other Loan Document or
any factual matters in connection therewith, which expenses shall include
without limitation the reasonable fees and disbursements of such Persons, and
(c) defend, indemnify and hold harmless the Agents and the Lenders, and their
respective parents, Subsidiaries, Affiliates, employees, agents, officers and
directors, from and against any losses, penalties, fines, liabilities,
settlements, damages, costs and expenses, suffered by any such Person in
connection with any claim, investigation, litigation or other proceeding
(whether or not the Agents or any Lender is a party thereto) and the prosecution
and defense thereof, arising out of or in any way connected with the Agreement,
any other Loan Document or the Loans, including without limitation reasonable
attorney's and consultant's fees, except to the extent that any of the foregoing
directly result from the gross negligence or willful misconduct of the party
seeking indemnification therefor.
SECTION 14.3 SET-OFF. In addition to any rights now or hereafter
granted under Applicable Law and to the extent permitted by law, and not by way
of limitation of any such rights, upon and after the occurrence of any Event of
Default and during the continuance thereof, the Lenders and any assignee or
participant of a Lender in accordance with SECTION 14.10 are hereby authorized
by the Borrowers at any time or from time to time, without notice to the
Borrowers or to any other Person, any such notice being hereby expressly waived,
to set off and to appropriate and to apply any and all deposits (general or
special, time or demand, including, but not limited to, indebtedness evidenced
by certificates of deposit, whether matured or unmatured) and any other
indebtedness
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at any time held or owing by the Lenders, or any such assignee or participant to
or for the credit or the account of the Borrowers against and on account of the
Obligations irrespective of whether or not (a) the Lenders shall have made any
demand under this Agreement or any of the other Loan Documents or (b) the
Administrative Agent shall have declared any or all of the Obligations to be due
and payable as permitted by SECTION 12.2 and although such Obligations shall be
contingent or unmatured.
SECTION 14.4 GOVERNING LAW. This Agreement, the Notes and the other
Loan Documents, unless otherwise expressly set forth therein, shall be governed
by, construed and enforced in accordance with the laws of the State of New York,
without regard to the conflicts or choice of law principles thereof.
SECTION 14.5 CONSENT TO JURISDICTION. The Borrowers hereby irrevocably
consent to the personal jurisdiction of the state and federal courts located in
Mecklenburg County, North Carolina, and in New York, New York, in any action,
claim or other proceeding arising out of any dispute in connection with this
Agreement, the Notes and the other Loan Documents, any rights or obligations
hereunder or thereunder, or the performance of such rights and obligations. The
Borrowers hereby irrevocably consent to the service of a summons and complaint
and other process in any action, claim or proceeding brought by the
Administrative Agent or any Lender in connection with this Agreement, the Notes
or the other Loan Documents, any rights or obligations hereunder or thereunder,
or the performance of such rights and obligations, on behalf of itself or its
property, in the manner specified in SECTION 14.1. Nothing in this SECTION 14.5
shall affect the right of the Administrative Agent or any Lender to serve legal
process in any other manner permitted by Applicable Law or affect the right of
the Administrative Agent or any Lender to bring any action or proceeding against
the Borrowers or their properties in the courts of any other jurisdictions.
SECTION 14.6 BINDING ARBITRATION; WAIVER OF JURY TRIAL.
(a) BINDING ARBITRATION. Upon demand of any party, whether made before
or after institution of any judicial proceeding, any dispute, claim or
controversy arising out of, connected with or relating to the Notes or any other
Loan Documents ("DISPUTES"), between or among parties to the Notes or any other
Loan Document shall be resolved by binding arbitration as provided herein.
Institution of a judicial proceeding by a party does not waive the right of that
party to demand arbitration hereunder. Disputes may include, without limitation,
tort claims, counterclaims, claims brought as class actions, claims arising from
Loan Documents executed in the future, disputes as to whether a matter is
subject to arbitration, or claims concerning any aspect of the past, present or
future relationships arising out of or connected with the Loan Documents.
Arbitration shall be conducted under and governed by the Commercial Financial
Disputes Arbitration Rules (the "ARBITRATION RULES") of the American Arbitration
Association and Title 9 of the U.S. Code. All arbitration hearings shall be
conducted in Charlotte, North Carolina. The expedited procedures set forth in
Rule 51, ET SEQ. of the Arbitration Rules shall be applicable to claims of less
than $1,000,000. All applicable statutes of limitation shall apply to
73
any Dispute. A judgment upon the award may be entered in any court having
jurisdiction. Notwithstanding anything foregoing to the contrary, any
arbitration proceeding demanded hereunder shall begin within ninety (90) days
after such demand thereof and shall be concluded within one-hundred twenty (120)
days after such demand. These time limitations may not be extended unless a
party hereto shows cause for extension and then such extension shall not exceed
a total of sixty (60) days. The panel from which all arbitrators are selected
shall be comprised of licensed attorneys. The single arbitrator selected for
expedited procedure shall be a retired judge from the highest court of general
jurisdiction, state or federal, of the state where the hearing will be
conducted. The parties hereto do not waive any applicable Federal or state
substantive law except as provided herein. Notwithstanding the foregoing, this
paragraph shall not apply to any Hedging Agreement that is a Loan Document.
(b) JURY TRIAL. THE ADMINISTRATIVE AGENT, EACH COLLATERAL AGENT, EACH
LENDER AND THE BORROWERS HEREBY ACKNOWLEDGE THAT BY AGREEING TO BINDING
ARBITRATION THEY HAVE IRREVOCABLY WAIVED THEIR RESPECTIVE RIGHTS TO A JURY TRIAL
WITH RESPECT TO ANY ACTION, CLAIM OR OTHER PROCEEDING ARISING OUT OF ANY DISPUTE
IN CONNECTION WITH THIS AGREEMENT, THE NOTES OR THE OTHER LOAN DOCUMENTS, ANY
RIGHTS OR OBLIGATIONS HEREUNDER OR THEREUNDER, OR THE PERFORMANCE OF SUCH RIGHTS
AND OBLIGATIONS.
(c) PRESERVATION OF CERTAIN REMEDIES. Notwithstanding the preceding
binding arbitration provisions, the parties hereto and the other Loan Documents
preserve, without diminution, certain remedies that such Persons may employ or
exercise freely, either alone, in conjunction with or during a Dispute. Each
such Person shall have and hereby reserves the right to proceed in any court of
proper jurisdiction or by self help to exercise or prosecute the following
remedies: (i) all rights to foreclose against any real or personal property or
other security by exercising a power of sale granted in the Loan Documents or
under applicable law or by judicial foreclosure and sale, (ii) all rights of
self help including peaceful occupation of property and collection of rents, set
off, and peaceful possession of property, (iii) obtaining provisional or
ancillary remedies including injunctive relief, sequestration, garnishment,
attachment, appointment of receiver and in filing an involuntary bankruptcy
proceeding, and (iv) when applicable, a judgment by confession of judgment.
Preservation of these remedies does not limit the power of an arbitrator to
grant similar remedies that may be requested by a party in a Dispute.
SECTION 14.7 REVERSAL OF PAYMENTS. To the extent the Borrowers make a
payment or payments to the Administrative Agent for the ratable benefit of the
Lenders or the Administrative Agent receives any payment or proceeds of the
collateral which payments or proceeds or any part thereof are subsequently
invalidated, declared to be fraudulent or preferential, set aside and/or
required to be repaid to a trustee, receiver or any other party under any
bankruptcy law, state or federal law, common law or equitable cause, then, to
the extent of such payment or proceeds repaid, the Obligations or part thereof
intended to be satisfied shall be revived and continued in full force and effect
as if such
74
payment or proceeds had not been received by the Administrative Agent.
SECTION 14.8 INJUNCTIVE RELIEF; PUNITIVE DAMAGES.
(a) The Borrowers recognize that, in the event the Borrowers fail to
perform, observe or discharge any of their obligations or liabilities under this
Agreement, any remedy of law may prove to be inadequate relief to the Lenders.
Therefore, the Borrowers agree that the Lenders, at the Lenders' option, shall
be entitled to temporary and permanent injunctive relief in any such case
without the necessity of proving actual damages.
(b) Each of the Administrative Agent, Lenders and Borrowers (on behalf
of itself and its Subsidiaries) hereby agree that no such Person shall have a
remedy of punitive or exemplary damages against any other party to a Loan
Document and each such Person hereby waives any right or claim to punitive or
exemplary damages that they may now have or may arise in the future in
connection with any Dispute, whether such Dispute is resolved through
arbitration or judicially.
(c) The parties agree that they shall not have a remedy of punitive or
exemplary damages against any other party in any Dispute and hereby waive any
right or claim to punitive or exemplary damages they have now or which may arise
in the future in connection with any Dispute whether the Dispute is resolved by
arbitration or judicially.
SECTION 14.9 ACCOUNTING MATTERS. All financial and accounting
calculations, measurements and computations made for any purpose relating to
this Agreement, including, without limitation, all computations utilized by the
Borrowers or any Subsidiary to determine compliance with any covenant contained
herein, shall, except as otherwise expressly contemplated hereby or unless there
is an express written direction by the Administrative Agent to the contrary
agreed to by the Borrowers, be performed in accordance with GAAP as in effect on
the Closing Date. In the event that changes in GAAP shall be mandated by the
Financial Accounting Standards Board, or any similar accounting body of
comparable standing, or shall be recommended by the Borrowers' certified public
accountants, to the extent that such changes would modify such accounting terms
or the interpretation or computation thereof, such changes shall be followed in
defining such accounting terms only from and after the date the Borrowers and
the Lenders shall have amended this Agreement to the extent necessary to reflect
any such changes in the financial covenants and other terms and conditions of
this Agreement.
SECTION 14.10 SUCCESSORS AND ASSIGNS; PARTICIPATIONS.
(a) BENEFIT OF AGREEMENT. This Agreement shall be binding upon and
inure to the benefit of the Borrowers, the Agents and the Lenders, all future
holders of the Notes, and their respective successors and assigns, except that
the Borrowers shall not assign or transfer any of
75
their rights or obligations under this Agreement without the prior written
consent of each Lender.
(b) ASSIGNMENT BY LENDERS. Each Lender may, with the consent of the
Borrowers (so long as no Default or Event of Default has occurred and is
continuing) and the consent of the Administrative Agent, which consents shall
not be unreasonably withheld, assign to one or more Eligible Assignees all or a
portion of its interests, rights and obligations under this Agreement
(including, without limitation, all or a portion of the Extensions of Credit at
the time owing to it and the Notes held by it); PROVIDED that:
(i) if less than all of the assigning Lender's Revolving
Credit Commitment or Term Loan Commitment is to be assigned, the Commitment so
assigned shall not be less than $5,000,000;
(ii) the parties to each such assignment shall execute and
deliver to the Administrative Agent, for its acceptance and recording in the
Register, an Assignment and Acceptance in the form of EXHIBIT G attached hereto
(an "ASSIGNMENT AND ACCEPTANCE"), together with any Note or Notes subject to
such assignment;
(iii) each Eligible Assignee must, concurrent with the
delivery by such Eligible Assignee of the Assignment and Acceptance, have
available to it and deliver the forms required pursuant to SECTION 5.11(e);
(iv) such assignment shall not, without the consent of the
Borrowers, require the Borrowers to file a registration statement with the
Securities and Exchange Commission or apply to or qualify the Loans or the Notes
under the blue sky laws of any state; and
(v) the assigning Lender shall pay to the Administrative Agent
an assignment fee of $3,500 upon the execution by such Lender of the Assignment
and Acceptance; PROVIDED that no such fee shall be payable upon any assignment
by a Lender to an Affiliate thereof.
Upon such execution, delivery, acceptance and recording, from and after the
effective date specified in each Assignment and Acceptance, which effective date
shall be at least five (5) Business Days after the execution thereof, (A) the
assignee thereunder shall be a party hereto and, to the extent provided in such
Assignment and Acceptance, have the rights and obligations of a Lender hereby
and (B) the Lender thereunder shall, to the extent provided in such assignment,
be released from its obligations under this Agreement.
(c) RIGHTS AND DUTIES UPON ASSIGNMENT. By executing and delivering an
Assignment and Acceptance, the assigning Lender thereunder and the assignee
thereunder confirm to and agree with each other and the other parties hereto as
set forth in such Assignment and Acceptance.
(d) REGISTER. The Administrative Agent shall maintain a copy of each
Assignment and Acceptance delivered to it and a register for the recordation of
the names and addresses of
76
the Lenders and the amount of the Extensions of Credit with respect to each
Lender from time to time (the "REGISTER"). The entries in the Register shall be
conclusive, in the absence of manifest error, and the Borrowers, the
Administrative Agent and the Lenders may treat each person whose name is
recorded in the Register as a Lender hereunder for all purposes of this
Agreement. The Register shall be available for inspection by the Borrowers or
Lender at any reasonable time and from time to time upon reasonable prior
notice.
(e) ISSUANCE OF NEW NOTES. Upon its receipt of an Assignment and
Acceptance executed by an assigning Lender and an Eligible Assignee together
with any Note or Notes subject to such assignment and the written consent to
such assignment, the Administrative Agent shall, if such Assignment and
Acceptance has been completed and is substantially in the form of EXHIBIT G:
(i) accept such Assignment and Acceptance;
(ii) record the information contained therein in the Register;
(iii) give prompt notice thereof to the Lenders and the
Borrowers; and
(iv) promptly deliver a copy of such Assignment and Acceptance
to the Borrowers.
Within five (5) Business Days after receipt of notice, the Borrowers shall
execute and deliver to the Administrative Agent, in exchange for the surrendered
Note or Notes, a new Note or Notes to the order of such Eligible Assignee in
amounts equal to the Commitment assumed by it pursuant to such Assignment and
Acceptance and a new Note or Notes to the order of the assigning Lender in an
amount equal to the Commitment retained by it hereunder. Such new Note or Notes
shall be in an aggregate principal amount equal to the aggregate principal
amount of such surrendered Note or Notes, shall be dated the effective date of
such Assignment and Acceptance and shall otherwise be in substantially the form
of the assigned Notes delivered to the assigning Lender. Each surrendered Note
or Notes shall be canceled and returned to the Borrowers.
(f) PARTICIPATIONS. Each Lender may sell participations to one or more
banks or other entities in all or a portion of its rights and obligations under
this Agreement (including, without limitation, all or a portion of its
Extensions of Credit and the Notes held by it); PROVIDED that:
(i) each such participation shall be in an amount not less
than $5,000,000;
(ii) such Lender's obligations under this Agreement
(including, without limitation, its Revolving Credit Commitment or Term Loan
Commitment, as applicable) shall remain unchanged;
(iii) such Lender shall remain solely responsible to the other
parties hereto for the performance of such obligations;
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(iv) such Lender shall remain the holder of the Notes held by
it for all purposes of this Agreement;
(v) the Borrowers, the Administrative Agent and the other
Lenders shall continue to deal solely and directly with such Lender in
connection with such Lender's rights and obligations under this Agreement;
(vi) such Lender shall not permit such participant the right
to approve any waivers, amendments or other modifications to this Agreement or
any other Loan Document other than waivers, amendments or modifications which
would reduce the principal of or the interest rate on any Loan or Reimbursement
Obligation, extend the term or increase the amount of the Commitment, reduce the
amount of any fees to which such participant is entitled, extend any scheduled
payment date for principal of any Loan or, except as expressly contemplated
hereby or thereby, release substantially all of the Collateral; and
(vii) any such disposition shall not, without the consent of
the Borrowers, require the Borrowers to file a registration statement with the
Securities and Exchange Commission to apply to qualify the Loans or the Notes
under the blue sky law of any state.
(g) DISCLOSURE OF INFORMATION; CONFIDENTIALITY. The Agents and the
Lenders shall hold all non-public information with respect to the Borrowers
obtained pursuant to the Loan Documents in accordance with their customary
procedures for handling confidential information; PROVIDED, that the Agents may
disclose information relating to this Agreement to GOLD SHEETS and other similar
bank trade publications, such information to consist of deal terms and other
information customarily found in such publications and PROVIDED FURTHER, that
the Agents and Lenders may disclose any such information to the extent such
disclosure is required by law or requested by any regulatory authority. Any
Lender may, in connection with any assignment, proposed assignment,
participation or proposed participation pursuant to this SECTION 14.10, disclose
to the assignee, participant, proposed assignee or proposed participant, any
information relating to the Borrowers furnished to such Lender by or on behalf
of the Borrowers; PROVIDED, that prior to any such disclosure, each such
assignee, proposed assignee, participant or proposed participant shall agree
with the Borrowers or such Lender to preserve the confidentiality of any
confidential information relating to the Borrowers received from such Lender.
(h) CERTAIN PLEDGES OR ASSIGNMENTS. Nothing herein shall prohibit any
Lender from pledging or assigning any Note to any Federal Reserve Bank in
accordance with Applicable Law.
SECTION 14.11 AMENDMENTS, WAIVERS AND CONSENTS. Except as set forth
below, any term, covenant, agreement or condition of this Agreement or any of
the other Loan Documents may be amended or waived by the Lenders, and any
consent given by the Lenders, if, but only if, such amendment, waiver or consent
is in writing signed by the Required Lenders (or by the Administrative Agent or
Collateral Agent, as applicable, with the consent of the Required Lenders) and
delivered to the Administrative Agent and, in the case of
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an amendment, signed by the Borrowers; PROVIDED, that no amendment, waiver or
consent shall:
(a) (i) increase the Revolving Credit Commitment of any Lender, (ii)
reduce the rate of interest or fees payable on any Revolving Credit Loan or
Reimbursement Obligation, (iii) reduce or forgive the principal amount of any
Revolving Credit Loan or Reimbursement Obligation, (iv) extend the originally
scheduled time or times of payment of the principal of any Revolving Credit Loan
or Reimbursement Obligation or the time or times of payment of interest on any
Revolving Credit Loan or Reimbursement Obligation or any fee or commission with
respect thereto, (v) permit any subordination of the principal or interest on
any Revolving Credit Loan or Reimbursement Obligation or (vi) extend the time of
the obligation of the Revolving Commitment Lenders to make or issue or
participate in Letters of Credit, in any case, without the written consent of
each Lender holding Revolving Credit Loans or a Revolving Credit Commitment;
(b) (i) increase the Term Loan Commitment of any Lender, (ii) reduce
the rate of interest or fees payable on any Term Loan, (iii) reduce or forgive
the principal amount of any Term Loan, (iv) permit any subordination of the
principal or interest on any Term Loan or (v) extend the originally scheduled
time or times of payment of the principal of any Term Loan or the time or times
of payment of interest on any Term Loan or any fee or commission with respect
thereto, in any case, without the consent of each Lender holding a Term Loan or
a Term Loan Commitment;
(c) (i) release the Borrowers from the Obligations hereunder, (ii)
permit any assignment (other than as specifically permitted or contemplated in
this Agreement) of any of the Borrowers' rights and obligations hereunder, (iii)
release any material portion of the Collateral or release any Security Document
(other than asset sales permitted pursuant to SECTION 11.6 and as otherwise
specifically permitted or contemplated in this Agreement or this applicable
Security Document) or (iv) amend the provisions of this SECTION 14.11 or the
definition of Required Lenders, without the prior written consent of each
Lender.
In addition, (a) no amendment, waiver or consent to the provisions of (i)
Article XIII shall be made without the written consent of the Administrative
Agent and (ii) Article III without the written consent of the Issuing Lender and
(b) with respect to the primary syndication of the Term Loan Facility, any
amendment of this Agreement solely effecting an increase in the rate of interest
or fees payable in connection with any Term Loan shall not require the consent
of the Required Lenders or Lenders solely holding Revolving Credit Loans or a
Revolving Credit Commitment.
SECTION 14.12 PERFORMANCE OF DUTIES. The Borrowers' obligations under
this Agreement and each of the Loan Documents shall be performed by the
Borrowers at their sole cost and expense.
SECTION 14.13 ALL POWERS COUPLED WITH INTEREST. All powers of attorney
and other authorizations granted to the Lenders, the Agents and any
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Persons designated by the Agents or any Lender pursuant to any provisions of
this Agreement or any of the other Loan Documents shall be deemed coupled with
an interest and shall be irrevocable so long as any of the Obligations remain
unpaid or unsatisfied or the Credit Facility has not been terminated.
SECTION 14.14 SURVIVAL OF INDEMNITIES. Notwithstanding any termination
of this Agreement, the indemnities to which the Agents and the Lenders are
entitled under the provisions of this Article XIV and any other provision of
this Agreement and the Loan Documents shall continue in full force and effect
and shall protect the Agents and the Lenders against events arising after such
termination as well as before.
SECTION 14.15 TITLES AND CAPTIONS. Titles and captions of Articles,
Sections and subsections in this Agreement are for convenience only, and neither
limit nor amplify the provisions of this Agreement.
SECTION 14.16 SEVERABILITY OF PROVISIONS. Any provision of this
Agreement or any other Loan Document which is prohibited or unenforceable in any
jurisdiction shall, as to such jurisdiction, be ineffective only to the extent
of such prohibition or unenforceability without invalidating the remainder of
such provision or the remaining provisions hereof or thereof or affecting the
validity or enforceability of such provision in any other jurisdiction.
SECTION 14.17 COUNTERPARTS. This Agreement may be executed in any
number of counterparts and by different parties hereto in separate counterparts,
each of which when so executed shall be deemed to be an original and shall be
binding upon all parties, their successors and assigns, and all of which taken
together shall constitute one and the same agreement.
SECTION 14.18 TERM OF AGREEMENT. This Agreement shall remain in effect
from the Closing Date through and including the date upon which all Obligations
shall have been indefeasibly and irrevocably paid and satisfied in full. The
Collateral Agent is hereby permitted to release all Liens on the Collateral upon
repayment of the outstanding principal of and all accrued interest on the Loans,
payment of all outstanding fees and expenses hereunder and the termination of
the Lender's Commitments. No termination of this Agreement shall affect the
rights and obligations of the parties hereto arising prior to such termination.
SECTION 14.19 INCONSISTENCIES WITH OTHER DOCUMENTS; INDEPENDENT EFFECT
OF COVENANTS. (a) In the event there is a conflict or inconsistency between this
Agreement and any other Loan Document, the terms of this Agreement shall
control; PROVIDED, that any provision of the Security Documents which imposes
additional burdens on the Borrowers or their Subsidiaries or further restricts
the rights of the Borrowers or their Subsidiaries or gives the Agents or Lenders
additional rights shall not be deemed to be in conflict or inconsistent with
this Agreement and
80
shall be given full force and effect.
(b) The Borrowers expressly acknowledge and agree that each covenant
contained in Articles IX, X, or XI shall be given independent effect.
Accordingly, the Borrowers shall not engage in any transaction or other act
otherwise permitted under any covenant contained in Articles IX, X, or XI if,
before or after giving effect to such transaction or act, the Borrowers shall or
would be in breach of any other covenant contained in Articles IX, X, or XI.
SECTION 14.20 COMPANY AS AGENT FOR SUBSIDIARY BORROWERS. Each
Subsidiary Borrower hereby irrevocably appoints and authorizes the Company (a)
to provide the Agents with all notices with respect to Loans obtained for the
benefit of any Subsidiary Borrower and all other notices and instructions under
this Agreement and (b) to take such action on behalf of any Subsidiary Borrower
it deems appropriate on their behalf to obtain Loans and to exercise such other
powers as are reasonably incidental thereto to carry out the purposes of this
Agreement.
[Signature pages to follow]
81
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed under seal by their duly authorized officers, all as of the day and
year first written above.
CONDOR TECHNOLOGY SOLUTIONS, INC., COMPUTER
HARDWARE MAINTENANCE COMPANY, INC.,
CORPORATE ACCESS, INC., DECISION SUPPORT
TECHNOLOGY, INC., FEDERAL COMPUTER
CORPORATION, GLOBAL CORE STRATEGIES
ACQUISITION, INC., INTERACTIVE SOFTWARE
SYSTEMS INCORPORATED, INVENTURE GROUP, INC.,
LINC SYSTEMS CORPORATION, ▇▇▇▇▇▇ ASSOCIATES,
INC., MANAGEMENT SUPPORT TECHNOLOGY CORP.,
MIS TECHNOLOGIES, INC., POWERCREW, INC.,
TITAN TECHNOLOGIES GROUP L.L.C., and U.S.
COMMUNICATIONS, INC., as Borrowers
[CORPORATE SEAL] By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Vice President
CONDOR SYSTEM SOLUTIONS, INC., as Borrower
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: President
FIRST UNION NATIONAL BANK,
as Collateral Agent, Administrative Agent and
Issuing Lender
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Title: Vice President
FIRST UNION COMMERCIAL CORPORATION,
as Swingline Lender, and Lender
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
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Title: Vice President
FLEET NATIONAL BANK, as Lender
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇
Name: ▇▇▇▇▇▇ ▇▇▇▇▇▇
Title: Senior Vice President
MELLON BANK, N.A., as Lender
By: /s/ ▇▇▇▇▇ ▇▇▇▇
Name: ▇▇▇▇▇ ▇▇▇▇
Title: First Vice President
83
SCHEDULE 1
(Lenders and Commitments)
---------------------------------------- ---------------------- -------------------- --------------------- --------------------
LENDER REVOLVING CREDIT REVOLVING CREDIT TERM LOAN COMMITMENT TERM LOAN
COMMITMENT COMMITMENT COMMITMENT
PERCENTAGE PERCENTAGE
---------------------------------------- ---------------------- -------------------- --------------------- --------------------
---------------------------------------- ---------------------- -------------------- --------------------- --------------------
First Union Commercial Corporation
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇- ▇
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: Syndication Agency Services $30,000,000.00 40% $25,000,000.00 100%
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy No.: (▇▇▇) ▇▇▇-▇▇▇▇
---------------------------------------- ---------------------- -------------------- --------------------- --------------------
---------------------------------------- ---------------------- -------------------- --------------------- --------------------
Fleet National Bank
One Federal Street
MA OF DO4J
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇ ▇▇▇▇▇▇ $15,000,000.00 20% - -
Senior Vice President
Phone: (▇▇▇) ▇▇▇-▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
---------------------------------------- ---------------------- -------------------- --------------------- --------------------
---------------------------------------- ---------------------- -------------------- --------------------- --------------------
State Street Bank and Trust
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇* $15,000,000.00 20% - -
Phone: (▇▇▇) ▇▇▇-▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
---------------------------------------- ---------------------- -------------------- --------------------- --------------------
---------------------------------------- ---------------------- -------------------- --------------------- --------------------
Mellon Bank, N.A.
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇ ▇▇▇▇▇▇ $15,000,000.00 20% - -
Vice President
Phone: (▇▇▇) ▇▇▇-▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
---------------------------------------- ---------------------- -------------------- --------------------- --------------------
---------------------------------------- ---------------------- -------------------- --------------------- --------------------
TOTALS $75,000,000.00 100% $25,000,000.00 100%
---------------------------------------- ---------------------- -------------------- --------------------- --------------------