AMENDED AND RESTATED BUSINESS LOAN AND SECURITY AGREEMENT
Exhibit
10.1
AMENDED AND RESTATED
BUSINESS LOAN
AND SECURITY AGREEMENT
THIS
AMENDED AND RESTATED BUSINESS LOAN AND SECURITY AGREEMENT (this “Agreement”) is made this 19th
day of August, 2010, by and among VSE CORPORATION, a corporation organized under
the laws of the State of Delaware (“VSE”), ENERGETICS
INCORPORATED, a corporation organized under the laws of the State of Maryland
(“Energetics”), VSE
SERVICES INTERNATIONAL, INC., a corporation organized under the laws of the
State of Delaware (“VSI”), INTEGRATED CONCEPTS AND
RESEARCH CORPORATION, a corporation organized under the laws of the District of
Columbia (“ICRC”),
G&B SOLUTIONS, INC., a corporation organized under the laws of the
Commonwealth of Virginia (“G&B”), AKIMEKA, LLC, a
limited liability company organized under the laws of the State of Hawaii
(“AK”), jointly and
severally (each of VSE, Energetics, VSI, ICRC, G&B, and AK, a “Borrower”; and collectively,
the “Borrowers”),
CITIZENS BANK OF PENNSYLVANIA, a bank chartered in the Commonwealth of
Pennsylvania, its successors and assigns (“Citizens”), SUNTRUST BANK, a
banking corporation organized under the laws of the State of Georgia, its
successors and assigns (“SunTrust”), each other
financial institution which is a party to this Agreement, whether by execution
of this Agreement or otherwise (collectively, the “Lenders” and individually, a
“Lender”) and CITIZENS
BANK OF PENNSYLVANIA, a bank chartered in the Commonwealth of Pennsylvania, its
successors and assigns, in its capacity as both collateral and administrative
agent for the Lenders (the “Agent”).
RECITALS
A. VSE,
Energetics, VSI, ICRC, G&B, Agent, and Lenders are parties to that certain
Business Loan and Security Agreement, dated August 26, 2009 (as amended,
modified, restated, substituted, extended, and renewed from time to time, the
“Existing Loan
Agreement”) pursuant to which the Borrowers have an existing revolving
line of credit with the Lender in the current maximum principal amount of Fifty
Million Dollars ($50,000,000) (the “Existing Revolving Loan”).
B. The
Borrowers have requested that the Agent and the Lenders amend and restate the
Existing Loan Agreement to (i) extend the maturity date of the Existing
Revolving Loan, (ii) make available to Borrowers a senior secured term loan in
the principal amount of Twenty Million Dollars ($20,000,000) to be used by
Borrowers in connection with the Purchase Agreement Transaction, (iii) add AK as
a joint and several co-borrower and co-obligor under the Loan Agreement, and
(iv) make certain other changes all as set forth herein.
C. The
Borrowers, Agent, and Lenders have agreed, pursuant to this Agreement, to amend
and restate the Existing Loan Agreement in its entirety, upon the terms and
subject to the conditions set forth in this Agreement.
AGREEMENTS
NOW,
THEREFORE, in consideration of the premises, the mutual agreements herein
contained, and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereby agree to amend
and restate the Existing Loan Agreement in its entirety as follows:
ARTICLE
I
DEFINITIONS
Section
1.1 Certain Defined
Terms.
As used
in this Agreement, the terms defined in the Preamble and Recitals hereto shall
have the respective meanings specified therein, and the following terms shall
have the following meanings:
“Account” individually and
“Accounts” collectively
mean all presently existing or hereafter acquired or created accounts, accounts
receivable, health care insurance receivables, contract rights, notes, drafts,
instruments, acceptances, chattel paper, leases and writings evidencing a
monetary obligation or a security interest in, or a lease of, goods, all rights
to receive the payment of a monetary obligation or other consideration under
present or future contracts (including, without limitation, all rights (whether
or not earned by performance) to receive payments under presently existing or
hereafter acquired or created letters of credit), or by virtue of property that
has been sold, leased, licensed, assigned or otherwise disposed of, services
rendered or to be rendered, loans and advances made or other considerations
given, by or set forth in or arising out of any present or future chattel paper,
note, draft, lease, acceptance, writing, bond, insurance policy, instrument,
document or general intangible, and all extensions and renewals of any thereof,
all rights under or arising out of present or future contracts, agreements or
general interest in goods which gave rise to any or all of the foregoing,
including all commercial tort claims, other claims or causes of action now
existing or hereafter arising in connection with or under any agreement or
document or by operation of law or otherwise, all collateral security of any
kind (including, without limitation, real property mortgages and deeds of
trust), Supporting Obligations, letter of credit rights and letters of credit
given by any Person with respect to any of the foregoing, all books and records
in whatever media (paper, electronic or otherwise) recorded or stored, with
respect to any or all of the foregoing and all equipment and general intangibles
necessary or beneficial to retain, access and/or process the information
contained in those books and records, and all Proceeds (cash and non-cash) of
the foregoing.
“Account Debtor” means any
Person who is obligated on a Receivable and “Account Debtors” mean all Persons
who are obligated on the Receivables.
“ACH Transactions” means any
cash management or related services by the Agent for the account of any of the
Borrowers pursuant to agreement or overdrafts.
“Additional Borrower” means
each Person that has executed and delivered an Additional Borrower Joinder
Supplement that has been accepted and approved by the Agent.
“Additional Borrower Joinder
Supplement” means an Additional Borrower Joinder Supplement in
substantially the form attached hereto as Exhibit A, with the
blanks appropriately completed and executed and delivered by the Additional
Borrower and accepted by VSE on behalf of the Borrowers.
“Affiliate” means, with respect
to any designated Person, any other Person, (a) directly or indirectly
controlling, directly or indirectly controlled by, or under direct or indirect
common control with the Person designated, (b) directly or indirectly owning or
holding five percent (5%) or more of any equity interest in such designated
Person, or (c) five percent (5%) or more of whose stock or other equity interest
is directly or indirectly owned or held by such designated
Person. For purposes of this definition, the term “control”
(including with correlative meanings, the terms “controlling”, “controlled by”
and “under common control with”) means the possession, directly or indirectly,
of the power to direct or cause the direction of the management and policies of
a Person, whether through ownership of voting securities or other equity
interests or by contract or otherwise.
“Agent” means the Person
defined as the “Agent” in the preamble of this Agreement and shall also include
any successor Agent appointed pursuant to Section 8.7.3 (Successor Agent).
“Agent’s Fee” has the meaning
described in Section 2.7.4 (Agent’s
Fee).
“Agent’s Obligations” shall
mean any and all Obligations payable solely to and for the exclusive benefit of
the Agent by any or all of the Borrowers under the terms of this Agreement
and/or any of the other Financing Documents, including, without limitation, any
and all Letter of Credit Fees/or Field Examination Fees.
“Aggregate Commitments” means
the Commitments of all Lenders.
“Agreement” means this Amended
and Restated Business Loan and Security Agreement, as amended, restated,
supplemented or otherwise modified in writing in accordance with the provisions
of Section 9.2 (Amendments; Waivers).
“AK Purchase Agreement” means
that certain Stock Purchase Agreement dated August 19, 2010, by and between VSE
and the Seller.
“AK Purchase Agreement
Documents” means collectively the AK Purchase Agreement and any and all
other agreements, documents or instruments (together with any and all
amendments, modifications, and supplements thereto, restatements thereof, and
substitutes therefore) previously, now or hereafter executed and delivered by
VSE, the Seller, or any other Person in connection with the Purchase Agreement
Transaction.
“AK Purchase Agreement
Transaction” means the stock purchase agreement transaction contemplated
by the provisions of the AK Purchase Agreement.
“Assets” means at any date all
assets that, in accordance with GAAP consistently applied, should be classified
as assets on a consolidated balance sheet of the Borrowers and their respective
Subsidiaries.
“Asset Coverage Ratio” means
the ratio of Total Gross Accounts Receivable to Total Funded Debt on a specified
date.
“Assignee” means any Person to
which any Lender assigns all or any portion of its interests under this
Agreement, any Commitment, and any Loan, in accordance with the provisions of Section 9.5 (Assignments by Lenders), together with
any and all successors and assigns of such Person; “Assignees” means the
collective reference to all Assignees.
“Assignment of Membership
Interests” means the pledge, assignment and security agreement in the
form of Exhibit
H attached hereto dated as of the Closing Date from all of the members of
AK to the Agent, for the benefit of Lenders ratably and Agent, as the same may
from time to time be amended, restated, supplemented or otherwise
modified.
“Bank Products” shall mean any
(i) commercial credit card, purchase card and merchant card services, or other
commercial credit card services or facilities, (ii) cash management services or
facilities, (iii) foreign investment or exchange products or services or (iv)
products under any non-speculative hedging agreement or arrangement, extended to
any Borrower by any Lender or any Affiliate of any Lender, from time
to time.
“Bankruptcy Code” means Title
11 of the United States Code, as amended from time to time, and any successor
Laws.
“Board” means the Board of
Governors of the United States Federal Reserve System.
“Borrower” means each Person
defined as a “Borrower” in the preamble of this Agreement and each Additional
Borrower; “Borrowers”
means the collective reference to all Persons defined as “Borrowers” in the
preamble to this Agreement and all Additional Borrowers.
“Borrowing Base” has the
meaning described in Section 2.1.3 (Borrowing
Base).
“Borrowing Base Deficiency” has
the meaning described in Section 2.1.3 (Borrowing
Base).
“Borrowing Base Report” has the
meaning described in Section 2.1.4 (Borrowing Base
Report).
“Business Day”
means:
(a) any day
which is neither a Saturday or Sunday nor a legal holiday on which commercial
banks are authorized or required to be closed in the State;
(b) when such
term is used to describe a day on which a borrowing, payment, prepaying, or
repaying is to be made in respect of any LIBOR Rate Loan, any day which is: (i)
neither a Saturday or Sunday nor a legal holiday on which commercial banks are
authorized or required to be closed in New York City; and (ii) a London Banking
Day; and
(c) when such
term is used to describe a day on which an interest rate determination is to be
made in respect of any LIBOR Rate Loan, any day which is a London Banking
Day.
“Capital Adequacy Regulation”
means any guideline, request or directive of any central bank or other
Governmental Authority, or any other law, rule or regulation, whether or not
having the force of law, in each case, regarding capital adequacy of any bank or
of any corporation controlling a bank.
“Capital Expenditure” means an
expenditure (whether payable in cash or other property or accrued as a
liability) for Fixed or Capital Assets, including, without limitation, the
entering into of a Capital Lease.
“Capital Lease” means with
respect to any Person any lease of real or personal property, for which the
related Lease Obligations have been or should be, in accordance with GAAP
consistently applied, capitalized on the balance sheet of that
Person.
“Cash Equivalents” means (a)
securities with maturities of one year or less from the date of acquisition
issued or fully guaranteed or insured by the United States Government or any
agency thereof, (b) certificates of deposit with maturities of one (1) year or
less from the date of acquisition of, or money market accounts maintained with,
the Agent, any Affiliate of the Agent, or any other domestic commercial bank
having capital and surplus in excess of One Hundred Million Dollars
($100,000,000.00) or such other domestic financial institutions or domestic
brokerage houses to the extent disclosed to, and approved by, the Agent and (c)
commercial paper of a domestic issuer rated at least either A-1 by Standard
& Poor’s Corporation (or its successor) or P-1 by ▇▇▇▇▇’▇ Investors Service,
Inc. (or its successor) with maturities of six (6) months or less from the date
of acquisition.
“Chattel Paper” means a record
or records (including, without limitation, electronic chattel paper) that
evidence both a monetary obligation and a security interest in specific goods, a
security interest in specific goods and software used in the goods, or a lease
of specific goods; all Supporting Obligations with respect thereto; any
returned, rejected or repossessed goods and software covered by any such record
or records and all proceeds (in any form including, without limitation,
accounts, contract rights, documents, chattel paper, instruments and general
intangibles) of such returned, rejected or repossessed goods; and all Proceeds
of the foregoing.
“Citizens Letter of Credit” and
“Citizens Letters of Credit” shall have
the meanings described in Section 2.3.1 (Citizens
Letters of Credit).
“Citizens Letter of Credit Documents”
means any and all drafts under or purporting to be under a Citizens Letter of
Credit, any Letter of Credit Agreement, and any other instrument, document or
agreement executed and/or delivered by any one or more of the Borrowers or any
other Person under, pursuant to or in connection with a Citizens Letter of
Credit or any Letter of Credit Agreement.
“Citizens Letter of Credit Fee” and
“Letter of Credit Fees”
have the meanings described in Section 2.3.1
(Citizens Letter of Credit Fees).
“Citizens Letter of Credit Obligations”
means the collective reference to all Obligations of any one or more of the
Borrowers with respect to the Citizens Letters of Credit and the Letter of
Credit Agreements.
“Citizens Letter of Credit
Sub-Facility” means the stand alone letter of credit sub-facility
established pursuant to Section 2.3 (Citizens
Letter of Credit Sub-Facility).
“Citizens Outstanding Letter of Credit
Obligations” has the meaning described in Section 2.3.2 (Terms of Citizens Letters of
Credit).
“Closing Date” means the
Business Day, on which the Agent shall be satisfied that the conditions
precedent set forth in Section 5.1 (Conditions to
Initial Advance) have been fulfilled or otherwise waived by the
Agent.
“Collateral” means all property
of each and every Borrower subject from time to time to the Liens of this
Agreement, any of the Security Documents and/or any of the other Financing
Documents, together with any and all Proceeds and products thereof.
“Collateral Account” has the
meaning described in Section 2.1.10 (The Collateral
Account).
“Collateral Disclosure List”
has the meaning described in Section 3.3
(Collateral Disclosure List).
“Collection” means each check,
draft, cash, money, instrument, item, and other remittance in payment or on
account of payment of the Accounts or otherwise with respect to any Collateral,
including, without limitation, cash proceeds of any returned, rejected or
repossessed goods, the sale or lease of which gave rise to an Account, and other
proceeds of Collateral; and “Collections” means the collective reference to all
of the foregoing.
“Commitment” means with respect
to each Lender, such Lender’s Revolving Credit Commitment or Term Loan
Commitment, as the case may be, and “Commitments” means the
collective reference to the Revolving Credit Commitments and the Term Loan
Commitments of all of Lenders.
“Committed Amount” means with
respect to each Lender, such Lender’s Revolving Loan Committed Amount or the
Term Loan Committed Amount and “Committed Amounts” means
collectively the Revolving Credit Committed Amount and the Term Loan Committed
Amount of each of Lenders.
“Compliance Certificate” means
a periodic Compliance Certificate described in Section 6.1.1 (Financial Statements).
“Commonly Controlled Entity”
means an entity, whether or not incorporated, which is under common control with
any Borrower within the meaning of Section 414(b) or (c) of the Internal Revenue
Code.
“Conversion Notice” has the
meaning described in Section 2.1.2 (Procedure for
Making Advances).
“Copyrights” means and
includes, in each case whether now existing or hereafter arising, all of each
Borrower’s rights, title and interest in and to (a) all copyrights, rights and
interests in copyrights, works protectable by copyright, copyright
registrations, copyright applications, and all renewals of any of the foregoing,
(b) all income, royalties, damages and payments now or hereafter due and/or
payable under any of the foregoing, including, without limitation, damages or
payments for past, current or future infringements of any of the foregoing, (c)
the right to ▇▇▇ for past, present and future infringements of any of the
foregoing, and (d) all rights corresponding to any of the foregoing throughout
the world.
“Credit Facility” means with
respect to each Lender, such Lender’s Pro Rata Share of the Revolving Credit
Facility, the Letter of Credit Sub-Facility or the Term Loan Facility, as the
case may be, and with respect to Citizens, the Citizens Letter of Credit
Sub-Facility and “Credit
Facilities” means collectively the Revolving Credit Facility, the Letter
of Credit Facility, the Term Loan Facility, the Citizens Letter of Credit
Facility, and any and all other credit facilities now or hereafter extended
under or secured by this Agreement.
“Deposit Account” means a
demand, time, savings, passbook or similar account maintained with a bank or
financial institution in which funds are held or invested for credit to or for
the benefit of any Borrower.
“Deposit Account Control
Agreement” means an agreement, in form and substance reasonably
satisfactory to Agent, among Agent, any applicable Borrower and each bank or
financial institution in which such Borrower maintains a Deposit Account, which
agreement provides that (a) such bank or financial institution acknowledges the
security interest of Agent in such Deposit Account, (b) such bank or financial
institution shall comply with instructions originated by Agent directing
disposition of the funds in such Deposit Account without further consent by the
applicable Borrower, and (c) such bank or financial institution shall agree that
it shall have no Lien on, or right of setoff or recoupment against, such Deposit
Account or the contents thereof, other than in respect of usual and customary
service fees and of returned items for which Agent has been given value, in each
such case expressly consented to by Agent, and containing such other or
different terms and conditions as Agent may require.
“Default” means an event which,
with the giving of notice or lapse of time, or both, could or would constitute
an Event of Default under the provisions of this Agreement.
“Defaulting Lender” shall mean,
at any time, any Lender that, at such time (i) has failed to make a Loan
required pursuant to the terms of this Agreement and/or make a payment to the
Agent in respect of a Letter of Credit (each, a “Funding Obligation”), (ii) has
failed to pay to the Agent or any Lender an amount owed by such Lender pursuant
to the terms of this Agreement and such default remains uncured, (iii) has been
deemed insolvent or has become subject to a bankruptcy or insolvency proceeding
or to a receiver, trustee or similar official, (iv) has, for three (3) or more
Business Days, failed to confirm in writing to the Agent, in response to a
written request of the Agent, that it will comply with its funding obligations
hereunder, or (v) has notified the Agent in writing, or has stated
publicly, that it will not comply with any such Funding Obligation hereunder, or
has defaulted on its funding obligations under any other loan agreement or
credit agreement or other similar/other financing agreement. Any
determination that a Lender is a Defaulting Lender will be made by the Agent in
its reasonable discretion acting in good faith. The Agent will
promptly send notice to all parties hereto of each such
determination.
“Documents” means all documents
of title or receipts, whether now existing or hereafter acquired or created, and
all Proceeds of the foregoing.
“EBITDA” means as to Borrowers
for any period of determination thereof, the sum of (a) net profit (or loss)
determined in accordance with GAAP consistently applied, plus (b) net interest
expense and income tax provisions for such period, plus (c) depreciation and
amortization of assets for such period, plus (d) non-cash stock compensation,
which does not represent a reserve for future cash payments, plus (e) non-cash
non-recurring charges, as approved in writing by the Agent prior to the due date
of the Compliance Certificate as required under Sections 6.1.1(a) (Annual Statements and Certificates) and 6.1.1(b) (Quarterly Statements and Certificates),
minus any non-cash gains to the extent included in net income. EBITDA
shall be determined on a rolling basis, based on the four (4) quarter period
then ending. EBITDA from any Permitted Acquisitions will be included
on a pro forma basis as such amounts may be deemed acceptable to the Agent in
its sole and absolute discretion.
“Eligible Receivable” and
“Eligible Receivables”
mean, at any time of determination thereof, the unpaid portion of each account
(net of any returns, discounts, claims, credits, charges, accrued rebates or
other allowances, offsets, deductions, counterclaims, disputes or other defenses
and reduced by the aggregate amount of all reserves, limits and deductions
provided for in this definition and elsewhere in this Agreement) receivable in
United States Dollars by a Borrower, provided each account conforms and
continues to conform to the following criteria to the satisfaction of the
Agent:
(a) the
account arose in the ordinary course of a Borrower’s business from a bona fide
outright sale of Inventory by such Borrower or from services performed by such
Borrower;
(b) the
account is a valid, legally enforceable obligation of the Account Debtor and
requires no further act on the part of any Person under any circumstances to
make the account payable by the Account Debtor;
(c) the
account is based upon an enforceable order or contract, written or oral, for
Inventory shipped or for services performed, and the same were shipped or
performed in accordance with such order or contract;
(d) if the
account arises from the sale of Inventory, the Inventory the sale of which gave
rise to the account has been shipped or delivered to the Account Debtor on an
absolute sale basis and not on a ▇▇▇▇ and hold sale basis, a consignment sale
basis, a guaranteed sale basis, a sale or return basis, or on the basis of any
other similar understanding;
(e) if the
account arises from the performance of services, such services have been fully
rendered and do not relate to any warranty claim or obligation;
(f) the
account is evidenced by an invoice or other documentation in form acceptable to
the Agent, dated no later than the date allowed under any contract governing
such account and containing only terms normally offered by the respective
Borrower;
(g) the
amount shown on the books of a Borrower and on any invoice, certificate,
schedule or statement delivered to the Agent is owing to such Borrower and no
partial payment has been received unless reflected with that
delivery;
(h) the
account is not outstanding more than ninety (90) days from the date of the
invoice therefore;
(i) the
account is not owing by any Account Debtor for which the Agent has deemed fifty
percent (50%) or more of such Account Debtor’s other accounts (or any portion
thereof) due to a Borrower, individually, or all of the Borrowers collectively,
to be non-Eligible Receivables;
(j) the
Account Debtor has not returned, rejected or refused to retain, or otherwise
notified a Borrower of any dispute concerning, or claimed nonconformity of, any
of the Inventory or services from the sale or furnishing of which the account
arose;
(k) the
account is not subject to any present or contingent (and no facts exist which
are the basis for any future) offset, claim, deduction or counterclaim, dispute
or defense in law or equity on the part of such Account Debtor, or any claim for
credits, allowances, or adjustments by the Account Debtor because of returned,
inferior, or damaged Inventory or unsatisfactory services, or for any other
reason including, without limitation, those arising on account of a breach of
any express or implied representation or warranty;
(l) the
Account Debtor is not a Subsidiary or Affiliate of any Borrower or an employee,
officer, director or shareholder of any Borrower or any Subsidiary or Affiliate
of any Borrower, other than any joint venture of the Borrower or any
Subsidiary;
(m) the
Account Debtor is not incorporated or primarily conducting business or otherwise
located in any jurisdiction outside of the United States of America, unless the
Account Debtor’s obligations with respect to such account are secured by a
letter of credit, guaranty or banker’s acceptance having terms and from such
issuers and confirmation banks as are acceptable to the Agent in its sole and
absolute discretion (which letter of credit, guaranty or banker’s acceptance is
subject to the perfected Lien of the Agent for the benefit of the Lenders
ratably and the Agent);
(n) as to
which none of the following events has occurred with respect to the Account
Debtor on such Account: death or judicial declaration of incompetency
of an Account Debtor who is an individual; the filing by or against the Account
Debtor of a request or petition for liquidation, reorganization, arrangement,
adjustment of debts, adjudication as a bankrupt, winding-up, or other relief
under the bankruptcy, insolvency, or similar laws of the United States, any
state or territory thereof, or any foreign jurisdiction, now or hereafter in
effect; the making of any general assignment by the Account Debtor for the
benefit of creditors; the appointment of a receiver or trustee for the Account
Debtor or for any of the assets of the Account Debtor, including, without
limitation, the appointment of or taking possession by a “custodian,” as defined
in the Federal Bankruptcy Code; the institution by or against the Account Debtor
of any other type of insolvency proceeding (under the bankruptcy laws of the
United States or otherwise) or of any formal or informal proceeding for the
dissolution or liquidation of, settlement of claims against, or winding up of
affairs of, the Account Debtor; the sale, assignment, or transfer of all or any
material part of the assets of the Account Debtor; the nonpayment generally by
the Account Debtor of its debts as they become due; or the cessation of the
business of the Account Debtor as a going concern;
(o) no
Borrower is indebted in any manner to the Account Debtor (as creditor, lessor,
supplier or otherwise, other than trade debt incurred in the ordinary course of
business), with the exception of customary credits, adjustments and/or discounts
given to an Account Debtor by a Borrower in the ordinary course of its
business;
(p) the
account does not arise from services under or related to any warranty obligation
of a Borrower or out of service charges, finance charges or other fees for the
time value of money;
(q) the
account is not evidenced by Chattel Paper or an instrument of any kind and is
not secured by any letter of credit;
(r) the title
of the respective Borrower to the account is absolute and is not subject to any
prior assignment, claim, Lien, or security interest, except Permitted
Liens;
(s) no bond
or other undertaking by a guarantor or surety has been or is required to be
obtained, supporting the account and any of the Account Debtor’s obligations in
respect of the account;
(t) each
Borrower has the full and unqualified right and power to assign and grant a
security interest in, and Lien on, the account to the Agent and the Lenders as
security and collateral for the payment of the Obligations and the Agent’s
Obligations;
(u) the
account does not arise out of a contract with, or order from, an Account Debtor
that, by its terms, forbids or makes void or unenforceable the assignment or
grant of a security interest by the Borrowers to the Agent, for the benefit of
the Lenders ratably and the Agent, of the account arising from such contract or
order;
(v) the
account is subject to a Lien in favor of the Agent, for the benefit of the
Lenders ratably and the Agent, which Lien is perfected as to the account by the
filing of financing statements and which Lien upon such filing constitutes a
first priority security interest and Lien;
(w) the
Inventory giving rise to the account was not, at the time of the sale thereof,
subject to any Lien, except those in favor of the Agent, for the benefit of the
Lenders ratably and the Agent;
(x) no part
of the account represents a retainage;
(y) the Agent
in the good faith exercise of its sole and absolute discretion has not deemed
the account ineligible because of uncertainty as to the creditworthiness of the
Account Debtor or because the Agent otherwise considers the collateral value of
such account to the Agent and the Lenders to be impaired or its or their ability
to realize such value to be insecure; and
(z) if the
Account Debtor is located in a state requiring the filing of a Notice of
Business Activities Report or similar report in order to permit any Borrower to
seek judicial enforcement in such state of payment of such Account, that
Borrower has qualified to do business in such state or has filed a Notice of
Business Activities Report or equivalent report for the then current
year.
In the
event of any dispute, under the foregoing criteria, as to whether an account is,
or has ceased to be, an Eligible Receivable, the decision of the Agent in the
good faith exercise of its sole and absolute discretion shall
control.
“Enforcement Costs” means all
expenses, charges, costs and fees whatsoever (including, without limitation,
reasonable outside and allocated in-house counsel attorney’s fees and expenses)
of any nature whatsoever paid or incurred by or on behalf of the Agent and/or
any of the Lenders in connection with (a) any or all of the Obligations, this
Agreement and/or any of the other Financing Documents, (b) the creation,
perfection, collection, maintenance, preservation, defense, protection,
realization upon, disposition, sale or enforcement of all or any part of the
Collateral, this Agreement or any of the other Financing Documents, including,
without limitation, those costs and expenses more specifically enumerated in Section 3.6 (Costs) and/or Section 9.10 (Enforcement Costs), and further
including, without limitation, amounts paid to lessors, processors, bailees,
warehousemen, sureties, judgment creditors and others in possession of or with a
Lien against or claimed against the Collateral, and (c) the monitoring,
administration, processing and/or servicing of any or all of the Obligations,
the Financing Documents, and/or the Collateral.
“Equipment” means all
equipment, machinery, computers, chattels, tools, parts, machine tools,
furniture, furnishings, fixtures and supplies of every nature, presently
existing or hereafter acquired or created and wherever located, whether or not
the same shall be deemed to be affixed to real property, and all of such types
of property leased by any Borrower and all of the Borrowers’ rights and
interests with respect thereto under such leases (including, without limitation,
options to purchase), together with all accessions, additions, fittings,
accessories, special tools, and improvements thereto and substitutions therefor
and all parts and equipment which may be attached to or which are necessary or
beneficial for the operation, use and/or disposition of such personal property,
all licenses, warranties, franchises and General Intangibles related thereto or
necessary or beneficial for the operation, use and/or disposition of the same,
together with all Accounts, Chattel Paper, Instruments and other consideration
received by any Borrower on account of the sale, lease or other disposition of
all or any part of the foregoing, and together with all rights under or arising
out of present or future Documents and contracts relating to the foregoing and
all Proceeds of the foregoing.
“ERISA” means the Employee
Retirement Income Security Act of 1974, as amended from time to
time.
“Event of Default” has the
meaning described in ARTICLE VII (Default and
Rights and Remedies).
“Facilities” means the
collective reference to the loan, letter of credit, interest rate protection,
foreign exchange risk, cash management, and other credit facilities now or
hereafter provided to any one or more of the Borrowers by the Agent or the
Lenders under this Agreement or otherwise by Citizens, solely with respect to
the Citizens Letter of Credit Sub-Facility.
“Federal Funds Open Rate” means
for any day of determination, the weighted average of the rates on overnight
federal funds transactions with members of the Federal Reserve System arranged
by federal funds brokers, as published for such day (or, if such day is not a
Business Day) by the Federal Reserve Bank for the next preceding Business Day)
by the Federal Reserve Bank of Richmond or, if such rate is not so published for
any day that is a Business Day, the average of quotations for such day on such
transactions received by the Agent from three (3) federal funds brokers of
recognized standing selected by the Agent.
“Fees” means the collective
reference to each fee payable to the Agent, for its own account or for the
ratable benefit of the Lenders, under the terms of this Agreement or under the
terms of any of the other Financing Documents, including, without limitation,
the Revolving Credit Unused Line Fee, the Origination Fee, Agent’s Fee, Letter
of Credit Fees, Citizens Letter of Credit Fees, and the Field Examination
Fees.
“Field Examination Fee” and
“Field Examination Fees”
have the meanings described in Section 2.7.5 (Field
Examination Fees).
“Financing Documents” means at
any time collectively this Agreement, the Notes, the Security Documents, the
Letter of Credit Documents, and any other instrument, agreement or document
previously, simultaneously or hereafter executed and delivered by any Borrower,
and/or any other Person, singly or jointly with another Person or Persons,
evidencing, securing, guarantying or in connection with this Agreement, any
Note, any of the Security Documents, any of the Facilities, and/or any of the
Obligations.
“Fixed or Capital Assets” of a
Person at any date means all assets which would, in accordance with GAAP
consistently applied, be classified on the balance sheet of such Person as
property, plant or equipment at such date.
“Fixed Charge Coverage Ratio”
means as to Borrowers for any period of determination thereof the ratio of (a)
the sum of (i) EBITDA, plus (ii) operating lease payments (including rent),
minus (iii) cash taxes, minus (iv) cash dividends, minus (v) share repurchases
to (b) Fixed Charges.
“Fixed Charges” means as to
Borrowers for any period of determination thereof, the sum of (i) scheduled or
required principal payments on all Indebtedness for Borrowed Money of Borrowers,
plus (ii) all operating lease payments (including rent), plus (iii) cash
interest expense, plus (iv) any earn-out payments of Borrowers paid in
cash.
“Funding Office” means the
office of the Agent specified in Section 9.1 or
such other office as may be specified from time to time by the Agent as its
funding office by written notice to VSE and the Lenders.
“GAAP” means generally accepted
accounting principles in the United States of America in effect from time to
time.
“General Intangibles” means all
general intangibles of every nature, whether presently existing or hereafter
acquired or created, and without implying any limitation of the foregoing,
further means all books and records, commercial tort claims, other claims
(including without limitation all claims for income tax and other refunds),
payment intangibles, Supporting Obligations, choses in action, claims, causes of
action in tort or equity, contract rights, judgments, customer lists, software,
Patents, Trademarks, licensing agreements, rights in intellectual property,
goodwill (including goodwill of Borrower’s business symbolized by and associated
with any and all Trademarks, trademark licenses, Copyrights and/or service
marks), royalty payments, licenses, letter-of-credit rights, letters of credit,
contractual rights, the right to receive refunds of unearned insurance premiums,
rights as lessee under any lease of real or personal property, literary rights,
Copyrights, service names, service marks, logos, trade secrets, amounts received
as an award in or settlement of a suit in damages, deposit accounts, interests
in joint ventures, general or limited partnerships, or limited liability
companies or partnerships, rights in applications for any of the foregoing,
books and records in whatever media (paper, electronic or otherwise) recorded or
stored, with respect to any or all of the foregoing, all Supporting Obligations
with respect to any of the foregoing, and all Equipment and General Intangibles
necessary or beneficial to retain, access and/or process the information
contained in those books and records, and all Proceeds of the
foregoing.
“Government Contracts” means
any contract with the United States or any department, agency or instrumentality
of the United States where Borrower is the prime contractor.
“Governmental Authority” means
any nation or government, any state or other political subdivision thereof and
any entity exercising executive, legislative, judicial, regulatory or
administrative functions of or pertaining to government and any department,
agency or instrumentality thereof.
“Hazardous Materials” means (a)
any “hazardous waste” as defined by the Resource Conservation and Recovery Act
of 1976, as amended from time to time, and regulations promulgated thereunder;
(b) any “hazardous substance” as defined by the Comprehensive Environmental
Response, Compensation and Liability Act of 1980, as amended from time to time,
and regulations promulgated thereunder; (c) any substance the presence of which
on any property now or hereafter owned, acquired or operated by any of the
Borrowers is prohibited by any Law similar to those set forth in this
definition; and (d) any other substance which by Law requires special handling
in its collection, storage, treatment or disposal.
“Hazardous Materials
Contamination” means the contamination (whether presently existing or
occurring after the date of this Agreement) by Hazardous Materials of any
property owned, operated or controlled by any of the Borrowers or for which any
of the Borrowers has responsibility, including, without limitation,
improvements, facilities, soil, ground water, air or other elements on, or of,
any property now or hereafter owned, acquired or operated by any of the
Borrowers, and any other contamination by Hazardous Materials for which any of
the Borrowers is, or is claimed to be, responsible.
“Hedging Contracts” means,
interest rate swap agreements, interest rate cap agreements and interest rate
collar agreements, or any other agreements or arrangements entered into between
the Borrowers and the Agent or any Lender and designed to protect the Borrowers
against fluctuations in interest rates or currency exchange rates.
“Hedging Obligations” means,
with respect to the Borrowers, all liabilities of each Borrower to the Agent or
any Lender under any Hedging Contracts.
“Increased Revolving Facility
Activation Notice” means a notice substantially in the form of Exhibit E attached
hereto and made a part hereof.
“Increased Revolving Facility Closing
Date” any Business Day designated as such in an Increased Revolving
Facility Activation Notice.
“Incremental Revolving Loans”
has the meaning described in 2.1.6 (Increase to
Revolving Credit Facility).
“Indebtedness” of a Person
means at any date the total liabilities of such Person at such time determined
in accordance with GAAP consistently applied.
“Indebtedness for Borrowed
Money” of a Person means at any time the sum at such time of (a)
Indebtedness of such Person for borrowed money or for the deferred purchase
price of property or services, (b) any obligations of such Person in respect of
letters of credit, banker’s or other acceptances or similar obligations issued
or created for the account of such Person, (c) Lease Obligations of such Person
with respect to Capital Leases, (d) all liabilities secured by any Lien on any
property owned by such Person, to the extent attached to such Person’s interest
in such property, even though such Person has not assumed or become personally
liable for the payment thereof, (e) obligations of third parties which are being
guarantied or indemnified against by such Person or which are secured by the
property of such Person; (f) any obligation of such Person under an employee
stock ownership plan or other similar employee benefit plan; (g) any obligation
of such Person or a Commonly Controlled Entity to a Multi-employer Plan; and (h)
any obligations, liabilities or indebtedness, contingent or otherwise, under or
in connection with, any Hedging Obligations; but excluding trade and other
accounts payable in the ordinary course of business in accordance with customary
trade terms and which are not overdue (as determined in accordance with
customary trade practices) or which are being disputed in good faith by such
Person and for which adequate reserves are being provided on the books of such
Person in accordance with GAAP.
“Indemnified Parties” has the
meaning set forth in Section 9.19
(Indemnification).
“Instrument” means a negotiable
instrument or any other writing which evidences a right to payment of a monetary
obligation and is not itself a security agreement or lease and is of a type that
in the ordinary course of business is transferred by delivery with any necessary
endorsement or assignment, and all Supporting Obligations with respect to any of
the foregoing and all Proceeds with respect to any of the
foregoing.
“Internal Revenue Code” means
the Internal Revenue Code of 1986, as amended from time to time, and the Income
Tax Regulations issued and proposed to be issued thereunder.
“Inventory” means all goods of
Borrowers and all right, title and interest of Borrowers in and to all of its
now owned and hereafter acquired goods and other personal property furnished
under any contract of service or intended for sale or lease, including, without
limitation, all raw materials, work-in-process, finished goods and materials and
supplies of any kind, nature or description which are used or consumed in
Borrowers’ business or are or might be used in connection with the manufacture,
packing, shipping, advertising, selling or finishing of such goods and other
personal property and all licenses, warranties, franchises, General Intangibles,
personal property and all documents of title or documents relating to the same,
together with all Accounts, Chattel Paper, Instruments and other consideration
received by Borrowers on account of the sale, lease or other disposition of all
or any part of the foregoing, and together with all rights under or arising out
of present or future Documents and contracts relating to the foregoing and all
Proceeds of the foregoing.
“Investment Property” means a
security, whether certificated or uncertificated, security entitlement,
securities account, commodity contract or commodity account and all Proceeds of,
and Supporting Obligations with respect to, the foregoing.
“Item of Payment” means each
check, draft, cash, money, instrument, item, and other remittance in payment or
on account of payment of the Receivables or otherwise with respect to any
Collateral, including, without limitation, cash proceeds of any returned,
rejected or repossessed goods, the sale or lease of which gave rise to a
Receivable, and other proceeds of Collateral; and “Items of Payment” means the
collective reference to all of the foregoing.
“Laws” means all ordinances,
statutes, rules, regulations, orders, injunctions, writs, or decrees of any
Governmental Authority.
“Lease Obligations” of a Person
means for any period the rental commitments of such Person for such period under
leases for real and/or personal property (net of rent from subleases thereof,
but including taxes, insurance, maintenance and similar expenses which such
Person, as the lessee, is obligated to pay under the terms of said leases,
except to the extent that such taxes, insurance, maintenance and similar
expenses are payable by sublessees), including rental commitments under Capital
Leases.
“Lender Insolvency Event” shall
mean that (i) a Lender or its Parent Company is insolvent, or is generally
unable to pay its debts as they become due, or makes a general assignment for
the benefit of its creditors, or (ii) such Lender or its Parent Company is the
subject of a bankruptcy, insolvency, reorganization, liquidation or similar
proceeding, or a receiver, trustee, conservator, intervenor or sequestrator or
the like has been appointed for such Lender or its Parent Company, or such
Lender or its Parent Company has taken any action in furtherance of or
indicating its consent to or acquiescence in any such proceeding or
appointment.
“Letter of Credit” and “Letters of Credit” shall have
the meanings described in Section 2.2.1 (Letters of
Credit).
“Letter of Credit Agreement”
means the collective reference to each letter of credit application and
agreement substantially in the form of the Agent’s then standard form of
application for letter of credit or such other form as may be approved by the
Agent, executed and delivered by any one or more of the Borrowers in connection
with the issuance of a Letter of Credit or a Citizens Letter of Credit, as the
case may be, as the same may from time to time be amended, restated,
supplemented or modified; and “Letter of Credit Agreements”
means all of the foregoing in effect at any time and from time to
time.
“Letter of Credit Documents”
means any and all drafts under or purporting to be under a Letter of Credit, any
Letter of Credit Agreement, and any other instrument, document or agreement
executed and/or delivered by any one or more of the Borrowers or any other
Person under, pursuant to or in connection with a Letter of Credit or any Letter
of Credit Agreement.
“Letter of Credit Exposure”
shall mean, at any time, the sum of (i) the aggregate undrawn amount of all
outstanding Letters of Credit at such time, plus (ii) the aggregate amount of
all Letter of Credit Disbursements that have not been reimbursed by or on behalf
of the Borrowers at such time. The Letter of Credit Exposure of any
Lender shall be its Pro Rata Share of the total Letter of Credit Exposure at
such time.
“Letter of Credit Fee” and
“Letter of Credit Fees”
have the meanings described in Section 2.2.2
(Letter of Credit Fees).
“Letter of Credit Issuance Fee”
means that per annum percentage rate determined by Agent from time to time in
accordance with the matrix below. The initial Letter of Credit
Issuance Fee will be determined at the Closing Date using the Leverage Ratio
calculated by reference to the consolidated financial statements of VSE and the
Compliance Certificate most recently received by the
Agent. Commencing on the date following the Closing Date when the
Agent receives the consolidated financial statements of VSE and the Compliance
Certificate in accordance with this Agreement and on each such date thereafter,
the Letter of Credit Issuance Fee will be reset based on the Leverage Ratio
calculated by reference to such consolidated financial statements and Compliance
Certificate.
|
Tier
|
Letter of Credit Issuance
Fee
|
Leverage Ratio
|
||
|
I
|
2.00%
|
Less
than 1.00 to 1.0
|
||
|
II
|
2.25%
|
Equal
to or greater than 1.00 to 1.0 but less than 2.00 to
1.0
|
||
|
III
|
2.50%
|
Equal
to or greater than 2.00 to 1.0
|
||
In the
event VSE fails to provide such consolidated financial statements and Compliance
Certificate to the Agent when due, the Letter of Credit Issuance Fee shall be at
the fee corresponding to “Tier III” in the table above until such time as such
consolidated financial statements and Compliance Certificate are submitted to
and accepted by the Agent pursuant to this Agreement.
“Letter of Credit Obligations”
means the collective reference to all Obligations of any one or more of the
Borrowers with respect to the Letters of Credit and the Letter of Credit
Agreements.
“Letter-of-credit right” means
a right to payment or performance under a letter of credit, whether or not the
beneficiary has demanded or is at the time entitled to demand payment or
performance.
“Letter of Credit Sub-Facility”
means the sub-facility established pursuant to Section
2.2 (Letter of Credit Sub-Facility).
“Leverage Ratio” means the
ratio of Total Funded Debt on a specified date to EBITDA for the four (4)
quarter period then ending on such date.
“Liabilities” means at any date
all liabilities that in accordance with GAAP consistently applied should be
classified as liabilities on a consolidated balance sheet of the Borrowers and
their respective Subsidiaries.
“LIBOR Interest Period” means
each of the Revolving Loan LIBOR Interest Period or the Term Loan LIBOR Interest
Period, as the case may be and “LIBOR Rate Loans” means the collective
reference to the Revolving Loan LIBOR Interest Periods or the Term Loan LIBOR
Interest Periods.
“LIBOR Rate” means each of the
Revolving Loan LIBOR Rate or the Term Loan LIBOR Rate, as the case may be, and
“LIBOR Rate Loans” means the collective
reference to the Revolving Loan LIBOR Rate or the Term Loan LIBOR
Rate.
“LIBOR Rate Loan” means each of
the Revolving Loan LIBOR Rate Loan or the Term Loan LIBOR Rate Loan, as the case
may be, and “LIBOR Rate
Loans” means the
collective reference to the Revolving Loan LIBOR Rate Loans or the Term Loan
LIBOR Rate Loans.
“Lien” means any mortgage, deed
of trust, deed to secure debt, grant, pledge, security interest, assignment,
encumbrance, judgment, lien, financing statement, hypothecation, provision in
any instrument or other document for confession of judgment, cognovit or other
similar right or other remedy, claim, charge, control over or interest of any
kind in real or personal property securing any indebtedness, duties,
obligations, and liabilities owed to, or a claimed to be owed to, a Person, all
whether perfected or unperfected, avoidable or unavoidable, based on the common
law, statute or contract or otherwise, including, without limitation, any
conditional sale or other title retention agreement, any lease in the nature
thereof, and the filing of or agreement to give any financing statement under
the Uniform Commercial Code of any jurisdiction, excluding the precautionary
filing of any financing statement by any lessor in a true lease transaction, by
any ▇▇▇▇▇▇ in a true bailment transaction or by any consignor in a true
consignment transaction under the Uniform Commercial Code of any jurisdiction or
the agreement to give any financing statement by any lessee in a true lease
transaction, by any bailee in a true bailment transaction or by any consignee in
a true consignment transaction.
“Loan” means each of the
Revolving Loan or the Term Loan, as the case may be and “Loans” means the collective
reference to the Revolving Loans or the Term Loans.
“Loan Notice” has the meaning
described in Section 2.1.2 (Procedure for Making
Advances).
“Lockbox” has the meaning
described in Section 2.1.10 (The Collateral
Account).
“London Banking Day” means a
day on which dealings in US dollars deposits are transacted in the London
interbank market.
“Maximum Rate” has the meaning
described in Section 2.7.7 (Maximum Interest
Rate).
“Multi-employer Plan” means a
Plan that is a Multi-employer plan as defined in Section 4001(a)(3) of
ERISA.
“Net Outstandings” of any
Lender means, at any time, the sum of (a) all amounts paid by such Lender (other
than pursuant to Section 8.5 (Indemnification)) to
the Agent in respect to the Revolving Loan or otherwise under this Agreement,
minus (b) all amounts paid by the Agent to such Lender which are received by the
Agent and which, pursuant to this Agreement, are paid over to such Lender for
application in reduction of the outstanding principal balance of the Revolving
Loan.
“Non-Defaulting Lender” shall
mean, at any time, a Lender that is not a Defaulting Lender or a Potential
Defaulting Lender.
“Non-Ratable Loan” means an
advance under the Revolving Loan made by Citizens in accordance with the
provisions of Section 2.8.3(a) (Selection of Settlement Dates).
“Note” means any Revolving
Credit Note, any Term Note or any Replacement Revolving Credit Note, as the case
may be, and “Notes”
means collectively each Revolving Credit Note, each Term Note, each Replacement
Revolving Credit Note and any other promissory note which may from time to time
evidence all or any portion of the Obligations.
“Obligations” means all present
and future indebtedness, duties, obligations, and liabilities, whether now
existing or contemplated or hereafter arising, of any one or more of the
Borrowers to the Lenders and/or Agent under, arising pursuant to, in connection
with and/or on account of the provisions of this Agreement, each Note, each
Security Document, and/or any of the other Financing Documents, the Loans, any
Hedging Obligations, and/or any of the Facilities including, without limitation,
the principal of, and interest on, each Note, late charges, the Fees,
Enforcement Costs, and prepayment fees (if any), letter of credit reimbursement
obligations, letter of credit fees or fees charged with respect to any guaranty
of any letter of credit; also means all other present and future indebtedness,
duties, obligations, and liabilities, whether now existing or contemplated or
hereafter arising, of any one or more of the Borrowers to the Agent and/or to
Lenders or its Affiliates under or in connection with, any Hedging Obligations
or Bank Products, regardless of whether such indebtedness, duties, obligations,
and liabilities be direct, indirect, primary, secondary, joint, several, joint
and several, fixed or contingent; and also means any and all renewals,
extensions, substitutions, amendments, restatements and rearrangements of any
such indebtedness, duties, obligations, and liabilities.
“OFAC” means the Office of
Foreign Assets Control of the United States Department of the
Treasury.
“Officer’s Certificate” means
an Officer’s Certificate described in Section 6.1.28(b) (Permitted Acquisition Deliverables) in
substantially the forms attached to this Agreement as Exhibit F-1 and Exhibit
F-2.
“Origination Fee” has the
meaning described in Section 2.7.3 (Origination
Fee).
“Outstanding Letter of Credit
Obligations” has the meaning described in Section 2.2.3 (Terms of Letters of Credit).
“Parent Company” shall mean,
with respect to a Lender, the bank holding company (as defined in Federal
Reserve Board Regulation Y), if any, of such Lender, and/or Person owning,
beneficially or of record, directly or indirectly, a majority of the shares of
such Lender.
“Patents” means and includes,
in each case whether now existing or hereafter arising, all of each Borrower’s
rights, title and interest in and to (a) any and all patents and patent
applications, (b) any and all inventions and improvements described and claimed
in such patents and patent applications, (c) reissues, divisions, continuations,
renewals, extensions and continuations-in-part of any patents and patent
applications, (d) income, royalties, damages, claims and payments now or
hereafter due and/or payable under and with respect to any patents or patent
applications, including, without limitation, damages and payments for past and
future infringements, (e) rights to ▇▇▇ for past, present and future
infringements of patents, and (f) all rights corresponding to any of the
foregoing throughout the world.
“PBGC” means the Pension
Benefit Guaranty Corporation.
“Permitted Acquisitions” means
a transaction or series of transactions whereby a Borrower acquires all or
substantially all of the assets of a business, or purchases an equity interest
in a business (the “Target”), provided, that, (i)
the acquisition or purchase price consideration paid by the Borrowers shall not
be greater than Ten Million Dollars ($10,000,000) for each Permitted Acquisition
and shall not exceed Twenty-Five Million Dollars ($25,000,000) in the aggregate
for all Permitted Acquisitions; (ii) the Target shall be in a similar line of
business as that of the Borrowers; (iii) the Target shall be a going concern,
not involved in any material litigation that is not fully covered by reserves
and/or insurance and shall have positive EBITDA for the immediately preceding
twelve (12) months; (iv) both before and after giving effect to such
transaction, no Default or Event of Default shall be continuing or shall occur
as a result of such transaction; (v) the Borrowers will be in compliance with
all financial covenants after giving pro forma effect to such transaction; (vi)
after giving pro forma effect to such transaction there must be at least Ten
Million Dollars ($10,000,000) of availability under the Revolving Loan; (vii)
the Agent shall have received evidence satisfactory to the Agent that
arrangements shall have been made for the termination of all Liens encumbering
any asset of the Target; (viii) no Indebtedness shall be assumed by any Borrower
in connection with such transaction; (ix) the Agent shall have received and
approved complete copies of the Purchase Agreement Documents; and (x) within 15
days of closing any transaction contemplated hereby, the Target shall be joined
to this Agreement as an Additional Borrower by executing and delivering to the
Agent an Additional Borrower Joinder Supplement and shall grant to Agent for the
benefit or the Agent and Lenders a Lien in all of its assets.
“Permitted Liens”
means: (a) Liens for Taxes which are not delinquent or which the
Agent has determined in the exercise of its sole and absolute discretion (i) are
being diligently contested in good faith and by appropriate proceedings, and
such contest operates to suspend collection of the contested Taxes and
enforcement of a Lien, (ii) the respective Borrower has the financial ability to
pay, with all penalties and interest, at all times without materially and
adversely affecting such Borrower, and (iii) are not, and will not be with
appropriate filing, the giving of notice and/or the passage of time, entitled to
priority over any Lien of the Agent and/or the Lenders; (b) deposits or pledges
to secure obligations under workers’ compensation, social security or similar
laws, or under unemployment insurance in the ordinary course of business; (c)
Liens securing the Obligations; (d) judgment Liens to the extent the entry of
such judgment does not constitute a Default or an Event of Default under the
terms of this Agreement or result in the sale or levy of, or execution on, any
of the Collateral; (e) Liens to secure the purchase price of Equipment or
Inventory in an aggregate amount not to exceed Two Hundred Fifty Thousand
Dollars ($250,000); and (f) such other Liens, if any, as are set forth on Schedule
4.1.18 attached
hereto and made a part hereof.
“Permitted Uses” means (a) with
respect to the Term Loan, to finance the AK Purchase Agreement Transaction and
(b) with respect to the Revolving Loan, for short term working capital of any
Borrower’s business, to support the issuance of Letters of Credit, to finance a
portion of the AK Purchase Agreement Transaction, and any Permitted
Acquisitions.
“Person” means and includes an
individual, a corporation, a partnership, a joint venture, a limited liability
company or partnership, a trust, an unincorporated association, a Governmental
Authority, or any other organization or entity.
“Plan” means any pension plan
that is covered by Title IV of ERISA and in respect of which any Borrower or a
Commonly Controlled Entity is an “employer” as defined in Section 3 of
ERISA.
“Potential Defaulting Lender”
shall mean, at any time, a Lender (i) as to which the Agent has notified the
Borrowers that an event of the kind described in the definition of “Lender
Insolvency Event” has occurred and is continuing in respect of any Subsidiary of
such Lender, (ii) as to which the Agent has in good faith determined and
notified the Borrowers that such Lender or its Parent Company or a Subsidiary
thereof has notified the Agent, or has stated publicly, that it will not comply
with its funding obligations under any other loan agreement or credit agreement
or other similar/other financing agreement, or (iii) that has, or whose Parent
Company has, a non-investment grade rating from ▇▇▇▇▇’▇ or S&P or another
nationally recognized rating agency. Any determination that a Lender
is a Potential Defaulting Lender under any of clauses (i) through (iii) above
will be made by the Agent in its reasonable discretion acting in good
faith. The Agent will promptly send to all parties hereto a copy of
any notice to the Borrowers provided for in this definition.
“Post-Default Rate” means the
sum of (a) the Prime Rate in effect from time to time, plus (b) the Prime Rate
Margin then in effect, plus (c) two percent (2.0%) per annum.
“Prepayment” means a Revolving
Loan Mandatory Prepayment, a Revolving Loan Optional Prepayment, a Term Loan
Mandatory Prepayment, or a Term Loan Optional Prepayment, as the case may be,
and “Prepayments” mean
collectively all Revolving Loan Mandatory Prepayments, all Revolving Loan
Optional Prepayments, all Term Loan Mandatory Prepayments and all Term Loan
Optional Prepayments.
“Prime Rate” shall mean a rate
per annum equal to the rate of interest announced by Agent in the State from
time to time as its “Prime Rate.” Any change in the Prime Rate shall
be effective immediately from and after such change in the Prime Rate. Interest
accruing by reference to the Prime Rate shall be calculated on the basis of
actual days elapsed and a 360-day year. The Borrowers acknowledges
that the Agent may make loans to its customers above, at or below the Prime
Rate.
“Prime Rate Interest Payment Date” means
with respect to any Prime Rate Loan, the last day of each calendar month,
commencing on August 31, 2010 and continuing thereafter until the Obligations
have been irrevocably paid in full.
“Prime Rate Loan” means any
Loan for the period(s) when the rate of interest applicable to such Loan is
calculated by reference to the Prime Rate.
“Prime Rate Margin” means the
amount determined to be in effect from time to time in accordance with the
matrix below. The initial Prime Rate Margin will be determined at the
Closing Date using the Leverage Ratio calculated by reference to the
consolidated financial statements of VSE and the Compliance Certificate most
recently received by the Agent. Commencing on the date following the
Closing Date when the Agent receives the consolidated financial statements of
VSE and the Compliance Certificate in accordance with this Agreement and on each
such date thereafter, the Prime Rate Margin will be reset based on the Leverage
Ratio calculated by reference to such consolidated financial statements and
Compliance Certificate.
|
Tier
|
Prime Rate Margin
|
Leverage Ratio
|
|
I
|
0%
|
Less
than 1.00 to 1.0
|
|
II
|
.25%
|
Equal
to or greater than 1.00 to 1.0 but less than 2.00 to
1.0
|
|
III
|
.50%
|
Equal
to or greater than 2.00 to 1.0
|
In the
event VSE fails to provide such consolidated financial statements and Compliance
Certificate to the Agent when due, the Prime Rate Margin shall be set at the
margin corresponding to “Tier III” in the table above until such time as such
consolidated financial statements and Compliance Certificate are submitted to
and accepted by Agent pursuant to this Agreement.
“Principal Amount” means the
aggregate outstanding principal balance of the Notes.
“Proceeds” has the meaning
described in the Uniform Commercial Code as in effect from time to
time.
“Pro-forma Balance Sheet” has
the meaning described in Section 4.1 (Pro-forma Financial
Statements).
“Pro-forma Financial
Projections” has the meaning described in Section 4.1 (Pro-forma
Financial Statements).
“Pro Rata Share” means at any
time and as to any Lender, the percentage derived by dividing the unpaid
principal amount of the Loans and Letter of Credit Obligations owing to that
Lender by the aggregate unpaid principal amount of all Loans and Letter of
Credit Obligations then outstanding; or if no Loans or Letter of Credit
Obligations are outstanding, by dividing the total amount of such Lender’s
Commitments by the total amount of the Commitments of the Agent and all of the
Lenders.
“Purchase Agreement Documents”
means collectively any agreement hereafter executed in connection with any
Permitted Acquisition and any and all other agreements, documents or instruments
(together with any and all amendments, modifications, and supplements thereto,
restatements thereof, and substitutes therefor) previously, now or hereafter
executed and delivered by any Borrower or any other Person in connection with
any Permitted Acquisition.
“Receivable” means one of each
Borrower’s now owned and hereafter owned, acquired or created Accounts, Chattel
Paper, General Intangibles and Instruments; and “Receivables” means all of each
Borrower’s now or hereafter owned, acquired or created Accounts, Chattel Paper,
General Intangibles and Instruments, and all cash and non-cash proceeds and
products thereof.
“Replacement Revolving Credit
Note” has the meaning described in Section 2.1.5 (Revolving Credit Note).
“Reportable Event” means any of
the events set forth in Section 4043(c) of ERISA or the regulations
thereunder.
“Responsible Officer” means for
each Borrower, its chief executive officer or president or, with respect to
financial matters, its chief financial officer, or treasurer.
“Requisite Lenders” means at
any time of determination one or more of the Lenders holding at least fifty-one
percent (51%) of the Commitments, provided, that, at any time of determination
there are (a) two Lenders, then one hundred percent (100%) of the Commitments
and (b) at least three Lenders, then at least two Lenders holding a minimum of
fifty-one percent (51%) of the Commitments, provided, however, that to the
extent that any Lender is a Defaulting Lender, such Defaulting Lender and all of
its Commitments, including its Letter of Credit Exposure shall be excluded for
purposes of determining Requisite Lenders.
“Revolving Credit Commitment”
means the agreement of a Lender relating to the making the Revolving Loan and
advances thereunder subject to and in accordance with the provisions of this
Agreement; and “Revolving
Credit Commitments” means the collective reference to the Revolving
Credit Commitment of each of the Lenders.
“Revolving Credit Commitment
Period” means the period of time from the Closing Date to the Business
Day preceding the Revolving Credit Termination Date.
“Revolving Credit Committed
Amount” has the meaning described in Section 2.1.1 (Revolving Credit Facility) as increased, from
time to time, pursuant to Section 2.1.6 (Increase
to Revolving Credit Facility).
“Revolving Credit Expiration
Date” means August 19, 2013.
“Revolving Credit Facility”
means the facility established by the Lenders pursuant to Section 2.1 (Revolving Credit Facility).
“Revolving Credit Note” and
“Revolving Credit Notes”
have the meanings described in Section 2.1.5
(Revolving Credit Notes).
“Revolving Credit Optional
Reduction” and “Revolving Credit Optional
Reductions” have the meanings described in Section 2.1.14 (Optional Reduction of Total Revolving Credit
Committed Amount).
“Revolving Credit Pro Rata
Share” has the meaning described in Section 2.1.1 (Revolving Credit Facility).
“Revolving Credit Termination
Date” means the earlier of (a) the Revolving Credit Expiration Date, or
(b) the date on which the Revolving Credit Commitments are terminated pursuant
to Section 7.2 (Remedies) or
otherwise.
“Revolving Credit Unused Line
Fee” and “Revolving
Credit Unused Line Fees” have the meanings described in Section 2.1.12 (Revolving Credit Unused Line
Fee).
“Revolving Loan” has the
meaning described in Section 2.1.1 (Revolving
Credit Facility).
“Revolving Loan Account” has
the meaning described in Section 2.1.11 (Revolving
Loan Account).
“Revolving Loan Adjusted LIBOR
Rate” means, relative to any Revolving Loan LIBOR Rate Loan to be made,
continued or maintained as, or converted into, a Revolving Loan LIBOR Rate Loan
for any Revolving Loan LIBOR Interest Period, a rate per annum determined by
dividing (x) the Revolving Loan LIBOR Rate for such Revolving Loan LIBOR
Interest Period by (y) a percentage equal to one hundred percent (100%) minus
the Revolving Loan LIBOR Reserve Percentage.
“Revolving Loan Applicable Interest
Rate” means either a (i) Revolving Loan LIBOR Rate or (ii) Prime
Rate.
“Revolving Loan LIBOR Interest Payment Date” means,
for any Revolving Loan LIBOR Rate Loan having a Revolving Loan LIBOR Interest
Period of three months or less, the last Business Day of such Revolving Loan
LIBOR Interest Period, and as to any Revolving Loan LIBOR Rate Loan having a
Revolving Loan LIBOR Interest Period longer than three months, each Business Day
which is three (3) months, or a whole multiple thereof, after the first day of
such Revolving Loan LIBOR Interest Period and the last day of such Revolving
Loan LIBOR Interest Period.
“Revolving Loan LIBOR Interest Period” means,
relative to any Revolving Loan LIBOR Rate Loan:
(a) initially,
the period beginning on (and including) the date on which such Revolving Loan
LIBOR Rate Loan is made or continued as, or converted into, a Revolving Loan
LIBOR Rate Loan pursuant to Section 2.1.2 and
ending on (but excluding) the day which numerically corresponds to such date one
(1), three (3) or six (6) months thereafter (or, if such month has no
numerically corresponding day, on the last Business Day of such month), in each
case as the VSE may select in its notice given pursuant to Section 2.1.2; and
(b) thereafter,
each period commencing on the last day of the next preceding Revolving Loan
LIBOR Interest Period applicable to such Revolving Loan LIBOR Rate Loan and
ending one (1), three (3) or six (6) months thereafter, as selected by the VSE
by irrevocable notice to the Agent pursuant to Section 2.1.2 hereof;
provided, however,
that
(a) at no
time may there be more than five (5) Revolving Loan LIBOR Interest Periods in
effect with respect to the Revolving Loan LIBOR Rate Loans;
(b) Revolving
Loan LIBOR Interest Periods commencing on the same date for Revolving Loan LIBOR
Rate Loans comprising part of the same advance under this Agreement shall be of
the same duration;
(c) Revolving
Loan LIBOR Interest Periods for Revolving Loan LIBOR Rate Loans in connection
with which the Borrowers have or may incur Hedging Obligations with the Agent or
Lenders shall be of the same duration as the relevant periods set under the
applicable Hedging Contracts;
(d) if such
Revolving Loan LIBOR Interest Period would otherwise end on a day which is not a
Business Day, such Revolving Loan LIBOR Interest Period shall end on the next
following Business Day unless such day falls in the next calendar month, in
which case such Revolving Loan LIBOR Interest Period shall end on the first
(1st) preceding Business Day; and
(e) no
Revolving Loan LIBOR Interest Period may end later than the termination of this
Agreement.
“Revolving Loan LIBOR Rate” means, relative to
any Revolving Loan LIBOR Interest Period, the offered rate for deposits of U.S.
Dollars in an amount approximately equal to the amount of the requested
Revolving Loan LIBOR Rate Loan for a term coextensive with the designated
Revolving Loan LIBOR Interest Period which the British Bankers’ Association
fixes as its LIBOR rate as of 11:00 a.m. London time on the day which is two (2)
London Banking Days prior to the beginning of such Revolving Loan LIBOR Interest
Period. If such day is not a London Banking Day, the Revolving Loan
LIBOR Rate shall be determined on the next preceding day which is a London
Banking Day. If for any reason the Agent cannot determine such
offered rate by the British Bankers’ Association, the Agent may, in its
discretion, select a replacement index based on the arithmetic mean of the
quotations, if any, of the interbank offered rate by first class banks in London
or New York for deposits in comparable amounts and maturities.
“Revolving Loan LIBOR Rate Loan” means any
Revolving Loan or advance the rate of interest applicable to which is based upon
the Revolving Loan LIBOR Rate.
“Revolving Loan LIBOR Rate Margin” means the
amount determined to be in effect from time to time in accordance with the
matrix below. The initial Revolving Loan LIBOR Rate Margin will be
determined at the Closing Date using the Leverage Ratio calculated by reference
to the consolidated financial statements of VSE and the Compliance Certificate
most recently received by the Agent. Commencing on the date following
the Closing Date when the Agent receives the consolidated financial statements
of VSE and the Compliance Certificate in accordance with this Agreement and on
each such date thereafter, the Revolving Loan LIBOR Rate Margin will be reset
based on the Leverage Ratio calculated by reference to such consolidated
financial statements and Compliance Certificate.
|
Tier
|
Revolving Loan LIBOR Rate
Margin
|
Leverage Ratio
|
|
I
|
2.00%
|
Less
than 1.00 to 1.0
|
|
II
|
2.25%
|
Equal
to or greater than 1.00 to 1.0 but less than 2.00 to
1.0
|
|
III
|
2.50%
|
Equal
to or greater than 2.00 to 1.0
|
In the
event VSE fails to provide such consolidated financial statements and Compliance
Certificate to the Agent when due, the Revolving Loan LIBOR Rate Margin shall be
set at the margin corresponding to “Tier III” in the table above until such time
as such consolidated financial statements and Compliance Certificate are
submitted to and accepted by the Agent pursuant to this Agreement.
“Revolving Loan LIBOR Reserve Percentage”
means, relative to any day of any Revolving Loan LIBOR Interest Period, the
maximum aggregate (without duplication) of the rates (expressed as a decimal
fraction) of reserve requirements (including all basic, emergency, supplemental,
marginal and other reserves and taking into account any transitional adjustments
or other scheduled changes in reserve requirements) under any regulations of the
Board or other governmental authority having jurisdiction with respect thereto
as issued from time to time and then applicable to assets or liabilities
consisting of “Eurocurrency
Liabilities”, as currently defined in Regulation D of the Board, having a
term approximately equal or comparable to such Revolving Loan LIBOR Interest
Period.
“Revolving Loan Mandatory
Prepayment” and “Revolving Loan Mandatory
Prepayments” have the meanings described in Section 2.1.6 (Mandatory Prepayments of Revolving
Loan).
“Revolving Loan Optional
Prepayment” and “Revolving Loan Optional
Prepayments” have the meanings described in Section 2.1.9 (Optional Prepayment of Revolving
Loan).
“Sanctioned Country” means a
country subject to a sanctions program identified on the list maintained by OFAC
and available at ▇▇▇▇://▇▇▇.▇▇▇▇▇.▇▇▇/▇▇▇▇▇▇▇/▇▇▇▇▇▇▇▇▇▇▇/▇▇▇▇/▇▇▇▇▇▇▇▇▇/, or as
otherwise published from time to time.
“Sanctioned Person” means (i) a
person named on the list of Specially Designated Nationals or Blocked Persons
maintained by OFAC available at
▇▇▇▇://▇▇▇.▇▇▇▇▇.▇▇▇/▇▇▇▇▇▇▇/▇▇▇▇▇▇▇▇▇▇▇/▇▇▇▇/▇▇▇ or as otherwise published from
time to time, or (ii) (A) an agency of the government of a Sanctioned Country,
(B) an organization controlled by a Sanctioned Country, or (C) a person resident
in a Sanctioned Country to the extent subject to a sanctions program
administered by OFAC.
“Security Documents” means
collectively any assignment, pledge agreement, security agreement, mortgage,
deed of trust, deed to secure debt, financing statement and any similar
instrument, document or agreement under or pursuant to which a Lien is now or
hereafter granted to, or for the benefit of, the Agent and/or the Lenders on any
real or personal property of any Person to secure all or any portion of the
Obligations, all as the same may from time to time be amended, restated,
supplemented or otherwise modified, including, without limitation, this
Agreement, the Assignment of Membership Interests, and the Stock Pledge
Agreements.
“Settlement Date” means no less
frequently than each Business Day after the Closing Date.
“Settlement Report” means each
report prepared by the Agent and delivered to each Lender on each Settlement
Date and setting forth, among other things, as of the Settlement Date indicated
thereon and as of the next preceding Settlement Date, the aggregate outstanding
principal balance of the Revolving Loan, each Lender’s Revolving Credit Pro Rata
Share thereof, each Lender’s Net Outstandings and all Non-Ratable Loans made,
and all payments of principal, interest and Fees received by the Agent from the
Borrowers during the period beginning on such next preceding Settlement Date and
ending on such Settlement Date.
“Solvent” means when used with
respect to any Person that at the time of determination:
(a) the
assets of such Person, at a fair valuation, are in excess of the total amount of
its debts (including, without limitation, contingent liabilities);
and
(b) the
present fair saleable value of its assets is greater than its probable liability
on its existing debts as such debts become absolute and matured;
and
(c) it is
then able and expects to be able to pay its debts (including, without
limitation, contingent debts and other commitments) as they mature;
and
(d) it has
capital sufficient to carry on its business as conducted and as proposed to be
conducted.
For
purposes of determining whether a Person is Solvent, the amount of any
contingent liability shall be computed as the amount that, in light of all the
facts and circumstances existing at such time, represents the amount that can
reasonably be expected to become an actual or matured liability.
“Seller” means each of ▇▇▇▇▇▇
G. A. ▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇. ▇▇▇▇▇▇, and ▇▇▇▇▇ ▇. ▇▇▇▇▇.
“Seller’s Creditor List” has
the meaning described in Section 4.1.30 (Seller’s
Creditor List).
“State” means the Commonwealth
of Virginia.
“Stock Pledge Agreements” means
those certain Pledge, Assignment and Security Agreements, dated August 26, 2009,
from VSE to Agent, for the benefit of Lenders ratably and Agent, as the same may
from time to time be amended, restated, supplemented or otherwise
modified.
“Subordinated Indebtedness”
means all Indebtedness, incurred at any time by any one or more of the
Borrowers, which is in amounts, subject to repayment terms, and subordinated to
the Obligations, as set forth in one or more written agreements, all in form and
substance satisfactory to the Agent in its sole and absolute
discretion.
“Subsidiary” means any
corporation the majority of the voting shares of which at the time are owned
directly by any Borrower and/or by one or more Subsidiaries of any
Borrower.
“Supporting Obligation” means a
letter-of-credit right, secondary obligation or obligation of a secondary
obligor or that supports the payment or performance of an account, chattel
paper, a document, a general intangible, an instrument or investment
property.
“Target” has the meaning
described in the definition of Permitted Acquisitions.
“Taxes” means all taxes and
assessments whether general or special, ordinary or extraordinary, or foreseen
or unforeseen, of every character (including all penalties or interest thereon),
which at any time may be assessed, levied, confirmed or imposed by any
Governmental Authority on any or all of the Borrowers or any of its or their
properties or assets or any part thereof or in respect of any of its or their
franchises, businesses, income or profits.
“Term Loan” and “Term Loans” have the meanings
described in Section 2.4.1 (Term Loan
Commitment).
“Term Loan Adjusted LIBOR Rate”
means, relative to a Term Loan LIBOR Rate Loan, a rate per annum determined by
dividing (x) the LIBOR Rate for such Term Loan LIBOR Interest Period by (y) a
percentage equal to one hundred percent (100%) minus the Term Loan LIBOR Reserve
Percentage.
“Term Loan Commitment” and
“Term Loan Commitments”
have the meanings described in Section 2.4.1 (Term
Loan Commitment).
“Term Loan Committed Amount”
has the meaning described in Section 2.4.1 (Term
Loan Commitment).
“Term Loan Facility” means the
facility established by Lenders pursuant to Section
2.4 (Term Loan Facility).
“Term Loan LIBOR Interest Payment
Date” means, for any Term Loan LIBOR Rate Loan having a Term Loan LIBOR
Interest Period of three months or less, the last Business Day of such Term Loan
LIBOR Interest Period, and as to any Term Loan LIBOR Rate Loan having a Term
Loan LIBOR Interest Period longer than three months, each Business Day which is
three (3) months, or a whole multiple thereof, after the first day of such Term
Loan LIBOR Interest Period and the last day of such Term Loan LIBOR Interest
Period.
“Term Loan LIBOR Interest
Period” means, in the case of a LIBOR Rate Loans
(a) initially,
the period beginning on (and including) the Funding Date and ending on (but
excluding) the day which numerically corresponds to such date one (1), three (3)
or six (6) months thereafter (or, if such month has no numerically corresponding
day, on the last Business Day of such month);
(b) thereafter,
each period commencing on the last day of the next preceding Term Loan LIBOR
Interest Period applicable to such Term Loan LIBOR Rate Loan and ending one (1),
three (3) or six (6) months thereafter;
provided, however,
that
(a) if the
Borrower has or may incur Hedging Obligations with the Agent or the Lenders in
connection with the Loan, the Term Loan LIBOR Interest Period shall be of the
same duration as the relevant period set under the applicable Hedging
Contract;
(b) if such
Term Loan LIBOR Interest Period would otherwise end on a day which is not a
Business Day, such Term Loan LIBOR Interest Period shall end on the next
following Business Day unless such day falls in the next calendar month, in
which case such Term Loan LIBOR Interest Period shall end on the first preceding
Business Day; and
(c) no Term
Loan LIBOR Interest Period may end later than the termination of this
Agreement.
“Term Loan LIBOR Rate” means,
relative to any Term Loan LIBOR Interest Period for a Term Loan LIBOR Rate Loan,
the offered rate for deposits of U.S. Dollars in an amount approximately equal
to the amount of the Term Loan LIBOR Rate Loan for a term coextensive with the
designated Term Loan LIBOR Interest Period which the British Bankers’
Association fixes as its LIBOR rate as of 11:00 a.m. London time on the day
which is two London Banking Days prior to the beginning of such Interest
Period. If the Agent cannot determine such offered rate by the
British Bankers’ Association, the Agent may, in its discretion, select a
replacement index based on the arithmetic mean of the quotations, if any, of the
interbank offered rate by first class banks in London or New York for deposits
in comparable amounts and maturities.
“Term Loan LIBOR Rate Loan”
means the Term Loan for the period(s) when the rate of interest applicable to
the Term Loan is calculated by reference to the Term Loan LIBOR Rate in the
manner set forth herein.
“Term Loan LIBOR Rate Margin” means the
amount determined to be in effect from time to time in accordance with the
matrix below. The initial Term Loan LIBOR Rate Margin will be
determined at the Closing Date using the Leverage Ratio calculated by reference
to the consolidated financial statements of VSE and the Compliance Certificate
most recently received by the Agent. Commencing on the date following
the Closing Date when the Agent receives the consolidated financial statements
of VSE and the Compliance Certificate in accordance with this Agreement and on
each such date thereafter, the Term Loan LIBOR Rate Margin will be reset based
on the Leverage Ratio calculated by reference to such consolidated financial
statements and Compliance Certificate.
|
Tier
|
Term Loan LIBOR Rate Margin
|
Leverage Ratio
|
|
I
|
2.00%
|
Less
than 1.00 to 1.0
|
|
II
|
2.25%
|
Equal
to or greater than 1.00 to 1.0 but less than 2.00 to
1.0
|
|
III
|
2.50%
|
Equal
to or greater than 2.00 to 1.0
|
In the
event VSE fails to provide such consolidated financial statements and Compliance
Certificate to the Agent when due, the Term Loan LIBOR Rate Margin shall be set
at the margin corresponding to “Tier III” in the table above until such time as
such consolidated financial statements and Compliance Certificate are submitted
to and accepted by the Agent pursuant to this Agreement.
“Term Loan LIBOR Reserve
Percentage” means, relative to any day of any Term Loan LIBOR Interest
Period, the maximum aggregate (without duplication) of the rates (expressed as a
decimal fraction) of reserve requirements (including all basic, emergency,
supplemental, marginal and other reserves and taking into account any
transitional adjustments or other scheduled changes in reserve requirements)
under any regulations of the Board or other governmental authority having
jurisdiction with respect thereto as issued from time to time and then
applicable to assets or liabilities consisting of “Eurocurrency Liabilities”, as
currently defined in Regulation D of the Board, having a term approximately
equal or comparable to such Term Loan LIBOR Interest Period.
“Term Loan Maturity Date” means
August 19, 2013.
“Term Loan Optional Prepayment”
and “Term Loan Optional
Prepayments” have the meanings described in Section 2.4.4(Optional Prepayments of Term Loan).
“Term Loan Pro Rata Share” has
the meaning described in Section 2.4.1 (Term Loan
Commitment).
“Term Note” and “Term Notes” have the meanings
described in Section 2.4.2 (The Term
Note).
“Total Gross Accounts
Receivable” means as to Borrowers for any period of determination thereof
the gross face amount the unpaid portion of each billed and unbilled account
(net of any returns, discounts, claims, credits, charges, accrued rebates or
other allowances, offsets, deductions, counterclaims, disputes or other defenses
and reduced by the aggregate amount of all reserves, limits and deductions
provided in this Agreement) in United States Dollars by the
Borrowers.
“Total Funded Debt” means as to
Borrowers for any period of determination thereof the sum of (i) all
Indebtedness for Borrowed Money of each Borrower (excluding all outstanding
advances under the Revolving Loan, if any), plus (ii) any accrued earn out
payments of each Borrower reasonably required to be paid by Borrower within the
next twelve (12) months (net of any Cash Equivalents for purposes of calculating
accrued earn out payments of each Borrower), plus (iii) the average of all
advances under the Revolving Loan made to Borrowers during the immediately
preceding thirty (30) consecutive days prior to such period of
determination.
“Total Revolving Credit Committed
Amount” has the meaning described in Section 2.1.1 (Revolving Credit Facility).
“Total Term Loan Committed
Amount” has the meaning described in Section 2.4.1 (Term Loan Commitment).
“Total Revolving Credit Committed
Amount” has the meaning described in Section 2.1.1 (Revolving Credit Facility) as the same may be
increased, from time to time, pursuant to Section 2.1.6 (Increase to Revolving Credit
Facility).
“Trademarks” means and includes
in each case whether now existing or hereafter arising, all of each Borrower’s
rights, title and interest in and to (a) any and all trademarks (including
service marks), trade names and trade styles, and applications for registration
thereof and the goodwill of the business symbolized by any of the foregoing, (b)
any and all licenses of trademarks, service marks, trade names and/or trade
styles, whether as licensor or licensee, (c) any renewals of any and all
trademarks, service marks, trade names, trade styles and/or licenses of any of
the foregoing, (d) income, royalties, damages and payments now or hereafter due
and/or payable with respect thereto, including, without limitation, damages,
claims, and payments for past, present and future infringements thereof, (e)
rights to ▇▇▇ for past, present and future infringements of any of the
foregoing, including the right to settle suits involving claims and demands for
royalties owing, and (f) all rights corresponding to any of the foregoing
throughout the world.
“Unearned Contract Value” means
the difference between (a) the then fully funded dollar value of the contract or
subcontract, whether or not earned, and (b) the total amounts previously billed
and properly billable for accepted end items or services under such contract or
subcontract.
“Uniform Commercial Code”
means, unless otherwise provided in this Agreement, the Uniform Commercial Code
as adopted by and in effect from time to time in the State or in any other
jurisdiction, as applicable.
“Unused Fee Margin” means that
per annum percentage rate determined by Agent from time to time in accordance
with the following matrix:
|
Tier
|
Unused Fee Margin
|
Leverage Ratio
|
|
I
|
0.25%
|
Less
than 1.00 to 1.0
|
|
II
|
0.35%
|
Equal
to or greater than 1.00 to 1.0 but less than 2.00 to
1.0
|
|
III
|
0.50%
|
Equal
to or greater than 2.00 to 1.0
|
In the
event VSE fails to provide such consolidated financial statements and Compliance
Certificate to the Agent when due, the Unused Fee Margin shall be set at the
margin corresponding to “Tier III” in the table above until such time as such
consolidated financial statements and Compliance Certificate are submitted to
and accepted by the Agent pursuant to this Agreement.
“Wholly Owned Subsidiary” means
any domestic United States corporation all the shares of stock of all classes of
which (other than directors’ qualifying shares) at the time are owned directly
or indirectly by a Borrower and/or by one or more Wholly Owned Subsidiaries of a
Borrower.
Section
1.2 Accounting Terms and Other
Definitional Provisions.
Unless
otherwise defined herein, as used in this Agreement and in any certificate,
report or other document made or delivered pursuant hereto, accounting terms not
otherwise defined herein, and accounting terms only partly defined herein, to
the extent not defined, shall have the respective meanings given to them under
GAAP, as consistently applied to the applicable Person. All terms
used herein which are defined by the Uniform Commercial Code shall have the same
meanings as assigned to them by the Uniform Commercial Code unless and to the
extent varied by this Agreement. The words “hereof”, “herein” and
“hereunder” and words of similar import when used in this Agreement shall refer
to this Agreement as a whole and not to any particular provision of this
Agreement, and article, section, subsection, schedule and exhibit references are
references to articles, sections or subsections of, or schedules or exhibits to,
as the case may be, this Agreement unless otherwise specified. As
used herein, the singular number shall include the plural, the plural the
singular and the use of the masculine, feminine or neuter gender shall include
all genders, as the context may require. Reference to any one or more
of the Financing Documents shall mean the same as the foregoing may from time to
time be amended, restated, substituted, extended, renewed, supplemented or
otherwise modified. Reference in this Agreement and the other
Financing Documents to the “Borrower”, the “Borrowers”, “each Borrower” or
otherwise with respect to any one or more of the Borrowers shall mean each and
every Borrower and any one or more of the Borrowers, jointly and severally,
unless a specific Borrower is expressly identified.
ARTICLE
II
THE CREDIT
FACILITIES
Section
2.1 The Revolving Credit
Facility.
2.1.1 Revolving Credit
Facility.
Subject
to and upon the provisions of this Agreement, the Lenders collectively, but
severally, establish a revolving credit facility (the “Revolving Credit Facility”) in
favor of the Borrowers. The aggregate of all advances under the
Revolving Credit Facility, including any advances under the Incremental
Revolving Commitment, is sometimes referred to in this Agreement collectively as
the “Revolving
Loan”.
The
amount set forth below opposite each Lender’s name is herein called such
Lender’s “Revolving Credit
Committed Amount” and the total of each Lender’s Revolving Credit
Committed Amount is herein called the “Total Revolving Credit Committed
Amount”. Each Lender’s Revolving Credit Committed Amount and
the Total Revolving Credit Committed Amount may be increased by the amount, if
any, of each Lender’s Incremental Revolving Commitment pursuant to Section 2.1.6 and all times thereafter all references herein
to each Lender’s Revolving Credit Committed Amount and the Total Revolving
Credit Committed Amount shall include the amount of each Lender’s Incremental
Revolving Commitment. The proportionate share set forth below
opposite each Lender’s name is herein called such Lender’s “Revolving Credit Pro Rata
Share”:
|
Lender
|
Revolving
Credit
Committed Amount
|
Revolving
Credit
Pro Rata Share
|
|
Citizens
|
$32,142,857
|
64.285715%
|
|
SunTrust
|
$17,857,143
|
35.714285%
|
|
Total
Revolving Credit Committed Amount
|
$50,000,000
|
100%
|
Neither
the Agent nor any of the Lenders shall be responsible for the Revolving Credit
Commitment of any other Lender, nor will the failure of any Lender to perform
its obligations under its Revolving Credit Commitment in any way relieve any
other Lender from performing its obligations under its Revolving Credit
Commitment.
During
the Revolving Credit Commitment Period, any or all of the Borrowers may request
advances under the Revolving Credit Facility in accordance with the provisions
of this Agreement; provided that after giving effect to any Borrower’s
request:
(a) the
outstanding principal balance of each Lender’s Pro Rata Share would not exceed
the lesser of (i) such Lender’s Revolving Credit Pro Rata Share of the Revolving
Credit Committed Amount or (ii) such Lender’s Pro Rata Share of the Borrowing
Base; and,
(b) the
aggregate outstanding principal balance of the Revolving Loans, all Letter of
Credit Obligations, and all Citizens Letter of Credit Obligations would not
exceed the lesser of (i) the Total Revolving Credit Committed Amount or (ii) the
Borrowing Base.
2.1.2 Procedure for Making
Advances Under the Revolving Loan; Continuation and Conversion Elections; Lender
Protection Loans.
The
Borrowers may borrow under the Revolving Credit Facility on any Business
Day. Advances under the Revolving Loan shall be deposited to a demand
deposit account of a Borrower with the Agent or shall be otherwise applied as
directed by the Borrowers, which direction the Agent may require to be in
writing.
By
delivering a borrowing request (a “Loan Notice”) to the Agent on
or before (i) 10:00 a.m., New York time, on a Business Day, the Borrowers may
from time to time irrevocably request, on not less than two (2) nor more than
five (5) Business Days’ notice, that a Revolving Loan LIBOR Rate Loan be made to
Borrowers and (ii) 10:00 a.m., New York time, on a Business Day, the Borrowers
may from time to time irrevocably request, that all other Revolving Loans be
made to Borrowers. Each Loan Notice shall specify the amount and if requested by
the Agent the purpose of the requested borrowing, the Applicable Interest Rate,
the Revolving Loan LIBOR Interest Period, if applicable, and if requested by the
Agent, be accompanied by a Borrowing Base Report. On the terms and
subject to the conditions of this Agreement, each Revolving Loan LIBOR Rate Loan
shall be made available to the Borrowers no later than 1:00 p.m. New York time
on the first (1st) day of the applicable Revolving Loan LIBOR Interest Period by
deposit to the account of the Borrower as shall have been specified in its Loan
Notice.
By
delivering a conversion notice (a “Conversion Notice”) to the
Agent on or before 10:00 a.m., New York time, on a Business Day, the Borrowers
may from time to time irrevocably request, on not less than two (2) nor more
than five (5) Business Days’ notice, that all or any portion of any Revolving
Loan LIBOR Rate Loan be converted on the last day of a Revolving Loan LIBOR
Interest Period into a Revolving Loan LIBOR Rate Loan with a different Revolving
Loan LIBOR Interest Period; provided, however, that no
portion of the outstanding principal amount of any Revolving Loan LIBOR Rate
Loan may be converted to, or be continued as, a Revolving Loan LIBOR Rate Loan
when any Default or Event of Default has occurred and is continuing, and no
portion of the outstanding principal amount of any Revolving Loan LIBOR Rate
Loan may be converted to a Revolving Loan LIBOR Rate Loan of a different
duration if such Revolving Loan LIBOR Rate Loan relates to any Hedging
Obligation. In the absence of delivery of a Conversion Notice with
respect to any Revolving Loan LIBOR Rate Loan at least two (2) Business Days
before the last day of the then current Revolving Loan LIBOR Interest Period
with respect thereto, such Revolving Loan LIBOR Rate Loan shall, on such last
day, automatically continue as a Revolving Loan LIBOR Rate Loan with the same
Revolving Loan LIBOR Interest Period.
Any oral
Loan Notice shall be confirmed in writing by the Borrowers within three (3)
Business Days after the making of the requested advance under the Revolving
Loan. Each Loan Notice shall be irrevocable. Upon receipt
of any such Loan Notice, the Agent shall promptly notify each Lender of the
amount of each advance to be made by such Lender on the requested borrowing date
under such Lender’s Revolving Credit Commitment.
Not later
than 1:00 p.m., New York time, on each requested borrowing date for the making
of advances under the Revolving Loan, each Lender shall, if it has received
notice from the Agent on or before 11:30 a.m. on such day of the Borrowers’
request for such advances, make available to the Agent, in funds immediately
available to the Agent at the Agent’s office set forth in Section 9.1 (Notices), such Lender’s Pro Rata Share of
the advances to be made on such date.
In
addition, each of the Borrowers hereby irrevocably authorizes the Lenders at any
time and from time to time, without further request from or notice to the
Borrowers, to make advances under the Revolving Loan, and irrevocably authorizes
the Agent to establish, without duplication, reserves against the Borrowing
Base, which the Agent, in its sole and absolute discretion, deems necessary or
appropriate to protect the interests of the Agent and/or any or all of the
Lenders under this Agreement, including, without limitation, advances and
reserves under the Revolving Loan made to cover shortages, debit balances or
overdrafts in the Revolving Loan Account, principal of, and/or interest on, any
Loan, the Obligations (including, without limitation, any Letter of Credit
Obligations and any Citizens Letter of Credit Obligations), and/or Enforcement
Costs, prior to, on, or after the termination of other advances under this
Agreement, regardless of whether the outstanding principal amount of the
Revolving Loan that the Lenders may advance or the Agent may reserve hereunder
exceeds the Total Revolving Credit Committed Amount or the Borrowing
Base.
2.1.3 Borrowing
Base.
As used
in this Agreement, the term “Borrowing Base” means at any
time, an amount equal to the sum of (i) ninety percent (90%) of Eligible
Receivables that arise from obligations due under and from Government Contracts
and (ii) eighty percent (80%) of the amount of Eligible Receivables that arise
from obligations other than due under and from Government
Contracts.
The
Borrowing Base shall be computed based on the Borrowing Base Report most
recently delivered to and accepted by the Agent in its sole and absolute
discretion. In the event the Borrowers fail to furnish a Borrowing
Base Report required by Section 2.1.4 (Borrowing
Base Report), or in the event the Agent believes that a Borrowing Base Report is
no longer accurate, the Agent may, in its sole and absolute discretion exercised
from time to time and without limiting other rights and remedies under this
Agreement, direct the Lenders to suspend the making of or limit advances under
the Revolving Loan. The Agent may reduce the Borrowing Base by
amounts credited to the Collateral Account since the date of the most recent
Borrowing Base Report and by the amount of any Receivable which was included in
the Borrowing Base but which the Agent determines fails to meet the respective
criteria applicable from time to time for Eligible Receivables.
If at any
time the total of the aggregate principal amount of the Revolving Loan,
Outstanding Letter of Credit Obligations, and the Citizens Outstanding Letter of
Credit Obligations exceeds the Borrowing Base, a borrowing base deficiency
(“Borrowing Base
Deficiency”) shall exist. Each time a Borrowing Base
Deficiency exists, the Borrowers shall immediately upon notice from Agent pay
the Borrowing Base Deficiency to the Agent for the benefit of the Lenders from
time to time.
Without
implying any limitation on the Agent’s discretion with respect to the Borrowing
Base, the criteria for Eligible Receivables contained in the definition of
Eligible Receivables are in part based upon the business operations of the
Borrowers existing on or about the Closing Date and upon information and records
furnished to the Agent by the Borrowers. If at any time or from time
to time hereafter, the business operations of the Borrowers change or such
information and records furnished to the Agent is incorrect or misleading, the
Agent in its discretion, may at any time and from time to time during the
duration of this Agreement change such criteria or add new
criteria. The Agent may communicate such changed or additional
criteria to the Borrowers from time to time either orally or in
writing.
2.1.4 Borrowing Base
Report.
The
Borrowers will furnish to the Agent no less frequently than monthly before the
last day of each month and at such other times as may be requested by the Agent
or any of the Lenders a report of the Borrowing Base (each a “Borrowing Base Report”;
collectively, the “Borrowing
Base Reports”) in the form required from time to time by the Agent,
appropriately completed and duly signed. The Borrowing Base Report
shall contain the net amount due on the Receivables, and the calculations of the
Borrowing Base, all in such detail, and accompanied by such supporting and other
information, as the Agent may from time to time request. Upon the
Agent’s request and upon the creation of any Receivables, or at such intervals
as the Agent may require, the Borrowers will provide the Agent with (a)
confirmatory assignment schedules; (b) copies of Account Debtor invoices; (c)
evidence of shipment or delivery; and (d) such further schedules, documents
and/or information regarding the Receivables as the Agent may reasonably
require. The items to be provided under this subsection shall be in form
satisfactory to the Agent, and certified as true and correct by a Responsible
Officer, and delivered to the Agent from time to time solely for the Agent’s
convenience in maintaining records of the Collateral. Any Borrower’s
failure to deliver any of such items to the Agent shall not affect, terminate,
modify, or otherwise limit the Liens of the Agent and the Lenders in the
Collateral.
2.1.5 Revolving Credit
Notes.
The joint
and several obligations of the Borrowers to pay each Lender’s Pro Rata Share of
the Revolving Loan, with interest, shall be evidenced by a series of amended and
restated promissory notes (as from time to time extended, amended, restated,
supplemented or otherwise modified, collectively the “Revolving Credit Notes” and
individually a “Revolving
Credit Note”) substantially in the form of Exhibit B-1 attached
hereto and made a part hereof, with appropriate insertions. One or more of the
Revolving Credit Notes may, pursuant to Section 2.1.6 (Increase to Revolving Credit Facility) of this
Agreement, be increased and replaced in their entirety with one or more
promissory notes (as from time to time extended, amended, restated, supplemented
or otherwise modified, collectively, the “Replacement Revolving Credit
Notes” and individually a “Replacement Revolving Credit Note”)
substantially in the form of Exhibit B-2 attached
hereto and made a part hereof. Each Lender’s Revolving Credit Note
shall be dated as of the Closing Date, shall be payable to the order of such
Lender at the times provided in this Agreement, and shall be in the principal
amount of such Lender’s Revolving Credit Pro Rata Share.
Each of
the Borrowers acknowledges and agrees that, if the outstanding principal balance
of the Revolving Loan outstanding from time to time exceeds the aggregate face
amount of the Revolving Credit Notes, the excess shall bear interest at the
rates provided from time to time for advances under the Revolving Loan evidenced
by the Revolving Credit Notes and shall be payable, with accrued interest, ON
DEMAND.
2.1.6 Increase to Revolving Credit
Facility.
Lenders
may, in their sole discretion, agree to increase the amount of each Lender’s
Revolving Credit Committed Amount (the “Incremental Revolving
Commitment”) to make incremental revolving credit loans available to
Borrowers (the “Incremental
Revolving Loans”) by executing and delivering to Agent a duly executed
Increased Revolving Facility Activation Notice specifying the (i) amount of such
increase and (ii) the Increased Revolving Facility Closing Date, provided,
however, at the time of said election, no Default or Event of Default has
occurred and is continuing. An Increased Revolving Facility
Activation Notice that has been executed and delivered to Agent may not be
rescinded without the consent of the Requisite
Lenders. Notwithstanding the foregoing, without the consent of the
Requisite Lenders, (i) each request for Incremental Revolving Loans shall be in
increments of not less than Five Million Dollars ($5,000,000), (ii) the
aggregate amount of the Incremental Revolving Commitment shall not exceed
Twenty-Five Million Dollars ($25,000,000) and (iii) the aggregate amount of the
Total Revolving Credit Committed Amount, as may be increased by the amount, if
any, of each Lender’s Incremental Revolving Commitment pursuant to this
Section 2.1.6 shall not exceed Seventy-Five
Million Dollars ($75,000,000) at any time. Not later than the
Increased Revolving Facility Closing Date, Borrowers shall have delivered to
Agent for benefit of the Lenders one or more duly executed and completed
Replacement Revolving Credit Notes which reflects the amount of the Revolving
Credit Committed Amount after giving effect to such increase.
2.1.7 Payment of Interest;
Principal; Automatic Rollover of Revolving Loans.
(a) Interest
on the outstanding principal amount of any Revolving Loan, when classified as a:
(i) Revolving Loan LIBOR Rate Loan, shall accrue during each Revolving Loan
LIBOR Interest Period at a rate per annum equal to the sum of the Revolving Loan
Adjusted LIBOR Rate for such Revolving Loan LIBOR Interest Period plus the
Revolving Loan LIBOR Rate Margin, and shall be due and payable on each Revolving
Loan Interest Payment Date and on the Revolving Credit Termination Date, and
(ii) Prime Rate Loan, shall accrue at a rate per annum equal to the sum of the
Prime Rate plus the Prime Rate Margin, and shall be due and payable on each
Prime Rate Interest Payment Date and on the Revolving Credit Termination
Date. Interest shall be calculated for the actual number of days
elapsed on the basis of a 360-day year, including the first date of the
applicable period to, but not including, the date of repayment.
(b) Unless
sooner paid, the outstanding principal portion of the Revolving Loan, together
with interest accrued and unpaid thereon, shall be due and payable in full on
the Revolving Credit Termination Date.
(c) Upon the
expiration of a Revolving Loan LIBOR Interest Period, the Revolving Loan LIBOR
Rate Loan shall automatically be continued as a Revolving Loan LIBOR Rate Loan
at the then applicable Revolving Loan Adjusted LIBOR Rate and in an amount equal
to the principal amount of the expiring Revolving Loan LIBOR Rate Loan less any principal
repayment amount made by Borrowers; provided, however, that no
portion of the outstanding principal amount of a Revolving Loan LIBOR Rate Loan
may be continued as a Revolving Loan LIBOR Rate Loan when any Event of Default
has occurred and is continuing. If any Event of Default has occurred
and is continuing (if the Agent does not otherwise elect to exercise any right
to accelerate the Revolving Loan hereunder), the Revolving Loan LIBOR Rate Loan
shall automatically be continued as a Prime Rate Loan on the first day of the
next Revolving Loan LIBOR Interest Period.
2.1.8 Mandatory Prepayments of
Revolving Loan.
The
Borrowers shall make the mandatory prepayments (each a “Revolving Loan Mandatory
Prepayment” and collectively, the “Revolving Loan Mandatory
Prepayments”) of the Revolving Loan at any time and from time to time in
such amounts requested by the Agent pursuant to Section 2.1.3 (Borrowing Base) in order to cover any Borrowing
Base Deficiency.
2.1.9 Optional Prepayments of
Revolving Loan.
The
Borrowers shall have the option at any time and from time to time to prepay
(each a “Revolving Loan
Optional Prepayment” and collectively the “Revolving Loan Optional
Prepayments”) the Revolving Loan, in whole or in part. When
classified as a Revolving Loan LIBOR Rate Loan, the Revolving Loan may be
prepaid upon the terms and conditions set forth in this Section 2.1.9. The Borrowers acknowledge and agree
that additional obligations may be associated with any such prepayment under the
terms and conditions of any applicable Hedging Contracts, including without
limitation any LIBOR Breakage Fee as described in Section 2.6.1 (LIBOR Breakage Fee). The Borrowers
shall give the Agent, no later than 10:00 a.m., New York time, at least four (4)
Business Days notice of any proposed prepayment of any Revolving Loan LIBOR Rate
Loan, specifying the proposed date of payment and the principal amount to be
paid. Each partial prepayment of the principal amount of the
Revolving Loan LIBOR Rate Loan shall be in an integral multiple of Five Hundred
Thousand Dollars ($500,000) and accompanied by the payment of all charges
outstanding on the Revolving Loan LIBOR Rate Loan (including any LIBOR Breakage
Fee as described in Section 2.6.1 (LIBOR Breakage
Fee)) and of all accrued interest on the principal repaid to the date of
payment.
2.1.10 The Collateral
Account.
Upon
request of the Agent after the occurrence of a Default or an Event of Default,
the Borrowers will deposit, or cause to be deposited, all Items of Payment to a
bank account designated by the Agent and from which the Agent alone has power of
access and withdrawal (the “Collateral Account”). Each deposit shall
be made not later than the next Business Day after the date of receipt of the
Items of Payment. The Items of Payment shall be deposited in
precisely the form received, except for the endorsements of the Borrowers where
necessary to permit the collection of any such Items of Payment, which
endorsement the Borrowers hereby agree to make. In the event the
Borrowers fail to do so, the Borrowers hereby authorize the Agent to make the
endorsement in the name of any or all of the Borrowers. Prior to such
a deposit, the Borrowers will not commingle any Items of Payment with any of the
Borrowers’ other funds or property, but will hold them separate and apart in
trust and for the account of the Agent for the benefit of the Lenders ratably
and the Agent.
In
addition, if so directed by the Agent, the Borrowers shall direct the mailing of
all Items of Payment from their Account Debtors to one or more post-office boxes
designated by the Agent, or to such other additional or replacement post-office
boxes pursuant to the request of the Agent from time to time (collectively, the
“Lockbox”). The
Agent shall have unrestricted and exclusive access to the Lockbox.
The
Borrowers hereby authorize the Agent after the occurrence of a Default or an
Event of Default to inspect all Items of Payment, endorse all Items of Payment
in the name of any or all of the Borrowers, and deposit such Items of Payment in
the Collateral Account. The Agent reserves the right, exercised in
its sole and absolute discretion from time to time, to provide to the Collateral
Account credit prior to final collection of an Item of Payment and to disallow
credit for any Item of Payment which is unsatisfactory to the
Agent. In the event Items of Payment are returned to the Agent for
any reason whatsoever, the Agent may, in the exercise of its discretion from
time to time, forward such Items of Payment a second time. Any
returned Items of Payment shall be charged back to the Collateral Account, the
Revolving Loan Account, or other account, as appropriate.
The Agent
will after the occurrence of a Default or an Event of Default apply the whole or
any part of the collected funds credited to the Collateral Account against the
Revolving Loan (or with respect to Items of Payment which are not proceeds of
Accounts or Inventory or after an Event of Default, against any of the
Obligations) or credit such collected funds to a depository account of any or
all of the Borrowers with the Agent, the order and method of such application to
be in the sole discretion of the Agent.
2.1.11 Revolving Loan
Account.
The Agent
will establish and maintain a loan account on its books (the “Revolving Loan Account”) to
which the Agent will (a) debit (i) the
principal amount of each advance under the Revolving Loan made by the Lenders
hereunder as of the date made, (ii) the amount of any interest accrued on the
Revolving Loan as and when due, and (iii) any other amounts due and payable by
the Borrowers to the Agent and/or the Lenders from time to time under the
provisions of this Agreement in connection with the Revolving Loan, including,
without limitation, Enforcement Costs, Fees, late charges, and service,
collection and audit fees, as and when due and payable, and (b) credit all payments
made by the Borrowers to the Agent on account of the Revolving Loan as of the
date made. The Agent may debit the Revolving Loan Account for the
amount of any Item of Payment that is returned to the Agent
unpaid. All credit entries to the Revolving Loan Account are
conditional and shall be readjusted as of the date made if final and
indefeasible payment is not received by the Agent in cash or solvent
credits. The Borrowers hereby promise to pay to the order of the
Agent for the ratable benefit of the Lenders, ON DEMAND, an amount equal to the
excess, if any, of all debit entries over all credit entries recorded in the
Revolving Loan Account under the provisions of this Agreement. Any
and all periodic or other statements or reconciliations, and the information
contained in those statements or reconciliations, of the Revolving Loan Account
shall be presumed conclusively to be correct, and shall constitute an account
stated between the Agent, the Lenders and the Borrowers unless the Agent
receives specific written objection thereto from any Borrower and/or any Lender
within thirty (30) Business Days after such statement or reconciliation shall
have been sent by the Agent. Any and all periodic or other statements
or reconciliations, and the information contained in those statements or
reconciliations, of the Revolving Loan Account shall be final, binding and
conclusive upon the Borrowers in all respects, absent manifest error, unless the
Agent receives specific written objection thereto from the Borrowers within
thirty (30) Business Days after such statement or reconciliation shall have been
sent by the Agent.
2.1.12 Revolving Credit Unused Line
Fee.
Borrowers
shall pay to Agent for the ratable benefit of Lenders a revolving credit
facility fee (collectively, the “Revolving Credit Unused Line
Fees” and individually, a “Revolving Credit Unused Line
Fee”) in an amount equal to the Unused Fee Margin multiplied by the
average daily unused and undisbursed portion of the Revolving Credit Committed
Amount in effect from time to time accruing during each calendar
quarter. For purposes of clarification, the face amount of all
outstanding Letters of Credit shall be considered usage of the Revolving Credit
Committed Amount. The accrued and unpaid portion of the Revolving
Credit Unused Line Fee shall be paid quarterly in arrears by Borrowers to Agent
on the last day of each calendar quarter, commencing on the first such date
following the date hereof, and on the Revolving Credit Termination
Date.
2.1.13 Required Availability under
the Revolving Credit Facility.
On the
Closing Date, the aggregate outstanding principal amount of the Revolving Loan
and Outstanding Letter of Credit Obligations shall not exceed an amount equal to
(a) the lesser of the Borrowing Base or the Total Revolving Credit Committed
Amount, minus (b) one (1) month Borrowers combined pro-forma
payroll. Borrowers shall on the Closing Date make a Revolving Loan
Mandatory Prepayment pursuant to the provisions of Section 2.1.7 (Mandatory Prepayments of Revolving Loan) to the
extent necessary to achieve compliance with this Section.
2.1.14 Optional Reduction of Total
Revolving Credit Committed Amount.
The
Borrowers shall have the right to reduce permanently (each a “Revolving Credit Optional
Reduction” and collectively the “Revolving Credit Optional
Reductions”) the Total Revolving Credit Committed Amount in effect from
time to time in the amount of any integral multiple of Five Million Dollars
($5,000,000), upon at least fifteen (15) Business Days prior written notice to
the Agent specifying the date and amount of such Revolving Credit Optional
Reduction and to the extent such Revolving Credit Optional Reduction constitutes
a Revolving Loan Optional Prepayment, Borrowers shall make such Revolving Loan
Optional Prepayment in accordance with Section 2.1.9 (Optional Prepayments of Revolving Loan);
provided, that no Revolving Credit Optional Reduction shall be permitted if, (i)
after giving effect thereto and to any Revolving Loan Optional Prepayment made
on the effective date thereof, the then outstanding principal amount of the
Revolving Loan, the Outstanding Letter of Credit Obligations and the Citizens
Outstanding Letter of Credit Obligations exceeds the Total Revolving Credit
Committed Amount as so reduced or (ii) after giving effect to such Revolving
Credit Optional Reduction there is not at least one (1) month of Borrowers
combined pro-forma payroll as determined pursuant to Section 2.1.13 (Required Availability under the Revolving
Credit Facility) of availability under the Revolving Loan. Such
notice shall be irrevocable as to the amount and date of such Revolving Credit
Optional Reduction.
Section
2.2 The Letter of Credit
Sub-Facility.
2.2.1 Letters of
Credit.
Subject
to and upon the provisions of this Agreement, and as a part of the Revolving
Credit Commitments, each of the Borrowers, upon the prior approval of the Agent,
may obtain standby letters of credit (as the same may from time to time be
amended, supplemented or otherwise modified, each a “Letter of Credit” and
collectively the “Letters of
Credit”) from the Agent from time to time from the Closing Date until the
Business Day preceding the Revolving Credit Termination Date. The
Borrowers will not be entitled to obtain a Letter of Credit unless (a) the
Borrowers are then able to obtain a Revolving Loan from the Lenders in an amount
not less than the proposed face amount of the Letter of Credit requested by the
Borrowers, and (b) the sum of the then Outstanding Letter of Credit Obligations
(including the amount of the requested Letter of Credit), unless otherwise
agreed to by the Lenders, does not exceed Fifteen Million Dollars ($15,000,000);
provided, that, the Borrower may not request any Letter of Credit if there is
any Defaulting Lender or Potential Defaulting Lender at the time of such request
or issuance unless the Borrower has cash collateralized a portion of its
obligations owed to the Agent with respect to Letters of Credit equal to such
Potential Defaulting Lender’s or such Defaulting Lender’s Letter of Credit
Exposure.
2.2.2 Letter of Credit
Fees.
With
respect to each Letter of Credit, the Borrowers shall pay to the Agent, for the
ratable benefit of the Lenders with a Revolving Credit Commitment an amount
equal to the Letter of Credit Issuance Fee multiplied by the face amount of each
Letter of Credit all without regard for provisions contained in the Letters of
Credit which may give rise to a reduction in the stated amount thereof unless
such reduction has actually occurred (collectively, the “Letter of Credit
Fees”). The Letter of Credit Fees shall be paid upon the
opening of each Letter of Credit and on the last day of each calendar quarter
thereafter, if any, at the per annum rate. In addition, the Borrowers
shall pay to the Agent, for its own account, all other reasonable and customary
amendment, negotiation, processing, transfer or other fees to the extent and as
and when required by the provisions of any Letter of Credit
Agreement. Notwithstanding the foregoing, during such period as a
Lender is a Defaulting Lender, such Defaulting Lender will not be entitled to
any Letter of Credit Fees accruing during such period (without prejudice to the
rights of the Lenders other than Defaulting Lenders in respect of such fees) and
the pro rata payment
provisions set forth herein will automatically be deemed adjusted to reflect the
provisions of this Section.
2.2.3 Terms of Letters of Credit;
Post-Expiration Date Letters of Credit.
Each
Letter of Credit shall (a) be opened pursuant to a Letter of Credit Agreement
and (b) expire on a date not later than the Business Day preceding the Revolving
Credit Expiration Date; provided, however, if any Letter of Credit does have an
expiration date later than the Business Day preceding the Revolving Credit
Termination Date (each a “Post-Expiration Date Letter of
Credit” and collectively, the “Post-Expiration Date Letters of
Credit”), effective as of the Business Day preceding the Revolving Credit
Termination Date Borrowers shall provide to Agent cash collateral in an amount
equal to 105% of the face amount of all such Letters of Credit or such Letters
of Credit shall be supported by back-to-back letters of credit in form and
substance satisfactory to the Agent. The Agent may in its sole and
absolute discretion issue or refuse to issue any Letter of Credit which is
automatically renewable or “evergreen”. The Agent shall deposit the
proceeds of such cash collateral received from the Borrowers into one or more
non-interest bearing accounts with and in the name of the Agent and over which
the Agent alone shall have exclusive power of access and withdrawal
(collectively, the “Letter of
Credit Cash Collateral Account”). The Letter of Credit Cash
Collateral Account is to be held by the Agent, for the ratable benefit of the
Lenders, as additional collateral and security for any Letter of Credit
Obligations relating to the Post-Expiration Date Letters of
Credit. The Borrowers hereby assign, pledge, grant and set over to
the Agent, for the ratable benefit of the Lenders, a first priority security
interest in, and Lien on, all of the funds on deposit in the Letter of Credit
Cash Collateral Account, together with any and all Proceeds and products thereof
as additional collateral and security for the Letter of Credit Obligations
relating to the Post-Expiration Date Letters of Credit. The Borrowers
acknowledge and agree that the Agent shall be entitled to fund any draw or draft
on any Post-Expiration Date Letter of Credit from the monies on deposit in the
Letter of Credit Cash Collateral Account without notice to or consent of the
Borrowers or any of the Lenders. The Borrowers further acknowledge
and agree that the Agent’s election to fund any draw or draft on any
Post-Expiration Date Letter of Credit from the Letter of Credit Cash Collateral
shall in no way limit, impair, lessen, reduce, release or otherwise adversely
affect the Borrowers’ obligation to pay any Letter of Credit Obligations under
or relating to the Post-Expiration Date Letters of Credit. At such
time as all Post-Expiration Date Letters of Credit have expired and all Letter
of Credit Obligations relating to the Post-Expiration Date Letters of Credit
have been paid in full, the Agent agrees to apply the amount of any remaining
funds on deposit in the Letter of Credit Cash Collateral Account to the then
unpaid balance of the Obligations under the Revolving Credit Facility in such
order and manner as the Agent shall determine in its sole and absolute
discretion in accordance with the provisions of this Agreement.
Each
Letter of Credit shall be issued for purposes acceptable to
Agent. The aggregate face amount of all Letters of Credit at any one
time outstanding and issued by the Agent pursuant to the provisions of this
Agreement, including, without limitation, any and all Post-Expiration Date
Letters of Credit, plus the amount of any unpaid Letter of Credit Fees and
unpaid Letter of Credit Fees accrued or scheduled to accrue thereon, and less
the aggregate amount of all drafts issued under or purporting to have been
issued under such Letters of Credit that have been paid by the Agent and for
which the Agent has been reimbursed by the Borrowers in full in accordance with
Section 2.2.5 (Payments of Letters of Credit) and
the Letter of Credit Agreements, and for which the Agent has no further
obligation or commitment to restore all or any portion of the amounts drawn and
reimbursed, is herein called the “Outstanding Letter of Credit
Obligations”.
2.2.4 Procedures for Letters of
Credit.
The
Borrowers shall give the Agent written notice at least five (5) Business Days
prior to the date on which the Borrower desires the Agent to issue a Letter of
Credit. Such notice shall be accompanied by a duly executed Letter of
Credit Agreement specifying, among other things: (a) the name and
address of the intended beneficiary of the Letter of Credit, (b) the requested
face amount of the Letter of Credit, (c) whether the Letter of Credit is to be
revocable or irrevocable, (d) the Business Day on which the Letter of Credit is
to be opened and the date on which the Letter of Credit is to expire, (e) the
terms of payment of any draft or drafts which may be drawn under the Letter of
Credit, and (f) any other terms or provisions the Borrowers desire to be
contained in the Letter of Credit. Such notice shall also be
accompanied by such other information, certificates, confirmations, and other
items as the Agent may require to assure that the Letter of Credit is to be
issued in accordance with the provisions of this Agreement and a Letter of
Credit Agreement. In the event of any conflict between the provisions
of this Agreement and the provisions of a Letter of Credit Agreement, the
provisions of this Agreement shall prevail and control unless otherwise
expressly provided in the Letter of Credit Agreement. Upon (x)
receipt of such notice, (y) payment of all Letter of Credit Fees and all other
Fees payable in connection with the issuance of such Letter of Credit, and (z)
receipt of a duly executed Letter of Credit Agreement, the Agent shall process
such notice and Letter of Credit Agreement in accordance with its customary
procedures and open such Letter of Credit on the Business Day specified in such
notice. The Agent shall not be obligated to issue any Letter of
Credit where the expiration date automatically renews or is
“evergreen”.
2.2.5 Payments of Letters of
Credit.
The
Borrowers hereby, jointly and severally, promise to pay to the Agent, ON DEMAND
and in United States Dollars, the following which are herein collectively
referred to as the “Current
Letter of Credit Obligations”:
(a) the
amount which the Agent has paid or will be required to pay under each draft or
draw on a Letter of Credit, whether such demand be in advance of the Agent’s
payment or for reimbursement for such payment;
(b) any and
all reasonable charges and expenses which the Agent may pay or incur relative to
the Letter of Credit and/or such draws or drafts; and
(c) interest
on the amounts described in (a) and (b) not paid by the Borrowers as and when
due and payable under the provisions of (a) and (b) above from the day the same
are due and payable until paid in full at the Post-Default Rate.
In
addition, the Borrowers hereby, jointly and severally, promise to pay any and
all other Letter of Credit Obligations as and when due and payable in accordance
with the provisions of this Agreement and the Letter of Credit
Agreements. The obligation of the Borrowers to pay Current Letter of
Credit Obligations and all other Letter of Credit Obligations shall be absolute
and unconditional under any and all circumstances and irrespective of any
setoff, counterclaim or defense to payment which the Borrowers or any other
account party may have or have had against the beneficiary of such Letter of
Credit, the Agent, any of the Lenders, or any other Person, including, without
limitation, any defense based on the failure of any draft or draw to conform to
the terms of such Letter of Credit, any draft or other document proving to be
forged, fraudulent or invalid, or the legality, validity, regularity or
enforceability of such Letter of Credit, any draft or other documents presented
with any draft, any Letter of Credit Agreement, this Agreement, or any of the
other Financing Documents, all whether or not the Agent or any of the Lenders
had actual or constructive knowledge of the same, and irrespective of any
Collateral, security or guarantee therefor or right of offset with respect
thereto and irrespective of any other circumstances whatsoever which
constitutes, or might be construed to constitute, an equitable or legal
discharge of the Borrowers for any Letter of Credit Obligations, in bankruptcy
or otherwise; provided, however, that the
Borrowers shall not be obligated to reimburse the Agent for any wrongful payment
under such Letter of Credit made as a result of the Agent’s willful
misconduct. The obligation of the Borrowers to pay the Letter of
Credit Obligations shall not be conditioned or contingent upon the pursuit by
the Agent or any other Person at any time of any right or remedy against any
Person which may be or become liable in respect of all or any part of such
obligation or against any Collateral, security or guarantee therefor or right of
offset with respect thereto.
The
Letter of Credit Obligations shall continue to be effective, or be reinstated,
as the case may be, if at any time payment of all or any portion of the Letter
of Credit Obligations is rescinded or must otherwise be restored or returned by
the Agent or any of the Lenders upon the insolvency, bankruptcy, dissolution,
liquidation or reorganization of any Person, or upon or as a result of the
appointment of a receiver, intervenor, or conservator of, or trustee or similar
officer for, any Person, or any substantial part of such Person’s property, all
as though such payments had not been made.
2.2.6 Change in Law; Increased
Cost.
If any
change in any law or regulation or in the interpretation thereof by any court or
other Governmental Authority charged with the administration thereof shall
either (a) impose, modify or deem applicable any reserve, special deposit or
similar requirement against Letters of Credit issued by the Agent, or (b) impose
on the Agent or any of the Lenders any other condition regarding this Agreement
or any Letter of Credit, and the result of any event referred to in clauses (a)
or (b) above shall be to increase the cost to the Agent of issuing, maintaining
or extending the Letter of Credit or the cost to any of the Lenders of funding
any obligation under or in connection with the Letter of Credit (which increase
in cost shall be the result of the Agent’s reasonable allocation of the
aggregate of such cost increases resulting from such events), then, upon demand
by the Agent, the Borrowers shall immediately pay to the Agent from time to time
as specified by the Agent, additional amounts which shall be sufficient to
compensate the Agent and the Lenders for such increased cost, together with
interest on each such amount from the date demanded until payment in full
thereof at a rate per annum equal to the then highest current rate of interest
on the Revolving Loan. A certificate as to such increased cost
incurred by the Agent and/or any of the Lenders, submitted by the Agent to the
Borrowers, shall be conclusive, absent manifest error.
2.2.7 General Letter of Credit
Provisions.
The
Borrowers hereby instruct the Agent to pay any draft complying with the terms of
any Letter of Credit irrespective of any instructions of the Borrowers to the
contrary. The Borrowers assume all risks of the acts and omissions of
the beneficiary and other users of any Letter of Credit. The Agent,
the Lenders and their respective branches, Affiliates and/or correspondents
shall not be responsible for and the Borrowers hereby indemnify and hold the
Agent, the Lenders and their respective branches, Affiliates and/or
correspondents harmless from and against all liability, loss and expense
(including reasonable attorney’s fees and costs) incurred by the Agent, the
Lenders and/or their respective branches, Affiliates and/or correspondents
relative to and/or as a consequence of (a) any failure by the Borrowers to
perform the agreements hereunder and under any Letter of Credit Agreement, (b)
any Letter of Credit Agreement, this Agreement, any Letter of Credit and any
draft, draw and/or acceptance under or purported to be under any Letter of
Credit, (c) any action taken or omitted by the Agent, any of the Lenders and/or
any of their respective branches, Affiliates and/or correspondents at the
request of the Borrowers, (d) any failure or inability to perform in accordance
with the terms of any Letter of Credit by reason of any control or restriction
rightfully or wrongfully exercised by any de facto or de jure Governmental
Authority, group or individual asserting or exercising governmental or paramount
powers, and/or (e) any consequences arising from causes beyond the control of
the Agent, any of the Lenders and/or any of their respective branches,
Affiliates and/or correspondents.
Except
for willful misconduct, the Agent, the Lenders and their respective branches,
Affiliates and/or correspondents, shall not be liable or responsible in any
respect for any (a) error, omission, interruption or delay in transmission,
dispatch or delivery of any one or more messages or advices in connection with
any Letter of Credit, whether transmitted by cable, telegraph, mail or otherwise
and despite any cipher or code which may be employed, and/or (b) action,
inaction or omission which may be taken or suffered by it or them in good faith
or through inadvertence in identifying or failing to identify any beneficiary or
otherwise in connection with any Letter of Credit.
Any
Letter of Credit may be amended, modified or revoked only upon the receipt by
the Agent from the Borrowers and the beneficiary (including any transferee
and/or assignee of the original beneficiary), of a written consent and request
therefor.
If any
Laws, order of court and/or ruling or regulation of any Governmental Authority
of the United States (or any state thereof) and/or any country other than the
United States permits a beneficiary under a Letter of Credit to require the
Agent, the Lenders and/or any of their respective branches, Affiliates and/or
correspondents to pay drafts under or purporting to be under a Letter of Credit
after the expiration date of the Letter of Credit, the Borrowers shall reimburse
the Agent and the Lenders, as appropriate, for any such payment pursuant to
provisions of Section 2.2.6 (Change in Law;
Increased Cost).
Except as
may otherwise be specifically provided in a Letter of Credit or Letter of Credit
Agreement, the laws of the State and the Uniform Customs and Practice for
Documentary Credits, 1993 Revision, International Chamber of Commerce
Publication No. 500 shall govern the Letters of Credit. The Laws,
rules, provisions and regulations of the Uniform Customs and Practice for
Documentary Credits are hereby incorporated by reference. In the
event of a conflict between the Uniform Customs and Practice for Documentary
Credits and the laws of the State, the Uniform Customs and Practice for
Documentary Credits shall prevail.
2.2.8 Participations in the
Letters of Credit.
Each
Lender hereby irrevocably authorizes the Agent to issue Letters of Credit in
accordance with the provisions of this Agreement. As of the date each
Letter of Credit is opened or issued by the Agent pursuant to the provisions of
this Agreement, each Lender shall have an undivided participating interest in
(a) the rights and obligations of the Agent under such Letter of Credit, and (b)
the Outstanding Letter of Credit Obligations of the Borrowers with respect to
such Letter of Credit, in an amount equal to each Lender’s Revolving Credit Pro
Rata Share of such Outstanding Letter of Credit Obligations.
2.2.9 Payments by the Lenders to
the Agent.
If the
Borrowers fail to pay to the Agent any Current Letter of Credit Obligations as
and when due and payable, the Agent shall promptly notify each of the Lenders
and shall demand payment from each of the Lenders such Lender’s Revolving Credit
Pro Rata Share of such unpaid Current Letter of Credit
Obligations. In addition, if any amount paid to the Agent on account
of Current Letter of Credit Obligations is rescinded or required to be restored
or turned over by the Agent upon the insolvency, bankruptcy, dissolution,
liquidation or reorganization of the Borrowers or upon or as a result of the
appointment of a receiver, intervenor, trustee, conservator or similar officer
for the Borrowers, or is otherwise not indefeasibly covered by an advance under
the Revolving Loan, the Agent shall promptly notify each of the Lenders and
shall demand payment from each of the Lenders of its Revolving Credit Pro Rata
Share of its portion of the Current Letter of Credit Obligations to be remitted
to the Borrowers.
Each of
the Lenders irrevocably and unconditionally agrees to honor any such demands for
payment under this Section and promises to pay to the Agent’s account on the
same Business Day as demanded the amount of its Revolving Credit Pro Rata Share
of the Current Letter of Credit Obligations in immediately available funds,
without any setoff, counterclaim or deduction of any kind. Any
payment by a Lender hereunder shall in no way release, discharge or lessen the
obligation of the Borrowers to pay Current Letter of Credit Obligations to the
Agent in accordance with the provisions of this Agreement.
The
obligation of each of the Lenders to remit the amounts of its Revolving Credit
Pro Rata Share of Current Letter of Credit Obligations for the account of the
Agent pursuant to this Section shall be unconditional and irrevocable under any
and all circumstances and may not be terminated, suspended or delayed for any
reason whatsoever, provided that all payments of such amounts by each of the
Lenders shall be without prejudice to the rights of each of the Lenders with
respect to the Agent’s alleged willful misconduct. Any claim any
Lender may have against the Agent as a result of the Agent’s alleged willful
misconduct may be brought by such Lender in a separate action against the Agent
but may not be used as a defense to payment under the provisions of this
Section.
No
failure of any Lender to remit the amount of its Revolving Credit Pro Rata Share
of Current Letter of Credit Obligations to the Agent pursuant to this Section
shall affect the obligations of the Agent under any Letter of Credit, and if any
Lender does not remit to the Agent the amount of its Revolving Credit Pro Rata
Share of Current Letter of Credit Obligations on the same day as demanded, then
without limiting such Lender’s obligation to transmit funds on the same Business
Day as demanded, such Lender shall be obligated to pay, on demand of the Agent
and without setoff, counterclaim or deduction of any kind whatsoever interest on
the unpaid amount at the Federal Funds Open Rate for each day from the date such
amount shall be due and payable to the Agent until the date such amount shall
have been paid in full to the Agent by such Lender.
2.2.10 Defaulting
Lender.
If a
Lender becomes, and during the period it remains, a Defaulting Lender, the
following provisions shall apply with respect to any outstanding Letter of
Credit Exposure of such Defaulting Lender:
(a) the
Borrower will, not less than five (5) Business Day after demand by the Agent,
(i) cash collateralize a portion of the obligations of the Borrower owed to the
Agent equal to such Defaulting Lender’s Letter of Credit Exposure or (ii) make
other arrangements reasonably satisfactory to the Agent in its reasonable
discretion to protect the Agent against the risk of non-payment by such
Defaulting Lender; and
(b) any
amount paid by the Borrower for the account of the Defaulting Lender under this
Agreement (whether on account of principal, interest, fees, indemnity payments
or other amounts) will not be paid or distributed to such Defaulting Lender, but
will instead be retained by the Agent in such segregated non-interest-bearing
account until the termination of the Commitments and payment in full of all
obligations of the Borrowers hereunder and will be applied by the Agent, to the
fullest extent permitted by law, to the making of payments from time to time in
the following order of priority: first to the payment
of any amounts owing by such Defaulting Lender to the Agent under this
Agreement, second to the payment
of Post-Default interest and then current interest due and payable to Lenders
other than Defaulting Lenders, ratably among them in accordance with the amounts
of such interest then due and payable to them, third to the payment
of fees then due and payable to the Non-Defaulting Lenders hereunder, ratably
among them in accordance with the amount of such fees then due and payable to
them, fourth,
to pay principal and unreimbursed payments made by the Agent then due and
payable to the Non-Defaulting Lenders hereunder ratably in accordance with the
amounts then due and payable to them, fifth, to the ratable
payment of other amounts then due and payable to the Non-Defaulting Lenders, and
sixth, after
the termination of the Commitments and payment in full of all obligations of the
Borrowers hereunder, to pay amounts owing under this Agreement to such
Defaulting Lender or as a court of competent jurisdiction may otherwise
direct.
Section
2.3 Citizens Letter of Credit
Sub-Facility.
2.3.1 Citizens Letters of
Credit.
In
addition to the Letters of Credit available to Borrower under Section 2.2.1, subject to and upon the provisions of this
Agreement, and as a part of Citizens Revolving Credit Commitment, each of the
Borrowers, upon the prior approval of Citizens, may obtain standby letters of
credit (as the same may from time to time be amended, supplemented or otherwise
modified, each a “Citizens
Letter of Credit” and collectively the “Citizens Letters of Credit”)
from Citizens from time to time from the Closing Date until the Business Day
preceding the Revolving Credit Termination Date. The Borrowers will
not be entitled to obtain a Citizens Letter of Credit unless (a) the Borrowers
have first made a request to the Agent for Letters of Credit under Section 2.2.1 and the requested aggregate amount of such
Letter of Credit, together with any outstanding Letters of Credit, would exceed
Fifteen Million Dollars ($15,000,000), unless at the time of the request for
issuance thereof there is any Defaulting Lender or Potential Defaulting Lender,
(b) the Borrowers are then able to obtain a Revolving Loan from Citizens in an
amount not less than the proposed face amount of the Citizens Letter of Credit
requested by the Borrowers, and (c) the sum of the then Citizens Outstanding
Letter of Credit Obligations (including the amount of the requested Citizens
Letter of Credit), unless otherwise agreed to by the Requisite Lenders, does not
exceed Five Million Dollars ($5,000,000).
With
respect to each Citizens Letter of Credit, the Borrowers shall pay to Citizens,
for its own account, an amount equal to the Letter of Credit Issuance Fee
multiplied by the face amount of each Citizens Letter of Credit all without
regard for provisions contained in the Citizens Letters of Credit which may give
rise to a reduction in the stated amount thereof unless such reduction has
actually occurred (collectively, the “Citizens Letter of Credit
Fees”). The Citizens Letter of Credit Fees shall be paid upon
the opening of each Citizens Letter of Credit and on the last day of each
calendar quarter thereafter, if any, at the per annum rate. In
addition, the Borrowers shall pay to Citizens all other reasonable and customary
amendment, negotiation, processing, transfer or other fees to the extent and as
and when required by the provisions of any Citizens Letter of Credit
Agreement. All Citizens Letter of Credit Fees and all such other
additional fees are included in and are a part of the “Fees” payable by the
Borrowers under the provisions of this Agreement and are for the sole and
exclusive benefit of Citizens and are a part of the Obligations.
2.3.2 Terms of Letters of Credit;
Post-Expiration Date Letters of Credit.
Each
Citizens Letter of Credit shall (a) be opened pursuant to a Letter of Credit
Agreement and (b) expire on a date not later than the Business Day preceding the
Revolving Credit Expiration Date; provided, however, if any Citizens Letter of
Credit does have an expiration date later than the Business Day preceding the
Revolving Credit Termination Date (each a “Citizens Post-Expiration Date Letter
of Credit” and collectively, the “Citizens Post-Expiration Date Letters
of Credit”), effective as of the Business Day preceding the Revolving
Credit Termination Date and without prior notice to or the consent of the
Borrowers, Citizens shall make advances under the Revolving Loan for the account
of the Borrowers in the aggregate face amount of all such Citizens Letters of
Credit. Citizens may in its sole and absolute discretion issue or
refuse to issue any Citizens Letter of Credit which is automatically renewable
or “evergreen”. Citizens shall deposit the proceeds of such advances
into one or more non-interest bearing accounts with and in the name of Citizens
and over which Citizens alone shall have exclusive power of access and
withdrawal (collectively, the “Citizens Letter of Credit Cash Collateral
Account”). The Citizens Letter of Credit Cash Collateral
Account is to be held by Citizens as additional collateral and security for any
Citizens Letter of Credit Obligations relating to the Citizens Post-Expiration
Date Letters of Credit. The Borrowers hereby assign, pledge, grant
and set over to Citizens a first priority security interest in, and Lien on, all
of the funds on deposit in the Citizens Letter of Credit Cash Collateral
Account, together with any and all Proceeds and products thereof as additional
collateral and security for the Citizens Letter of Credit Obligations relating
to the Citizens Post-Expiration Date Letters of Credit. The Borrowers
acknowledge and agree that Citizens shall be entitled to fund any draw or draft
on any Citizens Post-Expiration Date Letter of Credit from the monies on deposit
in the Citizens Letter of Credit Cash Collateral Account without notice to or
consent of the Borrowers or any of the Lenders. The Borrowers further
acknowledge and agree that Citizens election to fund any draw or draft on any
Citizens Post-Expiration Date Letter of Credit from the Letter of Credit Cash
Collateral shall in no way limit, impair, lessen, reduce, release or otherwise
adversely affect the Borrowers’ obligation to pay any Citizens Letter of Credit
Obligations under or relating to the Citizens Post-Expiration Date Letters of
Credit. At such time as all Citizens Post-Expiration Date Letters of
Credit have expired and all Citizens Letter of Credit Obligations relating to
the Citizens Post-Expiration Date Letters of Credit have been paid in full,
Citizens agrees to apply the amount of any remaining funds on deposit in the
Citizens Letter of Credit Cash Collateral Account to the then unpaid balance of
the Obligations under the Revolving Credit Facility in such order and manner as
Citizens shall determine in its sole and absolute discretion in accordance with
the provisions of this Agreement.
Each
Citizens Letter of Credit shall be issued for purposes acceptable to
Citizens. The aggregate face amount of all Citizens Letters of Credit
at any one time outstanding and issued by Citizens pursuant to the provisions of
this Agreement, including, without limitation, any and all Citizens
Post-Expiration Date Letters of Credit, plus the amount of any unpaid Citizens
Letter of Credit Fees and unpaid Citizens Letter of Credit Fees accrued or
scheduled to accrue thereon, and less the aggregate amount of all drafts issued
under or purporting to have been issued under such Citizens Letters of Credit
that have been paid by Citizens and for which Citizens has been reimbursed by
the Borrowers in full in accordance with Section 2.3.4 (Payments of Citizens Letters of Credit) and the
Letter of Credit Agreements, and for which Citizens has no further obligation or
commitment to restore all or any portion of the amounts drawn and reimbursed, is
herein called the “Citizens Outstanding Letter of Credit
Obligations”.
2.3.3 Procedures for Letters of
Credit.
The
Borrowers shall give Citizens written notice at least five (5) Business Days
prior to the date on which the Borrower desires Citizens to issue a Citizens
Letter of Credit. Such notice shall be accompanied by a duly executed
Letter of Credit Agreement specifying, among other things: (a) the
name and address of the intended beneficiary of the Citizens Letter of Credit,
(b) the requested face amount of the Citizens Letter of Credit, (c) whether the
Citizens Letter of Credit is to be revocable or irrevocable, (d) the Business
Day on which the Citizens Letter of Credit is to be opened and the date on which
the Citizens Letter of Credit is to expire, (e) the terms of payment of any
draft or drafts which may be drawn under the Citizens Letter of Credit, and (f)
any other terms or provisions the Borrowers desire to be contained in the
Citizens Letter of Credit. Such notice shall also be accompanied by
such other information, certificates, confirmations, and other items as Citizens
may require to assure that the Citizens Letter of Credit is to be issued in
accordance with the provisions of this Agreement and a Letter of Credit
Agreement. In the event of any conflict between the provisions of
this Agreement and the provisions of a Letter of Credit Agreement, the
provisions of this Agreement shall prevail and control unless otherwise
expressly provided in the Letter of Credit Agreement. Upon (x)
receipt of such notice, (y) payment of all Citizens Letter of Credit Fees and
all other Fees payable in connection with the issuance of such Citizens Letter
of Credit, and (z) receipt of a duly executed Letter of Credit Agreement,
Citizens shall process such notice and Letter of Credit Agreement in accordance
with its customary procedures and open such Citizens Letter of Credit on the
Business Day specified in such notice. Citizens shall not be
obligated to issue any Citizens Letter of Credit where the expiration date
automatically renews or is “evergreen”.
2.3.4 Payments of Letters of
Credit.
The
Borrowers hereby, jointly and severally, promise to pay to Citizens, ON DEMAND
and in United States Dollars, the following which are herein collectively
referred to as the “Citizens
Current Letter of Credit Obligations”:
(a) the
amount which Citizens has paid or will be required to pay under each draft or
draw on a Citizens Letter of Credit, whether such demand be in advance of the
Citizens payment or for reimbursement for such payment;
(b) any and
all reasonable charges and expenses which Citizens may pay or incur relative to
the Citizens Letter of Credit and/or such draws or drafts; and
(c) interest
on the amounts described in (a) and (b) not paid by the Borrowers as and when
due and payable under the provisions of (a) and (b) above from the day the same
are due and payable until paid in full at the Post-Default Rate.
In
addition, the Borrowers hereby, jointly and severally, promise to pay any and
all other Citizens Letter of Credit Obligations as and when due and payable in
accordance with the provisions of this Agreement and the Letter of Credit
Agreements. The obligation of the Borrowers to pay Citizens Current
Letter of Credit Obligations and all other Citizens Letter of Credit Obligations
shall be absolute and unconditional under any and all circumstances and
irrespective of any setoff, counterclaim or defense to payment which the
Borrowers or any other account party may have or have had against the
beneficiary of such Citizens Letter of Credit, Citizens, or any other Person,
including, without limitation, any defense based on the failure of any draft or
draw to conform to the terms of such Citizens Letter of Credit, any draft or
other document proving to be forged, fraudulent or invalid, or the legality,
validity, regularity or enforceability of such Citizens Letter of Credit, any
draft or other documents presented with any draft, any Citizens Letter of Credit
Agreement, this Agreement, or any of the other Financing Documents, all whether
or not Citizens had actual or constructive knowledge of the same, and
irrespective of any Collateral, security or guarantee therefor or right of
offset with respect thereto and irrespective of any other circumstances
whatsoever which constitutes, or might be construed to constitute, an equitable
or legal discharge of the Borrowers for any Citizens Letter of Credit
Obligations, in bankruptcy or otherwise; provided, however, that the
Borrowers shall not be obligated to reimburse Citizens for any wrongful payment
under such Citizens Letter of Credit made as a result of Citizens willful
misconduct. The obligation of the Borrowers to pay the Citizens
Letter of Credit Obligations shall not be conditioned or contingent upon the
pursuit by Citizens or any other Person at any time of any right or remedy
against any Person which may be or become liable in respect of all or any part
of such obligation or against any Collateral, security or guarantee therefor or
right of offset with respect thereto.
The
Citizens Letter of Credit Obligations shall continue to be effective, or be
reinstated, as the case may be, if at any time payment of all or any portion of
the Citizens Letter of Credit Obligations is rescinded or must otherwise be
restored or returned by Citizens upon the insolvency, bankruptcy, dissolution,
liquidation or reorganization of any Person, or upon or as a result of the
appointment of a receiver, intervenor, or conservator of, or trustee or similar
officer for, any Person, or any substantial part of such Person’s property, all
as though such payments had not been made.
2.3.5 Change in Law; Increased
Cost.
If any
change in any law or regulation or in the interpretation thereof by any court or
other Governmental Authority charged with the administration thereof shall
either (a) impose, modify or deem applicable any reserve, special deposit or
similar requirement against Citizens Letters of Credit issued by Citizens, or
(b) impose on Citizens any other condition regarding this Agreement or any
Citizens Letter of Credit, and the result of any event referred to in clauses
(a) or (b) above shall be to increase the cost to Citizens of issuing,
maintaining or extending the Citizens Letter of Credit or the cost to Citizens
of funding any obligation under or in connection with the Citizens Letter of
Credit (which increase in cost shall be the result of the Citizens reasonable
allocation of the aggregate of such cost increases resulting from such events),
then, upon demand by Citizens, the Borrowers shall immediately pay to Citizens
from time to time as specified by Citizens, additional amounts which shall be
sufficient to compensate Citizens for such increased cost, together with
interest on each such amount from the date demanded until payment in full
thereof at a rate per annum equal to the then highest current rate of interest
on the Revolving Loan. A certificate as to such increased cost
incurred by Citizens, submitted by Citizens to the Borrowers, shall be
conclusive, absent manifest error.
2.3.6 General Letter of Credit
Provisions.
The
Borrowers hereby instruct Citizens to pay any draft complying with the terms of
any Citizens Letter of Credit irrespective of any instructions of the Borrowers
to the contrary. The Borrowers assume all risks of the acts and
omissions of the beneficiary and other users of any Citizens Letter of
Credit. Citizens and their respective branches, Affiliates and/or
correspondents shall not be responsible for and the Borrowers hereby indemnify
and hold the Citizens and their respective branches, Affiliates and/or
correspondents harmless from and against all liability, loss and expense
(including reasonable attorney’s fees and costs) incurred by Citizens and/or
their respective branches, Affiliates and/or correspondents relative to and/or
as a consequence of (a) any failure by the Borrowers to perform the agreements
hereunder and under any Letter of Credit Agreement, (b) any Citizens Letter of
Credit Agreement, this Agreement, any Citizens Letter of Credit and any draft,
draw and/or acceptance under or purported to be under any Citizens Letter of
Credit, (c) any action taken or omitted by Citizens and/or any of their
respective branches, Affiliates and/or correspondents at the request of the
Borrowers, (d) any failure or inability to perform in accordance with the terms
of any Citizens Letter of Credit by reason of any control or restriction
rightfully or wrongfully exercised by any de facto or de jure Governmental
Authority, group or individual asserting or exercising governmental or paramount
powers, and/or (e) any consequences arising from causes beyond the control of
Citizens and/or any of their respective branches, Affiliates and/or
correspondents.
Except
for willful misconduct, Citizens and their respective branches, Affiliates
and/or correspondents, shall not be liable or responsible in any respect for any
(a) error, omission, interruption or delay in transmission, dispatch or delivery
of any one or more messages or advices in connection with any Citizens Letter of
Credit, whether transmitted by cable, telegraph, mail or otherwise and despite
any cipher or code which may be employed, and/or (b) action, inaction or
omission which may be taken or suffered by it or them in good faith or through
inadvertence in identifying or failing to identify any beneficiary or otherwise
in connection with any Citizens Letter of Credit.
Any
Citizens Letter of Credit may be amended, modified or revoked only upon the
receipt by Citizens from the Borrowers and the beneficiary (including any
transferee and/or assignee of the original beneficiary), of a written consent
and request therefor.
If any
Laws, order of court and/or ruling or regulation of any Governmental Authority
of the United States (or any state thereof) and/or any country other than the
United States permits a beneficiary under a Citizens Letter of Credit to require
Citizens and/or any of their respective branches, Affiliates and/or
correspondents to pay drafts under or purporting to be under a Citizens Letter
of Credit after the expiration date of the Citizens Letter of Credit, the
Borrowers shall reimburse Citizens, as appropriate, for any such payment
pursuant to provisions of Section 2.3.5 (Change in
Law; Increased Cost).
Except as
may otherwise be specifically provided in a Citizens Letter of Credit or Letter
of Credit Agreement, the laws of the State and the Uniform Customs and Practice
for Documentary Credits, 1993 Revision, International Chamber of Commerce
Publication No. 500 shall govern the Citizens Letters of Credit. The
Laws, rules, provisions and regulations of the Uniform Customs and Practice for
Documentary Credits are hereby incorporated by reference. In the
event of a conflict between the Uniform Customs and Practice for Documentary
Credits and the laws of the State, the Uniform Customs and Practice for
Documentary Credits shall prevail.
Section
2.4 The Term Loan
Facility.
2.4.1 Term Loan
Commitment.
Subject
to and upon the provisions of this Agreement, each Lender severally agrees to
make a senior secured term loan (each a “Term Loan”; and collectively,
the “Term Loans”) to
Borrowers on the Closing Date in the principal amount set forth below opposite
such Lender’s name (herein called such Lender’s “Term Loan Committed
Amount”). The total of each Lender’s Term Loan Committed
Amount is herein called the “Total Term Loan Committed
Amount”. The proportionate share set forth below opposite each
Lender’s name is herein called such Lender’s “Term Loan Pro Rata
Share”:
|
Lender
|
Term
Loan
Committed Amount
|
Term
Loan
Pro Rata Share
|
|
Citizens
|
$12,857,143
|
64.285715%
|
|
SunTrust
|
$ 7,142,857
|
35.714285%
|
|
Total
Term Loan Committed Amount
|
$20,000,000
|
100%
|
The
obligation of each Lender to make a Term Loan is several and is limited to its
Term Loan Committed Amount, and such obligation of each Lender is herein called
its “Term Loan
Commitment”. The Term Loan Commitment of each of Lenders are
herein collectively referred to as the “Term Loan
Commitments”. Agent shall not be responsible for the Term Loan
Commitment of any Lender; and similarly, none of Lenders shall be responsible
for the Term Loan Commitment of any of the other Lenders; the failure, however,
of any Lender to perform its Term Loan Commitment shall not relieve any of the
other Lenders from the performance of their respective Term Loan
Commitments.
2.4.2 Term
Notes.
The
obligation of Borrowers to pay the Term Loans with interest shall be evidenced
by a series of promissory notes (each as from time to time extended, amended,
restated, supplemented or otherwise modified, the “Term Note” and collectively,
the “Term Notes”)
substantially in the form of Exhibit B-3 attached
hereto and made a part hereof with appropriate insertions. Each Term
Note shall be dated as of the Closing Date, shall be payable to the order of a
Lender at the times set forth herein, and shall be in the principal amount of
such Lender’s Term Loan Committed Amount.
2.4.3 Payment of Interest;
Principal; Automatic Rollover of Term Loans.
(a) Interest
on the outstanding principal amount of the Term Loan, when classified as a: (i)
Term Loan LIBOR Rate Loan, shall accrue during each Term Loan LIBOR Interest
Period at a rate per annum equal to the sum of the Term Loan Adjusted LIBOR Rate
for such Term Loan LIBOR Interest Period plus the Term Loan LIBOR Rate Margin,
and shall be due and payable on each Term Loan LIBOR Interest Payment Date and
on the Term Loan Maturity Date, and (ii) Prime Rate Loan, shall accrue at a rate
per annum equal to the sum of the Prime Rate plus the Prime Rate Margin, and
shall be due and payable on each Prime Rate Interest Payment Date and on the
Term Loan Maturity Date. Interest shall be calculated for the actual
number of days elapsed on the basis of a 360-day year, including the first date
of the applicable period to, but not including, the date of
repayment.
(b) Commencing
on the Closing Date through and including August 31, 2010, the Term Loan shall
be classified as a Prime Rate Loan and Borrowers hereby, jointly and severally,
promise to make a single payment of accrued and unpaid interest on the unpaid
principal sum of the Term Loan on August 31, 2010.
(c) Commencing
on September 30, 2010 and continuing on the last day of each month thereafter to
the Term Loan Maturity Date, Borrowers hereby, jointly and severally, promise to
pay the unpaid principal sum of the Term Loan, in monthly installments of
principal based on a thirty-six (36) month straight-line amortization period
of thirty-five (35) equal monthly principal payments of Five Hundred
Fifty-Five Thousand Five Hundred Fifty-Five Dollars and Fifty-Five Cents
($555,555.55) plus interest thereon and one (1) final monthly payment of Five
Hundred Fifty-Five Thousand Five Hundred Fifty-Five Dollars and Seventy-Five
Cents ($555,555.75) (or the amount of the Term Loan then outstanding), plus
interest thereon.
(d) Unless
sooner paid, the outstanding principal balance of the Term Loan, together with
interest accrued and unpaid thereon, shall be due and payable in full on the
Term Loan Maturity Date.
(e) Upon the
expiration of a Term Loan LIBOR Interest Period, the Term Loan LIBOR Rate Loan
shall automatically be continued as a Term Loan LIBOR Rate Loan at the then
applicable Term Loan Adjusted LIBOR Rate and in an amount equal to the principal
amount of the expiring Term Loan LIBOR Rate Loan less any principal
repayment amount made by Borrower; provided, however, that no
portion of the outstanding principal amount of a Term Loan LIBOR Rate Loan may
be continued as a Term Loan LIBOR Rate Loan when any Event of Default has
occurred and is continuing. If any Event of Default has occurred and
is continuing (if the Agent does not otherwise elect to exercise any right to
accelerate the Term Loan hereunder), the Term Loan LIBOR Rate Loan shall
automatically be continued as a Prime Rate Loan on the first day of the next
Term Loan LIBOR Interest Period.
2.4.4 Optional Prepayments of Term
Loans.
Borrowers
may, at their option, at any time and from time to time, prepay (each a “Term Loan Optional Prepayment”
and collectively the “Term Loan
Optional Prepayments”) the Term Loans, in whole or in part, upon five (5)
Business Days prior written notice, specifying the date and amount of
prepayment. The amount to be so prepaid, together with interest
accrued thereon to date of prepayment if the amount is intended as a prepayment
of the Term Loans in whole, shall be paid by Borrowers to Agent for the ratable
benefit of Lenders on the date specified for such prepayment. When
classified as a Term Loan LIBOR Rate Loan, the Term Loan may be prepaid upon the
terms and conditions set forth in this Section 2.4.4. The Borrowers acknowledge that
additional obligations may be associated with any such prepayment under the
terms and conditions of any applicable Hedging Contracts. Partial
Term Loan Optional Prepayments shall be in an amount not less than the aggregate
amount of the next principal installments under the Term Notes and shall be
applied first to all accrued and unpaid interest on the principal of the Term
Notes and then to principal against the principal installments in the inverse
order of their maturity. Each Term Loan Optional Prepayment shall be
accompanied by the payment of all charges outstanding on the Term Loan LIBOR
Rate Loan (including any LIBOR Breakage Fee) and all accrued interest on the
principal repaid to the date of payment.
2.4.5 Procedure for Funding the
Term Loan; Continuation and Conversion Elections.
On the
Closing Date, subject to the terms and conditions of this Agreement, the Term
Loan shall be made available to the Borrowers no later than 11:00 a.m. New York
time to a demand deposit account of a Borrower with the Agent or as otherwise
instructed by the Borrowers in writing in the full principal amount of the Term
Loan. From the Closing Date through August 31, 2010, the Term Loan
shall be classified as a Prime Rate Loan and upon Agent’s receipt of Borrowers’
written request in accordance with and pursuant to the next paragraph, shall be
converted to a Term Loan LIBOR Rate Loan on September 1, 2010.
By
delivering a Conversion Notice to the Agent on or before 10:00 a.m., New York
time, on a Business Day, the Borrowers may from time to time irrevocably
request, on not less than two (2) nor more than five (5) Business Days’ notice,
that all or any portion of the Term Loan LIBOR Rate Loan be converted on the
last day of a Term Loan LIBOR Interest Period into a Term Loan LIBOR Rate Loan
with a different Term Loan LIBOR Interest Period; provided, however, that no
portion of the outstanding principal amount of the Term Loan LIBOR Rate Loan may
be converted to, or be continued as, a Term Loan LIBOR Rate Loan when any
Default or Event of Default has occurred and is continuing, and no portion of
the outstanding principal amount of the Term Loan LIBOR Rate Loan may be
converted to a Term Loan LIBOR Rate Loan of a different duration if such Term
Loan LIBOR Rate Loan relates to any Hedging Obligation. In the
absence of delivery of a Conversion Notice with respect to the Term Loan LIBOR
Rate Loan at least two (2) Business Days before the last day of the then current
Term Loan LIBOR Interest Period with respect thereto, such Term Loan LIBOR Rate
Loan shall, on such last day, automatically continue as a Term Loan LIBOR Rate
Loan with the same Term Loan LIBOR Interest Period.
Section
2.5 Payment Provisions;
Application.
All
payments hereunder (including any payment or prepayment of principal, interest,
fees and other charges) or with respect to the Notes or the Loans shall be made
in lawful money of the United States of America, in immediately available funds
without set-off, deduction or counterclaim of any kind, to the Agent, for the
ratable benefit of the Lenders, at its office at the Funding Office, or at such
other place as the Agent may in writing designate, and shall be applied, at the
option of each Lender with respect to the Obligations due to such Lender, first to accrued
Obligations other than principal and interest, second to accrued
interest on Loans bearing interest at the Prime Rate, third to accrued
interest on Loans bearing interest at the Revolving Loan LIBOR Rate, fourth to accrued
interest on Loans bearing interest at the Term Loan LIBOR Rate, fifth to principal
due on Loans bearing interest at the Prime Rate, sixth to principal
due on Loans bearing interest at the Revolving Loan LIBOR Rate on the last day
of the Interest Period applicable thereto, and seventh to principal
due on Loans bearing interest at a Term Loan LIBOR Rate on the last day of the
Interest Period applicable thereto.
Section
2.6 LIBOR Rate
Provisions.
2.6.1 LIBOR Breakage
Fee.
Upon: (i)
any Event of Default by any Borrower in making any borrowing of, conversion into
or continuation of any LIBOR Rate Loan following any Borrowers’ delivery of a
borrowing request or conversion notice hereunder or (ii) any prepayment of a
LIBOR Rate Loan on any day that is not the last day of the relevant LIBOR
Interest Period (regardless of the source of such prepayment and whether
voluntary, by acceleration or otherwise), the Borrowers shall pay an amount
(“LIBOR Breakage Fee”),
as calculated by the Agent, equal to the amount of any losses, expenses and
liabilities (including without limitation any loss of margin and anticipated
profits) that Agent may sustain as a result of such default or
payment. The Borrowers understand, agree and acknowledge that: (i)
the Agent does not have any obligation to purchase, sell and/or match funds in
connection with the use of the LIBOR Rate as a basis for calculating the rate of
interest on a LIBOR Rate Loan, (ii) the LIBOR Rate may be used merely as a
reference in determining such rate, and (iii) the Borrowers have accepted the
LIBOR Rate as a reasonable and fair basis for calculating the LIBOR Breakage Fee
and other funding losses incurred by the Agent and each
Lender. Borrowers further agree to pay the LIBOR Breakage Fee and
other funding losses, if any, whether or not the Agent elects to purchase, sell
and/or match funds.
2.6.2 LIBOR Rate Lending
Unlawful.
If the
Agent shall determine (which determination shall, upon notice thereof to
Borrowers be conclusive and binding on the Borrowers) that the introduction of
or any change in or in the interpretation of any law, rule, regulation or
guideline, (whether or not having the force of law) makes it unlawful, or any
central bank or other governmental authority asserts that it is unlawful, for
the Agent to make, continue or maintain any LIBOR Rate Loan as, or to convert
any loan into, a LIBOR Rate Loan of a certain duration, the obligations of the
Agent to make, continue, maintain or convert into any such LIBOR Rate Loans
shall, upon such determination, forthwith be suspended until the Agent shall
notify the Borrowers that the circumstances causing such suspension no longer
exist, and all LIBOR Rate Loans of such type shall automatically convert into
Prime Rate Loans at the end of the then current LIBOR Interest Periods with
respect thereto or sooner, if required by such law or assertion.
2.6.3 Unavailability of LIBOR
Rate.
In the
event that Borrowers shall have requested a LIBOR Rate Loan in accordance with
Sections 2.1.2 or 2.4.5 and the Agent, in its sole discretion, shall
have determined that U.S. dollar deposits in the relevant amount and for the
relevant LIBOR Interest Period are not available to the Agent in the London
interbank market; or by reason of circumstances affecting the Agent in the
London interbank market, adequate and reasonable means do not exist for
ascertaining the LIBOR Rate applicable to the relevant LIBOR Interest Period; or
the LIBOR Rate no longer adequately and fairly reflects the Agent’s cost of
funding loans; upon notice from the Agent to the Borrowers, the obligations of
the Agent under Sections 2.1.2 and 2.4.5 to make or continue any loans as, or to convert
any loans into, LIBOR Rate Loans of such duration shall forthwith be suspended
until the Agent shall notify the Borrowers that the circumstances causing such
suspension no longer exist.
2.6.4 Increased
Costs.
If, on or
after the date hereof, the adoption of any applicable law, rule or regulation or
guideline (whether or not having the force of law), or any change therein, 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 the Agent with any request or directive
(whether or not having the force of law) of any such authority, central bank or
comparable agency: (a) shall impose, modify or deem applicable any reserve,
special deposit or similar requirement (including, without limitation, any such
requirement imposed by the Board) against assets of, deposits with or for the
account of, or credit extended by, the Agent or shall impose on the Agent or on
the London interbank market any other condition affecting its LIBOR Rate Loans
or its obligation to make LIBOR Rate Loans; or (b) shall impose on the Agent any
other condition affecting its LIBOR Rate Loans or its obligation to make LIBOR
Rate Loans, and the result of any of the foregoing is to increase the cost to
the Agent of making or maintaining any LIBOR Rate Loan, or to reduce the amount
of any sum received or receivable by the Agent under this agreement with respect
thereto, by an amount deemed by the Agent to be material, then, within 15 days
after demand by the Agent, the Borrowers shall pay to the Agent such additional
amount or amounts as will compensate the Agent for such increased cost or
reduction.
2.6.5 Increased Capital
Costs.
If any
change in, or the introduction, adoption, effectiveness, interpretation,
reinterpretation or phase-in of, any law or regulation, directive, guideline,
decision or request (whether or not having the force of law) of any court,
central bank, regulator or other governmental authority affects or would affect
the amount of capital required or expected to be maintained by the Agent, or
person controlling the Agent, and the Agent determines (in its sole and absolute
discretion) that the rate of return on its or such controlling person’s capital
as a consequence of its commitments or the loans made by the Agent is reduced to
a level below that which the Agent or such controlling person could have
achieved but for the occurrence of any such circumstance, then, in any such case
upon notice from time to time by the Agent to the Borrowers, the Borrowers shall
immediately pay directly to the Agent additional amounts sufficient to
compensate the Agent or such controlling person for such reduction in rate of
return. A statement of the Agent as to any such additional amount or
amounts (including calculations thereof in reasonable detail) shall, in the
absence of manifest error, be conclusive and binding on the
Borrowers. In determining such amount, the Agent may use any method
of averaging and attribution that it (in its sole and absolute discretion) shall
deem applicable.
2.6.6 Taxes.
All
payments by the Borrowers of principal of, and interest on, LIBOR Rate Loans and
all other amounts payable hereunder shall be made free and clear of and without
deduction for any present or future Taxes, but excluding franchise taxes and
taxes imposed on or measured by the Agent’s net income or
receipts. In the event that any withholding or deduction from any
payment to be made by the Borrowers hereunder is required in respect of any
Taxes pursuant to any applicable law, rule or regulation, then the Borrowers
will:
(a) pay
directly to the relevant authority the full amount required to be so withheld or
deducted;
(b) promptly
forward to the Agent an official receipt or other documentation satisfactory to
the Agent evidencing such payment to such authority; and
(c) pay to
the Agent such additional amount or amounts as is necessary to ensure that the
net amount actually received by the Agent will equal the full amount the Agent
would have received had no such withholding or deduction been
required.
Moreover,
if any Taxes are directly asserted against the Agent with respect to any payment
received by the Agent hereunder, the Agent may pay such Taxes and the Borrowers
will promptly pay such additional amount (including any penalties, interest or
expenses) as is necessary in order that the net amount received by the Agent
after the payment of such Taxes (including any Taxes on such additional amount)
shall equal the amount the Agent would have received had not such Taxes been
asserted.
If the
Borrowers fail to pay any Taxes when due to the appropriate taxing authority or
fails to remit to the Agent the required receipts or other required documentary
evidence, the Borrowers shall indemnify the Agent for any incremental Taxes,
interest or penalties that may become payable by the Agent as a result of any
such failure.
Section
2.7 General Financing
Provisions.
2.7.1 Borrowers’
Representatives.
The
Borrowers hereby represent and warrant to the Agent and the Lenders that each of
them will derive benefits, directly and indirectly, from each Letter of Credit,
each Citizens Letter of Credit, and from each Loan, both in their separate
capacity and as a member of the integrated group to which each of the Borrowers
belong and because the successful operation of the integrated group is dependent
upon the continued successful performance of the functions of the integrated
group as a whole, because (a) this financing is enabling the AK Purchase
Agreement Transaction and any Permitted Acquisition, (b) the terms of the
consolidated financing provided under this Agreement are more favorable than
would otherwise would be obtainable by the Borrowers individually, and (c) the
Borrowers’ additional administrative and other costs and reduced flexibility
associated with individual financing arrangements which would otherwise be
required if obtainable would substantially reduce the value to the Borrowers of
the financing. The Borrowers in the discretion of their respective
managements are to agree among themselves as to the allocation of the benefits
of Letters of Credit and the proceeds of Loans; provided, however, that the
Borrowers shall be deemed to have represented and warranted to the Agent and the
Lenders at the time of allocation that each benefit and use of proceeds is a
Permitted Use.
For
administrative convenience, each Borrower hereby irrevocably appoints VSE as
each Borrower’s attorney-in-fact, with power of substitution (with the prior
written consent of the Agent in the exercise of its sole and absolute
discretion), in the name of VSE or in the name of the Borrower or otherwise to
take any and all actions with respect to the this Agreement, the other Financing
Documents, the Obligations and/or the Collateral (including, without limitation,
the Proceeds thereof) as VSE may so elect from time to time, including, without
limitation, actions to (i) request advances under the Loans, apply for and
direct the benefits of Letters of Credits, and direct the Agent to disburse or
credit the proceeds of any Loan directly to an account of VSE, any one or more
of the Borrowers or otherwise, which direction shall evidence the making of such
Loan and shall constitute the acknowledgment by each of the Borrowers of the
receipt of the proceeds of such Loan or the benefit of such Letter of Credit or
Citizens Letter of Credit, (ii) enter into, execute, deliver, amend, modify,
restate, substitute, extend and/or renew this Agreement, any Additional Borrower
Joinder Supplement, any other Financing Documents, security agreements,
mortgages, deposit account agreements, instruments, certificates, waivers,
letter of credit applications, releases, documents and agreements from time to
time, and (iii) endorse any check or other item of payment in the name of the
Borrower or in the name of VSE. The foregoing appointment is coupled
with an interest, cannot be revoked without the prior written consent of the
Agent, and may be exercised from time to time through VSE’s duly authorized
officer, officers or other Person or Persons designated by VSE to act from time
to time on behalf of VSE.
Each of
the Borrowers hereby irrevocably authorizes each of the Lenders to make Loans to
any one or more of the Borrowers, and hereby irrevocably authorizes the Agent to
issue or cause to be issued Letters of Credit for the account of any or all of
the Borrowers, pursuant to the provisions of this Agreement upon the written,
oral or telephone request of any one or more of the Persons who is from time to
time a Responsible Officer of a Borrower under the provisions of the most recent
certificate of corporate resolutions and/or incumbency of the Borrowers on file
with the Agent and also upon the written, oral or telephone request of any one
of the Persons who is from time to time a Responsible Officer of VSE under the
provisions of the most recent certificate of corporate resolutions and/or
incumbency for VSE on file with the Agent.
Neither
the Agent nor any of the Lenders assumes any responsibility or liability for any
errors, mistakes, and/or discrepancies in the oral, telephonic, written or other
transmissions of any instructions, orders, requests and confirmations between
the Agent and the Borrowers or the Agent and any of the Lenders in connection
with the Credit Facilities, any Loan, any Letter of Credit, any Citizens Letter
of Credit, or any other transaction in connection with the provisions of this
Agreement. Without implying any limitation on the joint and several nature of
the Obligations, the Lenders agree that, notwithstanding any other provision of
this Agreement, the Borrowers may create reasonable inter-company indebtedness
between or among the Borrowers with respect to the allocation of the benefits
and proceeds of the advances and Credit Facilities under this
Agreement. The Borrowers agree among themselves, and the Agent and
the Lenders consent to that agreement, that each Borrower shall have rights of
contribution from all of the other Borrowers to the extent such Borrower incurs
Obligations in excess of the proceeds of the Loans received by, or allocated to
purposes for the direct benefit of, such Borrower. All such
indebtedness and rights shall be, and are hereby agreed by the Borrowers to be,
subordinate in priority and payment to the indefeasible repayment in full in
cash of the Obligations, and, unless the Agent agrees in writing otherwise,
shall not be exercised or repaid in whole or in part until all of the
Obligations have been indefeasibly paid in full in cash. The
Borrowers agree that all of such inter-company indebtedness and rights of
contribution are part of the Collateral and secure the
Obligations. Each Borrower hereby waives all rights of counterclaim,
recoupment and offset between or among themselves arising on account of that
indebtedness and otherwise. Each Borrower shall not evidence the
inter-company indebtedness or rights of contribution by note or other
instrument, and shall not secure such indebtedness or rights of contribution
with any Lien or security. Notwithstanding anything contained in this
Agreement to the contrary, the amount covered by each Borrower under the
Obligations (including, without limitation, Section 2.7.11 (Guaranty)) shall be limited to an aggregate
amount (after giving effect to any collections from, rights to receive
contribution from or payments made by or on behalf of any other Borrower in
respect of the Obligations) which, together with other amounts owing by such
Borrowers to the Agent and the Lenders under the Obligations, is equal to the
largest amount that would not be subject to avoidance under the Bankruptcy Code
or any applicable provisions of any applicable, comparable state or other
Laws.
2.7.2 Use of Proceeds of the
Loans.
The
proceeds of each advance under the Loans shall be used by the Borrowers for
Permitted Uses, and for no other purposes except as may otherwise be agreed by
the Requisite Lenders in writing.
2.7.3 Origination
Fee.
The
Borrowers shall pay to the Agent on or before the Closing Date for the ratable
benefit of the Lenders in accordance with their pro rata share of the
Commitments an origination fee in the amount of One Hundred Fifty Thousand
Dollars ($150,000) (the “Origination Fee”), which
Origination Fee has been fully earned and is non-refundable.
2.7.4 Agent’s
Fee.
Borrower
shall pay to Agent on the Closing Date and at each anniversary of the Closing
Date the fee as described in that certain Commitment Letter, dated June 1, 2009,
by Citizens to VSE, as accepted by VSE on June 4, 2009 (the “Agent’s Fee”). The
Agent’s Fee has been fully earned and is non-refundable.
2.7.5 Field Examination
Fees.
The
Borrower shall pay to the Agent a field examination fee (collectively, the
“Field Examination Fees”
and individually a “Field
Examination Fee”), which Field Examination Fees shall be payable at the
time of each field examination of each Borrowers’ books and records in an amount
prior to an Event of Default, not to exceed the Agent’s actual costs of
obtaining such field examination.
2.7.6 Computation of Interest and
Fees.
All
applicable Fees and interest shall be calculated on the basis of a year of 360
days for the actual number of days elapsed. Any change in the
interest rate on any of the Obligations resulting from a change in the
Applicable Interest Rate shall become effective as of the opening of business on
the day on which such change in the Applicable Interest Rate is
announced.
2.7.7 Maximum Interest
Rate.
In no
event shall any interest rate provided for hereunder exceed the maximum rate
permissible for corporate borrowers under applicable law for loans of the type
provided for hereunder (the “Maximum Rate”). If,
in any month, any interest rate, absent such limitation, would have exceeded the
Maximum Rate, then the interest rate for that month shall be the Maximum Rate,
and, if in future months, that interest rate would otherwise be less than the
Maximum Rate, then that interest rate shall remain at the Maximum Rate until
such time as the amount of interest paid hereunder equals the amount of interest
which would have been paid if the same had not been limited by the Maximum
Rate. In the event that, upon payment in full of the Obligations, the
total amount of interest paid or accrued under the terms of this Agreement is
less than the total amount of interest which would, but for this Section, have
been paid or accrued if the interest rates otherwise set forth in this Agreement
had at all times been in effect, then the Borrowers shall, to the extent
permitted by applicable law, pay the Agent for the ratable benefit of the
Lenders, an amount equal to the excess of (a) the lesser of (i) the amount of
interest which would have been charged if the Maximum Rate had, at all times,
been in effect or (ii) the amount of interest which would have accrued had the
interest rates otherwise set forth in this Agreement, at all times, been in
effect over (b) the amount of interest actually paid or accrued under this
Agreement. In the event that a court determines that the Agent and
the Lenders have received interest and other charges hereunder in excess of the
Maximum Rate, such excess shall be deemed received on account of, and shall
automatically be applied to reduce, the Obligations other than interest, in the
inverse order of maturity, and if there are no Obligations outstanding, the
Lenders shall refund to the Borrowers such excess.
2.7.8 Payments.
All
payments of the Obligations, including, without limitation, principal, interest,
Prepayments, and Fees, shall be paid by the Borrowers without setoff or
counterclaim to the Agent (except as otherwise provided herein) at the Funding
Office in immediately available funds not later than noon (New York time) on the
due date of such payment. All payments received by the Agent after
such time shall be deemed to have been received by the Agent for purposes of
computing interest and Fees and otherwise as of the next Business
Day. Payments shall not be considered received by the Agent until
such payments are paid to the Agent in immediately available funds.
2.7.9 Liens;
Setoff.
The
Borrowers hereby grant to the Agent and to the Lenders a continuing Lien for all
of the Obligations (including, without limitation, the Agent’s Obligations) upon
any and all monies, Investment Property, and other property of the Borrowers and
the Proceeds thereof, now or hereafter held or received by or in transit to, the
Agent, any of the Lenders, and/or any Affiliate of the Agent and/or any of the
Lenders, from or for the Borrowers, and also upon any and all deposit accounts
(general or special) and credits of the Borrowers, if any, with the Agent, any
of the Lenders or any Affiliate of the Agent or any of the Lenders, at any time
existing, excluding any deposit accounts held by the Borrowers in their capacity
as trustee for Persons who are not Borrowers or Affiliates of the
Borrowers. Without implying any limitation on any other rights the
Agent and/or the Lenders may have under the Financing Documents or applicable
Laws, during the continuance of an Event of Default, the Agent and the each of
the Lenders, respectively, are hereby authorized by the Borrowers at any time
and from time to time, without notice to the Borrowers, to set off, appropriate
and apply any or all items hereinabove referred to against all Obligations
(including, without limitation, the Agent’s Obligations) then outstanding
(whether or not then due), all in such order and manner as shall be determined
by the Agent in its sole and absolute discretion.
2.7.10 Requirements of
Law.
In the
event that any Lender shall have determined in good faith that (a) the adoption
of any Capital Adequacy Regulation, or (b) any change in any Capital Adequacy
Regulation or in the interpretation or application thereof or (c) compliance by
such Lender or any corporation controlling such Lender with any request or
directive regarding any capital adequacy (whether or not having the force of
law) from any central bank or Governmental Authority, does or shall have the
effect of reducing the rate of return on the capital of such Lender or any
corporation controlling such Lender, as a consequence of the obligations of such
Lender hereunder to a level below that which such Lender or any corporation
controlling such Lender would have achieved but for such adoption, change or
compliance (taking into consideration the policies of such Lender and the
corporation controlling such Lender, with respect to capital adequacy) by an
amount deemed by such Lender to be material, then from time to time, after
submission by such Lender to the Borrowers of a written request therefor and a
statement of the basis for such determination, the Borrowers shall pay to such
Lender such additional amount or amounts in order to compensate for such
reduction.
2.7.11 Guaranty.
(a) Each
Borrower hereby unconditionally and irrevocably, guarantees to the Agent and the
Lenders:
(i) the due
and punctual payment in full (and not merely the collectibility) by the other
Borrowers of the Obligations, including unpaid and accrued interest thereon, in
each case when due and payable, all according to the terms of this Agreement,
the Notes and the other Financing Documents;
(ii) the due
and punctual payment in full (and not merely the collectibility) by the other
Borrowers of all other sums and charges which may at any time be due and payable
in accordance with this Agreement, the Notes or any of the other Financing
Documents;
(iii) the due
and punctual performance by the other Borrowers of all of the other terms,
covenants and conditions contained in the Financing Documents; and
(iv) all the
other Obligations of the other Borrowers.
(b) The
obligations and liabilities of each Borrower as a guarantor under this Section
2.7.11 shall be absolute and unconditional and
joint and several, irrespective of the genuineness, validity, priority,
regularity or enforceability of this Agreement, any of the Notes or any of the
Financing Documents or any other circumstance which might otherwise constitute a
legal or equitable discharge of a surety or guarantor. Each Borrower
in its capacity as a guarantor expressly agrees that the Agent and the Lenders
may, in their sole and absolute discretion, without notice to or further assent
of such Borrower and without in any way releasing, affecting or in any way
impairing the joint and several obligations and liabilities of such Borrower as
a guarantor hereunder:
(i) waive
compliance with, or any defaults under, or grant any other indulgences under or
with respect to any of the Financing Documents;
(ii) modify,
amend, change or terminate any provisions of any of the Financing
Documents;
(iii) grant
extensions or renewals of or with respect to the Credit Facilities, the Notes or
any of the other Financing Documents;
(iv) effect
any release, subordination, compromise or settlement in connection with this
Agreement, any of the Notes or any of the other Financing
Documents;
(v) agree to
the substitution, exchange, release or other disposition of the Collateral or
any part thereof, or any other collateral for the Loan or to the subordination
of any lien or security interest therein;
(vi) make
advances for the purpose of performing any term, provision or covenant contained
in this Agreement, any of the Notes or any of the other Financing Documents with
respect to which the Borrowers shall then be in default;
(vii) make
future advances pursuant to this Agreement or any of the other Financing
Documents;
(viii) assign,
pledge, hypothecate or otherwise transfer the Commitments, the Obligations, the
Notes, any of the other Financing Documents or any interest therein, all as and
to the extent permitted by the provisions of this Agreement;
(ix) deal in
all respects with the other Borrowers as if this Section 2.7.11 were not in effect;
(x) effect
any release, compromise or settlement with any of the other Borrowers, whether
in their capacity as a Borrower or as a guarantor under this Section 2.7.11, or any other guarantor; and
(xi) provide
debtor-in-possession financing or allow use of cash collateral in proceedings
under the Bankruptcy Code, it being expressly agreed by all Borrowers that any
such financing and/or use would be part of the Obligations.
(c) The
obligations and liabilities of each Borrower, as guarantor under this Section 2.7.11, shall be primary, direct and immediate, shall
not be subject to any counterclaim, recoupment, set off, reduction or defense
based upon any claim that a Borrower may have against any one or more of the
other Borrowers, the Agent, any one or more of the Lenders and/or any other
guarantor and shall not be conditional or contingent upon pursuit or enforcement
by the Agent or other Lenders of any remedies it may have against the Borrowers
with respect to this Agreement, the Notes or any of the other Financing
Documents, whether pursuant to the terms thereof or by operation of
law. Without limiting the generality of the foregoing, the Agent and
the Lenders shall not be required to make any demand upon any of the Borrowers,
or to sell the Collateral or otherwise pursue, enforce or exhaust its or their
remedies against the Borrowers or the Collateral either before, concurrently
with or after pursuing or enforcing its rights and remedies
hereunder. Any one or more successive or concurrent actions or
proceedings may be brought against each Borrower under this Section 2.7.11, either in the same action, if any, brought
against any one or more of the Borrowers or in separate actions or proceedings,
as often as the Agent may deem expedient or advisable. Without
limiting the foregoing, it is specifically understood that any modification,
limitation or discharge of any of the liabilities or obligations of any one or
more of the Borrowers, any other guarantor or any obligor under any of the
Financing Documents, arising out of, or by virtue of, any bankruptcy,
arrangement, reorganization or similar proceeding for relief of debtors under
federal or state law initiated by or against any one or more of the Borrowers,
in their respective capacities as borrowers and guarantors under this Section 2.7.11, or under any of the Financing Documents shall
not modify, limit, lessen, reduce, impair, discharge, or otherwise affect the
liability of each Borrower under this Section 2.7.11 in any manner whatsoever, and this Section 2.7.11 shall remain and continue in full force and
effect. It is the intent and purpose of this Section 2.7.11 that each Borrower shall and does hereby waive
all rights and benefits which might accrue to any other guarantor by reason of
any such proceeding, and the Borrowers agree that they shall be liable for the
full amount of the obligations and liabilities under this Section 2.7.11, regardless of, and irrespective to, any
modification, limitation or discharge of the liability of any one or more of the
Borrowers, any other guarantor or any obligor under any of the Financing
Documents, that may result from any such proceedings.
(d) Each
Borrower, as guarantor under this Section 2.7.11,
hereby unconditionally, jointly and severally, irrevocably and expressly
waives:
(i) presentment
and demand for payment of the Obligations and protest of
non-payment;
(ii) notice of
acceptance of this Section 2.7.11 and of
presentment, demand and protest thereof;
(iii) notice of
any default hereunder or under the Notes or any of the other Financing Documents
and notice of all indulgences;
(iv) notice of
any increase in the amount of any portion of or all of the indebtedness
guaranteed by this Section 2.7.11;
(v) demand
for observance, performance or enforcement of any of the terms or provisions of
this Section 2.7.11, the Notes or any of the other
Financing Documents;
(vi) all
errors and omissions in connection with the Lender’s administration of all
indebtedness guaranteed by this Section 2.7.11,
except errors and omissions resulting from acts of bad faith;
(vii) any right
or claim of right to cause a marshalling of the assets of any one or more of the
other Borrowers;
(viii) any act
or omission of the Agent or the Lenders which changes the scope of the risk as
guarantor hereunder; and
(ix) all other
notices and demands otherwise required by law which the Borrower may lawfully
waive.
Within
ten (10) days following any request of the Agent so to do, each Borrower will
furnish the Agent and the Lenders and such other persons as the Agent may direct
with a written certificate, duly acknowledged stating in detail whether or not
any credits, offsets or defenses exist with respect to this Section 2.7.11.
2.7.12 ACH Transactions and Hedging
Contracts.
The
Borrowers may request and any Lender or its Affiliates may, in their sole and
absolute discretion, provide ACH Transactions and Hedging Contracts although the
Borrowers are not required to do so. In the event the Borrowers
request any Lender or its Affiliates to procure ACH Transactions or Hedging
Contracts, then the Borrowers agree to indemnify and hold any Lender or its
affiliates harmless from any and all obligations now or hereafter owing to the
or its affiliates. The Borrowers agree to pay any Lender or its
Affiliates all amounts owing to any Lender or its Affiliates pursuant to ACH
Transactions and Hedging Contracts. In the event the Borrowers shall
not have paid to any Lender or its Affiliates such amounts, any Lender may cover
such amounts by an advance under the Revolving Loan, which advance shall be
deemed to have been requested by the Borrowers. The Borrowers
acknowledge and agree that the obtaining of ACH Transactions and Hedging
Contracts from any Lender or its Affiliates (a) is in the sole and absolute
discretion of such Lender or its Affiliates and (b) is subject to all rules and
regulations of such Lender or its Affiliates.
Section
2.8 Settlement Among
Lenders.
2.8.1 Term
Loans.
Agent
shall pay to each Lender on each Term Loan LIBOR Interest Payment Date or Prime
Rate Interest Payment Date, as the case may be, such Lender’s ratable share of
all payments received by Agent in immediately available funds on account of the
Term Loans, net of any amounts payable by such Lender to Agent, by wire transfer
of same day funds; the amount payable to each Lender shall be based on the
principal amount of the Term Loans owing to such Lender.
2.8.2 Revolving
Loans.
It is
agreed that each Lender’s Net Outstandings are intended by the Lenders to be
equal at all times to such Lender’s Revolving Credit Pro Rata Share of the
aggregate outstanding principal amount of the Revolving Loan
outstanding. Notwithstanding such agreement, the several and not
joint obligation of each Lender to fund the Revolving Loans made in accordance
with the terms of this Agreement ratably in accordance with such Lender’s
Revolving Credit Pro Rata Share and each Lender’s right to receive its ratable
share of principal payments on the Revolving Loan in accordance with its
Revolving Credit Pro Rata Share, the Lenders agree that in order to facilitate
the administration of this Agreement and the Financing Documents that settlement
among them may take place on a periodic basis in accordance with the provisions
of this Section 2.8.
2.8.3 Settlement Procedures as to
Revolving Loan.
(a) In
General. To the extent and in the manner hereinafter provided
in this Section 2.8.3, settlement among the Lenders
as to the Revolving Loan may occur periodically not later than one (1) Business
Day after each Settlement Date determined from time to time by the Agent, which
may occur before or after the occurrence or during the continuance of a Default
or Event of Default and whether or not all of the conditions set forth in Section 5.2 (Conditions to All Extensions of Credit)
have been met. Not later than one (1) Business Day after each
Settlement Date payments shall be made by or to Agent and the other Lenders in
the manner provided in this Section 2.8.3 in
accordance with the Settlement Report delivered by the Agent pursuant to the
provisions of this Section 2.8.3 in respect of such
Settlement Date so that not later than one (1) Business Day after each
Settlement Date, and after giving effect to the transactions to take place on
such Settlement Date, each Lender’s Net Outstandings shall equal such Lender’s
Revolving Credit Pro Rata Share of the Revolving Loan outstanding, provided,
that, in the case such Lender is a Defaulted Lender, the Agent shall be entitled
to set off the funding short-fall against that Defaulted Lender’s respective
share of all payments received from Borrowers.
(b) Non-Ratable Loans and
Payments. Between Settlement Dates, the Agent shall request
and Citizens may (but shall not be obligated to) advance to the Borrowers out of
Citizens own funds, the entire principal amount of any advance under the
Revolving Loan requested or deemed requested pursuant to Section 2.1.2 (Procedure for Making Advances Under the
Revolving Loan) (any such advance under the Revolving Loan being referred to as
a “Non-Ratable
Loan”). The making of each Non-Ratable Loan by Citizens shall
be deemed to be a purchase by Citizens of a one hundred percent (100%)
participation in each other Lender’s Revolving Credit Pro Rata Share of the
amount of such Non-Ratable Loan. All payments of principal, interest
and any other amount with respect to such Non-Ratable Loan shall be payable to
and received by the Agent for the account of Citizens. Upon demand by
Citizens, with notice to the Agent, each other Lender shall pay to Citizens, as
the repurchase of such participation, an amount equal to one hundred percent
(100%) of such Lender’s Revolving Credit Pro Rata Share of the principal amount
of such Non-Ratable Loan. Any payments received by the Agent between
Settlement Dates which in accordance with the terms of this Agreement are to be
applied to the reduction of the outstanding principal balance of Revolving Loan,
shall be paid over to and retained by Citizens for such application, and such
payment to and retention by Citizens shall be deemed, to the extent of each
other Lender’s Revolving Credit Pro Rata Share of such payment, to be a purchase
by each such other Lender of a participation in the advance under the Revolving
Loan (including the repurchase of participations in Non-Ratable Loans) made by
Citizens. Upon demand by another Lender, with notice thereof to the
Agent, Citizens shall pay to the Agent, for the account of such other Lender, as
a repurchase of such participation, an amount equal to such other Lender’s
Revolving Credit Pro Rata Share of any such amounts (after application thereof
to the repurchase of any participations of Citizens in such other Lender’s
Revolving Credit Pro Rata Share of any Non-Ratable Loans) paid only to Citizens
by the Agent.
(c) Net Decrease in
Outstandings. If on any Settlement Date the increase, if any,
in the dollar amount of any Lender’s Net Outstandings which is required to
comply with the first sentence of Section 2.8.1 is
less than such Lender’s Revolving Credit Pro Rata Share of amounts received by
the Agent but paid only to Citizens since the next preceding Settlement Date,
such Lender and the Agent, in their respective records, shall apply such
Lender’s Revolving Credit Pro Rata Share of such amounts to the increase in such
Lender’s Net Outstandings, and Citizens shall pay to the Agent, for the account
of such Lender, the excess allocable to such Lender.
(d) Net Increase in
Outstandings. If on any Settlement Date the increase, if any,
in the dollar amount of any Lender’s Net Outstandings which is required to
comply with the first sentence of Section 2.8.1
exceeds such Lender’s Revolving Credit Pro Rata Share of amounts received by the
Agent but paid only to Citizens since the next preceding Settlement Date, such
Lender and the Agent, in their respective records, shall apply such Lender’s
Revolving Credit Pro Rata Share of such amounts to the increase in such Lender’s
Net Outstandings, and such Lender shall pay to the Agent, for the account of
Citizens, any excess.
(e) No Change in
Outstandings. If a Settlement Report indicates that no advance
under the Revolving Loan has been made during the period since the next
preceding Settlement Date, then such Lender’s Revolving Credit Pro Rata Share of
any amounts received by the Agent but paid only to Citizens shall be paid by
Citizens to the Agent, for the account of such Lender. If a
Settlement Report indicates that the increase in the dollar amount of a Lender’s
Net Outstandings which is required to comply with the first sentence of Section
2.8.1 is exactly equal to such Lender’s Revolving
Credit Pro Rata Share of amounts received by the Agent but paid only to Citizens
since the next preceding Settlement Date, such Lender and the Agent, in their
respective records, shall apply such Lender’s Revolving Credit Pro Rata Share of
such amounts to the increase in such Lender’s Net Outstandings.
(f) Return of
Payments. If any amounts received by Citizens in respect of
the Obligations are later required to be returned or repaid by Citizens to the
Borrowers or any other obligor or their respective representatives or successors
in interest, whether by court order, settlement or otherwise, in excess of
Citizens’ Revolving Credit Pro Rata Share of all such amounts required to be
returned by all Lenders, each other Lender shall, upon demand by Citizens with
notice to the Agent, pay to the Agent for the account of Citizens, an amount
equal to the excess of such Lender’s Revolving Credit Pro Rata Share of all such
amounts required to be returned by all Lenders over the amount, if any, returned
directly by such Lender.
(g) Payments to Agent,
Lenders.
(i) Payment
by any Lender to the Agent shall be made not later than 2:00 p.m. New York time
on the Business Day such payment is due, provided that if such payment is due on
demand by another Lender, such demand is made on the paying Lender not later
than 10:00 a.m. New York time on such Business Day. Payment by the
Agent to any Lender shall be made by wire transfer to such Lender’s specified
account set forth on Exhibit C attached
hereto, promptly following the Agent’s receipt of funds for the account of such
Lender and in the type of funds received by the Agent, provided that if the
Agent receives such funds at or prior to 12:00 p.m. noon New York time, the
Agent shall pay such funds to such Lender by 2:00 p.m. New York time on such
Business Day. If a demand for payment is made after the applicable
time set forth above, the payment due shall be made by 2:00 p.m. New York time
on the first Business Day following the date of such demand.
(ii) If a
Lender shall, at any time, fail to make any payment to the Agent required
hereunder, the Agent may, but shall not be required to, retain payments that
would otherwise be made to such Lender hereunder and apply such payments to such
Lender’s defaulted obligations hereunder, at such time, and in such order, as
the Agent may elect in its sole discretion.
(iii) With
respect to the payment of any funds under this Section 2.8.3, whether from the Agent to a Lender or from a
Lender to the Agent, the party failing to make full payment when due pursuant to
the terms hereof shall, upon demand by the other party, pay such amount together
with interest on such amount at the Federal Funds Open Rate.
2.8.4 Settlement of Other
Obligations.
All other
amounts received by the Agent on account of, or applied by the Agent to the
payment of, any Obligation owed to the Lenders (including, without limitation,
Fees payable to the Lenders and proceeds from the sale of, or other realization
upon, all or any part of the Collateral following an Event of Default) that are
received by the Agent not later than 11:00 a.m. (New York time on a Business Day
will be paid by the Agent to each Lender on the same Business Day, and any such
amounts that are received by the Agent after 11:00 a.m. New York time will be
paid by the Agent to each Lender on the following Business
Day. Unless otherwise stated herein, the Agent shall distribute Fees
payable to the Lenders ratably to the Lenders based on each Lender’s Revolving
Credit Pro Rata Share and shall distribute proceeds from the sale of, or other
realization upon, all or any part of the Collateral following an Event of
Default ratably to the Lenders based on the amount of the Obligations then owing
to each Lender.
2.8.5 Presumption of
Payment.
Unless
the Agent shall have received notice from a Lender prior to 12:00 p.m. noon New
York time on the date of the requested date for the making of advances under the
Revolving Loan that such Lender will not make available to the Agent, such
Lender’s Revolving Credit Pro Rata Share of the advances to be made on such
date, the Agent may assume that such Lender has made such amount available to
the Agent on such date in accordance with this, and the Agent, in its sole
discretion may, in reliance upon such assumption, make available to the
Borrowers on such date a corresponding amount on behalf of such
Lender.
If and to
the extent such Lender shall not have so made available to the Agent its
Revolving Credit Pro Rata Share of the advances under the Revolving Loan made on
such date, and the Agent shall have so made available to the Borrowers a
corresponding amount on behalf of such Lender, such Lender shall, on demand, pay
to the Agent such corresponding amount, together with interest thereon, at the
Federal Funds Open Rate, for each day from the date such corresponding amount
shall have been so available by the Agent to the Borrowers until the date such
amount shall have been repaid to the Agent. Such Lender shall not be
entitled to payment of any interest which accrues on the amount made available
by the Agent to the Borrowers for the account of such Lender until such time as
such Lender reimburses the Agent for such amount, together with interest
thereon, as provided in this Section 2.8.5.
A
certificate of the Agent submitted to any Lender with respect to any amounts
owing to the Agent by such Lender under this Section shall be conclusive and
binding on such Lender, absent manifest error. If such Lender does
not pay such amounts to the Agent promptly upon the Agent’s demand, the Agent
shall promptly notify the Borrowers of such Lender’s failure to make payment,
and the Borrowers shall immediately repay such amounts to the Agent, together
with accrued interest thereon at the applicable rate on the Revolving Loan, all
without prejudice to the rights and remedies of the Agent against any defaulting
Lender. Any and all amounts due and payable to the Agent by the
Borrowers under this Section constitute and shall be part of the Agent’s
Obligations.
Unless
the Agent shall have received notice from the Borrowers prior to the date on
which any payment is due to the Agent that the Borrowers will not make such
payment in full, the Agent may assume that the Borrowers have made such payment
in full to the Agent on such date and the Agent in its sole discretion may, in
reliance upon such assumption, cause to be distributed to each Lender on such
due date an amount equal to the amount then due such Lender. If and
to the extent the Borrowers shall not have so made such payment in full to the
Agent and the Agent shall have distributed to any Lender all or any portion of
such amount, such Lender shall repay to the Agent on demand the amount so
distributed to such Lender, together with interest thereon at the Federal Funds
Open Rate, for each day from the date such amount is distributed to such Lender
until the date such Lender repays such amount to the Agent.
2.8.6 Defaulting
Lenders.
The
failure of any Defaulting Lender to make any advances under the Revolving Loan
or any payment required by it hereunder shall not relieve any other Lender of
its obligations to make such Revolving Loan or payment, but neither any other
Lender nor the Agent shall be responsible for the failure of any Defaulting
Lender to make a Revolving Loan or make any other payment required
hereunder. Notwithstanding anything set forth herein to the contrary,
a Defaulting Lender shall not have any voting or consent rights under or with
respect to any Financing Document or constitute a “Lender” (or be included in
the calculation of “Requisite Lenders” hereunder) for any voting or consent
rights under or with respect to any Financing Documents.
THE
COLLATERAL
Section
3.1 Debt and Obligations
Secured.
All
property and Liens assigned, pledged or otherwise granted under or in connection
with this Agreement (including, without limitation, those under Section 3.2 (Grant of Liens)) or any of the Financing
Documents shall secure (a) the payment of all of the Obligations, including,
without limitation, any and all Outstanding Letter of Credit Obligations, all
Citizens Outstanding Letter of Credit Obligations, and any and all Agent’s
Obligations, and (b) the performance, compliance with and observance by the
Borrowers of the provisions of this Agreement and all of the other Financing
Documents or otherwise under the Obligations. The security interest
and Lien of each Lender in such property shall rank equally in priority with the
interest of each other Lender, but the security interest and Lien of the Agent
with respect to the Agent’s Obligations shall be superior and paramount to the
security interest and Lien of the Lenders.
Section
3.2 Grant of
Liens.
Each of
the Borrowers hereby assigns, pledges and grants to the Agent, for the ratable
benefit of the Lenders and for the benefit of the Agent with respect to the
Agent’s Obligations, and agrees that the Agent and the Lenders shall have a
perfected and continuing security interest in, and Lien on, all of the
Borrowers’ Accounts, Inventory, Government Contracts, Chattel Paper, Documents,
Instruments, Equipment, Investment Property, and General Intangibles and all of
the Borrower’s deposit accounts with any financial institution with which the
Borrowers maintain deposits, whether now owned or existing or hereafter acquired
or arising, all returned, rejected or repossessed goods, the sale or lease of
which shall have given or shall give rise to an Account or Chattel Paper, all
insurance policies relating to the foregoing, all books and records in whatever
media (paper, electronic or otherwise) recorded or stored, with respect to the
foregoing and all Equipment and General Intangibles necessary or beneficial to
retain, access and/or process the information contained in those books and
records, and Proceeds of the foregoing. Each of the Borrowers further
agrees that the Agent, for the ratable benefit of the Lenders and for the
benefit of the Agent with respect to the Agent’s Obligations, shall have in
respect thereof all of the rights and remedies of a secured party under the
Uniform Commercial Code as well as those provided in this Agreement, under each
of the other Financing Documents and under applicable Laws.
Without
implying any limitation to the foregoing, as additional Collateral and security
for the Obligations, each of the Borrowers hereby assigns to the Agent, for the
ratable benefit of the Lenders and for the benefit of the Agent with respect to
the Agent’s Obligations, all of its respective rights, title and interest in,
to, and under, the AK Purchase Agreement and all of the AK Purchase Agreement
Documents, including, without limitation, all of the benefits of any
representations and warranties provided by the Seller and any and all rights of
any or all of the Borrowers to indemnification from the Seller or any other
Person contained therein. The Borrowers agree that neither the
assignment to the Agent, for the ratable benefit of the Lenders and for the
benefit of the Agent with respect to the Agent’s Obligations, nor any other
provision contained in this Agreement or any of the other Financing Documents
shall impose on the Agent or any of the Lenders any obligation or liability of
any of the Borrowers under the AK Purchase Agreement and/or under any of the
other AK Purchase Agreement Documents. The Borrowers hereby jointly
and severally agree to indemnify the Agent and each of the Lenders and hold the
Agent and each of the Lenders harmless from any and all claims, actions, suits,
losses, damages, costs, expenses, fees, obligations and liabilities which may be
incurred by or imposed upon the Agent and/or any of the Lenders by virtue of the
assignment of and Lien on each of the Borrower’s rights, title and interest in,
to, and under the AK Purchase Agreement and the AK Purchase Agreement
Documents. The Borrowers further acknowledge and agree that following
the occurrence of an Event of Default, the Agent, with the consent of the
Requisite Lenders of the Lenders, shall be entitled to enforce any and all
rights and remedies available to any or all of the Borrowers under the Purchase
Agreement and/or under any or all of the AK Purchase Agreement Documents and/or
applicable Laws with respect to the AK Purchase Agreement
Transaction.
Section
3.3 Collateral Disclosure
List.
On or
prior to the Closing Date, the Borrowers shall deliver to the Agent a list (the
“Collateral Disclosure
List”) which shall contain such information with respect to each
Borrower’s business and real and personal property as the Agent may require and
shall be certified by a Responsible Officer of each of the Borrowers, all in the
form provided to the Borrowers by the Agent. Promptly after demand by
the Agent, the Borrowers, as appropriate, shall furnish to the Agent an update
of the information contained in the Collateral Disclosure List at any time and
from time to time as may be requested by the Agent.
Section
3.4 Personal
Property.
The
Borrowers acknowledge and agree that it is the intention of the parties to this
Agreement that the Agent, for the ratable benefit of the Lenders and for the
benefit of the Agent with respect to the Agent’s Obligations, shall have a first
priority, perfected Lien, in form and substance satisfactory to the Agent and
its counsel, on all of the Borrowers’ assets of any kind and nature whatsoever,
whether now owned or hereafter acquired, subject only to the Permitted Liens, if
any. In furtherance of the foregoing.
3.4.1 Investment Property, Chattel
Paper, Promissory Notes, etc.
On the
Closing Date and without implying any limitation on the scope of Section 3.2 (Grant of Liens), each of the Borrowers
shall deliver to the Agent, for the ratable benefit of the Lenders and for the
benefit of the Agent with respect to the Agent’s Obligations, all originals of
all of the Borrower’s letters of credit, Investment Property, Chattel Paper,
Documents and Instruments and, if the Agent so requires, shall execute and
deliver a separate pledge, assignment and security agreements in form and
content acceptable to the Agent, which pledge, assignment and security
agreements shall assign, pledge and ▇▇▇▇▇ ▇ ▇▇▇▇ to the Agent, for the ratable
benefit of the Lenders and for the benefit of the Agent with respect to the
Agent’s Obligations on all of each Borrower’s letters of credit, Investment
Property, Chattel Paper, Documents and Instruments.
In the
event that any of the Borrowers shall acquire after the Closing Date any letters
of credit, Investment Property, Chattel Paper, Documents or Instruments, each
such Borrower shall promptly so notify the Agent and deliver the originals of
all of the foregoing to the Agent promptly and in any event within ten (10) days
of each acquisition.
All
letters of credit, Investment Property, Chattel Paper, Documents and Instruments
shall be delivered to the Agent endorsed and/or assigned as required by the
pledge, assignment and security agreement and/or as the Agent may require and,
if applicable, shall be accompanied by blank irrevocable and unconditional stock
or bond powers.
3.4.2 Patents, Copyrights and
Other Property Requiring Additional Steps to Perfect.
On the
Closing Date and without implying any limitation on the scope of Section 3.2 (Grant of Liens), the Borrowers shall
execute and deliver all Financing Documents and take all actions requested by
the Agent in order to perfect a first priority assignment of Patents,
Copyrights, Trademarks, customer lists or any other type or kind of intellectual
property acquired by any of the Borrowers after the Closing Date.
3.4.3 Government Contracts
Requiring Additional Steps to Perfect.
Each
Borrower covenants and agrees that it shall provide the Agent with all necessary
information and will execute and deliver such documents as are required to
comply with the Federal Assignment of Claims Act of 1940 (31 ▇.▇.▇. §▇▇▇▇ and 41
U.S.C. §15), to perfect the Agent’s security interest in Government Contracts
for the ratable benefit of the Lenders on such Government Contracts as the Agent
may determine in its sole discretion.
Section
3.5 Record
Searches.
As of the
Closing Date and thereafter at the time any Financing Document is executed and
delivered by the Borrowers pursuant to this Section, the Agent shall have
received, in form and substance satisfactory to the Agent, such Lien or record
searches with respect to all of the Borrowers and/or any other Person, as
appropriate, and the property covered by such Financing Document showing that
the Lien of such Financing Document will be a perfected first priority Lien on
the property covered by such Financing Document subject only to Permitted Liens
or to such other matters as the Agent may approve.
Section
3.6 Costs.
The
Borrowers agree to pay, as part of the Enforcement Costs and to the fullest
extent permitted by applicable Laws, on demand all costs, fees and expenses
incurred by the Agent and/or any of the Lenders in connection with the taking,
perfection, preservation, protection and/or release of a Lien on the Collateral,
including, without limitation:
(a) customary
fees and expenses incurred by the Agent and/or any of the Lenders in preparing,
reviewing, negotiating and finalizing the Financing Documents from time to time
(including, without limitation, reasonable attorneys’ fees incurred in
connection with preparing, reviewing, negotiating, and finalizing any of the
Financing Documents, including, any amendments and supplements
thereto);
(b) all
filing and/or recording taxes or fees;
(c) all costs
of Lien and record searches; and
(d) all
related costs, fees and expenses.
Section
3.7 Release.
Upon the
indefeasible repayment in full in cash of the Obligations and performance of all
Obligations of the Borrowers and all obligations and liabilities of each other
Person, other than the Agent and the Lenders, under this Agreement and all other
Financing Documents, the termination and/or expiration of all of the
Commitments, all Letters of Credit, all Outstanding Letter of Credit Obligations
and all Citizens Outstanding Letter of Credit Obligations, upon the Borrowers’
request and at the Borrowers’ sole cost and expense, the Agent shall release
and/or terminate any Financing Document but only if and provided that there is
no commitment or obligation (whether or not conditional) of the Agent and/or any
of the Lenders to re-advance amounts which would be secured thereby and/or no
commitment or obligation of the Agent or Citizens, as the case may be, to issue
any Letter of Credit or Citizens Letter of Credit or return or restore any
payment of any Current Letter of Credit Obligations or any Citizens Current
Letter of Credit Obligations.
Section
3.8 Inconsistent
Provisions.
In the
event that the provisions of any Financing Document directly conflict with any
provision of this Agreement, the provisions of this Agreement
govern.
ARTICLE
IV
REPRESENTATIONS AND
WARRANTIES
Section
4.1 Representations and
Warranties.
The
Borrowers, for themselves and for each other, represent and warrant to the Agent
and the Lenders, as follows:
4.1.1 Subsidiaries.
The
Borrowers have the Subsidiaries listed on the Collateral Disclosure List
attached hereto and made a part hereof and no others. Each of the
Subsidiaries is a Wholly Owned Subsidiary except as shown on the Collateral
Disclosure List, which correctly indicates the nature and amount of each
Borrower’s ownership interests therein.
4.1.2 Good
Standing.
Each
Borrower and its Subsidiaries (a) is a corporation duly organized, existing and
in good standing under the laws of the jurisdiction of its incorporation, (b)
has the corporate power to own its property and to carry on its business as now
being conducted, and (c) is duly qualified to do business and is in good
standing in each jurisdiction in which the character of the properties owned by
it therein or in which the transaction of its business makes such qualification
necessary.
4.1.3 Power and
Authority.
Each
Borrower has full corporate power and authority to execute and deliver this
Agreement, the other Financing Documents, and the AK Purchase Agreement
Documents to which it is a party, to make the borrowings and request Letters of
Credit under this Agreement, to close and consummate the Purchase Agreement
Transaction, and to incur and perform the Obligations whether under this
Agreement, the other Financing Documents or otherwise, all of which have been
duly authorized by all proper and necessary corporate action. No
consent or approval of shareholders or any creditors of any Borrower, and no
consent, approval, filing or registration with or notice to any Governmental
Authority on the part of any Borrower, is required as a condition to the
execution, delivery, validity or enforceability of this Agreement, or any of the
other Financing Documents or any of the AK Purchase Agreement Documents, the
performance by any Borrower of the Obligations or the closing and consummation
of the AK Purchase Agreement Transaction.
4.1.4 Binding
Agreements.
This
Agreement and the other Financing Documents executed and delivered by the
Borrowers have been properly executed and delivered and constitute the valid and
legally binding obligations of the Borrowers and are fully enforceable against
each of the Borrowers in accordance with their respective terms, subject to
bankruptcy, insolvency, reorganization, moratorium and other laws of general
application affecting the rights and remedies of creditors and secured parties,
and general principles of equity regardless of whether applied in a proceeding
in equity or at law.
4.1.5 No Defaults,
Violations.
(a) No
Default or Event of Default has occurred and is continuing.
(b) None of
the Borrowers nor any of their respective Subsidiaries is in default under or
with respect to any obligation under any existing mortgage, indenture, contract
or agreement binding on it or affecting its property in any respect which could
be materially adverse to the business, operations, property or financial
condition of any Borrower, or which could materially adversely affect the
ability of any Borrower to perform its obligations under this Agreement or the
other Financing Documents, to which any Borrower is a party.
4.1.6 Compliance with
Laws.
(a) None of
the Borrowers nor any of their respective Subsidiaries is in violation of any
applicable Laws (including, without limitation, any Laws relating to employment
practices, to environmental, occupational and health standards and controls) or
order, writ, injunction, decree or demand of any court, arbitrator, or any
Governmental Authority affecting any Borrower or any of its properties, the
violation of which, considered in the aggregate, could materially adversely
affect the business, operations or properties of any Borrower and/or its
Subsidiaries.
(b) No
Borrower is a Sanctioned Person or has any of its assets in a Sanctioned Country
or does business in or with, or derives any of its operating income from
investments in or transactions with, Sanctioned Persons or Sanctioned Countries
in violation of economic sanctions administered by OFAC. The proceeds
from the Loan will not be used to fund any operations in, finance any
investments or activities in, or make any payments to, a Sanctioned Person or a
Sanctioned Country; except that proceeds from the Loan may be used to fund
operations in or finance investments or activities in a Sanctioned Country if
such work is performed under a contract with the United States
government.
4.1.7 Investment Company
Act.
None of
the Borrowers nor any of their respective Subsidiaries is an investment company
within the meaning of the Investment Company Act of 1940, as amended, nor is it,
directly or indirectly, controlled by or acting on behalf of any Person which is
an investment company within the meaning of said Act.
4.1.8 Litigation.
Except as
otherwise disclosed on
Schedule
4.1.8 attached
hereto and made a part hereof, there are no proceedings, actions or
investigations pending or, so far as any Borrower knows, threatened before or by
any court, arbitrator or any Governmental Authority which, in any one case or in
the aggregate, if determined adversely to the interests of any Borrower or any
Subsidiary, would have a material adverse effect on the business, properties,
condition (financial or otherwise) or operations, present or prospective, of any
Borrower.
4.1.9 Financial
Condition.
The
consolidated financial statements of the Borrowers dated March 31, 2010, are
complete and correct and fairly present the financial position of each of the
Borrowers and its Subsidiaries and the results of their operations and
transactions in their surplus accounts as of the date and for the period
referred to and have been prepared in accordance with GAAP applied on a
consistent basis throughout the period involved. There are no
liabilities, direct or indirect, fixed or contingent, of any Borrower or any
Subsidiary as of the date of such financial statements that are not reflected
therein or in the notes thereto. There has been no adverse change in
the financial condition or operations of any Borrower or any Subsidiary since
the date of such financial statements and to the Borrowers’ knowledge no such
adverse change is pending or threatened. None of the Borrowers nor
any Subsidiary has guaranteed the obligations of, or made any investment in or
advances to, any Person, except as disclosed in such financial
statements.
4.1.10 Full
Disclosure.
The
financial statements referred to in Section 4.1.9
(Financial Condition) of this Agreement, the Financing Documents (including,
without limitation, this Agreement), and the statements, reports or certificates
furnished by any Borrower in connection with the Financing Documents (a) do not
contain any untrue statement of a material fact and (b) when taken in their
entirety, do not omit any material fact necessary to make the statements
contained therein not misleading. There is no fact known to any
Borrower which such Borrower has not disclosed to the Agent and the Lenders in
writing prior to the date of this Agreement with respect to the transactions
contemplated by the Financing Documents which materially and adversely affects
or in the future could, in the reasonable opinion of that Borrower materially
adversely affect the condition, financial or otherwise, results of operations,
business, or assets of any Borrower or of any Subsidiary.
4.1.11 Indebtedness for Borrowed
Money.
Except
for the Obligations and except as set forth in
Schedule
4.1.11 attached
hereto and made a part hereof, the Borrowers have no Indebtedness for Borrowed
Money. The Agent has received photocopies of all promissory notes
evidencing any Indebtedness for Borrowed Money set forth in
Schedule 4.1.11,
together with any and all subordination agreements, other agreements, documents,
or instruments securing, evidencing, guarantying or otherwise
executed and delivered in connection therewith.
4.1.12 Taxes.
Each of
the Borrowers and its Subsidiaries has filed all returns, reports and forms for
Taxes which, to the knowledge of the Borrowers, are required to be filed, and
has paid all Taxes as shown on such returns or on any assessment received by it,
to the extent that such Taxes have become due, unless and to the extent only
that such Taxes, assessments and governmental charges are currently contested in
good faith and by appropriate proceedings by a Borrower, such Taxes are not the
subject of any Liens other than Permitted Liens, and adequate reserves therefor
have been established as required under GAAP. All tax liabilities of
the Borrowers were as of the date of audited financial statements referred to in
Section 4.1.9 (Financial Condition), and are now,
adequately provided for on the books of the Borrowers and its Subsidiaries, as
appropriate. No tax liability has been asserted by the Internal
Revenue Service or any state or local authority against any Borrower for Taxes
in excess of those already paid.
4.1.13 ERISA.
With
respect to any Plan that is maintained or contributed to by any Borrower and/or
by any Commonly Controlled Entity or as to which any of the Borrowers retains
material liability: (a) no “accumulated funding deficiency” as defined in Code
§412 or ERISA §302 has occurred, whether or not that accumulated funding
deficiency has been waived; (b) no Reportable Event has occurred other than
events for which reporting has been waived or that are unlikely to result in
material liability for any of the Borrowers; (c) no termination of any plan
subject to Title IV of ERISA has occurred; (d) neither any Borrower nor any
Commonly Controlled Entity has incurred a “complete withdrawal” within the
meaning of ERISA §4203 from any Multi-employer Plan that is likely to result in
material liability for one or more of the Borrowers; (e) neither any Borrower
nor any Commonly Controlled Entity has incurred a “partial withdrawal” within
the meaning of ERISA §4205 with respect to any Multi-employer Plan that is
likely to result in material liability for one or more of the Borrowers; (f) no
Multi-employer Plan to which any Borrower or any Commonly Controlled Entity has
an obligation to contribute is to the knowledge of the Borrowers, in
“reorganization” within the meaning of ERISA §4241 nor has notice been received
by any Borrower or any Commonly Controlled Entity that such a Multi-employer
Plan will be placed in “reorganization.”
4.1.14 Title to
Properties.
The
Borrowers have good and marketable title to all of their respective properties,
including, without limitation, the Collateral and the properties and assets
reflected in the balance sheets described in Section 4.1.9 (Financial Condition). The Borrowers
have legal, enforceable and uncontested rights to use freely such property and
assets. All of such properties, including, without limitation, the
Collateral which were purchased, were purchased for fair consideration and
reasonably equivalent value in the ordinary course of business of both the
seller and the Borrowers and not, by way of example only, as part of a bulk
sale.
4.1.15 Patents, Trademarks,
Etc.
Each of
the Borrowers and its Subsidiaries owns, possesses, or has the right to use all
necessary Patents, licenses, Trademarks, Copyrights, permits and franchises to
own its properties and to conduct its business as now conducted, without known
conflict with the rights of any other Person. Any and all obligations
to pay royalties or other charges with respect to such properties and assets are
properly reflected on the financial statements described in Section 4.1.9 (Financial Condition).
4.1.16 Employee
Relations.
Except as
disclosed on
Schedule
4.1.16 attached
hereto and made a part hereof, (a) no Borrower nor any Subsidiary thereof nor
any of the Borrower’s or Subsidiary’s employees is subject to any collective
bargaining agreement, (b) no petition for certification or union election is
pending with respect to the employees of any Borrower or any Subsidiary and no
union or collective bargaining unit has sought such certification or recognition
with respect to the employees of a Borrower, (c) there are no strikes,
slowdowns, work stoppages or controversies pending or, to the best knowledge of
the Borrowers after due inquiry, threatened between any Borrower and its
employees, and (d) no Borrower nor any Subsidiaries is subject to an employment
contract, commission contract or bonus agreement. Hours worked and
payments made to the employees of any one or more of the Borrowers have not been
in violation of the Fair Labor Standards Act or any other applicable law dealing
with such matters. All payments due from any one or more of the
Borrowers or for which any claim may be made against a Borrower, on account of
wages and employee and retiree health and welfare insurance and other benefits
have been paid or accrued as a liability on its books. The
consummation of the transactions contemplated by the Financing Agreement or any
of the other Financing Documents, or by the AK Purchase Agreement or any of the
other AK Purchase Agreement Documents, will not give rise to a right of
termination or right of renegotiation on the part of any union under any
collective bargaining agreement to which any Borrower is a party or by which it
is bound.
4.1.17 Presence of Hazardous
Materials or Hazardous Materials Contamination.
To the
best of each Borrower’s knowledge, (a) no Hazardous Materials are located on any
real property owned, controlled or operated by of any Borrower or for which any
Borrower is, or is claimed to be, responsible, except for reasonable quantities
of necessary supplies for use by a Borrower in the ordinary course of its
current line of business and stored, used and disposed in accordance with
applicable Laws; and (b) no property owned, controlled or operated by any
Borrower or for which any Borrower has, or is claimed to have, responsibility
has ever been used as a manufacturing, storage, or dump site for Hazardous
Materials nor is affected by Hazardous Materials Contamination at any other
property.
4.1.18 Perfection and Priority of
Collateral.
The Agent
and the Lenders have, or upon execution and recording of this Agreement and the
Security Documents will have, and will continue to have as security for the
Obligations, a valid and perfected Lien on and security interest in all
Collateral, free of all other Liens, claims and rights of third parties
whatsoever except Permitted Liens, including, without limitation, those
described on
Schedule
4.1.18 attached hereto
and made a part hereof.
4.1.19 Places of Business and
Location of Collateral.
The
information contained in the Collateral Disclosure List is complete and
correct. The Collateral Disclosure List completely and accurately
identifies the address of (a) the chief executive office of each Borrower, (b)
any and each other place of business of each Borrower, (c) the location of all
books and records pertaining to the Collateral, and (d) each location, other
than the foregoing, where any of the Collateral is located. The
proper and only places to file financing statements with respect to the
Collateral within the meaning of the Uniform Commercial Code are the filing
offices for those jurisdictions in which any one or more of the Borrowers
maintain a place of business as identified on the Collateral Disclosure
List.
4.1.20 Business Names and
Addresses.
In the
five (5) years preceding the date hereof, no Borrower has changed its name,
identity or corporate structure, has conducted business under any name other
than its current name, and has conducted its business in any jurisdiction other
than those disclosed on the Collateral Disclosure List.
4.1.21 Equipment.
All
Equipment is personalty and is not and will not be affixed to real estate in
such manner as to become a fixture or part of such real estate. No
Equipment is held by any Borrower on a sale on approval basis.
4.1.22 Inventory.
The
Inventory of the Borrowers is (a) of good and merchantable quality, free from
defects, (b) not stored with a bailee, warehouseman, carrier, or similar party,
(c) not on consignment, sale on approval, or sale or return, and (d) located at
the places of business set forth on the Collateral Disclosure
List. No goods offered for sale by any Borrower are consigned to or
held on sale or return terms by that Borrower.
4.1.23 Accounts.
With
respect to all Accounts and to the best of each of Borrower’s knowledge (a) they
are genuine, and in all respects what they purport to be, and are not evidenced
by a judgment, an Instrument, or Chattel Paper (unless such judgment has been
assigned and such Instrument or Chattel Paper has been endorsed and delivered to
the Agent for the benefit of itself and the Lenders); (b) they represent bona
fide transactions completed in accordance with the terms and provisions
contained in the invoices, purchase orders and other contracts relating thereto,
and the underlying transaction therefor is in accordance with all applicable
Laws; (c) the amounts shown on the respective Borrower’s books and records, with
respect thereto are actually and absolutely owing to that Borrower and are not
contingent or subject to reduction for any reason other than regular discounts,
credits or adjustments allowed by that Borrower in the ordinary course of its
business; (d) no payments have been or shall be made thereon except payments
turned over to the Agent by the Borrowers to reduce the Obligations; (e) all
Account Debtors thereon have the capacity to contract; and (f) the goods sold,
leased or transferred or the services furnished giving rise thereto are not
subject to any Liens except the security interest granted to the Agent and the
Lenders by this Agreement and Permitted Liens.
4.1.24 Compliance with Eligibility
Standards.
Each
Account included in the calculation of the Borrowing Base does and will at all
times meet and comply with all of the standards for Eligible
Receivables. With respect to those Accounts which the Agent has
deemed Eligible Receivables (a) there are no facts, events or occurrences which
in any way impair the validity, collectibility or enforceability thereof or tend
to reduce the amount payable thereunder; and (b) there are no proceedings or
actions known to any Borrower which are threatened or pending against any
Account Debtor which might result in any material adverse change in the
Borrowing Base.
4.1.25 Solvency
Each of
Borrowers is Solvent prior to and after giving effect to the AK Purchase
Transaction and the making of the Loans.
4.1.26 Claims and
Investigations.
There
exist no pending or threatened claims, investigations (whether formal or
informal), litigation, disputes, protests or other controversies involving the
Borrowers or any Affiliate pertaining to or arising out of any contract with any
Governmental Authority which, if adversely determined, would have a material
adverse effect on the business, assets, operations or condition, financial or
otherwise, of the Borrowers or any Affiliate. Neither the Borrowers
nor any Affiliate has filed nor has any basis for filing any claims or demands
for payment against the United States or any other party arising out of or in
connection with any such contract, other than progress ▇▇▇▇▇▇▇▇, public
vouchers, and invoices submitted in the ordinary course of
business.
4.1.27 Government Contract
Obligations.
With
respect to all Government Contracts no Borrower or any Affiliate has defaulted
under any Government Contract which default would be a basis of terminating such
Government Contract.
4.1.28 Margin
Regulations.
None of
the proceeds from the Loans have been or will be used, directly or indirectly,
for the purpose of “buying” or “carrying” any “Margin Stock” within the
respective meanings of each of the quoted terms under Regulation U of the
Federal Reserve Board as now and from time to time hereafter in effect, for the
purpose of reducing or retiring any indebtedness which was originally incurred
to buy or carry any “Margin Stock” or for any other purpose which might cause
any of the Loans to be considered a “purpose credit” within the meaning of
Regulation T, U or X of the Federal Reserve Board as now and from time to time
hereafter in effect.
4.1.29 Purchase Agreement
Transaction.
Agent has
received true and correct photocopies of the AK Purchase Agreement and each of
the other AK Purchase Agreement Documents, executed, delivered and/or furnished
on or before the Closing Date in connection with the AK Purchase Agreement
Transaction. Neither the AK Purchase Agreement nor any of the other
AK Purchase Agreement Documents have been modified, changed, supplemented,
canceled, amended or otherwise altered or affected, except as otherwise
disclosed to Agent in writing on or before the Closing Date. The AK
Purchase Agreement Transaction has been effected, closed and consummated
pursuant to, and in accordance with, the terms and conditions of the AK Purchase
Agreement and with all applicable Laws.
4.1.30 Seller’s Creditor
List.
To the
best of Borrowers’ knowledge and belief, after due investigation, the
information set forth in the list of the Seller’s creditors provided to
Borrowers in accordance with the AK Purchase Agreement (the “Seller’s Creditor List”) is
true, accurate and correct.
4.1.31 Pro-forma Financial
Statements.
Borrowers
have furnished to Agent a Pro-forma consolidated balance sheet of Borrowers and
their Subsidiaries as of immediately after consummation of AK Purchase Agreement
Transaction and the transactions incident thereto (the “Pro-forma Balance Sheet”)
together with Pro-forma financial projections for the year ending on December
31, 2009 (the “Pro-forma
Financial Projections”). A copy of the Pro-forma Balance Sheet
and the Pro-forma Financial Projections are attached hereto as Exhibits G-1 and
G-2,
respectively. The Pro-forma Balance Sheet is correct and complete,
has been prepared in accordance with GAAP, and fairly presents the consolidated
financial condition of Borrowers and their Subsidiaries as of immediately after
consummation of the AK Purchase Agreement Transaction and the transactions
incident thereto. The Pro-forma Financial Projections represent
Borrowers’ best estimate of the future operations of Borrowers and are based on
reasonable and conservative assumptions.
4.1.32 Survival; Updates of
Representations and Warranties.
All
representations and warranties contained in or made under or in connection with
this Agreement and the other Financing Documents shall survive the Closing Date,
the making of any advance under the Loans and extension of credit made
hereunder, and the incurring of any other Obligations and shall be deemed to
have been made at the time of each request for, and again at the time of the
making of, each advance under the Loans or the issuance of each Letter of Credit
and Citizens Letter of Credit, except that the representations and warranties
which relate to the financial statements which are referred to in Section 4.1.9 (Financial Condition), shall also be deemed to
cover financial statements furnished from time to time to the Agent and the
Lenders pursuant to Section 6.1.1 (Financial
Statements).
ARTICLE
V
CONDITIONS
PRECEDENT
Section
5.1 Conditions to the Initial
Advance and Initial Letter of Credit.
The
making of the initial advance under the Loans and the issuance of the initial
Letter of Credit is subject to the fulfillment on or before the Closing Date of
the following conditions precedent in a manner satisfactory in form and
substance to the Agent and its counsel:
5.1.1 Organizational Documents -
Borrowers
The Agent
shall have received for each Borrower:
(a) a
certificate of good standing certified by the Secretary of State, or other
appropriate Governmental Authority, of the state of incorporation of such
Borrower;
(b) a
certified copy from the appropriate Governmental Authority under which such
Borrower is organized, of such Borrower’s recorded limited partnership
certificate and all recorded amendments thereto;
(c) a
certificate of qualification to do business for such Borrower certified by the
Secretary of State or other Governmental Authority of each state in which such
Borrower conducts business;
(d) a
certificate dated as of the Closing Date by the Secretary or an Assistant
Secretary of such Borrower covering:
(i) true and
complete copies of that Borrower’s corporate charter, bylaws, and all amendments
thereto;
(ii) true and
complete copies of the resolutions of its Board of Directors authorizing (A) the
execution, delivery and performance of the Financing Documents and the AK
Purchase Agreement Documents, (B) the borrowings hereunder, (C) the granting of
the Liens contemplated by this Agreement and the Financing Documents to which
that Borrower is a party and (D) the AK Purchase Agreement Transaction if and to
the extent a Borrower is a party;
(iii) the
incumbency, authority and signatures of the officers of such Borrower authorized
to sign this Agreement and the other Financing Documents to which such Borrower
is a party; and
(iv) the
identity of such Borrower’s current directors, common stock holders and other
equity holders, as well as their respective percentage ownership
interests.
5.1.2 Consents, Licenses,
Approvals, Etc.
The Agent
shall have received copies of all consents, licenses and approvals, required in
connection with the execution, delivery, performance, validity and
enforceability of the Financing Documents and the AK Purchase Agreement
Documents, and such consents, licenses and approvals shall be in full force and
effect.
5.1.3 Notes.
The Agent
shall have received for delivery to each of the Lenders the Revolving Credit
Notes and the Term Notes, each conforming to the requirements hereof and
executed by a Responsible Officer of each Borrower and attested by a duly
authorized representative of each Borrower.
5.1.4 Financing Documents and
Collateral.
Each
Borrower shall have executed and delivered the Financing Documents to be
executed by it, and shall have delivered original Chattel Paper, Instruments,
Investment Property, and related Collateral and all opinions, and other
documents contemplated by ARTICLE III (The
Collateral).
5.1.5 Other Documents,
Etc.
The Agent
shall have received such other certificates, opinions, documents and instruments
confirmatory of or otherwise relating to the transactions contemplated hereby as
may have been reasonably requested by the Agent.
5.1.6 Payment of
Fees.
The Agent
and the Lenders shall have received payment of any Fees due on or before the
Closing Date.
5.1.7 Collateral Disclosure
List.
Each
Borrower shall have delivered the Collateral Disclosure List required under the
provisions of Section 3.3 (Collateral Disclosure
List) duly executed by a Responsible Officer of each Borrower.
5.1.8 Recordings and
Filings.
Each
Borrower shall have: (a) executed and delivered all Financing Documents required
to be filed, registered or recorded in order to create, in favor of the Agent
and the Lenders, a perfected Lien in the Collateral (subject only to the
Permitted Liens) in form and in sufficient number for filing, registration, and
recording in each office in each jurisdiction in which such filings,
registrations and recordations are required, and (b) delivered such evidence as
the Agent may deem satisfactory that all necessary filing fees and all recording
and other similar fees, and all Taxes and other expenses related to such
filings, registrations and recordings will be or have been paid in
full.
5.1.9 Insurance
Certificate.
The Agent
shall have received an insurance certificate in accordance with the provisions
of Section 6.1.8 (Insurance) and Section 6.1.20 (Insurance With Respect to Equipment and
Inventory), provided, that Agent shall have received such insurance certificates
from Borrowers with respect to insurance coverage for AK not later than two (2)
Business Days after the Closing Date.
5.1.10 Landlord’s
Waivers.
The Agent
shall have received a landlord’s waiver from each landlord of each and every
business premise requested by the Agent, leased by each Borrower and on which
any of the Collateral is or may hereafter be located, which landlords’ waivers
must be reasonably acceptable to the Agent and its counsel in their sole and
absolute discretion.
5.1.11 Purchase Agreement
Transaction.
The AK
Purchase Agreement Transaction shall have been completed and closed prior to or
simultaneously herewith upon terms and conditions satisfactory to Agent, in
accordance with the AK Purchase Agreement and applicable Laws.
The Agent
shall have received photocopies of all AK Purchase Agreement Documents executed,
delivered and/or furnished in connection with the AK Purchase Agreement
Transaction, together with a certificate signed by a Responsible Officer of each
of Borrowers certifying that the AK Purchase Agreement and the other AK Purchase
Agreement Documents furnished to Agent are true, correct, in full force and
effect and the provisions thereof have not been in any way modified, amended or
waived, the AK Purchase Agreement Transaction has been closed and completed in
accordance with the AK Purchase Agreement and the other AK Purchase Agreement
Documents furnished to Agent and in accordance with all applicable
Laws.
5.1.12 Pledged Membership
Interests; Transfer Powers.
The Agent
shall have received, to the extent applicable all originals of the certificates
representing the membership interests, if any, of AK pledged pursuant to the
Assignments of Membership Interests, together with an undated power of transfer,
if certificated, for each such certificate executed in blank by a duly
authorized officer of the pledgor thereof.
5.1.13 Pro-forma Balance Sheet and
Projections.
Agent
shall have received and approved Borrowers’ Pro-forma Balance Sheet and
Pro-forma Financial Projections, which Pro-forma Balance Sheet and Pro-forma
Financial Projections must be in form and content acceptable to Agent in its
sole and absolute discretion.
5.1.14 AK Payoff
Letter.
Agent
shall have received and approved a payoff letter from the Bank of Hawaii with
respect to the secured loan to AK, which shall provide that the liens in favor
of the Bank of Hawaii shall be terminated upon receipt in full of the payoff
amount set forth in such payoff letter and authorize Borrowers or its counsel to
file any and all appropriate UCC terminations, which such authorization shall be
given to Agent or its counsel by the Borrowers or its counsel to file such UCC
terminations.
5.1.15 AK Affiliated
Loan.
Agent
shall have received written confirmation and evidence satisfactory to Agent that
the affiliated loan made by AK to Akimeka Technologies has been repaid in full
and that AK has no further obligations to lend to Akimeka
Technologies.
5.1.16 Compliance
Certificate.
Agent
shall have received an executed Compliance Certificate from the
Borrowers.
Section
5.2 Conditions to all Extensions
of Credit.
The
making of all advances under the Loans and the issuance of all Letters of Credit
is subject to the fulfillment of the following conditions precedent in a manner
satisfactory in form and substance to the Agent and its counsel:
5.2.1 Compliance.
Each
Borrower shall have complied and shall then be in compliance with all terms,
covenants, conditions and provisions of this Agreement and the other Financing
Documents that are binding upon it.
5.2.2 Borrowing
Base.
The
Borrowers shall have furnished all Borrowing Base Reports required by Section 2.1.4 (Borrowing Base Report), there shall exist no
Borrowing Base Deficiency, and as evidence thereof, the Borrowers shall have
furnished to the Agent such reports, schedules, certificates, records and other
papers as may be requested by the Agent, and the Borrowers shall be in
compliance with the provisions of this Agreement both immediately before and
immediately after the making of the advance requested.
5.2.3 Default.
There
shall exist no Event of Default or Default hereunder.
5.2.4 Representations and
Warranties.
The
representations and warranties of each of the Borrowers contained among the
provisions of this Agreement shall be true and with the same effect as though
such representations and warranties had been made at the time of the making of,
and of the request for, each advance under the Loans or the issuance of each
Letter of Credit or Citizens Letter of Credit, except that the representations
and warranties which relate to financial statements which are referred to in
Section 4.1.9 (Financial Condition), shall also be
deemed to cover financial statements furnished from time to time to the Agent
pursuant to Section 6.1.1 (Financial
Statements).
5.2.5 Adverse
Change.
No
adverse change shall have occurred in the condition (financial or otherwise),
operations or business of any Borrower that would, in the good faith judgment of
the Agent, materially impair the ability of that Borrower to pay or perform any
of the Obligations.
5.2.6 Legal
Matters.
All legal
documents incident to each advance under the Loans and each of the Letters of
Credit shall be reasonably satisfactory to counsel for the Agent.
5.2.7 Defaulting
Lenders.
To the
extent any Lender is a Defaulting Lender or a Potential Defaulting Lender, at
the time of such Loan or issuance of such Letter of Credit, the participation
interest that would result therefrom is fully covered or eliminated by cash
collateralizing the reimbursement obligations of the Borrowers with respect to
such Letter of Credit by an amount at least equal to the Letter of Credit
Exposure of such Defaulting Lender or Potential Defaulting Lender, or that
Borrowers have made other arrangements reasonably satisfactory to the Agent in
its reasonable discretion to protect them against the risk of non-payment by
such Defaulting Lender or Potential Defaulting Lender; provided that no such
cash collateralization will constitute a waiver or release of any claim the
Borrowers, the Agent or any other Lender may have against such Defaulting
Lender, or cause such Defaulting Lender or Potential Defaulting Lender to be a
Non-Defaulting Lender.
ARTICLE
VI
COVENANTS OF THE
BORROWERS
Section
6.1 Affirmative
Covenants.
So long
as any of the Obligations (or any the Commitments therefor) shall be outstanding
hereunder, the Borrowers agree jointly and severally with the Agent and the
Lenders as follows:
6.1.1 Financial
Statements.
The
Borrowers shall furnish to the Agent and the Lenders:
(a) Annual Statements and
Certificates. The Borrowers shall furnish to the Agent and the
Lenders as soon as available, but in no event more than one hundred twenty (120)
days after the close of the Borrowers’ fiscal years, (i) a copy of the annual
financial statement in reasonable detail satisfactory to the Agent relating to
the Borrowers and their Subsidiaries, prepared in accordance with GAAP and
examined and certified by independent certified public accountants satisfactory
to the Agent, which financial statement shall include a consolidated and
consolidating balance sheet of the Borrowers and their Subsidiaries as of the
end of such fiscal year and consolidated and consolidating statements of income,
cash flows and changes in shareholders equity of the Borrowers and their
Subsidiaries for such fiscal year, and (ii) a Compliance Certificate, in
substantially the form attached to this Agreement as Exhibit D, containing
a detailed computation of each financial covenant in this Agreement which is
applicable for the period reported, a certification that no change has occurred
to the information contained in the Collateral Disclosure List (except as set
forth in any schedule attached to the certification), each prepared by a
Responsible Officer of the Borrowers in a format acceptable to the Agent and
(iii) if issued, a management letter (including those marked draft) in the form
prepared by the Borrowers’ independent certified public accountants and within
thirty (30) days of such issuance.
(b) Quarterly Statements and
Certificates. The Borrowers shall furnish to the Agent and the
Lenders as soon as available, but in no event more than forty-five (45) days
after the close of the Borrowers’ first (1st)
three (3) fiscal quarters, consolidated and consolidating balance sheets of the
Borrowers and their respective Subsidiaries as of the close of such period,
consolidated and consolidating income, cash flows and changes in shareholders
equity statements for such period, and a Compliance Certificate, in
substantially the form attached to this Agreement as Exhibit D, containing
a detailed computation of each financial covenant in this Agreement which is
applicable for the period reported, a certification that no change has occurred
to the information contained in the Collateral Disclosure List (except as set
forth on any schedule attached to the certification), each prepared by a
Responsible Officer of or on behalf of each Borrower in a format acceptable to
the Agent, all as prepared and certified by a Responsible Officer of the
Borrowers and accompanied by a certificate of that officer stating whether any
event has occurred which constitutes a Default or an Event of Default hereunder,
and, if so, stating the facts with respect thereto.
(c) Monthly
Reports. The Borrowers shall furnish to the Agent and the
Lenders within twenty (30) days after the end of each fiscal month, a Borrowing
Base Report, and a report containing the following information:
(i) a
detailed aging schedule of all Receivables by Account Debtor, in such detail,
and accompanied by such supporting information, as the Agent may from time to
time reasonably request;
(ii) a
detailed aging of all accounts payable by supplier, in such detail, and
accompanied by such supporting information, as the Agent may from time to time
reasonably request; and
(iii) such
other information as the Agent may reasonably request.
(d) Contract Backlog
Report. With the quarterly financial statements to be
delivered hereunder or at such other times as the Agent may request, reports
relating to the Receivables included in any Borrowing Base Report submitted
during such quarter setting forth a description of contracts giving rise to such
Receivables, the percentage of completion of the work to be performed with
respect to such contracts, the amounts billed under such contracts and the
amounts remaining to be billed, in form and detail satisfactory to the
Agent.
(e) Government Contract
Audits. Promptly after any Borrower’s receipt thereof, notice
of any final decision of a contracting officer disallowing costs aggregating
more than One Hundred Thousand Dollars ($100,000), which disallowed costs
arising out of any audit of such Borrower’s contract with a Governmental
Authority.
(f) Annual
Projections. The Borrowers shall furnish to the Lender as soon
as available, but in no event less than thirty (30) days after the end of each
fiscal year, management prepared annual financial projections on a consolidated
basis for the Borrowers for the immediately succeeding fiscal year in each case
describing such projections in detail satisfactory to the Agent in its sole and
absolute discretion.
(g) Additional Reports and
Information. The Borrowers shall furnish to the Agent and the
Lenders promptly, such additional information, reports or statements as the
Agent and/or any of the Lenders may from time to time reasonably
request.
6.1.2 Reports to SEC and to
Stockholders.
The
Borrowers will furnish to the Agent and the Lenders, promptly upon the filing or
making thereof, but in no event more than ten (10) days after such filing or
making, at least one (l) copy of all financial statements, reports, notices and
proxy statements sent by any Borrower to its stockholders, and of all regular
and other reports filed by any Borrower with any securities exchange or with the
Securities and Exchange Commission.
6.1.3 Recordkeeping, Rights of
Inspection, Field Examination, Etc.
(a) Each of
the Borrowers shall, and shall cause each of its Subsidiaries to, maintain (i) a
standard system of accounting in accordance with GAAP, and (ii) proper books of
record and account in which full, true and correct entries are made of all
dealings and transactions in relation to its properties, business and
activities.
(b) Each of
the Borrowers shall, and shall cause each of its Subsidiaries to, permit
authorized representatives of the Agent to visit and inspect the properties of
the Borrowers and its Subsidiaries, to review, audit, check and inspect the
Collateral at any time with or without notice, to review, audit, check and
inspect the Borrowers’ other books of record at any time with or without notice
and to make abstracts and photocopies thereof, and to discuss the affairs,
finances and accounts of the Borrowers and their Subsidiaries, with the
officers, directors, employees and other representatives of the Borrowers and
their Subsidiaries and their respective accountants, all at such times during
normal business hours and other reasonable times and as often as the Agent may
reasonably request.
(c) Each of
the Borrowers hereby irrevocably authorizes and directs all accountants and
auditors employed by any of the Borrowers and/or any of their Subsidiaries at
any time prior to the repayment in full of the Obligations to exhibit and
deliver to the Agent and the Lenders copies of any and all of the financial
statements, trial balances, management letters, or other accounting records of
any nature of any or all of the Borrowers and/or any or all of their respective
Subsidiaries in the accountant’s or auditor’s possession, and to disclose to the
Agent and any of the Lenders any information they may have concerning the
financial status and business operations of any or all of the Borrowers and/or
any or all of their respective Subsidiaries. Further, each of the
Borrowers hereby authorizes all Governmental Authorities to furnish to the Agent
and the Lenders copies of reports or examinations relating to any and all of the
Borrowers and/or any or all Subsidiaries, whether made by the Borrowers or
otherwise.
(d) Any and
all costs and expenses incurred by, or on behalf of, the Agent in connection
with the conduct of any of the foregoing, including, without limitation, travel,
lodging, meals, and other shall be part of the Enforcement Costs and shall be
payable to the Agent upon demand. The Borrowers acknowledge and agree
that such expenses may include, but shall not be limited to, any and all
out-of-pocket costs and expenses of the Agent’s employees and agents in, and
when, traveling to any of the Borrowers’ facilities.
6.1.4 Corporate
Existence.
Each of
the Borrowers shall maintain, and cause each of its Subsidiaries to maintain,
its corporate existence in good standing in the jurisdiction in which it is
incorporated and in each other jurisdiction where it is required to register or
qualify to do business if the failure to do so in such other jurisdiction might
have a material adverse effect on the ability of the Borrower to perform the
Obligations, on the conduct of the Borrower’s operations, on the Borrower’s
financial condition, or on the value of, or the ability of the Agent and the
Lenders to realize upon, the Collateral.
6.1.5 Compliance with
Laws.
Each of
the Borrowers shall comply, and cause each of its Subsidiaries to comply, with
all applicable Laws and observe the valid requirements of Governmental
Authorities, the noncompliance with or the non-observance of which might have a
material adverse effect on the ability of the Borrowers to perform the
Obligations, on the conduct of the Borrowers’ operations, on the Borrowers’
consolidated financial condition, or on the value of, or the ability of the
Agent and the Lenders to realize upon, the Collateral.
6.1.6 Preservation of
Properties.
Each of
the Borrowers will, and will cause each of its Subsidiaries to, at all times (a)
maintain, preserve, protect and keep its properties, whether owned or leased, in
good operating condition, working order and repair (ordinary wear and tear
excepted), and from time to time will make all proper repairs, maintenance,
replacements, additions and improvements thereto needed to maintain such
properties in good operating condition, working order and repair, and (b) do or
cause to be done all things necessary to preserve and to keep in full force and
effect its material franchises, leases of real and personal property, trade
names, Patents, Trademarks, Copyrights and permits which are necessary for the
orderly continuance of its business.
6.1.7 Line of
Business.
Each of
the Borrowers will continue to engage substantially in the business of providing
diversified engineering, technical and management services.
6.1.8 Insurance.
Each of
the Borrowers will, and will cause each of its Subsidiaries to, at all times
maintain with “A” or better rated insurance companies such insurance as is
required by applicable Laws and such other insurance, in such amounts, of such
types and against such risks, hazards, liabilities, casualties and contingencies
as are usually insured against in the same geographic areas by business entities
engaged in the same or similar business, including, without limitation,
commercial and general liability coverage for Borrowers’ business, fiduciary,
management, director and officer and products liability
coverage. Without limiting the generality of the foregoing, each of
the Borrowers will, and will cause each of its Subsidiaries to, keep adequately
insured all of its property against loss or damage resulting from fire or other
risks insured against by extended coverage and maintain public liability
insurance against claims for personal injury, death or property damage occurring
upon, in or about any properties occupied or controlled by it, or arising in any
manner out of the businesses carried on by it, all in such amounts not less than
the Agent shall reasonably determine from time to time. Each
insurance policy must include a lender’s loss payee endorsement and an
additional insured endorsement in favor of Agent in a form acceptable to Lender
and shall provide for at least thirty (30) days prior written notice to Agent of
any cancellation thereof. Each of the Borrowers shall deliver to the
Agent on the Closing Date (and thereafter on each date there is a material
change in the insurance coverage) a certificate from the Borrowers’ insurance
carrier of the Borrowers containing a detailed list of the insurance then in
effect and stating the names of the insurance companies, the types, the amounts
and rates of the insurance, dates of the expiration thereof and the properties
and risks covered thereby. Each insurance certificate shall name
Agent as lender’s loss payee or an additional insured, as appropriate and
provide for at least thirty (30) days prior written notice to Agent of any
cancellation thereof. Within thirty (30) days after notice in writing
from the Agent, the Borrowers will obtain such additional insurance as the Agent
may reasonably request.
6.1.9 Taxes.
Except to
the extent that the validity or amount thereof is being contested in good faith
and by appropriate proceedings, each of the Borrowers will, and will cause each
of its Subsidiaries, to pay and discharge all Taxes prior to the date when any
interest or penalty would accrue for the nonpayment thereof. Each of
the Borrowers shall furnish to the Agent at such times as the Agent may require
proof satisfactory to the Agent of the making of payments or deposits required
by applicable Laws including, without limitation, payments or deposits with
respect to amounts withheld by any of the Borrowers from wages and salaries of
employees and amounts contributed by any of the Borrowers on account of federal
and other income or wage taxes and amounts due under the Federal Insurance
Contributions Act, as amended.
6.1.10 ERISA.
Each
Borrower will, and will cause each of its Commonly Controlled Entities to,
comply with the funding requirements of ERISA with respect to Plans for its
respective employees. No Borrower will permit with respect to any
Plan (a) any prohibited transaction or transactions under ERISA or the Internal
Revenue Code, which results, or may result, in any material liability of the
Borrower, or (b) any Reportable Event if, upon termination of the Plan or Plans
with respect to which one or more such Reportable Events shall have occurred,
there is or would be any material liability of the Borrower to the
PBGC. Upon the Agent’s request, each Borrower will deliver to the
Agent a copy of the most recent actuarial report, financial statements and
annual report completed with respect to any Plan.
6.1.11 Notification of Events of
Default and Adverse Developments.
Each of
the Borrowers shall promptly notify the Agent upon obtaining knowledge of the
occurrence of:
(a) any Event
of Default;
(b) any
Default;
(c) any
litigation instituted or their knowledge threatened against any of the Borrowers
or any of their Subsidiaries and of the entry of any judgment or Lien (other
than any Permitted Liens) against any of the assets or properties of any of the
Borrowers or any Subsidiary where the claims against any Borrower or any
Subsidiary exceed Two Hundred Fifty Thousand Dollars ($250,000) and are not
covered by insurance;
(d) any
event, development or circumstance whereby the financial statements furnished
hereunder fail in any material respect to present fairly, in accordance with
GAAP, the financial condition and operational results of any of the Borrowers or
any of their respective Subsidiaries;
(e) any
default under any contract with any Governmental Authority or any event which if
not corrected could give rise to a default under any such contract or a
termination for convenience;
(f) any
judicial, administrative or arbitral proceeding pending against any of the
Borrowers or any of their respective Subsidiaries and any judicial or
administrative proceeding known by any of the Borrowers to be threatened against
any Borrower or any Subsidiary which, if adversely decided, could materially
adversely affect the financial condition or operations (present or prospective)
of any Borrower or any Subsidiary;
(g) the
receipt by any of the Borrowers or any Subsidiary of any notice, claim or demand
from any Governmental Authority which alleges that any of the Borrowers or any
Subsidiary is in violation of any of the terms of, or has failed to comply with
any applicable material Laws regulating its operation and business, including,
but not limited to, the Occupational Safety and Health Act and the Environmental
Protection Act; and
(h) any other
development in the business or affairs of any of the Borrowers or any of their
respective Subsidiaries which may be materially adverse;
in each
case describing in detail satisfactory to the Agent the nature thereof and the
action the Borrowers propose to take with respect thereto.
6.1.12 Hazardous Materials;
Contamination.
Each of
the Borrowers agrees to:
(a) give
notice to the Agent immediately upon acquiring knowledge of the presence of any
Hazardous Materials or any Hazardous Materials Contamination on any property
owned, operated or controlled by any Borrower or for which any Borrower is, or
is claimed to be, responsible (provided that such notice shall not be required
for Hazardous Materials placed or stored on such property in accordance with
applicable Laws in the ordinary course (including, without limitation, quantity)
of a Borrower’s line of business expressly described in this Agreement), with a
full description thereof;
(b) promptly
comply with any Laws requiring the removal, treatment or disposal of Hazardous
Materials or Hazardous Materials Contamination and provide the Agent with
satisfactory evidence of such compliance;
(c) provide
the Agent, within thirty (30) days after a demand by the Agent, with a bond,
letter of credit or similar financial assurance evidencing to the Agent’s
satisfaction that the necessary funds are available to pay the cost of removing,
treating, and disposing of such Hazardous Materials or Hazardous Materials
Contamination and discharging any Lien which may be established as a result
thereof on any property owned, operated or controlled by any Borrower or for
which any Borrower is, or is claimed to be, responsible; and
(d) as part
of the Obligations, defend, indemnify and hold harmless the Agent, each of the
Lenders and each of their respective agents, employees, trustees, successors and
assigns from any and all claims which may now or in the future (whether before
or after the termination of this Agreement) be asserted as a result of the
presence of any Hazardous Materials or any Hazardous Materials Contamination on
any property owned, operated or controlled by any Borrower for which any
Borrower is, or is claimed to be, responsible. Each Borrower
acknowledges and agrees that this indemnification shall survive the termination
of this Agreement and the Commitments and the payment and performance of all of
the other Obligations.
6.1.13 Disclosure of Significant
Transactions.
Each of
the Borrowers shall deliver to the Agent a written notice describing in detail
each transaction by it involving the purchase, sale, lease, or other acquisition
or loss or casualty to or disposition of an interest in Fixed or Capital Assets
(other than Capital Expenditures permitted by Section 6.2.20 of this Agreement)
which exceeds Two Hundred Fifty Thousand Dollars ($250,000.00), said notices to
be delivered to the Agent within thirty (30) days of the occurrence of each such
transaction.
6.1.14 Financial
Covenants.
(a) Fixed Charge Coverage
Ratio. The Borrowers will maintain, on a consolidated basis
and tested as of the last day of each of the Borrowers’ fiscal quarters,
commencing on June 30, 2010, for the four (4) quarter period ending on that
date, a Fixed Charge Coverage Ratio of not less than 1.25 to 1.00.
(b) Leverage
Ratio. The Borrowers will maintain, on a consolidated basis
and tested as of the last day of each of the Borrowers’ fiscal quarters,
commencing on June 30, 2010, for the four (4) quarter period ending on that
date, a Leverage Ratio of not greater than 3.00 to 1.00.
(c) Profitability. The
Borrowers will maintain, on a consolidated basis and tested as of the last day
of each of the Borrowers’ fiscal quarters, commencing on June 30, 2010,
during the three (3) month period ending on that date, net income, minus cash
dividends declared by the Borrowers during such period, in excess of
$1.00.
(d) Capital
Expenditures. None of the Borrowers will, or will permit any
Subsidiary to, directly or indirectly (by way of the acquisition of the
securities of a Person or otherwise), make any Capital Expenditures that would,
in the aggregate for all of the Borrowers and their Subsidiaries (taken as a
whole), exceed two percent (2.0%) of the Borrowers’ combined net revenue as of
such date on a consolidated basis. This covenant shall be tested as
of the last day of each of the Borrowers’ fiscal quarters for the four (4)
quarter period ending on that date, commencing with the fiscal quarter ending on
June 30, 2010.
(e) Asset Coverage
Ratio. Borrowers will maintain, on a consolidated basis and
tested as of the last day of each of Borrowers’ fiscal quarters, commencing on
June 30, 2010, an Asset Coverage Ratio of not less than 1.50 to
1.00.
6.1.15 Collection of
Receivables.
Until
such time that the Agent shall notify the Borrowers of the revocation of such
privilege, the Borrowers and their Subsidiaries shall at their own expense have
the privilege for the account of, and in trust for, the Agent and the Lenders of
collecting their Receivables and receiving in respect thereto all Items of
Payment and shall otherwise completely service all of the Receivables including
(a) the billing, posting and maintaining of complete records applicable thereto,
(b) the taking of such action with respect to the Receivables as the Agent may
request or in the absence of such request, as each of the Borrowers and each of
the Subsidiaries may deem advisable; and (c) the granting, in the ordinary
course of business, to any Account Debtor, any rebate, refund or adjustment to
which the Account Debtor may be lawfully entitled, and may accept, in connection
therewith, the return of goods, the sale or lease of which shall have given rise
to a Receivable and may take such other actions relating to the settling of any
Account Debtor’s claim as may be commercially reasonable. The Agent
may, at its option, at any time or from time to time after and during the
continuance of an Event of Default hereunder, revoke the collection privilege
given in this Agreement to any one or more of the Borrowers and each of the
Subsidiaries by either giving notice of its assignment of, and Lien on the
Collateral to the Account Debtors or giving notice of such revocation to the
Borrowers. The Agent shall not have any duty to, and the Borrowers
hereby release the Agent and the Lenders from all claims of loss or damage
caused by the delay or failure to collect or enforce any of the Receivables or
to preserve any rights against any other party with an interest in the
Collateral. The Agent shall be entitled at any time and from time to time to
confirm and verify Receivables.
6.1.16 Assignments of
Receivables.
Each
Borrower will promptly, upon request, execute and deliver to the Agent written
assignments, in form and content acceptable to the Agent, of specific
Receivables or groups of Receivables; provided, however, the Lien and/or
security interest granted to the Agent, for the ratable benefit of the Lenders
and for the benefit of the Agent with respect to the Agent’s Obligations, under
this Agreement shall not be limited in any way to or by the inclusion or
exclusion of Receivables within such assignments. Receivables so
assigned shall secure payment of the Obligations and are not sold to the Agent
and/or the Lenders whether or not any assignment thereof, which is separate from
this Agreement, is in form absolute. The Borrowers agree that neither
any assignment to the Lender nor any other provision contained in this Agreement
or any of the other Financing Documents shall impose on the Agent or the Lenders
any obligation or liability of any of the Borrowers with respect to that which
is assigned and the Borrowers hereby agree jointly and severally to indemnify
the Agent and the Lenders and hold the Agent and the Lenders harmless from any
and all claims, actions, suits, losses, damages, costs, expenses, fees,
obligations and liabilities which may be incurred by or imposed upon the Agent
and/or any of the Lenders by virtue of the assignment of and Lien on any
Borrower’s rights, title and interest in, to, and under the
Collateral.
6.1.17 Government
Accounts.
The
Borrowers will upon request of the Agent immediately notify the Agent if any of
the Receivables arise out of contracts with the United States or with any other
Governmental Authority, and, if requested by the Agent, execute any Instruments
and take any steps required by the Agent in order that all moneys due and to
become due under such contracts shall be assigned to the Agent, for the ratable
benefit of the Lenders and for the benefit of the Agent with respect to the
Agent’s Obligations, and notice thereof given to the Governmental Authority
under the Federal Assignment of Claims Act or any other applicable
Laws.
6.1.18 Notice of Returned Goods,
etc.
The
Borrowers will promptly notify, and will cause the Subsidiaries to promptly
notify, the Agent of the return, rejection or repossession of any goods of the
Borrowers or any Subsidiaries sold or delivered in respect of any Receivables,
and of any claims made in regard thereto to the extent that the aggregate
purchase price of any such goods in any given calendar month exceeds in the
aggregate One Hundred Fifty Thousand Dollars ($150,000.00) for such
month.
6.1.19 Inventory.
With
respect to the Inventory, the Borrowers and their Subsidiaries will, after an
Event of Default: (a) maintain a perpetual inventory reporting system
at all times, (b) keep correct and accurate records itemizing and describing the
kind, type, quality and quantity of Inventory, the Borrowers’ and Subsidiaries’
cost therefor and the selling price thereof, all of which records shall be
available to the officers, employees or agents of the Agent upon demand for
inspection and copying thereof; (c) not store any Inventory with a bailee,
warehouseman or similar Person without the Agent’s prior written consent, which
consent may be conditioned on, among other things, delivery by the bailee,
warehouseman or similar Person to the Agent of warehouse receipts, in form
acceptable to the Agent, in the name of the Agent evidencing the storage of
Inventory and the interests of the Agent and the Lenders therein; (d) permit the
Agent and its agents or representatives to inspect and examine the Inventory and
to check and test the same as to quality, quantity, value and condition at any
time or times hereafter during the Borrowers’ and Subsidiaries’ usual business
hours or at other reasonable times and (e) at the Agent’s request, designate the
Agent as the consignee on all bills of lading and other negotiable and
non-negotiable documents. The Borrowers shall be permitted to sell
their Inventory in the ordinary course of business until the occurrence of an
Event of Default.
6.1.20 Insurance With Respect to
Equipment and Inventory.
The
Borrowers will (a) maintain and cause each of their Subsidiaries to maintain
hazard insurance with fire and extended coverage on the Equipment and Inventory
in an amount at least equal to the lesser amount of the outstanding principal
amount of the Obligations or the fair market value of the Equipment and
Inventory (but in any event sufficient to avoid any co-insurance obligations)
and with a specific endorsement to each such insurance policy pursuant to which
the insurer provides for lender’s loss payee and additional insured endorsements
in favor of Agent in a form acceptable to Agent, agrees to give the Agent at
least thirty (30) days written notice before any alteration or cancellation of
such insurance policy and that no act or default of any of the Borrowers shall
affect the right of the Agent to recover under such policy in the event of loss
or damage; (b) file, and cause each of their Subsidiaries to file, with the
Agent, upon its request, a detailed list of the insurance then in effect and
stating the names of the insurance companies, the amounts and rates of the
insurance, dates of the expiration thereof and the properties and risks covered
thereby; and (c) within thirty (30) days after notice in writing from the Agent,
obtain, and cause each of their Subsidiaries to obtain, such additional
insurance as the Agent may reasonably request.
6.1.21 Maintenance of the
Collateral.
The
Borrowers will maintain the Collateral in good working order, saving and
excepting ordinary wear and tear, and will not permit anything to be done to the
Collateral that may materially impair the value thereof. The Agent,
or an agent designated by the Agent, shall be permitted to enter the premises of
each of the Borrowers and their Subsidiaries and examine, audit and inspect the
Collateral at any reasonable time and from time to time without
notice. The Agent shall not have any duty to, and the Borrowers
hereby release the Agent and the Lenders from all claims of loss or damage
caused by the delay or failure to collect or enforce any of the Receivables or
to, preserve any rights against any other party with an interest in the
Collateral.
6.1.22 Equipment.
The
Borrowers shall (a) maintain all Equipment as personalty, (b) not affix any
Equipment to any real estate in such manner as to become a fixture or part of
such real estate, and (c) shall hold no Equipment on a sale on approval
basis. The Borrowers hereby declare their intent that,
notwithstanding the means of attachment, no goods of the Borrowers hereafter
attached to any realty shall be deemed a fixture, which declaration shall be
irrevocable, without the Agent’s consent, until all of the Obligations have been
paid in full and all of the Commitments and Letters of Credit have been
terminated or have expired.
6.1.23 Defense of Title and Further
Assurances.
At their
expense, the Borrowers will defend the title to the Collateral (and any part
thereof), and will immediately execute, acknowledge and deliver any financing
statement, renewal, affidavit, deed, assignment, continuation statement,
security agreement, certificate or other document which the Agent may require in
order to perfect, preserve, maintain, continue, protect and/or extend the Lien
or security interest granted to the Agent, for the ratable benefit of the
Lenders and for the benefit of the Agent with respect to the Agent’s
Obligations, under this Agreement, under any of the other Financing Documents
and the first priority of that Lien, subject only to the Permitted
Liens. The Borrowers will from time to time do whatever the Agent may
require by way of obtaining, executing, delivering, and/or filing financing
statements, landlords’ or mortgagees’ waivers, notices of assignment and other
notices and amendments and renewals thereof and the Borrowers will take any and
all steps and observe such formalities as the Agent may require, in order to
create and maintain a valid Lien upon, pledge of, or paramount security interest
in, the Collateral, subject to the Permitted Liens. The Borrowers
shall pay to the Agent on demand all taxes, costs and expenses incurred by the
Agent in connection with the preparation, execution, recording and filing of any
such document or instrument. To the extent that the Proceeds of any
of the Accounts or Receivables of the Borrowers are expected to become subject
to the control of, or in the possession of, a party other than the Borrowers or
the Agent, the Borrowers shall cause all such parties to execute and deliver on
the Closing Date security documents, financing statements or other documents as
requested by the Agent and as may be necessary to evidence and/or perfect the
security interest of the Agent, for the ratable benefit of the Lenders and for
the benefit of the Agent with respect to the Agent’s Obligations, in those
Proceeds. The Borrowers agree that a copy of a fully executed
security agreement and/or financing statement shall be sufficient to satisfy for
all purposes the requirements of a financing statement as set forth in Article 9
of the applicable Uniform Commercial Code. Each Borrower hereby
irrevocably appoints the Agent as the Borrower’s attorney-in-fact, with power of
substitution, in the name of the Agent or in the name of the Borrower or
otherwise, for the use and benefit of the Agent for itself and the Lenders, but
at the cost and expense of the Borrowers and without notice to the Borrowers, to
execute and deliver any and all of the instruments and other documents and take
any action which the Lender may require pursuant the foregoing provisions of
this Section 6.1.23.
6.1.24 Business Names;
Locations.
Each
Borrower will notify and cause each of the Subsidiaries to notify the Agent not
less than thirty (30) days prior to (a) any change in the name under which the
Borrower or the applicable Subsidiary conducts its business, (b) any change of
the location of the chief executive office of the applicable Borrower or
Subsidiary, and (c) the opening of any new place of business or the closing of
any existing place of business, (d) any change in the location of the places
where the Collateral, or any part thereof, or the books and records, or any part
thereof, are kept, and (e) any change in its jurisdiction of its incorporation
or organization.
6.1.25 Use of Premises and
Equipment.
The
Borrowers agree that until the Obligations are fully paid and all of the
Commitments and the Letters of Credit have been terminated or have expired, the
Agent (a) after and during the continuance of an Event of Default, may use any
of the Borrowers’ owned or leased lifts, hoists, trucks and other facilities or
equipment for handling or removing the Collateral; and (b) shall have, and is
hereby granted, a right of ingress and egress to the places where the Collateral
is located, and may proceed over and through any of the Borrowers’ owned or
leased property.
6.1.26 Protection of
Collateral.
The
Borrowers agree that the Agent may at any time following an Event of Default
take such steps as the Agent deems reasonably necessary to protect the interest
of the Agent and the Lenders in, and to preserve the Collateral, including, the
hiring of such security guards or the placing of other security protection
measures as the Agent deems appropriate, may employ and maintain at any of the
Borrowers’ premises a custodian who shall have full authority to do all acts
necessary to protect the interests of the Agent and the Lenders in the
Collateral and may lease warehouse facilities to which the Agent may move all or
any part of the Collateral to the extent commercially reasonable. The
Borrowers agree to cooperate fully with the Agent’s efforts to preserve the
Collateral and will take such actions to preserve the Collateral as the Agent
may reasonably direct. All of the Agent’s expenses of preserving the
Collateral, including any reasonable expenses relating to the compensation and
bonding of a custodian, shall be part of the Enforcement Costs.
6.1.27 SunTrust Deposit
Account.
At all
times that SunTrust remains a Lender under this Agreement, Borrowers hereby
agree to maintain an average collected balance of not less than Six Hundred
Thousand Dollars ($600,000) in a non-interest bearing Demand Deposit Account
held at SunTrust.
6.1.28 Permitted Acquisition
Deliverables.
In
connection with any Permitted Acquisition, VSE shall:
(a) Immediately
after the consummation of any Permitted Acquisition, furnish to the Lender a
post-closing pro-forma consolidated balance sheet of Borrowers and their
Subsidiaries (each a “Post-Closing Balance Sheet”)
together with post-closing financial projections for the fiscal year period
subsequent to the Permitted Acquisition (each a “Post-Closing Financial
Projections”). The Post-Closing Financial Projections
will represent Borrowers best estimate of the future operations of each Borrower
and are based on reasonable and conservative assumptions.
(b) Deliver
to the Agent within ten (10) Business Days prior to the closing date of any
Permitted Acquisition an Officer’s Certificate in the form attached hereto as
Exhibit F-1
duly signed by a Responsible Officer of VSE certifying that all of the
conditions required for a Permitted Acquisition hereunder have been fully
satisfied by the Borrowers and showing the calculations of all financial
covenants on a pro forma basis for such Permitted Acquisition in sufficient
detail satisfactory to the Agent.
(c) In
connection with the delivery of an Additional Borrower Joinder Supplement
pursuant to clause (x) of the definition of Permitted Acquisitions, also deliver
to the Agent an Officer’s Certificate in the form attached hereto as Exhibit F-2 duly
signed by a Responsible Officer of VSE certifying that the transactions
contemplated by a Permitted Acquisition have been fully satisfied and closed by
the Borrowers and Target.
Section
6.2 Negative
Covenants.
So long
as any of the Obligations or the Commitments or Letters of Credit therefor shall
be outstanding hereunder, the Borrowers agree with the Agent and the Lenders
that without the prior written consent of the Agent and the
Lenders:
6.2.1 Capital Structure, Merger,
Acquisition or Sale of Assets.
None of
the Borrowers will alter or amend their capital structure, authorize any
additional class of equity, issue any stock or equity of any class, enter into
any merger or consolidation or amalgamation, windup or dissolve themselves (or
suffer any liquidation or dissolution) or acquire all or substantially all the
assets of any Person (other than in connection with a Permitted Acquisition), or
sell, lease or otherwise dispose of any of its assets (except Inventory disposed
of in the ordinary course of business prior to an Event of
Default). Any consent of the Agent to the disposition of any assets
may be conditioned on a specified use of the proceeds of
disposition.
6.2.2 Subsidiaries.
None of
the Borrowers will create or acquire any Subsidiaries other than the
Subsidiaries identified on the Collateral Disclosure List and as a result of any
Permitted Acquisitions.
6.2.3 Issuance of
Stock.
None of
the Borrowers will issue, or grant any option or right to purchase, any of its
capital stock, except for stock issued under the terms of existing stock option
plans, provided that no Default or Event of Default has occurred or would exist
after giving effect to the issuance, grant or purchases.
6.2.4 Purchase or Redemption of
Securities, Dividend Restrictions.
Declare
or pay any dividends; purchase, redeem, retire, or otherwise acquire for value
any of its capital stock now or hereafter outstanding; make any distribution of
assets to its stockholders whether in cash, assets or obligations of a Borrower;
allocate or otherwise set apart any sum for the payment of any dividend or
distribution on, or for the purchase, redemption, or retirement of, any shares
of its capital stock; make any other distribution by reduction of capital or
otherwise in respect of any shares of its capital stock; or permit any
Subsidiary to purchase or otherwise acquire for value any stock of a Borrower or
another Subsidiary, except that if there is no Default or Event of Default at
such time and no covenant violation would occur after giving effect thereto (a)
VSE may pay cash dividends, which dividends shall not exceed Three Million
Dollars ($3,000,000) in the aggregate per fiscal year, (b) each Borrower may
declare and deliver dividends and make distributions payable solely in its
common stock; (c) each Borrower may purchase or otherwise acquire shares of its
capital stock by exchange for or out of the proceeds received from a
substantially concurrent issue of new shares of its capital stock, and (d) VSE,
during each fiscal year, may repurchase shares of its capital stock in amounts
not to exceed Ten Million Dollars ($10,000,000), provided, that, at the time of
each such repurchase, availability under the Revolving Loan, after taking into
account any Outstanding Letter of Credit Obligations, shall not be less
than Ten Million Dollars ($10,000,000).
6.2.5 Indebtedness.
None of
the Borrowers will create, incur, assume or suffer to exist any Indebtedness for
Borrowed Money or permit any Subsidiary to do so, except:
(a) the
Obligations;
(b) current
accounts payable arising in the ordinary course;
(c) Indebtedness
secured by Permitted Liens;
(d) Subordinated
Indebtedness, if approved by the Requisite Lenders;
(e) Indebtedness
of the Borrowers existing on the date hereof and reflected on the financial
statements furnished pursuant to Section 4.1.9
(Financial Condition);
(f) Assumed
Indebtedness of any Target incurred after the Closing Date in the ordinary
course of business, if approved by the Requisite Lenders; and
(g) Indebtedness
of the Borrowers not otherwise permitted by this Agreement which, in the
aggregate, does not exceed Fifty Thousand Dollars ($50,000).
6.2.6 Investments, Loans and Other
Transactions.
Except as
otherwise provided in this Agreement, none of the Borrowers will, nor will
permit any of its Subsidiaries to, (a) make, assume, acquire or continue to hold
any investment in any real property (unless used in connection with its business
and treated as a Fixed or Capital Asset of any Borrower or any Subsidiary) or
any Person, whether by stock purchase, capital contribution, acquisition of
indebtedness of such Person or otherwise (including, without limitation,
investments in any joint venture or partnership), (b) guaranty or otherwise
become contingently liable for the Indebtedness or obligations of any Person, or
(c) make any loans or advances, or otherwise extend credit to any Person,
except:
(i) any
advance to an officer or employee of any Borrower or any Subsidiary, provided
that the aggregate amount of all such advances by all of the Borrowers and their
Subsidiaries (taken as a whole) shall not exceed at any time outstanding the
aggregate principal sum of (a) (i) Two Hundred Fifty Thousand Dollars ($250,000)
for all such loans by the Borrower, plus (ii) reasonable advances for
anticipated business expenses of employees that would be reimbursed to such
employees under such Borrower’s expense reimbursement policy, and (b) Two
Million Dollars ($2,000,000) for all loans from VSE to Affiliates.
(ii) the
endorsement of negotiable instruments for deposit or collection or similar
transactions in the ordinary course of business;
(iii) any
investment in Cash Equivalents, which are pledged to the Agent, for the ratable
benefit of the Lenders and for the benefit of the Agent with respect to the
Agent’s Obligations, as collateral and security for the
Obligations;
(iv) trade
credit extended to customers in the ordinary course of business;
(v) investments
in any Targets pursuant to any Permitted Acquisition; and
(vi) investments
consisting of Deposit Accounts permitted pursuant to Section 6.2.19.
6.2.7 Stock of
Subsidiaries.
None of
the Borrowers will sell or otherwise dispose of any shares of capital stock of
any Subsidiary (except in connection with a merger or consolidation of a Wholly
Owned Subsidiary into any of the Borrowers or another Wholly Owned Subsidiary of
any of the Borrowers or with the dissolution of any Subsidiary) or permit any
Subsidiary to issue any additional shares of its capital stock except pro rata to its
stockholders.
6.2.8 Subordinated
Indebtedness.
None of
the Borrowers will, nor will permit any Subsidiary to make:
(a) any
payment of principal of, or interest on, any of the Subordinated Indebtedness,
if a Default or an Event of Default then exists hereunder or would result from
such payment;
(b) any
payment of the principal or interest due on the Subordinated Indebtedness as a
result of acceleration thereunder or a mandatory prepayment
thereunder;
(c) any
amendment or modification of or supplement to the documents evidencing or
securing the Subordinated Indebtedness; and
(d) payment
of principal or interest on the Subordinated Indebtedness other than when due
(without giving effect to any acceleration of maturity or mandatory
prepayment).
6.2.9 Liens.
Each
Borrower agrees that it (a) will not create, incur, assume or suffer to exist
any Lien upon any of its properties or assets, whether now owned or hereafter
acquired, or permit any Subsidiary so to do, except for Liens securing the
Obligations and Permitted Liens, (b) will not agree to, assume or suffer to
exist any provision in any instrument or other document for confession of
judgment, cognovit or other similar right or remedy, (c) will not allow or
suffer to exist any Permitted Liens to be superior to Liens securing the
Obligations, (d) will not enter into any contracts for the consignment of goods,
will not execute or suffer the filing of any financing statements or the posting
of any signs giving notice of consignments, and will not, as a material part of
its business, engage in the sale of goods belonging to others, other than sales
of goods belonging to others which have been disclosed to the Agent, and (e)
will not allow or suffer to exist the failure of any Lien described in the
Security Documents to attach to, and/or remain at all times perfected on, any of
the property described in the Security Documents.
6.2.10 Transactions with
Affiliates.
None of
the Borrowers nor any of their Subsidiaries will enter into or participate in
any transaction except in the ordinary course of business, with any Affiliate
or, except in the ordinary course of business, with the officers, directors,
employees and other representatives of any Borrower and/or any
Subsidiary.
6.2.11 Other
Businesses.
None of
the Borrowers nor any of their Subsidiaries will engage directly or indirectly
in any business other than its current line of business described elsewhere in
this Agreement.
6.2.12 ERISA
Compliance.
None of
the Borrowers nor any Commonly Controlled Entity shall: (a) engage in
or permit any “prohibited transaction” (as defined in ERISA); (b) cause any
“accumulated funding deficiency” as defined in ERISA and/or the Internal Revenue
Code; (c) terminate any pension plan in a manner which could result in the
imposition of a lien on the property of any Borrower pursuant to ERISA; (d)
terminate or consent to the termination of any Multi-employer Plan; or (e) incur
a complete or partial withdrawal with respect to any Multi-employer
Plan.
6.2.13 Prohibition on Hazardous
Materials.
None of
the Borrowers shall place, manufacture or store or permit to be placed,
manufactured or stored any Hazardous Materials on any property owned, operated
or controlled by any Borrower or for which any Borrower is responsible other
than Hazardous Materials placed or stored on such property in accordance with
applicable Laws in the ordinary course of a Borrower’s business expressly
described in this Agreement.
6.2.14 Method of Accounting; Fiscal
Year.
None of
the Borrowers will:
(a) change
the method of accounting employed in the preparation of any financial statements
furnished to the Agent under the provisions of Section 6.1.1 (Financial Statements), unless required to
conform to GAAP and on the condition that the Borrowers’ accountants shall
furnish such information as the Agent may request to reconcile the changes with
the Borrowers’ prior financial statements
(b) change
its fiscal year from a year ending on December 31st.
6.2.15 Compensation.
None of
the Borrowers nor any Subsidiary will pay any bonuses, fees, compensation,
commissions, salaries, drawing accounts, or other payments (cash and non-cash),
whether direct or indirect, to any stockholders of any Borrower or any
Subsidiary, or any Affiliate of any Borrower or any Subsidiary, other than
reasonable compensation for actual services rendered by stockholders in their
capacity as officers or employees.
6.2.16 Transfer of
Collateral.
None of
the Borrowers nor any of their Subsidiaries will transfer, or permit the
transfer, to another location of any of the Collateral or the books and records
related to any of the Collateral.
6.2.17 Sale and
Leaseback.
None of
the Borrowers nor any of the Subsidiaries will directly or indirectly enter into
any arrangement to sell or transfer all or any substantial part of its fixed
assets and thereupon or within one year thereafter rent or lease the assets so
sold or transferred.
6.2.18 Disposition of
Collateral.
None of
the Borrowers will sell, discount, allow credits or allowances, transfer,
assign, extend the time for payment on, convey, lease, assign, transfer or
otherwise dispose of the Collateral, except, prior to an Event of Default,
dispositions expressly permitted elsewhere in this Agreement, the sale of
Inventory in the ordinary course of business, and the sale of unnecessary or
obsolete Equipment, but only if the proceeds of the sale of such Equipment are
(a) used to purchase similar Equipment to replace the unnecessary or obsolete
Equipment or (b) immediately turned over to the Agent for application to the
Obligations in accordance with the provisions of this Agreement.
6.2.19 Deposit
Accounts.
Schedule 6.2.19 lists
all of the Deposit Accounts of each Borrower as of the Closing
Date. After the Closing Date, none of the Borrowers will, or will
permit any Subsidiary to, directly or indirectly, maintain or establish any bank
account or Deposit Account with any bank or financial institution that is not a
Lender which in the aggregate maintains balances of greater than One Hundred
Thousand Dollars ($100,000), unless prior to opening such account, such Borrower
or such Subsidiary enters into a Deposit Account Control
Agreement. The provisions of this Section requiring Deposit Account
Control Agreements shall not apply to Deposit Accounts (a) exclusively used for
payroll, payroll taxes, employee travel reimbursement, and other employee wage
and benefit payments to or for the benefit of Borrowers’ employees and
identified in detail satisfactory to Agent by Borrowers (b) maintained by any
Borrower pursuant to Section 6.1.27, and (c)
established after the Closing Date by Borrowers for purposes other than
described in clause (a) of this Section, in each case, upon the prior written
approval of Agent in its sole and absolute discretion and for each such Deposit
Account that is approved by Agent, Borrowers will disclose, on the annual
Compliance Certificate delivered to Agent pursuant to Section 6.1.1(a), the average collected account balances of
all such Deposit Accounts for each of the preceding twelve (12)
months.
ARTICLE
VII
DEFAULT AND RIGHTS AND
REMEDIES
Section
7.1 Events of
Default.
The
occurrence of any one or more of the following events shall constitute an “Event
of Default” under the provisions of this Agreement:
7.1.1 Failure to
Pay.
The
failure of the Borrowers to pay any of the Obligations as and when due and
payable in accordance with the provisions of this Agreement, the Notes and/or
any of the other Financing Documents.
7.1.2 Breach of Representations
and
Warranties.
Any
representation or warranty made in this Agreement or in any report, statement,
schedule, certificate, opinion (including any opinion of counsel for the
Borrowers), financial statement or other document furnished in connection with
this Agreement, any of the other Financing Documents, or the Obligations, shall
prove to have been false or misleading when made (or, if applicable, when
reaffirmed) in any material respect.
7.1.3 Failure to Comply with
Covenants.
The
failure of the Borrowers to perform, observe or comply with any covenant,
condition or agreement contained in this Agreement.
7.1.4 Default Under Other
Financing Documents or Obligations.
A default
shall occur under any of the other Financing Documents or under any other
Obligations, and such default is not cured within any applicable grace period
provided therein, including without limitation, all agreements between Agent and
Borrowers which give rise to Hedging Obligations.
7.1.5 Receiver;
Bankruptcy.
Any
Borrower or any Subsidiary shall (a) apply for or consent to the appointment of
a receiver, trustee or liquidator of itself or any of its property, (b) admit in
writing its inability to pay its debts as they mature, (c) make a general
assignment for the benefit of creditors, (d) be adjudicated a bankrupt or
insolvent, (e) file a voluntary petition in bankruptcy or a petition or an
answer seeking or consenting to reorganization or an arrangement with creditors
or to take advantage of any bankruptcy, reorganization, insolvency, readjustment
of debt, dissolution or liquidation law or statute, or an answer admitting the
material allegations of a petition filed against it in any proceeding under any
such law, or take corporate action for the purposes of effecting any of the
foregoing, (f) by any act indicate its consent to, approval of or acquiescence
in any such proceeding or the appointment of any receiver of or trustee for any
of its property, or suffer any such receivership, trusteeship or proceeding to
continue undischarged for a period of sixty (60) days, or (g) by any act
indicate its consent to, approval of or acquiescence in any order, judgment or
decree by any court of competent jurisdiction or any Governmental Authority
enjoining or otherwise prohibiting the operation of a material portion of any
Borrower’s or any Subsidiary’s business or the use or disposition of a material
portion of any Borrower’s or any Subsidiary’s assets.
7.1.6 Involuntary Bankruptcy,
etc.
(a) An
order for relief shall be entered in any involuntary case brought against any
Borrower or any Subsidiary under the Bankruptcy Code, or (b) any such case shall
be commenced against any Borrower or any Subsidiary and shall not be dismissed
within sixty (60) days after the filing of the petition, or (c) an order,
judgment or decree under any other Law is entered by any court of competent
jurisdiction or by any other Governmental Authority on the application of a
Governmental Authority or of a Person other than any Borrower or any Subsidiary
(i) adjudicating any Borrower, or any Subsidiary bankrupt or insolvent, or (ii)
appointing a receiver, trustee or liquidator of any Borrower or of any
Subsidiary, or of a material portion of any Borrower’s or any Subsidiary’s
assets, or (iii) enjoining, prohibiting or otherwise limiting the operation of a
material portion of any Borrower’s or any Subsidiary’s business or the use or
disposition of a material portion of any Borrower’s or any Subsidiary’s assets,
and such order, judgment or decree continues unstayed and in effect for a period
of thirty (30) days from the date entered.
7.1.7 Judgment.
Unless
adequately insured in the opinion of the Agent, the entry of a final judgment
for the payment of money involving more than $200,000 against any Borrower or
any Subsidiary, and the failure by such Borrower or such Subsidiary to discharge
the same, or cause it to be discharged, within thirty (30) days from the date of
the order, decree or process under which or pursuant to which such judgment was
entered, or to secure a stay of execution pending appeal of such
judgment.
7.1.8 Execution;
Attachment.
Any
execution or attachment shall be levied against the Collateral, or any part
thereof, and such execution or attachment shall not be set aside, discharged or
stayed within thirty (30) days after the same shall have been
levied.
7.1.9 Default Under Other
Borrowings.
Default
shall be made with respect to any Indebtedness for Borrowed Money of any of the
Borrowers (other than the Loans) in excess of Two Hundred Thousand Dollars
($200,000) if the effect of such default is to accelerate the maturity of such
Indebtedness for Borrowed Money or to permit the holder or obligee thereof or
other party thereto to cause such Indebtedness for Borrowed Money to become due
prior to its stated maturity.
7.1.10 Challenge to
Agreements.
Any
Borrower shall challenge the validity and binding effect of any provision of any
of the Financing Documents or shall state its intention to make such a challenge
of any of the Financing Documents or any of the Financing Documents shall for
any reason (except to the extent permitted by its express terms) cease to be
effective or to create a valid and perfected first priority Lien (except for
Permitted Liens) on, or security interest in, any of the Collateral purported to
be covered thereby.
7.1.11 Material Adverse
Change.
The
Agent, in its sole discretion, determines in good faith that a material adverse
change has occurred in the financial condition of any of the
Borrowers.
7.1.12 Impairment of
Position.
The
Agent, in its sole discretion, determines in good faith that an event has
occurred which impairs the prospect of payment of any of the Obligations and/or
the value of the Collateral.
7.1.13 Collateral
Inadequacy.
The
determination in good faith by the Agent that the security for the Obligations
is inadequate.
7.1.14 Change in
Ownership.
The
failure of VSE to own at least fifty one percent (51%) of the voting capital
stock of each of the other Borrowers.
7.1.15 Liquidation, Termination,
Dissolution, Change in Management, etc.
Any
Borrower shall liquidate, dissolve or terminate its existence or any change
occurs in the management or control of any Borrower without the prior written
consent of the Agent.
7.1.16 De-Listing of
Stock.
The
failure of the stock of VSE to be listed on NASDAQ or a national stock
exchange.
7.1.17 Government
Default.
The
issuance to a Borrower or any Subsidiary of (a) a cure notice or a show-cause
notice relating to a possible termination for default under any contract which
is either a contract with a Governmental Authority or is a subcontract (at any
tier) which is related to a contract between a third party and Governmental
Authority and, within thirty (30) calendar days after the date of such notice,
no written notification is received by such Borrower or such Subsidiary from the
cognizant contracting officer or customer official stating that a termination
will not occur; or (b) a notice of actual termination of default (complete or
partial), under any such contract or subcontract; provided, however, that no
Event of Default shall be declared based upon clauses (a) or (b) of this Section
7.1.17 if the notice in question is issued at a
time when the Unearned Contract Value of the contract or subcontract in question
is less than $500,000.
Section
7.2 Remedies.
Upon the
occurrence of any Event of Default, the Agent may, in the exercise of its sole
and absolute discretion from time to time, and shall, at the direction of the
Requisite Lenders, at any time thereafter exercise any one or more of the
following rights, powers or remedies.
7.2.1 Acceleration.
The Agent
may declare any or all of the Obligations to be immediately due and payable,
notwithstanding anything contained in this Agreement or in any of the other
Financing Documents to the contrary, without presentment, demand, protest,
notice of protest or of dishonor, or other notice of any kind, all of which the
Borrowers hereby waive.
7.2.2 Further
Advances.
The Agent
may from time to time without notice to the Borrowers suspend, terminate or
limit any further advances, loans or other extensions of credit under the
Commitments, under this Agreement and/or under any of the other Financing
Documents. Further, upon the occurrence of an Event of Default or
Default specified in Sections 7.1.5 (Receiver;
Bankruptcy) or 7.1.6 (Involuntary Bankruptcy,
etc.), the Commitments and any agreement in any of the Financing Documents to
provide additional credit and/or to issue Letters of Credit shall immediately
and automatically terminate and the unpaid principal amount of the Notes (with
accrued interest thereon) and all other Obligations then outstanding, shall
immediately become due and payable without further action of any kind and
without presentment, demand, protest or notice of any kind, all of which are
hereby expressly waived by the Borrowers.
7.2.3 Uniform Commercial
Code.
The Agent
shall have all of the rights and remedies of a secured party under the
applicable Uniform Commercial Code and other applicable Laws. Upon
demand by the Agent, the Borrowers shall assemble the Collateral and make it
available to the Agent, at a place designated by the Agent. The Agent
or its agents may without notice from time to time enter upon any Borrower’s
premises to take possession of the Collateral, to remove it, to render it
unusable, to process it or otherwise prepare it for sale, or to sell or
otherwise dispose of it.
Any
written notice of the sale, disposition or other intended action by the Agent
with respect to the Collateral which is sent by regular mail, postage prepaid,
to the Borrowers at the address set forth in Section
9.1 (Notices), or such other address of the Borrowers which may from time to
time be shown on the Agent’s records, at least ten (10) days prior to such sale,
disposition or other action, shall constitute commercially reasonable notice to
the Borrowers. The Agent may alternatively or additionally give such
notice in any other commercially reasonable manner. Nothing in this
Agreement shall require the Agent to give any notice not required by applicable
Laws.
If any
consent, approval, or authorization of any state, municipal or other
Governmental Authority or of any other Person or of any Person having any
interest therein, should be necessary to effectuate any sale or other
disposition of the Collateral, the Borrowers agree to execute all such
applications and other instruments, and to take all other action, as may be
required in connection with securing any such consent, approval or
authorization.
The
Borrowers recognize that the Agent may be unable to effect a public sale of all
or a part of the Collateral consisting of Investment Property by reason of
certain prohibitions contained in the Securities Act of 1933, as amended, and
other applicable Federal and state Laws. The Agent may, therefore, in
its discretion, take such steps as it may deem appropriate to comply with such
Laws and may, for example, at any sale of the Collateral consisting of
securities restrict the prospective bidders or purchasers as to their number,
nature of business and investment intention, including, without limitation, a
requirement that the Persons making such purchases represent and agree to the
satisfaction of the Agent that they are purchasing such securities for their
account, for investment, and not with a view to the distribution or resale of
any thereof. The Borrowers covenant and agree to do or cause to be
done promptly all such acts and things as the Agent may request from time to
time and as may be necessary to offer and/or sell the securities or any part
thereof in a manner which is valid and binding and in conformance with all
applicable Laws. Upon any such sale or disposition, the Agent
shall have the right to deliver, assign and transfer to the purchaser thereof
the Collateral consisting of securities so sold.
7.2.4 Specific Rights With Regard
to Collateral.
In
addition to all other rights and remedies provided hereunder or as shall exist
at law or in equity from time to time, the Agent may (but shall be under no
obligation to), without notice to any of the Borrowers, and each Borrower hereby
irrevocably appoints the Agent as its attorney-in-fact, with power of
substitution, in the name of the Agent and/or any or all of the Lenders and/or
in the name of any or all of the Borrowers or otherwise, for the use and benefit
of the Agent and the Lenders, but at the cost and expense of the Borrowers and
without notice to the Borrowers:
(a) request
any Account Debtor obligated on any of the Accounts to make payments thereon
directly to the Agent, with the Agent taking control of the Proceeds
thereof;
(b) compromise,
extend or renew any of the Collateral or deal with the same as it may deem
advisable;
(c) make
exchanges, substitutions or surrenders of all or any part of the
Collateral;
(d) copy,
transcribe, or remove from any place of business of any Borrower or any
Subsidiary all books, records, ledger sheets, correspondence, invoices and
documents, relating to or evidencing any of the Collateral or without cost or
expense to the Agent or the Lenders, make such use of any Borrower’s or any
Subsidiary’s place(s) of business as may be reasonably necessary to administer,
control and collect the Collateral;
(e) repair,
alter or supply goods if necessary to fulfill in whole or in part the purchase
order of any Account Debtor;
(f) demand,
collect, receipt for and give renewals, extensions, discharges and releases of
any of the Collateral;
(g) institute
and prosecute legal and equitable proceedings to enforce collection of, or
realize upon, any of the Collateral;
(h) settle,
renew, extend, compromise, compound, exchange or adjust claims in respect of any
of the Collateral or any legal proceedings brought in respect
thereof;
(i) endorse
or sign the name of any Borrower upon any Items of Payment, certificates of
title, Instruments, Investment Property, stock powers, documents, documents of
title, financing statements, assignments, notices or other writing relating to
or part of the Collateral and on any proof of claim in bankruptcy against an
Account Debtor;
(j) clear
Inventory through customs in the Agent’s or any Borrower’s name and to sign and
deliver to customs officials powers of attorney in any Borrower’s name for such
purpose;
(k) notify
the Post Office authorities to change the address for the delivery of mail to
the Borrowers to such address or Post Office Box as the Agent may designate and
receive and open all mail addressed to any of the Borrowers; and
(l) take any
other action necessary or beneficial to realize upon or dispose of the
Collateral or to carry out the terms of this Agreement.
7.2.5 Application of
Proceeds.
Any
proceeds of sale or other disposition of the Collateral will be applied by the
Agent to the payment first of any and all Agent’s Obligations, then to any and
all Enforcement Costs, then to unpaid interest and Fees, and any balance of such
proceeds will be remitted to the Lenders in like currency and funds received
ratably in accordance with their respective pro rata shares of the then
outstanding Obligations. Each Lender shall apply any such proceeds
received from the Agent to its Obligations in such order and manner as such
Lender shall determine. If the sale or other disposition of the
Collateral fails to fully satisfy the Obligations, the Borrowers shall remain
liable to the Agent and the Lenders for any deficiency.
7.2.6 Performance by
Agent.
If the
Borrowers shall fail to pay the Obligations or otherwise fail to perform,
observe or comply with any of the conditions, covenants, terms, stipulations or
agreements contained in this Agreement or any of the other Financing Documents,
the Agent without notice to or demand upon the Borrowers and without waiving or
releasing any of the Obligations or any Default or Event of Default, may (but
shall be under no obligation to) at any time thereafter make such payment or
perform such act for the account and at the expense of the Borrowers, and may
enter upon the premises of the Borrowers for that purpose and take all such
action thereon as the Agent may consider necessary or appropriate for such
purpose and each of the Borrowers hereby irrevocably appoints the Agent as its
attorney-in-fact to do so, with power of substitution, in the name of the Agent,
in the name of any or all of the Lenders, or in the name of any or all of the
Borrowers or otherwise, for the use and benefit of the Agent, but at the cost
and expense of the Borrowers and without notice to the Borrowers. All
sums so paid or advanced by the Agent together with interest thereon from the
date of payment, advance or incurring until paid in full at the Post-Default
Rate and all costs and expenses, shall be deemed part of the Enforcement Costs,
shall be paid by the Borrowers to the Agent on demand, and shall constitute and
become a part of the Agent’s Obligations.
7.2.7 Other
Remedies.
The Agent
may from time to time proceed to protect or enforce the rights of the Agent
and/or any of the Lenders by an action or actions at law or in equity or by any
other appropriate proceeding, whether for the specific performance of any of the
covenants contained in this Agreement or in any of the other Financing
Documents, or for an injunction against the violation of any of the terms of
this Agreement or any of the other Financing Documents, or in aid of the
exercise or execution of any right, remedy or power granted in this Agreement,
the Financing Documents, and/or applicable Laws. The Agent and each
of the Lenders is authorized to offset and apply to all or any part of the
Obligations all moneys, credits and other property of any nature whatsoever of
any or all of the Borrowers now or at any time hereafter in the possession of,
in transit to or from, under the control or custody of, or on deposit with, the
Agent, any of the Lenders or any Affiliate of the Agent or any of the Lenders;
and Agent and Lenders agree to share, as among themselves, any offset received
in excess of its Pro Rata Share.
ARTICLE
VIII
THE
AGENT
Section
8.1 Appointment.
Each
Lender hereby designates and appoints Citizens as its agent under this Agreement
and the Financing Documents, and each Lender hereby irrevocably authorizes the
Agent to take such action or to refrain from taking such action on its behalf
under the provisions of this Agreement and the Financing Documents and to
exercise such powers as are set forth herein or therein, together with such
other powers as are reasonably incidental thereto. The Agent agrees
to act as such on the express conditions contained in this ARTICLE VIII. The provisions of this ARTICLE VIII are solely for the benefit of the Agent
and the Lenders and neither the Borrowers nor any Person shall have any rights
as a third party beneficiary of any of the provisions hereof. In
performing its functions and duties under this Agreement, the Agent shall act
solely as an administrative representative of the Lenders and does not assume
and shall not be deemed to have assumed any obligation toward or relationship of
agency or trust with or for the Lenders, the Borrowers or any
Person. The Agent may perform any of its duties hereunder, or under
the Financing Documents, by or through its agents or employees.
Section
8.2 Nature of
Duties.
8.2.1 In
General
The Agent
shall have no duties, obligations or responsibilities except those expressly set
forth in this Agreement or in the Financing Documents. The duties of
the Agent shall be mechanical and administrative in nature. The Agent
shall not have by reason of this Agreement a fiduciary relationship in respect
of any Lender. Each Lender shall make its own independent
investigation of the financial condition and affairs of the Borrowers in
connection with the extension of credit hereunder and shall make its own
appraisal of the credit worthiness of the Borrowers, and the Agent shall have no
duty or responsibility, either initially or on a continuing basis, to provide
any Lender with any credit or other information with respect thereto, whether
coming into its possession before the Closing Date or at any time or times
thereafter. If the Agent seeks the consent or approval of any of the
Lenders to the taking or refraining from taking of any action hereunder, then
the Agent shall send notice thereof to each Lender. The Agent shall
promptly notify each Lender any time that the applicable percentage of Lenders
has instructed the Agent to act or refrain from acting pursuant
hereto.
8.2.2 Express
Authorization
The Agent
is hereby expressly and irrevocably authorized by each of the Lenders, as agent
on behalf of itself and the other Lenders:
(a) to
receive on behalf of each of the Lenders any payment or collection on account of
the Obligations and to distribute to each Lender its Pro Rata Share of all such
payments and collections so received as provided in this Agreement;
(b) to
receive all documents and items to be furnished to the Lenders under the
Financing Documents (nothing contained herein shall relieve the Borrowers of any
obligation to deliver any item directly to the Lenders to the extent expressly
required by the provisions of this Agreement);
(c) to act or
refrain from acting in this Agreement and in the other Financing Documents with
respect to those matters so designated for the Agent;
(d) to act as
nominee for and on behalf of the Lenders in and under this Agreement and the
other Financing Documents;
(e) to
arrange for the means whereby the funds of the Lenders are to be made available
to the Borrowers;
(f) to
distribute promptly to the Lenders, if required by the terms of this Agreement,
all written information, requests, notices, Loan Notices, payments, Prepayments,
documents and other items received from the Borrowers or other
Person;
(g) to amend,
modify, or waive any provisions of this Agreement or the other Financing
Documents on behalf of the Lenders subject to the requirement that certain of
the Lenders’ consent be obtained in certain instances as provided in Section 9.2 (Amendments; Waivers);
(h) to
deliver to the Borrowers and other Persons, all requests, demands, approvals,
notices, and consents received from any of the Lenders;
(i) to
exercise on behalf of each Lender all rights and remedies of the Lenders upon
the occurrence of any Event of Default and/or Default specified in this
Agreement and/or in any of the other Financing Documents or applicable
Laws;
(j) to
execute any of the Security Documents and any other documents on behalf of the
Lenders as the secured party for the benefit of the Agent and the Lenders;
and
(k) to take
such other actions as may be requested by the Requisite Lenders.
Section
8.3 Rights, Exculpation,
Etc.
Neither
the Agent nor any of its officers, directors, employees or agents shall be
liable to any Lender for any action taken or omitted by them hereunder or under
any of the Financing Documents, or in connection herewith or therewith, except
that the Agent shall be obligated on the terms set forth herein for performance
of its express obligations hereunder, and except that the Agent shall be liable
with respect to its own gross negligence or willful misconduct. The
Agent shall not be liable for any apportionment or distribution of payments made
by it in good faith and if any such apportionment or distribution is
subsequently determined to have been made in error the sole recourse of any
Lender to whom payment was due but not made, shall be to recover from the other
Lenders any payment in excess of the amount to which they are determined to be
entitled (and such other Lenders hereby agree to return to such Lender any such
erroneous payments received by them). The Agent shall not be
responsible to any Lender for any recitals, statements, representations or
warranties herein or for the execution, effectiveness, genuineness, validity,
enforceability, collectible, or sufficiency of this Agreement or any of the
Financing Documents or the transactions contemplated thereby, or for the
financial condition of any Person. The Agent shall not be required to
make any inquiry concerning either the performance or observance of any of the
terms, provisions or conditions of this Agreement or any of the Financing
Documents or the financial condition of any Person, or the existence or possible
existence of any Default or Event of Default. The Agent may at any
time request instructions from the Lenders with respect to any actions or
approvals which by the terms of this Agreement or of any of the Financing
Documents the Agent is permitted or required to take or to grant, and the Agent
shall be absolutely entitled to refrain from taking any action or to withhold
any approval and shall not be under any liability whatsoever to any Person for
refraining from any action or withholding any approval under any of the
Financing Documents until it shall have received such instructions from the
applicable percentage of the Lenders. Without limiting the foregoing,
no Lender shall have any right of action whatsoever against the Agent as a
result of the Agent acting or refraining from acting under this Agreement or any
of the other Financing Documents in accordance with the instructions of the
applicable percentage of the Lenders and notwithstanding the instructions of the
Lenders, the Agent shall have no obligation to take any action if it, in good
faith, believes that such action exposes the Agent to any
liability.
Section
8.4 Reliance.
The Agent
shall be entitled to rely upon any written notices, statements, certificates,
orders or other documents or any telephone message or other communication
(including any writing, telex, telecopy or telegram) believed by it in good
faith to be genuine and correct and to have been signed, sent or made by the
proper Person, and with respect to all matters pertaining to this Agreement or
any of the Financing Documents and its duties hereunder or thereunder, upon
advice of counsel selected by it. The Agent may deem and treat the
original Lenders as the owners of the respective Notes for all purposes until
receipt by the Agent of a written notice of assignment, negotiation or transfer
of any interest therein by the Lenders in accordance with the terms of this
Agreement. Any interest, authority or consent of any holder of any of
the Notes shall be conclusive and binding on any subsequent holder, transferee,
or assignee of such Notes. The Agent shall be entitled to rely upon
the advice of legal counsel, independent accountants, and other experts selected
by the Agent in its sole discretion.
Section
8.5 Indemnification.
Each
Lender, severally, agrees to reimburse and indemnify the Agent for and against
any and all liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, costs, expenses, advances or disbursements including, without
limitation, Enforcement Costs, of any kind or nature whatsoever which may be
imposed on, incurred by, or asserted against the Agent in any way relating to or
arising out of this Agreement or any of the Financing Documents or any action
taken or omitted by the Agent under this Agreement for any of the Financing
Documents, in proportion to each Lender’s Pro Rata Share, all of the foregoing
as they may arise, be asserted or be imposed from time to time; provided, however, that no
Lender shall be liable for any portion of such liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, costs, expenses, advances or
disbursements resulting from the Agent’s gross negligence or willful
misconduct. The obligations of the Lenders under this Section 8.5 shall survive the payment in full of the
Obligations and the termination of this Agreement. Notwithstanding the
foregoing, if the Agent, after having received any such reimbursement from any
or all of the Lenders, shall later recover, from a source other than a Lender,
all or any portion of the amount reimbursed, the Agent shall share such recovery
with the reimbursing Lenders in proportion to their contribution to such
reimbursement.
Section
8.6 Citizens
Individually.
With
respect to its Commitments and the Loans made by it, and the Notes issued to it,
Citizens shall have and may exercise the same rights and powers hereunder and is
subject to the same obligations and liabilities as and to the extent set forth
herein for any other Lender. The terms “the Lenders” or “Requisite
Lenders” or any similar terms shall, unless the context clearly otherwise
indicates, include Citizens in its individual capacity as a Lender or one of the
Requisite Lenders. Citizens and its Affiliates may lend money to,
accept deposits from and generally engage in any kind of banking, trust or other
business with the Borrowers, any Affiliate of any Borrower, or any other Person
or any of their officers, directors and employees as if Citizens were not acting
as the Agent pursuant hereto and the Agent may accept fees and other
consideration from the Borrowers, any Affiliate of the Borrowers or any of their
officers, directors and employees for services in connection with this Agreement
or otherwise without having to account for or share the same with the
Lenders.
Section
8.7 Successor
Agent.
8.7.1 Resignation.
The Agent
may resign from the performance of all its functions and duties hereunder at any
time by giving at least thirty (30) Business Days’ prior written notice to the
Borrowers and the Lenders. Such resignation shall take effect upon
the acceptance by a successor Agent of appointment pursuant to Section 8.7.2 (Appointment of Successor) or as otherwise
provided below.
8.7.2 Appointment of
Successor.
Upon any
such notice of resignation pursuant to Section 8.7.1 (Resignation), the Requisite Lenders shall
appoint a successor to the Agent. If a successor to the Agent shall
not have been so appointed within said thirty (30) Business Day period, the
Agent retiring, upon notice to the Borrowers, shall then appoint a successor
Agent who shall serve as the Agent until such time, as the Requisite Lenders
appoint a successor the Agent as provided above.
8.7.3 Successor
Agent.
Upon the
acceptance of any appointment as the Agent under the Financing Documents by a
successor Agent, such successor to the Agent shall thereupon succeed to and
become vested with all the rights, powers, privileges and duties of the Agent
retiring, and the Agent retiring shall be discharged from its duties and
obligations under the Financing Documents. After any Agent’s
resignation as the Agent under the Financing Documents, the provisions of this
ARTICLE VIII shall inure to its benefit as to any
actions taken or omitted to be taken by it while it was the Agent under the
Financing Documents.
Section
8.8 Collateral
Matters.
8.8.1 Release of
Collateral.
The
Lenders hereby irrevocably authorize the Agent, at its option and in its
discretion, to release any Lien granted to or held by the Agent upon any
property covered by this Agreement or the Financing Documents:
(a) upon
termination of the Commitments and payment and satisfaction of all
Obligations;
(b) constituting
property being sold or disposed of if the Borrowers certify to the Agent that
the sale or disposition is made in compliance with the provisions of this
Agreement (and the Agent may rely in good faith conclusively on any such
certificate, without further inquiry);
(c) constituting
property leased to the Borrowers under a lease which has expired or been
terminated in a transaction permitted under this Agreement or is about to expire
and which has not been, and is not intended by the Borrowers to be, renewed or
extended; or
(d) constituting
property covered by Permitted Liens with lien priority superior to those Liens
in favor or for the benefit of the Lenders.
In
addition during any fiscal year of the Borrowers (x) the Agent may release
Collateral having a book value of not more than 10% of the book value of all
Collateral, (y) the Agent, with the consent of Requisite Lenders, may release
Collateral having a book value of not more than 25% of the book value of all
Collateral and (z) the Agent, with the consent of the Lenders having 100% of (i)
the Commitments and (ii) Loans, may release all the Collateral.
8.8.2 Confirmation of Authority,
Execution of Releases.
Without
in any manner limiting the Agent’s authority to act without any specific or
further authorization or consent by the Lenders as set forth in Section 8.8.1 (Release of Collateral), each Lender agrees to
confirm in writing, upon request by the Borrowers, the authority to release any
property covered by this Agreement or the Financing Documents conferred upon the
Agent under Section 8.8.1 (Release of
Collateral). So long as no Event of Default is then continuing, upon
receipt by the Agent of confirmation from the requisite percentage of the
Lenders, of its authority to release any particular item or types of property
covered by this Agreement or the Financing Documents, and upon at least five (5)
Business Days prior written request by the Borrowers, the Agent shall (and is
hereby irrevocably authorized by the Lenders to) execute such documents as may
be necessary to evidence the release of the Liens granted to the Agent for the
benefit of the Lenders herein or pursuant hereto upon such Collateral; provided, however,
that (a) the Agent shall not be required to execute any such document on terms
which, in the Agent’s opinion, would expose the Agent to liability or create any
obligation or entail any consequence other than the release of such Liens
without recourse or warranty, and (b) such release shall not in any manner
discharge, affect or impair the Obligations or any Liens upon (or obligations of
any Person, in respect of), all interests retained by any Person, including,
without limitation, the proceeds of any sale, all of which shall continue to
constitute part of the property covered by this Agreement or the Financing
Documents.
8.8.3 Absence of
Duty.
The Agent
shall have no obligation whatsoever to any Lender, the Borrowers or any other
Person to assure that the property covered by this Agreement or the Financing
Documents exists or is owned by the Borrowers or is cared for, protected or
insured or has been encumbered or that the Liens granted to the Agent on behalf
of the Lenders herein or pursuant hereto have been properly or sufficiently or
lawfully created, perfected, protected or enforced or are entitled to any
particular priority, or to exercise at all or in any particular manner or under
any duty of care, disclosure or fidelity, or to continue exercising, any of the
rights, authorities and powers granted or available to the Agent in this Section
8.8.3 or in any of the Financing Documents, it
being understood and agreed that in respect of the property covered by this
Agreement or the Financing Documents or any act, omission or event related
thereto, the Agent may act in any manner it may deem appropriate, in its
discretion, given the Agent’s own interest in property covered by this Agreement
or the Financing Documents as one of the Lenders and that the Agent shall have
no duty or liability whatsoever to any of the other the Lenders.
Section
8.9 Agency for
Perfection.
Each
Lender hereby appoints the Agent and each other Lender as agent for the purpose
of perfecting the Lenders’ Liens in Collateral which, in accordance with Article
9 of the Uniform Commercial Code in any applicable jurisdiction or otherwise,
can be perfected only by possession. Should any Lender (other than
the Agent) obtain possession of any such Collateral, such Lender shall notify
the Agent thereof, and, promptly upon the Agent’s request therefor, shall
deliver such Collateral to the Agent or in accordance with the Agent’s
instructions.
Section
8.10 Exercise of
Remedies.
Each
Lender agrees that it will not have any right individually to enforce or seek to
enforce this Agreement or any Financing Document or to realize upon any
collateral security for the Loans, it being understood and agreed that such
rights and remedies may be exercised only by the Agent.
Section
8.11 Consents.
(a) In the
event the Agent requests the consent of a Lender and does not receive a written
denial thereof, or a written notice from a Lender that due course consideration
of the request requires additional time, in each case, within ten (10) Business
Days after such Lender’s receipt of such request, then such Lender will be
deemed to have given such consent.
(b) In the
event the Agent requests the consent of a Lender and such consent is denied,
then Citizens may, at its option, require such Lender to assign its interest in
the Loans to Citizens for a price equal to the then outstanding principal amount
thereof plus
accrued and unpaid interest, fees and costs and expenses due such Lender under
the Financing Documents, which principal, interest, fees and costs and expenses
will be paid on the date of such assignment. In the event that
Citizens elects to require any Lender to assign its interest to Citizens,
Citizens will so notify such Lender in writing within thirty (30) days following
such Lender’s denial, and such Lender will assign its interest to Citizens no
later than five (5) days following receipt of such notice.
Section
8.12 Dissemination of
Information.
The Agent
will provide the Lenders with any information received by the Agent from the
Borrowers which is required to be provided to the Agent or to the Lenders
hereunder; provided, however, that the
Agent shall not be liable to any Lender for any failure to do so, except to the
extent that such failure is attributable to the Agent’s gross negligence or
willful misconduct.
Section
8.13 Discretionary
Advances.
The Agent
may, in its sole discretion, make, for the account of the Lenders on a pro rata
basis, advances under the Revolving Loan of up to ten percent (10%) in excess of
the Borrowing Base (but not in excess of the limitation set forth in aggregate
Revolving Credit Commitments) for a period of not more than thirty (30)
consecutive days in any calendar year.
ARTICLE
IX
MISCELLANEOUS
Section
9.1 Notices.
All
notices, requests and demands to or upon the parties to this Agreement shall be
in writing (including facsimile and electronic mail) and shall be deemed to have
been given or made when delivered by hand on a Business Day, or two (2) days
after the date when deposited in the mail, postage prepaid by registered or
certified mail, return receipt requested, or when sent by overnight courier, on
the Business Day next following the day on which the notice is delivered to such
overnight courier, addressed as follows:
Borrowers: VSE
Corporation
▇▇▇▇
▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇.
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Facsimile:
(▇▇▇) ▇▇▇-▇▇▇▇
Agent: Citizens
Bank of Pennsylvania
▇▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇
▇▇▇
▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇
▇. ▇▇▇▇▇▇▇▇
Facsimile:
(▇▇▇) ▇▇▇-▇▇▇▇
with a
copy
to: ▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇ LLP
▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇
▇▇▇
▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇
▇. ▇▇▇▇▇▇, Esq.
Facsimile:
(▇▇▇) ▇▇▇-▇▇▇▇
SunTrust SunTrust
Bank
▇▇▇▇
▇▇▇▇▇ ▇▇▇▇.
▇▇▇▇▇
▇▇▇
▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇.
▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Facsimile:
(▇▇▇) ▇▇▇-▇▇▇▇
By
written notice, each party to this Agreement may change the address to which
notice is given to that party, provided that such changed notice shall include a
street address to which notices may be delivered by overnight courier in the
ordinary course on any Business Day.
Section
9.2 Amendments;
Waivers.
9.2.1 In
General.
This
Agreement and the other Financing Documents may not be amended, modified, or
changed in any respect except by an agreement in writing signed by the Agent,
the Requisite Lenders and the Borrowers, and, to the extent provided in Section
9.2.2 (Circumstances Where Consent of all of the
Lenders is Required), by an agreement in writing signed by the Agent, all of the
Lenders and the Borrowers. No waiver of any provision of this
Agreement or of any of the other Financing Documents, nor consent to any
departure by the Borrowers therefrom, shall in any event be effective unless the
same shall be in writing signed by the Requisite Lenders. No course
of dealing between the Borrowers and the Agent and/or any of the Lenders and no
act or failure to act from time to time on the part of the Agent and/or any of
the Lenders shall constitute a waiver, amendment or modification of any
provision of this Agreement or any of the other Financing Documents or any right
or remedy under this Agreement, under any of the other Financing Documents or
under applicable Laws. Without implying any limitation on the
foregoing, and subject to the provisions of Section 9.2.2 (Circumstances Where Consent of all of the
Lenders is Required):
(a) Any
waiver or consent shall be effective only in the specific instance, for the
terms and purpose for which given, subject to such conditions as the Agent and
Lenders may specify in any such instrument.
(b) No waiver
of any Default or Event of Default shall extend to any subsequent or other
Default or Event of Default, or impair any right consequent
thereto.
(c) No notice
to or demand on the Borrowers in any case shall entitle the Borrowers to any
other or further notice or demand in the same, similar or other
circumstance.
(d) No
failure or delay by the Lenders to insist upon the strict performance of any
term, condition, covenant or agreement of this Agreement or of any of the other
Financing Documents, or to exercise any right, power or remedy consequent upon a
breach thereof, shall constitute a waiver, amendment or modification of any such
term, condition, covenant or agreement or of any such breach or preclude the
Lenders from exercising any such right, power or remedy at any time or
times.
(e) By
accepting payment after the due date of any amount payable under this Agreement
or under any of the other Financing Documents, the Lenders shall not be deemed
to waive the right either to require prompt payment when due of all other
amounts payable under this Agreement or under any of the other Financing
Documents, or to declare a default for failure to effect such prompt payment of
any such other amount.
9.2.2 Circumstances Where Consent
of all of the Lenders is Required.
Notwithstanding
anything to the contrary contained herein, no amendment, modification, change or
waiver shall be effective without the consent of all of the Lenders
to:
(a) extend
the maturity of the principal of, or interest on, any Note or of any of the
other Obligations;
(b) reduce
the principal amount of any Note or of any of the other Obligations, the rate of
interest thereon or the Fees due to the Lenders, except as expressly permitted
therein;
(c) change
the aggregate Commitments;
(d) change
the date of payment of principal of, or interest on, any Note or of any of the
other Obligations;
(e) change
the method of calculation utilized in connection with the computation of
interest and Fees;
(f) change
the manner of pro rata application by the Agent of payments made by the
Borrowers, or any other payments required hereunder or under the other Financing
Documents;
(g) modify
this Section, Section 8.8.1 (Release of
Collateral), Section 8.12 (Dissemination of
Information), or the definition of “Requisite Lenders”;
(h) release
or agree to subordinate any material portion of any Collateral or Financing
Document (except to the extent provided herein or therein);
(i) change
the standards used in determining Eligible Receivables if the Borrowing Base is
materially increased as a result of the change; or
(j) change
the definition of “Borrowing Base”.
Additionally,
no change may be made to the amount of a Lender’s Commitment or to the Lender’s
percentage of all Commitments without the prior written consent of that
Lender.
Notwithstanding
anything to the contrary contained in this Section
9.2, no Defaulting Lender shall have any right to approve or disapprove any
amendment, waiver or consent hereunder, except that the Commitment of such
Lender may not be increased or extended without the consent of such
Lender.
Section
9.3 Cumulative
Remedies.
The
rights, powers and remedies provided in this Agreement and in the other
Financing Documents are cumulative, may be exercised concurrently or separately,
may be exercised from time to time and in such order as the Agent shall
determine, subject to the provisions of this Agreement, and are in addition to,
and not exclusive of, rights, powers and remedies provided by existing or future
applicable Laws. In order to entitle the Agent to exercise any remedy
reserved to it in this Agreement, it shall not be necessary to give any notice,
other than such notice as may be expressly required in this
Agreement. Without limiting the generality of the foregoing and
subject to the terms of this Agreement, the Agent may:
(a) proceed
against any one or more of the Borrowers with or without proceeding against any
other Person who may be liable (by endorsement, guaranty, indemnity or
otherwise) for all or any part of the Obligations;
(b) proceed
against any one or more of the Borrowers with or without proceeding under any of
the other Financing Documents or against any Collateral or other collateral and
security for all or any part of the Obligations;
(c) without
reducing or impairing the obligation of the Borrowers and without notice,
release or compromise with any guarantor or other Person liable for all or any
part of the Obligations under the Financing Documents or otherwise;
(d) without
reducing or impairing the obligations of the Borrowers and without notice
thereof:
(i) fail to
perfect the Lien in any or all Collateral or to release any or all the
Collateral or to accept substitute Collateral;
(ii) approve
the making of advances under the Revolving Loan under this
Agreement;
(iii) waive any
provision of this Agreement or the other Financing Documents;
(iv) exercise
or fail to exercise rights of set-off or other rights; or
(v) accept
partial payments or extend from time to time the maturity of all or any part of
the Obligations.
Section
9.4 Severability.
In case
one or more provisions, or part thereof, contained in this Agreement or in the
other Financing Documents shall be invalid, illegal or unenforceable in any
respect under any Law, then without need for any further agreement, notice or
action:
(a) the
validity, legality and enforceability of the remaining provisions shall remain
effective and binding on the parties thereto and shall not be affected or
impaired thereby;
(b) the
obligation to be fulfilled shall be reduced to the limit of such
validity;
(c) if such
provision or part thereof pertains to repayment of the Obligations, then, at the
sole and absolute discretion of the Agent, all of the Obligations of the
Borrowers to the Agent and the Lenders shall become immediately due and payable;
and
(d) if the
affected provision or part thereof does not pertain to repayment of the
Obligations, but operates or would prospectively operate to invalidate this
Agreement in whole or in part, then such provision or part thereof only shall be
void, and the remainder of this Agreement shall remain operative and in full
force and effect.
Section
9.5 Assignments by
Lenders.
Any
Lender may, with the prior written consent of the Agent (which consent shall not
be unreasonably withheld), but without notice to or consent of the Borrowers,
assign to any Person (each an “Assignee” and collectively,
the “Assignees”) all or
a portion of such Lender’s Commitments; provided that, unless such Lender has
assigned all of its Commitments, after giving effect to such assignment, such
Lender must continue to hold a Pro Rata Share of the Commitments at least equal
to Five Million Dollars ($5,000,000). Any Lender that elects to make
such an assignment shall pay to the Agent, for the exclusive benefit of the
Agent, an administrative fee for processing each such assignment in the amount
of Three Thousand Five Hundred Dollars ($3,500). Such Lender and its
Assignee shall notify the Agent and the Borrowers in writing of the date on
which the assignment is to be effective (the “Adjustment
Date”). On or before the Adjustment Date, the assigning
Lender, the Agent, the Borrowers and the respective Assignee shall execute and
deliver a written assignment agreement in a form acceptable to the Agent, which
shall constitute an amendment to this Agreement to the extent necessary to
reflect such assignment. Upon the request of any assigning Lender
following an assignment made in accordance with this Section 9.5, the Borrowers shall issue new Notes to
the assigning Lender and its Assignee reflecting such assignment, in exchange
for the existing Notes held by the assigning Lender.
In
addition, notwithstanding the foregoing, any Lender may at any time pledge all
or any portion of such Lender’s rights under this Agreement, any of the
Commitments or any of the Obligations to a Federal Reserve Bank.
Section
9.6 Participations by
Lenders.
Any
Lender may at any time sell to one or more financial institutions participating
interests in any of such Lender’s Obligations or Commitments; provided, however,
that (a) no such participation shall relieve such Lender from its obligations
under this Agreement or under any of the other Financing Documents to which it
is a party, (b) such Lender shall remain solely responsible for the performance
of its obligations under this Agreement and under all of the other Financing
Documents to which it is a party, and (c) the Borrowers, the 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 and
the other Financing Documents.
Section
9.7 Disclosure of Information by
Lenders.
In
connection with any sale, transfer, assignment or participation by any Lender in
accordance with Section 9.5 (Assignments by
Lenders) or Section 9.6 (Participations by
Lenders), each Lender shall have the right to disclose to any actual or
potential purchaser, assignee, transferee or participant all financial records,
information, reports, financial statements and documents obtained in connection
with this Agreement and/or any of the other Financing Documents or
otherwise.
Section
9.8 Successors and
Assigns.
This
Agreement and all other Financing Documents shall be binding upon and inure to
the benefit of the Borrowers, the Agent and the Lenders and their respective
heirs, personal representatives, successors and assigns, except that the
Borrowers shall not have the right to assign their rights hereunder or any
interest herein without the prior written consent of the Agent and the Requisite
Lenders.
Section
9.9 Continuing
Agreements.
All
covenants, agreements, representations and warranties made by the Borrowers in
this Agreement, in any of the other Financing Documents, and in any certificate
delivered pursuant hereto or thereto shall survive the making by the Lenders of
the Loans, the issuance of Letters of Credit by the Agent and the execution and
delivery of the Notes, shall be binding upon the Borrowers regardless of how
long before or after the date hereof any of the Obligations were or are
incurred, and shall continue in full force and effect so long as any of the
Obligations are outstanding and unpaid. From time to time upon the Agent’s
request, and as a condition of the release of any one or more of the Security
Documents, the Borrowers and other Persons obligated with respect to the
Obligations shall provide the Agent with such acknowledgments and agreements as
the Agent may require to the effect that there exists no defenses, rights of
setoff or recoupment, claims, counterclaims, actions or causes of action of any
kind or nature whatsoever against the Agent, any or all of the Lenders, and/or
any of its or their agents and others, or to the extent there are, the same are
waived and released.
Section
9.10 Enforcement
Costs.
The
Borrowers agree to pay to the Agent on demand all Enforcement Costs, together
with interest thereon from the date incurred or advanced until paid in full at a
per annum rate of interest equal at all times to the Post-Default Rate.
Enforcement Costs shall be immediately due and payable at the time advanced or
incurred, whichever is earlier. Without implying any limitation on
the foregoing, the Borrowers agree, as part of the Enforcement Costs, to pay
upon demand any and all stamp and other Taxes and fees payable or determined to
be payable in connection with the execution and delivery of this Agreement and
the other Financing Documents and to save the Agent and the Lenders harmless
from and against any and all liabilities with respect to or resulting from any
delay in paying or omission to pay any Taxes or fees referred to in this
Section. The provisions of this Section shall survive the execution
and delivery of this Agreement, the repayment of the other Obligations and shall
survive the termination of this Agreement.
Section
9.11 Applicable Law;
Jurisdiction.
9.11.1 Applicable
Law.
As a
material inducement to the Agent and the Lenders to enter into this Agreement,
each of the Borrowers acknowledges and agrees that the Financing Documents,
including, this Agreement, shall be governed by the Laws of the State, as if
each of the Financing Documents and this Agreement had each been executed,
delivered, administered and performed solely within the State even though for
the convenience and at the request of the Borrowers, one or more of the
Financing Documents may be executed elsewhere. The Agent and the
Lenders acknowledge, however, that remedies under certain of the Financing
Documents that relate to property outside the State may be subject to the laws
of the state in which the property is located.
9.11.2 Submission to
Jurisdiction.
The
Borrowers irrevocably submit to the jurisdiction of any state or federal court
sitting in the State over any suit, action or proceeding arising out of or
relating to this Agreement or any of the other Financing
Documents. Each of the Borrowers irrevocably waives, to the fullest
extent permitted by law, any objection that it may now or hereafter have to the
laying of the venue of any such suit, action or proceeding brought in any such
court and any claim that any such suit, action or proceeding brought in any such
court has been brought in an inconvenient forum. Final judgment in
any such suit, action or proceeding brought in any such court shall be
conclusive and binding upon the Borrowers and may be enforced in any court in
which the Borrowers are subject to jurisdiction, by a suit upon such judgment,
provided that service of process is effected upon the Borrowers in one of the
manners specified in this Section or as otherwise permitted by applicable
Laws.
9.11.3 Appointment of Agent for
Service of Process.
The
Borrowers hereby irrevocably designate and appoint CT Corporation System, ▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, as the Borrowers’ authorized
agent to receive on the Borrowers’ behalf service of any and all process that
may be served in any suit, action or proceeding of the nature referred to in
this Section in any state or federal court sitting in the State. If
such agent shall cease so to act, the Borrowers shall irrevocably designate and
appoint without delay another such agent in the State satisfactory to the Agent
and shall promptly deliver to the Agent evidence in writing of such other
agent’s acceptance of such appointment and its agreement that such appointment
shall be irrevocable.
9.11.4 Service of
Process.
Each of
the Borrowers hereby consents to process being served in any suit, action or
proceeding of the nature referred to in this Section by (a) the mailing of a
copy thereof by registered or certified mail, postage prepaid, return receipt
requested, to the Borrower at the Borrower’s address designated in or pursuant
to Section 9.1 (Notices), and (b) serving a copy
thereof upon the agent, if any, designated and appointed by the Borrower as the
Borrower’s agent for service of process by or pursuant to this
Section. The Borrowers irrevocably agree that such service (y) shall
be deemed in every respect effective service of process upon the Borrowers in
any such suit, action or proceeding, and (z) shall, to the fullest extent
permitted by law, be taken and held to be valid personal service upon the
Borrowers. Nothing in this Section shall affect the right of the
Agent to serve process in any manner otherwise permitted by law or limit the
right of the Agent otherwise to bring proceedings against the Borrowers in the
courts of any jurisdiction or jurisdictions.
Section
9.12 Duplicate Originals and
Counterparts.
This
Agreement may be executed in any number of duplicate originals or counterparts,
each of such duplicate originals or counterparts shall be deemed to be an
original and all taken together shall constitute but one and the same
instrument.
Section
9.13 Headings.
The
headings in this Agreement are included herein for convenience only, shall not
constitute a part of this Agreement for any other purpose, and shall not be
deemed to affect the meaning or construction of any of the provisions
hereof.
Section
9.14 No
Agency.
Nothing
herein contained shall be construed to constitute the Borrowers as the agent of
the Agent or any of the Lenders for any purpose whatsoever or to permit the
Borrowers to pledge any of the credit of the Agent or any of the Lenders.
Neither the Agent nor any of the Lenders shall be responsible or liable for any
shortage, discrepancy, damage, loss or destruction of any part of the Collateral
wherever the same may be located and regardless of the cause
thereof. Neither the Agent nor any of the Lenders shall, by anything
herein or in any of the Financing Documents or otherwise, assume any of the
Borrowers’ obligations under any contract or agreement assigned to the Agent
and/or the Lenders, and neither the Agent nor any of the Lenders shall be
responsible in any way for the performance by the Borrowers of any of the terms
and conditions thereof.
Section
9.15 Date of
Payment.
Should
the principal of or interest on the Notes become due and payable on other than a
Business Day, the maturity thereof shall be extended to the next succeeding
Business Day and in the case of principal, interest shall be payable thereon at
the rate per annum specified in the Notes during such extension.
Section
9.16 Entire
Agreement.
This
Agreement is intended by the Agent, the Lenders and the Borrowers to be a
complete, exclusive and final expression of the agreements contained
herein. Neither the Agent, the Lenders nor the Borrowers shall
hereafter have any rights under any prior agreements pertaining to the matters
addressed by this Agreement but shall look solely to this Agreement for
definition and determination of all of their respective rights, liabilities and
responsibilities under this Agreement.
Section
9.17 Waiver of Trial by
Jury.
THE
BORROWERS, THE AGENT AND THE LENDERS HEREBY JOINTLY AND SEVERALLY WAIVE TRIAL BY
JURY IN ANY ACTION OR PROCEEDING TO WHICH THE BORROWER AND THE AGENT AND/OR ANY
OR ALL OF THE LENDERS MAY BE PARTIES, ARISING OUT OF OR IN ANY WAY PERTAINING TO
(A) THIS AGREEMENT, (B) ANY OF THE FINANCING DOCUMENTS, OR (C) THE
COLLATERAL. THIS WAIVER CONSTITUTES A WAIVER OF TRIAL BY JURY OF ALL
CLAIMS AGAINST ALL PARTIES TO SUCH ACTIONS OR PROCEEDINGS, INCLUDING CLAIMS
AGAINST PARTIES WHO ARE NOT PARTIES TO THIS AGREEMENT.
This
waiver is knowingly, willingly and voluntarily made by the Borrowers, the Agent
and the Lenders, and the Borrowers, the Agent and the Lenders hereby represent
that no representations of fact or opinion have been made by any individual to
induce this waiver of trial by jury or to in any way modify or nullify its
effect. The Borrowers, the Agent and the Lenders further represent
that they have been represented in the signing of this Agreement and in the
making of this waiver by independent legal counsel, selected of their own free
will, and that they have had the opportunity to discuss this waiver with
counsel.
Section
9.18 Liability of the Agent and
the Lenders.
The
Borrowers hereby agree that neither the Agent nor any of the Lenders shall be
chargeable for any negligence, mistake, act or omission of any accountant,
examiner, agency or attorney employed by the Agent and/or any of the Lenders in
making examinations, investigations or collections, or otherwise in perfecting,
maintaining, protecting or realizing upon any lien or security interest or any
other interest in the Collateral or other security for the
Obligations.
By
inspecting the Collateral or any other properties of the Borrowers or by
accepting or approving anything required to be observed, performed or fulfilled
by the Borrowers or to be given to the Agent and/or any of the Lenders pursuant
to this Agreement or any of the other Financing Documents, neither the Agent nor
any of the Lenders shall be deemed to have warranted or represented the
condition, sufficiency, legality, effectiveness or legal effect of the same, and
such acceptance or approval shall not constitute any warranty or representation
with respect thereto by the Agent and/or the Lenders.
Section
9.19 Indemnification.
The
Borrowers agrees to indemnify and hold harmless, the Agent, the Lenders, the
respective parent and Affiliates of the Agent and the Lenders and the respective
parent’s and Affiliates’ officers, directors, shareholders, employees and agents
(each an “Indemnified
Party,” and collectively, the “Indemnified Parties”), from
and against any and all claims, liabilities, losses, damages, costs and expenses
(whether or not such Indemnified Party is a party to any litigation), including
without limitation, reasonable attorney’s fees and costs and costs of
investigation, document production, attendance at depositions or other
discovery, incurred by any Indemnified Party with respect to, arising out of or
as a consequence of (a) this Agreement or any of the other Financing Documents,
including without limitation, any failure of the Borrowers to pay when due (at
maturity, by acceleration or otherwise) any principal, interest, fee or any
other amount due under this Agreement or the other Financing Documents, or any
other Event of Default; (b) the use by the Borrowers of any proceeds advanced
hereunder; (c) the transactions contemplated hereunder; or (d) any claim,
demand, action or cause of action being asserted against (i) the Borrowers or
any of their Affiliates by any other Person, or (ii) any Indemnified Party by
the Borrowers in connection with the transactions contemplated
hereunder. Notwithstanding anything herein or elsewhere to the
contrary, the Borrowers shall not be obligated to indemnify or hold harmless any
Indemnified Party from any liability, loss or damage resulting from the gross
negligence, willful misconduct or unlawful actions of such Indemnified
Party. Any amount payable to the Agent and/or the Lenders under this
Section will bear interest at the Post-Default Rate from the due date until
paid.
Section
9.20 Patriot Act
Notice.
To help
fight the funding of terrorism and money laundering activities, Federal law
requires all financial institutions to obtain, verify, and record information
that identifies each person who opens an account. For purposes of
this section, account shall be understood to include loan accounts.
[Signatures
Appear on the Following Pages]
Tyson01
425010v9 220794.000008
IN
WITNESS WHEREOF, each of the parties hereto have executed and delivered this
Loan and Security Agreement under their respective seals as of the day and year
first written above.
BORROWERS:
WITNESS/ATTEST: VSE
CORPORATION
_________________________ By:
____________________________(Seal)
▇▇▇▇▇▇▇
▇. ▇▇▇▇▇▇▇▇
Chief
Executive Officer, President and
Chief
Operating Officer
WITNESS/ATTEST: ENERGETICS
INCORPORATED
_________________________ By:
____________________________(Seal)
▇▇▇▇▇▇▇
▇. ▇▇▇▇▇▇▇▇
Director
WITNESS/ATTEST: VSE
SERVICES INTERNATIONAL, INC.
_________________________ By:
____________________________(Seal)
▇▇▇▇▇▇▇
▇. ▇▇▇▇▇▇▇▇
Director
|
WITNESS/ATTEST:
|
INTEGRATED
CONCEPTS AND RESEARCH CORPORATION
|
_________________________ By:
____________________________(Seal)
▇▇▇▇▇▇▇
▇. ▇▇▇▇▇▇▇▇
Director
WITNESS/ATTEST: G&B
SOLUTIONS, INC.
_________________________ By:
____________________________(Seal)
▇▇▇▇▇▇▇
▇. ▇▇▇▇▇▇▇▇
Director
WITNESS/ATTEST: AKIMEKA,
LLC
_________________________ By:
____________________________(Seal)
▇▇▇▇▇▇ G.
A. ▇▇▇▇▇▇▇▇▇▇▇▇
Manager
LENDERS:
WITNESS: CITIZENS
BANK OF PENNSYLVANIA,
in its
capacity as a Lender
_________________________ By:
____________________________(Seal)
Name:
Title:
WITNESS: SUNTRUST
BANK,
in its
capacity as a Lender
_________________________ By:
____________________________(Seal)
Name:
Title:
|
|
AGENT:
|
WITNESS: CITIZENS
BANK OF PENNSYLVANIA,
in its
capacity as Agent
_________________________ By:
____________________________(Seal)
Name:
Title:
Tyson01
425010v9 220794.000008
LIST OF
EXHIBITS
A. Additional
Borrower Joinder Supplement
B-1. Form
of Revolving Credit Note
B-2 Form
of Replacement Revolving Credit Note
B-3 Form
of Term Loan Note
C. Account
Information for Wire Transfer
D. Form
of Compliance Certificate
E. Form
of Increased Revolving Facility Activation Notice
F-1. Form
of Officer’s Certificate
F-2. Form
of Officer’s Certificate
G-1 Pro-forma
Balance Sheet
G-2 Pro-forma
Financial Projections
H. Form
Assignment of Membership Interest
Tyson01
425010v9 220794.000008
LIST OF
SCHEDULES
Schedule
4.1.8 Litigation
Schedule
4.1.11 Indebtedness
for Borrowed Money
Schedule
4.1.16 Employee
Relations
Schedule
4.1.18 Perfection
and Priority of Collateral
Schedule
6.2.19 Deposit
Accounts
Tyson01
425010v9 220794.000008
Exhibit
A
Additional
Borrower Joinder Supplement
[See
attached]
Tyson01
425010v9 220794.000008
Exhibit
B-1
Form of
Revolving Credit Note
[See
attached]
Tyson01
425010v9 220794.000008
Exhibit
B-2
Form of
Replacement Revolving Credit Note
[See
attached]
Tyson01
425010v9 220794.000008
Exhibit
B-3
Form of
Term Note
[See
attached]
Tyson01
425010v9 220794.000008
Exhibit
C
Account
Information for Wire Transfer
Lenders Account and Wire
Instructions
Citizens
Bank of Pennsylvania
Philadelphia,
PA
ABA #
▇▇▇▇▇▇▇▇▇
Acct
Name: Commercial Loan Operations
Account
#6000005222
Ref: VSE
Corporation
PAYDOWN/ADVANCE/ETC
SunTrust
Bank
ABA
Number: ▇▇▇▇▇▇▇▇▇
For
Credit To: Technology & Government
Account
Number: 9443002459
Reference:
VSE Corporation
Tyson01
425010v9 220794.000008
Exhibit
D
Form of
Compliance Certificate
[See
attached]
Tyson01
425010v9 220794.000008
Exhibit
E
Form
Increased Revolving Facility Activation Notice
[See
attached]
Tyson01
425010v9 220794.000008
INCREASED REVOLVING FACILITY
ACTIVATION NOTICE
To: Citizens
Bank of Pennsylvania, a bank chartered in the Commonwealth of
Pennsylvania,
as Agent
under the Loan Agreement referred to below
______________,
__, 20__
Reference
is made to the Amended and Restated Business Loan and Security Agreement, dated
as of August 19, 2010 (as amended, supplemented, restated or modified, from time
to time, the “Loan
Agreement”), by and among VSE CORPORATION, a corporation organized under
the laws of the State of Delaware (“VSE”), ENERGETICS
INCORPORATED, a corporation organized under the laws of the State of Maryland
(“Energetics”), VSE
SERVICES INTERNATIONAL, INC., a corporation organized under the laws of the
State of Delaware (“VSI”), INTEGRATED CONCEPTS AND
RESEARCH CORPORATION, a corporation organized under the laws of the District of
Columbia (“ICRC”),
G&B Solutions, Inc., a corporation organized under the laws of the
Commonwealth of Virginia (“G&B”), AKIMEKA, LLC, a
limited liability company organized under the laws of the State of Hawaii
(“AK”), jointly and
severally (each of VSE, Energetics, VSI, ICRC, G&B, and AK, a “Borrower”; and collectively,
the “Borrowers”),
CITIZENS BANK OF PENNSYLVANIA, a bank chartered in the Commonwealth of
Pennsylvania, its successors and assigns (“Citizens”), SUNTRUST BANK, a
banking corporation organized under the laws of the State of Georgia, its
successors and assigns (“SunTrust”), each other
financial institution which is a party to this Agreement, whether by execution
of this Agreement or otherwise (collectively, the “Lenders” and individually, a
“Lender”) and CITIZENS
BANK OF PENNSYLVANIA, a bank chartered in the Commonwealth of Pennsylvania, its
successors and assigns, in its capacity as both collateral and administrative
agent for the Lenders (the “Agent”).
This
notice is an Increased Revolving Facility Activation Notice referred to in the
Loan Agreement, and Borrowers and each of the Lenders party hereto notify you
that:
1. Each
Lender party hereto agrees to increase the amount of its Revolving Commitment as
set forth opposite such Lender’s name on the signature pages hereof under the
caption “Increased Revolving Facility Amount”.
2. The
Increased Revolving Facility Closing Date is _____________.
[Signatures
Appear on the Following Page]
Tyson01
425010v9 220794.000008
VSE CORPORATION
By:
____________________________(Seal)
Name:
Title:
ENERGETICS INCORPORATED
By:
____________________________(Seal)
Name:
Title:
VSE SERVICES INTERNATIONAL,
INC.
By:
____________________________(Seal)
Name:
Title:
|
|
INTEGRATED
CONCEPTS AND RESEARCH CORPORATION
|
By:
____________________________(Seal)
Name:
Title:
G&B SOLUTIONS, INC.
By:
____________________________(Seal)
Name:
Title:
AKIMEKA,
LLC
By:
____________________________(Seal)
Name:
Title:
Increased
Revolving Facility
Amount [Name
of Lender],
$__________________ in
its capacity as a Lender
By:
____________________________(Seal)
Name:
Title:
|
|
CONSENTED
TO:
|
CITIZENS
BANK OF PENNSYLVANIA,
in its
capacity as Agent
By:
____________________________(Seal)
Name:
Title:
Tyson01
425010v9 220794.000008
Exhibit
F-1
Form of
Officer’s Certificate
[See
attached]
Tyson01
425010v9 220794.000008
OFFICER’S
CERTIFICATE
Pursuant
to Section 6.1.28(a) of that Amended and Restated
Business Loan and Security Agreement dated as of August 19, 2010 (as the same
may from time to time be amended, modified, supplemented or restated, the “Loan Agreement”; terms defined
therein being used herein as therein defined), by and among VSE
CORPORATION, a corporation organized under the laws of the State of Delaware
(“VSE”), ENERGETICS
INCORPORATED, a corporation organized under the laws of the State of Maryland
(“Energetics”), VSE
SERVICES INTERNATIONAL, INC., a corporation organized under the laws of the
State of Delaware (“VSI”), INTEGRATED CONCEPTS AND
RESEARCH CORPORATION, a corporation organized under the laws of the District of
Columbia (“ICRC”),
G&B Solutions, Inc., a corporation organized under the laws of the
Commonwealth of Virginia (“G&B”), AKIMEKA, LLC, a
limited liability company organized under the laws of the State of Hawaii
(“AK”), jointly and
severally (each of VSE, Energetics, VSI, ICRC, G&B, and AK, a “Borrower”; and collectively,
the “Borrowers”),
CITIZENS BANK OF PENNSYLVANIA, a bank chartered in the Commonwealth of
Pennsylvania, its successors and assigns (“Citizens”), SUNTRUST BANK, a
banking corporation organized under the laws of the State of Georgia, its
successors and assigns (“SunTrust”), each other
financial institution which is a party to this Agreement, whether by execution
of this Agreement or otherwise (collectively, the “Lenders” and individually, a
“Lender”) and CITIZENS
BANK OF PENNSYLVANIA, a bank chartered in the Commonwealth of Pennsylvania, its
successors and assigns, in its capacity as both collateral and administrative
agent for the Lenders (the “Agent”), the undersigned,
being the duly elected and acting [President and Chief Executive Officer] of
VSE, does hereby certify that:
1. All
conditions, covenants, and provisions required for the Permitted Acquisition
under the Loan Agreement have been fully satisfied by the Borrowers, other than
with respect to clause (x) of the definition of Permitted
Acquisition.
2. Attached
hereto as Exhibit
A are true and correct copies of the Purchase Agreement Documents, and
such documents are in full force and effect as of the date hereof, and the
provisions thereof have not been in any way modified, amended or
waived.
3. In
connection with the transactions contemplated by the Loan Agreement, the Lenders
and Agent are entitled to rely and have, in fact, relied on the information
contained herein, any successor or assignee of, or participant with, any Lender
(as permitted under the Loan Agreement) is also entitled to rely on the
information contained herein.
[Signature
Appears on Following Page.]
Tyson01
425010v9 220794.000008
IN WITNESS WHEREOF, the undersigned has
executed this Officer’s Certificate as of the ____ day of _______,
201_.
VSE
CORPORATION
By:
____________________________(Seal)
Name:
Title:
Tyson01
425010v9 220794.000008
Exhibit
A
Purchase
Agreement Documents
[see
attached]
Tyson01
425010v9 220794.000008
Exhibit
F-2
Form of
Officer’s Certificate
[See
attached]
Tyson01
425010v9 220794.000008
OFFICER’S
CERTIFICATE
Pursuant
to Section 6.1.28(c) of that Amended and Restated
Business Loan and Security Agreement dated as of August 19, 2010 (as the same
may from time to time be amended, modified, supplemented or restated, the “Loan Agreement”; terms defined
therein being used herein as therein defined), by and among VSE
CORPORATION, a corporation organized under the laws of the State of Delaware
(“VSE”), ENERGETICS
INCORPORATED, a corporation organized under the laws of the State of Maryland
(“Energetics”), VSE
SERVICES INTERNATIONAL, INC., a corporation organized under the laws of the
State of Delaware (“VSI”), INTEGRATED CONCEPTS AND
RESEARCH CORPORATION, a corporation organized under the laws of the District of
Columbia (“ICRC”),
G&B Solutions, Inc., a corporation organized under the laws of the
Commonwealth of Virginia (“G&B”), AKIMEKA, LLC, a
limited liability company organized under the laws of the State of Hawaii
(“AK”), jointly and
severally (each of VSE, Energetics, VSI, ICRC, G&B, and AK, a “Borrower”; and collectively,
the “Borrowers”),
CITIZENS BANK OF PENNSYLVANIA, a bank chartered in the Commonwealth of
Pennsylvania, its successors and assigns (“Citizens”), SUNTRUST BANK, a
banking corporation organized under the laws of the State of Georgia, its
successors and assigns (“SunTrust”), each other
financial institution which is a party to this Agreement, whether by execution
of this Agreement or otherwise (collectively, the “Lenders” and individually, a
“Lender”) and CITIZENS
BANK OF PENNSYLVANIA, a bank chartered in the Commonwealth of Pennsylvania, its
successors and assigns, in its capacity as both collateral and administrative
agent for the Lenders (the “Agent”), the undersigned,
being the duly elected and acting [President and Chief Executive Officer] of
VSE, does hereby certify that:
1. All
conditions, covenants, and provisions required for the Permitted Acquisition
under the Loan Agreement have been fully satisfied by the
Borrowers.
2. Attached
hereto as Exhibit
A are true and correct copies of the Purchase Agreement Documents, and
such documents are in full force and effect as of the date hereof, and the
provisions thereof have not been in any way modified, amended or
waived.
3. The
Permitted Acquisition has been closed and completed in accordance with the
Purchase Agreement Documents as furnished to Lender herein in accordance with
all applicable Laws.
4. Borrowers
have obtained all consents, licenses and approvals to permit it to engage in the
business previously operated and conducted by the Target, and the Target has
duly and properly assigned to Borrowers all of its right, title and interest in,
and to, any and all Trademarks, Copyrights and Patents, together with the
goodwill of the Target associated with, and/or symbolized by, any of the
foregoing, and such assignment has been duly and properly filed, registered and
recorded with the United States Patent and Trademark Office, the United States
Copyright Office and with such other state or any Governmental Authority as may
be necessary to effect and consummate an assignment of such Trademarks,
Copyrights and Patents, together with the goodwill associated with, or
symbolized by any of the foregoing from the Target to Borrowers.
5. In
connection with the transactions contemplated by the Loan Agreement, the Lenders
and Agent are entitled to rely and have, in fact, relied on the information
contained herein, any successor or assignee of, or participant with, any Lender
(as permitted under the Loan Agreement) is also entitled to rely on the
information contained herein.
[Signature
Appears on Following Page.]
Tyson01
425010v9 220794.000008
IN WITNESS WHEREOF, the undersigned has
executed this Officer’s Certificate as of the ____ day of _______,
201_.
VSE
CORPORATION
By:
____________________________(Seal)
Name:
Title:
Tyson01
425010v9 220794.000008
Exhibit
A
Purchase
Agreement Documents
[see
attached]
Tyson01
425010v9 220794.000008
Exhibit
G-1
Pro-forma
Balance Sheet
[See
attached]
Tyson01
425010v9 220794.000008
Exhibit
G-2
Pro-forma
Financial Projections
[See
attached]
Tyson01
425010v9 220794.000008
Exhibit
H
Form
Assignment of Membership Interest
[See
attached]
Tyson01
425010v9 220794.000008
Litigation
None
Tyson01
425010v9 220794.000008
Indebtedness
for Borrowed Money
None
Tyson01
425010v9 220794.000008
Employee
Relations
VSE has
two Union Agreements:
Name:
The International Association of Machinists Aerospace Workers, AFL-CIO, Local
Lodge 93
Effective
Date: October 1, 2008 through September 30, 2011.
Approximate
No. of employee: 130
Name:
The International Brotherhood of Boilermakers, Iron Ship Builders, Blacksmiths,
Forgers and Helpers, Local Lodge 344
Effective
Date: May 1, 2009 through April 30, 2012
Approximate
No. of employee: 43
Reference
is made to employment agreements between VSE and its Subsidiaries and the
following individuals:
|
1.
|
▇▇▇▇▇▇▇
▇. ▇▇▇▇▇▇▇▇ – CEO, President, and COO of
VSE
|
|
2.
|
▇▇▇▇▇▇
▇. ▇▇▇▇▇▇ - Executive Vice President and CFO of
VSE
|
|
3.
|
▇▇▇▇▇
▇. ▇▇▇▇, ▇▇. - Executive Vice President of
VSE
|
|
4.
|
▇▇▇▇▇▇
▇. ▇▇▇▇▇ - Executive Vice President of
VSE
|
|
5.
|
▇▇▇▇▇▇▇
▇▇▇▇▇▇▇ - Executive Vice President of
VSE
|
|
6.
|
▇▇▇▇▇
▇▇▇▇▇▇▇▇ – President of Energetics
|
|
7.
|
▇▇▇▇▇▇
▇▇▇▇▇▇▇ – President of G&B
|
|
8.
|
▇▇▇▇
▇. ▇▇▇▇▇▇▇▇ - President of ICRC
|
|
9.
|
▇▇▇▇▇▇
▇. ▇▇▇▇▇▇▇ – Vice President and Secretary of
VSE
|
|
10.
|
▇▇▇▇▇
▇. ▇▇▇▇▇▇ – Senior Vice President of
VSE
|
Tyson01
425010v9 220794.000008
Schedule
4.1.18
Perfection
and Priority of Collateral
None
Tyson01
425010v9 220794.000008
Schedule
6.2.19
Deposit
Accounts
|
List
of VSE and Subsidiary
|
List
of VSE and Subsidiary
|
List
of VSE and Subsidiary
|
|||||
|
Non-Citizens
Bank DDA
|
Citizens
Bank DDA
|
Citizens
Bank DDA
|
|||||
|
Company:
|
VSE
Corporation
|
Company:
|
VSE Corporation
|
Company:
|
VSE
Corporation
|
||
|
Bank:
|
SunTrust
|
Bank:
|
Citizens
|
Bank:
|
Citizens
|
||
|
ACCT
#:
|
1000096163182
|
ACCT
#:
|
6101737091
|
ACCT
#:
|
6101737148
|
||
|
Name:
|
VSE
Corporation
|
Name:
|
VSE Corporation
|
Name:
|
VSE401K
acct
|
||
|
Type:
|
Stand
Alone
|
Type:
|
Master/sweep
|
Type:
|
Stand
Alone
|
||
|
Company:
|
Energetics
|
Company:
|
VSE Corporation
|
Company:
|
ICRC
|
||
|
Bank:
|
M
& T Bank
|
Bank:
|
Citizens
|
Bank:
|
Citizens
|
||
|
ACCT
#:
|
▇▇▇▇▇▇▇▇
|
ACCT
#:
|
▇▇▇▇▇▇▇▇▇▇
|
ACCT
#:
|
6220713358
|
||
|
Name:
|
Energetics
|
Name:
|
VSE Corporation
|
Name:
|
ICRC
Flex acct
|
||
|
Type:
|
▇▇▇▇▇
cash
|
Type:
|
ZBA
|
Type:
|
Stand
Alone
|
||
|
Company:
|
Energetics
|
Company:
|
G&B
Solutions
|
Company:
|
VSE Corporation
|
||
|
Bank:
|
M
& T Bank
|
Bank:
|
Citizens
|
Bank:
|
Citizens
|
||
|
ACCT
#:
|
▇▇▇▇▇▇▇▇
|
ACCT
#:
|
6221703755
|
ACCT
#:
|
6699010437
|
||
|
Name:
|
Energetics
|
Name:
|
G&B
Solutions
|
Name:
|
VSE Corporation
-CDA
|
||
|
Type:
|
Health-flex
|
Type:
|
ZBA
|
Type:
|
CDA
|
||
|
Company:
|
VSE Corporation
|
Company:
|
ICRC
|
Company:
|
VSE Corporation
|
||
|
Bank:
|
National
Bank of Kuwait
|
Bank:
|
Citizens
|
Bank:
|
Citizens
|
||
|
ACCT
#:
|
0801201050301
|
ACCT
#:
|
6219257441
|
ACCT
#:
|
6218223853
|
||
|
Name:
|
VSE Corporation
|
Name:
|
I.C.R.C
|
Name:
|
TEOAF
Account
|
||
|
Type:
|
Stand
Alone
|
Type:
|
ZBA
|
Type:
|
Stand
Alone
|
||
|
Company:
|
VSE Corporation
|
Company:
|
VSE
Corporation
|
Company:
|
VSE
Corporation
|
||
|
Bank:
|
▇▇
▇▇▇▇▇▇
|
Bank:
|
Citizens
|
Bank:
|
Citizens
|
||
|
ACCT
#:
|
475737024
|
ACCT
#:
|
6101737105
|
ACCT
#:
|
6221706851
|
||
|
Name:
|
Cigna
|
Name:
|
Bav
travel acct
|
Name:
|
Sub-payroll
|
||
|
Type:
|
Health-flex
|
Type:
|
Stand
Alone
|
Type:
|
Stand
Alone
|
||
|
Company:
|
VSE
Corporation
|
Company:
|
Energetics
|
Company:
|
G&B
Solutions
|
||
|
Bank:
|
National
Bank of Kuwait
|
Bank:
|
Citizens
|
Bank:
|
Citizens
|
||
|
ACCT
#:
|
0801201050101
|
ACCT
#:
|
6202211109
|
ACCT
#:
|
▇▇▇▇▇▇▇▇▇▇
|
||
|
Name:
|
VSE
Corporation
|
Name:
|
Energetics
|
Name:
|
G&B
flex acct
|
||
|
Type:
|
Stand
Alone
|
Type:
|
ZBA
|
Type:
|
Stand
Alone
|
||
Tyson01
425010v9 220794.000008
TABLE OF
CONTENTS
AMENDED
AND RESTATED BUSINESS LOAN AND SECURITY AGREEMENT [INSERT PAGE NUMBER]
RECITALS [INSERT PAGE NUMBER]
AGREEMENTS [INSERT PAGE NUMBER]
ARTICLE
I DEFINITIONS [INSERT PAGE
NUMBER]
Section
1.1 Certain
Defined Terms. [INSERT PAGE
NUMBER]
Section
1.2 Accounting
Terms and Other Definitional Provisions. [INSERT
PAGE NUMBER]
ARTICLE
II THE CREDIT FACILITIES [INSERT PAGE
NUMBER]
Section
2.1 The
Revolving Credit Facility. [INSERT PAGE
NUMBER]
2.1.1 Revolving Credit Facility.[INSERT PAGE NUMBER]
2.1.2 Procedure for Making Advances Under the
Revolving Loan; Continuation and Conversion Elections; Lender Protection
Loans.[INSERT PAGE NUMBER]
2.1.3 Borrowing Base.[INSERT PAGE NUMBER]
2.1.4 Borrowing Base Report.[INSERT PAGE NUMBER]
2.1.5 Revolving Credit Notes.[INSERT PAGE NUMBER]
2.1.6 Increase to Revolving Credit
Facility.[INSERT PAGE NUMBER]
2.1.7 Payment of Interest; Principal;
Automatic Rollover of Revolving Loans.[INSERT
PAGE NUMBER]
2.1.8 Mandatory Prepayments of Revolving
Loan.[INSERT PAGE NUMBER]
2.1.9 Optional Prepayments of Revolving
Loan.[INSERT PAGE NUMBER]
2.1.10 The Collateral Account.[INSERT PAGE NUMBER]
2.1.11 Revolving Loan Account.[INSERT PAGE NUMBER]
2.1.12 Revolving Credit Unused Line
Fee.[INSERT PAGE NUMBER]
2.1.13 Required Availability under the
Revolving Credit Facility.[INSERT PAGE
NUMBER]
2.1.14 Optional Reduction of Total Revolving
Credit Committed Amount.[INSERT PAGE
NUMBER]
Section
2.2 The
Letter of Credit Sub-Facility. [INSERT PAGE
NUMBER]
2.2.1 Letters of Credit.[INSERT PAGE NUMBER]
2.2.2 Letter of Credit Fees.[INSERT PAGE NUMBER]
2.2.3 Terms of Letters of Credit;
Post-Expiration Date Letters of Credit.[INSERT
PAGE NUMBER]
2.2.4 Procedures for Letters of
Credit.[INSERT PAGE NUMBER]
2.2.5 Payments of Letters of Credit.[INSERT PAGE NUMBER]
2.2.6 Change in Law; Increased Cost.[INSERT PAGE NUMBER]
2.2.7 General Letter of Credit
Provisions.[INSERT PAGE NUMBER]
2.2.8 Participations in the Letters of
Credit.[INSERT PAGE NUMBER]
2.2.9 Payments by the Lenders to the
Agent.[INSERT PAGE NUMBER]
2.2.10 Defaulting Lender.[INSERT PAGE NUMBER]
Section
2.3 Citizens
Letter of Credit Sub-Facility. [INSERT PAGE
NUMBER]
2.3.1 Citizens Letters of Credit.[INSERT PAGE NUMBER]
2.3.2 Terms of Letters of Credit;
Post-Expiration Date Letters of Credit.[INSERT
PAGE NUMBER]
2.3.3 Procedures for Letters of
Credit.[INSERT PAGE NUMBER]
2.3.4 Payments of Letters of Credit.[INSERT PAGE NUMBER]
2.3.5 Change in Law; Increased Cost.[INSERT PAGE NUMBER]
2.3.6 General Letter of Credit
Provisions.[INSERT PAGE NUMBER]
Section
2.4 The
Term Loan Facility. [INSERT PAGE
NUMBER]
2.4.1 Term Loan Commitment.[INSERT PAGE NUMBER]
2.4.2 Term Notes.[INSERT PAGE NUMBER]
2.4.3 Payment of Interest; Principal;
Automatic Rollover of Term Loans.[INSERT PAGE
NUMBER]
2.4.4 Optional Prepayments of Term
Loans.[INSERT PAGE NUMBER]
2.4.5 Procedure for Funding the Term Loan;
Continuation and Conversion Elections.[INSERT
PAGE NUMBER]
Section
2.5 Payment
Provisions; Application. [INSERT PAGE
NUMBER]
Section
2.6 LIBOR
Rate Provisions. [INSERT PAGE
NUMBER]
2.6.1 LIBOR Breakage Fee.[INSERT PAGE NUMBER]
2.6.2 LIBOR Rate Lending Unlawful.[INSERT PAGE NUMBER]
2.6.3 Unavailability of LIBOR Rate.[INSERT PAGE NUMBER]
2.6.4 Increased Costs.[INSERT PAGE NUMBER]
2.6.5 Increased Capital Costs.[INSERT PAGE NUMBER]
2.6.6 Taxes.[INSERT PAGE NUMBER]
Section
2.7 General
Financing Provisions. [INSERT PAGE
NUMBER]
2.7.1 Borrowers’ Representatives.[INSERT PAGE NUMBER]
2.7.2 Use of Proceeds of the Loans.[INSERT PAGE NUMBER]
2.7.3 Origination Fee.[INSERT PAGE NUMBER]
2.7.4 Agent’s Fee.[INSERT PAGE NUMBER]
2.7.5 Field Examination Fees.[INSERT PAGE NUMBER]
2.7.6 Computation of Interest and
Fees.[INSERT PAGE NUMBER]
2.7.7 Maximum Interest Rate.[INSERT PAGE NUMBER]
2.7.8 Payments.[INSERT PAGE NUMBER]
2.7.9 Liens; Setoff.[INSERT PAGE NUMBER]
2.7.10 Requirements of Law.[INSERT PAGE NUMBER]
2.7.11 Guaranty.[INSERT PAGE NUMBER]
2.7.12 ACH Transactions and Hedging
Contracts.[INSERT PAGE NUMBER]
Section
2.8 Settlement
Among Lenders. [INSERT PAGE
NUMBER]
2.8.1 Term Loans.[INSERT PAGE NUMBER]
2.8.2 Revolving Loans.[INSERT PAGE NUMBER]
2.8.3 Settlement Procedures as to Revolving
Loan.[INSERT PAGE NUMBER]
2.8.4 Settlement of Other
Obligations.[INSERT PAGE
NUMBER]
2.8.5 Presumption of Payment.[INSERT PAGE NUMBER]
2.8.6 Defaulting Lenders.[INSERT PAGE NUMBER]
ARTICLE
III THE COLLATERAL [INSERT PAGE
NUMBER]
Section
3.1 Debt
and Obligations Secured. [INSERT PAGE
NUMBER]
Section
3.2 Grant
of Liens. [INSERT PAGE NUMBER]
Section
3.3 Collateral
Disclosure List. [INSERT PAGE
NUMBER]
Section
3.4 Personal
Property. [INSERT PAGE NUMBER]
3.4.1 Investment Property, Chattel Paper,
Promissory Notes, etc.[INSERT PAGE
NUMBER]
3.4.2 Patents, Copyrights and Other Property
Requiring Additional Steps to Perfect.[INSERT
PAGE NUMBER]
3.4.3 Government Contracts Requiring
Additional Steps to Perfect.[INSERT PAGE
NUMBER]
Section
3.5 Record
Searches. [INSERT PAGE NUMBER]
Section
3.6 Costs. [INSERT PAGE NUMBER]
Section
3.7 Release. [INSERT PAGE NUMBER]
Section
3.8 Inconsistent
Provisions. [INSERT PAGE NUMBER]
ARTICLE
IV REPRESENTATIONS AND WARRANTIES [INSERT PAGE
NUMBER]
Section
4.1 Representations
and Warranties. [INSERT PAGE
NUMBER]
4.1.1 Subsidiaries.[INSERT PAGE NUMBER]
4.1.2 Good Standing.[INSERT PAGE NUMBER]
4.1.3 Power and Authority.[INSERT PAGE NUMBER]
4.1.4 Binding Agreements.[INSERT PAGE NUMBER]
4.1.5 No Defaults, Violations.[INSERT PAGE NUMBER]
4.1.6 Compliance with Laws.[INSERT PAGE NUMBER]
4.1.7 Investment Company Act.[INSERT PAGE NUMBER]
4.1.8 Litigation.[INSERT PAGE NUMBER]
4.1.9 Financial Condition.[INSERT PAGE NUMBER]
4.1.10 Full Disclosure.[INSERT PAGE NUMBER]
4.1.11 Indebtedness for Borrowed
Money.[INSERT PAGE NUMBER]
4.1.12 Taxes.[INSERT PAGE NUMBER]
4.1.13 ERISA.[INSERT PAGE NUMBER]
4.1.14 Title to Properties.[INSERT PAGE NUMBER]
4.1.15 Patents, Trademarks, Etc.[INSERT PAGE NUMBER]
4.1.16 Employee Relations.[INSERT PAGE NUMBER]
4.1.17 Presence of Hazardous Materials or
Hazardous Materials Contamination.[INSERT PAGE
NUMBER]
4.1.18 Perfection and Priority of
Collateral.[INSERT PAGE NUMBER]
4.1.19 Places of Business and Location of
Collateral.[INSERT PAGE NUMBER]
4.1.20 Business Names and Addresses.[INSERT PAGE NUMBER]
4.1.21 Equipment.[INSERT PAGE NUMBER]
4.1.22 Inventory.[INSERT PAGE NUMBER]
4.1.23 Accounts.[INSERT PAGE NUMBER]
4.1.24 Compliance with Eligibility
Standards.[INSERT PAGE NUMBER]
4.1.25 Solvency[INSERT PAGE NUMBER]
4.1.26 Claims and Investigations.[INSERT PAGE NUMBER]
4.1.27 Government Contract
Obligations.[INSERT PAGE
NUMBER]
4.1.28 Margin Regulations.[INSERT PAGE NUMBER]
4.1.29 Purchase Agreement
Transaction.[INSERT PAGE
NUMBER]
4.1.30 Seller’s Creditor List.[INSERT PAGE NUMBER]
4.1.31 Pro-forma Financial
Statements.[INSERT PAGE NUMBER]
4.1.32 Survival; Updates of Representations
and Warranties.[INSERT PAGE
NUMBER]
ARTICLE
V CONDITIONS PRECEDENT [INSERT PAGE
NUMBER]
Section
5.1 Conditions
to the Initial Advance and Initial Letter of Credit. [INSERT PAGE NUMBER]
5.1.1 Organizational Documents -
Borrowers[INSERT PAGE NUMBER]
5.1.2 Consents, Licenses, Approvals,
Etc.[INSERT PAGE NUMBER]
5.1.3 Notes.[INSERT PAGE NUMBER]
5.1.4 Financing Documents and
Collateral.[INSERT PAGE NUMBER]
5.1.5 Other Documents, Etc.[INSERT PAGE NUMBER]
5.1.6 Payment of Fees.[INSERT PAGE NUMBER]
5.1.7 Collateral Disclosure List.[INSERT PAGE NUMBER]
5.1.8 Recordings and Filings.[INSERT PAGE NUMBER]
5.1.9 Insurance Certificate.[INSERT PAGE NUMBER]
5.1.10 Landlord’s Waivers.[INSERT PAGE NUMBER]
5.1.11 Purchase Agreement
Transaction.[INSERT PAGE
NUMBER]
5.1.12 Pledged Membership Interests; Transfer
Powers.[INSERT PAGE NUMBER]
5.1.13 Pro-forma Balance Sheet and
Projections.[INSERT PAGE
NUMBER]
5.1.14 AK Payoff Letter.[INSERT PAGE NUMBER]
5.1.15 AK Affiliated Loan.[INSERT PAGE NUMBER]
5.1.16 Compliance Certificate.[INSERT PAGE NUMBER]
Section
5.2 Conditions
to all Extensions of Credit. [INSERT PAGE
NUMBER]
5.2.1 Compliance.[INSERT PAGE NUMBER]
5.2.2 Borrowing Base.[INSERT PAGE NUMBER]
5.2.3 Default.[INSERT PAGE NUMBER]
5.2.4 Representations and
Warranties.[INSERT PAGE NUMBER]
5.2.5 Adverse Change.[INSERT PAGE NUMBER]
5.2.6 Legal Matters.[INSERT PAGE NUMBER]
5.2.7 Defaulting Lenders.[INSERT PAGE NUMBER]
ARTICLE
VI COVENANTS OF THE BORROWERS [INSERT PAGE
NUMBER]
Section
6.1 Affirmative
Covenants. [INSERT PAGE NUMBER]
6.1.1 Financial Statements.[INSERT PAGE NUMBER]
6.1.2 Reports to SEC and to
Stockholders.[INSERT PAGE
NUMBER]
6.1.3 Recordkeeping, Rights of Inspection,
Field Examination, Etc.[INSERT PAGE
NUMBER]
6.1.4 Corporate Existence.[INSERT PAGE NUMBER]
6.1.5 Compliance with Laws.[INSERT PAGE NUMBER]
6.1.6 Preservation of Properties.[INSERT PAGE NUMBER]
6.1.7 Line of Business.[INSERT PAGE NUMBER]
6.1.8 Insurance.[INSERT PAGE NUMBER]
6.1.9 Taxes.[INSERT PAGE NUMBER]
6.1.10 ERISA.[INSERT PAGE NUMBER]
6.1.11 Notification of Events of Default and
Adverse Developments.[INSERT PAGE
NUMBER]
6.1.12 Hazardous Materials;
Contamination.[INSERT PAGE
NUMBER]
6.1.13 Disclosure of Significant
Transactions.[INSERT PAGE
NUMBER]
6.1.14 Financial Covenants.[INSERT PAGE NUMBER]
6.1.15 Collection of Receivables.[INSERT PAGE NUMBER]
6.1.16 Assignments of Receivables.[INSERT PAGE NUMBER]
6.1.17 Government Accounts.[INSERT PAGE NUMBER]
6.1.18 Notice of Returned Goods, etc.[INSERT PAGE NUMBER]
6.1.19 Inventory.[INSERT PAGE NUMBER]
6.1.20 Insurance With Respect to Equipment and
Inventory.[INSERT PAGE NUMBER]
6.1.21 Maintenance of the Collateral.[INSERT PAGE NUMBER]
6.1.22 Equipment.[INSERT PAGE NUMBER]
6.1.23 Defense of Title and Further
Assurances.[INSERT PAGE NUMBER]
6.1.24 Business Names; Locations.[INSERT PAGE NUMBER]
6.1.25 Use of Premises and Equipment.[INSERT PAGE NUMBER]
6.1.26 Protection of Collateral.[INSERT PAGE NUMBER]
6.1.27 SunTrust Deposit Account.[INSERT PAGE NUMBER]
6.1.28 Permitted Acquisition
Deliverables.[INSERT PAGE
NUMBER]
Section
6.2 Negative
Covenants. [INSERT PAGE NUMBER]
6.2.1 Capital Structure, Merger, Acquisition
or Sale of Assets.[INSERT PAGE
NUMBER]
6.2.2 Subsidiaries.[INSERT PAGE NUMBER]
6.2.3 Issuance of Stock.[INSERT PAGE NUMBER]
6.2.4 Purchase or Redemption of Securities,
Dividend Restrictions.[INSERT PAGE
NUMBER]
6.2.5 Indebtedness.[INSERT PAGE NUMBER]
6.2.6 Investments, Loans and Other
Transactions.[INSERT PAGE
NUMBER]
6.2.7 Stock of Subsidiaries.[INSERT PAGE NUMBER]
6.2.8 Subordinated Indebtedness.[INSERT PAGE NUMBER]
6.2.9 Liens.[INSERT PAGE NUMBER]
6.2.10 Transactions with Affiliates.[INSERT PAGE NUMBER]
6.2.11 Other Businesses.[INSERT PAGE NUMBER]
6.2.12 ERISA Compliance.[INSERT PAGE NUMBER]
6.2.13 Prohibition on Hazardous
Materials.[INSERT PAGE NUMBER]
6.2.14 Method of Accounting; Fiscal
Year.[INSERT PAGE NUMBER]
6.2.15 Compensation.[INSERT PAGE NUMBER]
6.2.16 Transfer of Collateral.[INSERT PAGE NUMBER]
6.2.17 Sale and Leaseback.[INSERT PAGE NUMBER]
6.2.18 Disposition of Collateral.[INSERT PAGE NUMBER]
6.2.19 Deposit Accounts.[INSERT PAGE NUMBER]
ARTICLE
VII DEFAULT AND RIGHTS AND REMEDIES [INSERT PAGE
NUMBER]
Section
7.1 Events
of Default. [INSERT PAGE NUMBER]
7.1.1 Failure to Pay.[INSERT PAGE NUMBER]
7.1.2 Breach of Representations and Warranties.[INSERT PAGE NUMBER]
7.1.3 Failure to Comply with
Covenants.[INSERT PAGE NUMBER]
7.1.4 Default Under Other Financing Documents
or Obligations.[INSERT PAGE
NUMBER]
7.1.5 Receiver; Bankruptcy.[INSERT PAGE NUMBER]
7.1.6 Involuntary Bankruptcy, etc.[INSERT PAGE NUMBER]
7.1.7 Judgment.[INSERT PAGE NUMBER]
7.1.8 Execution; Attachment.[INSERT PAGE NUMBER]
7.1.9 Default Under Other
Borrowings.[INSERT PAGE NUMBER]
7.1.10 Challenge to Agreements.[INSERT PAGE NUMBER]
7.1.11 Material Adverse Change.[INSERT PAGE NUMBER]
7.1.12 Impairment of Position.[INSERT PAGE NUMBER]
7.1.13 Collateral Inadequacy.[INSERT PAGE NUMBER]
7.1.14 Change in Ownership.[INSERT PAGE NUMBER]
7.1.15 Liquidation, Termination, Dissolution,
Change in Management, etc.[INSERT PAGE
NUMBER]
7.1.16 De-Listing of Stock.[INSERT PAGE NUMBER]
7.1.17 Government Default.[INSERT PAGE NUMBER]
Section
7.2 Remedies. [INSERT PAGE NUMBER]
7.2.1 Acceleration.[INSERT PAGE NUMBER]
7.2.2 Further Advances.[INSERT PAGE NUMBER]
7.2.3 Uniform Commercial Code.[INSERT PAGE NUMBER]
7.2.4 Specific Rights With Regard to
Collateral.[INSERT PAGE NUMBER]
7.2.5 Application of Proceeds.[INSERT PAGE NUMBER]
7.2.6 Performance by Agent.[INSERT PAGE NUMBER]
7.2.7 Other Remedies.[INSERT PAGE NUMBER]
ARTICLE
VIII THE AGENT [INSERT PAGE
NUMBER]
Section
8.1 Appointment. [INSERT PAGE NUMBER]
Section
8.2 Nature
of Duties. [INSERT PAGE NUMBER]
8.2.1 In General[INSERT PAGE NUMBER]
8.2.2 Express Authorization[INSERT PAGE NUMBER]
Section
8.3 Rights,
Exculpation, Etc. [INSERT PAGE
NUMBER]
Section
8.4 Reliance. [INSERT PAGE NUMBER]
Section
8.5 Indemnification. [INSERT PAGE NUMBER]
Section
8.6 Citizens
Individually. [INSERT PAGE
NUMBER]
Section
8.7 Successor
Agent. [INSERT PAGE NUMBER]
8.7.1 Resignation.[INSERT PAGE NUMBER]
8.7.2 Appointment of Successor.[INSERT PAGE NUMBER]
8.7.3 Successor Agent.[INSERT PAGE NUMBER]
Section
8.8 Collateral
Matters. [INSERT PAGE NUMBER]
8.8.1 Release of Collateral.[INSERT PAGE NUMBER]
8.8.2 Confirmation of Authority, Execution of
Releases.[INSERT PAGE NUMBER]
8.8.3 Absence of Duty.[INSERT PAGE NUMBER]
Section
8.9 Agency
for Perfection. [INSERT PAGE
NUMBER]
Section
8.10 Exercise
of Remedies. [INSERT PAGE NUMBER]
Section
8.11 Consents. [INSERT PAGE NUMBER]
Section
8.12 Dissemination
of Information. [INSERT PAGE
NUMBER]
Section
8.13 Discretionary
Advances. [INSERT PAGE NUMBER]
ARTICLE
IX MISCELLANEOUS [INSERT PAGE
NUMBER]
Section
9.1 Notices. [INSERT PAGE NUMBER]
Section
9.2 Amendments;
Waivers. [INSERT PAGE NUMBER]
9.2.1 In General.[INSERT PAGE NUMBER]
9.2.2 Circumstances Where Consent of all of
the Lenders is Required.[INSERT PAGE
NUMBER]
Section
9.3 Cumulative
Remedies. [INSERT PAGE NUMBER]
Section
9.4 Severability. [INSERT PAGE NUMBER]
Section
9.5 Assignments
by Lenders. [INSERT PAGE NUMBER]
Section
9.6 Participations
by Lenders. [INSERT PAGE NUMBER]
Section
9.7 Disclosure
of Information by Lenders. [INSERT PAGE
NUMBER]
Section
9.8 Successors
and Assigns. [INSERT PAGE NUMBER]
Section
9.9 Continuing
Agreements. [INSERT PAGE NUMBER]
Section
9.10 Enforcement
Costs. [INSERT PAGE NUMBER]
Section
9.11 Applicable
Law; Jurisdiction. [INSERT PAGE
NUMBER]
9.11.1 Applicable Law.[INSERT PAGE NUMBER]
9.11.2 Submission to Jurisdiction.[INSERT PAGE NUMBER]
9.11.3 Appointment of Agent for Service of
Process.[INSERT PAGE NUMBER]
9.11.4 Service of Process.[INSERT PAGE NUMBER]
Section
9.12 Duplicate
Originals and Counterparts. [INSERT PAGE
NUMBER]
Section
9.13 Headings. [INSERT PAGE NUMBER]
Section
9.14 No
Agency. [INSERT PAGE NUMBER]
Section
9.15 Date
of Payment. [INSERT PAGE NUMBER]
Section
9.16 Entire
Agreement. [INSERT PAGE NUMBER]
Section
9.17 Waiver
of Trial by Jury. [INSERT PAGE
NUMBER]
Section
9.18 Liability
of the Agent and the Lenders. [INSERT PAGE
NUMBER]
Section
9.19 Indemnification. [INSERT PAGE NUMBER]
Section
9.20 Patriot
Act Notice. [INSERT PAGE NUMBER]
LIST
OF EXHIBITS [INSERT PAGE NUMBER]
LIST
OF SCHEDULES [INSERT PAGE NUMBER]
TABLE
OF CONTENTS [INSERT PAGE NUMBER]
Tyson01
425010v9 220794.000008
________________________________________________________________
AMENDED
AND RESTATED
Dated
August
19, 2010
By
and Among
VSE
CORPORATION,
ENERGETICS
INCORPORATED,
VSE
SERVICES INTERNATIONAL, INC.,
INTEGRATED
CONCEPTS AND RESEARCH CORPORATION,
G&B
SOLUTIONS, INC.,
AKIMEKA,
LLC
as
Borrowers,
CITIZENS
BANK OF PENNSYLVANIA
and
SUNTRUST
BANK
as
Lenders
and
CITIZENS
BANK OF PENNSYLVANIA
as
Collateral and Administrative Agent
______________________________________________________________________________
Tyson01
425010v9 220794.000008