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INTEGRATED DEFENSE TECHNOLOGIES, INC.
CREDIT AGREEMENT
This CREDIT AGREEMENT is dated as of February 27, 2002 and entered
into by and among INTEGRATED DEFENSE TECHNOLOGIES, INC., a Delaware corporation
("BORROWER"), THE FINANCIAL INSTITUTIONS LISTED ON THE SIGNATURE PAGES HEREOF OR
PARTY FROM TIME TO TIME HERETO (each individually referred to herein as a
"LENDER" and collectively as "LENDERS"), CANADIAN IMPERIAL BANK OF COMMERCE,
acting through one or more of its agencies, branches or affiliates ("CIBC"), as
administrative agent for Lenders (in such capacity, "ADMINISTRATIVE AGENT"),
GENERAL ELECTRIC CAPITAL CORPORATION, as Co-Syndication Agent, CREDIT LYONNAIS
NEW YORK BRANCH, as Co-Syndication Agent and Co-Lead Arranger and CIBC WORLD
MARKETS CORP., as lead arranger and bookrunner (in such capacity, "LEAD
ARRANGER").
R E C I T A L S
WHEREAS, Borrower desires to refinance substantially all of
Borrower's existing indebtedness through an initial public offering of a portion
of Borrower's Capital Stock resulting in not less than $100,000,000 in net
proceeds (the "IPO") and through the credit facility contemplated hereby;
WHEREAS, Lenders, at the request of Borrower, have agreed to extend
certain credit facilities to Borrower, in the aggregate original principal
amount of $125,000,000 the proceeds of which will be used, (i) together with the
proceeds of the IPO, (a) to repay Borrower's existing indebtedness in the
aggregate outstanding principal amount of approximately $180,000,000, which
includes $126,000,000 outstanding under the Credit Agreement dated as of
September 29, 2000, between Borrower, the lenders named therein and First Union
National Bank, as Administrative Agent, as amended or supplemented prior to the
Closing Date (the "EXISTING CREDIT AGREEMENT") and $51,250,000 aggregate
principal amount of 12% Senior Subordinated Notes due December 31, 2007 (the
"SENIOR SUBORDINATED NOTES"), (b) to pay a mandatory redemption price under
Borrower's Senior Subordinated Notes in the amount of approximately $2,562,500
(the "REDEMPTION PREMIUM"), and (c) to pay transaction costs in an amount not in
excess of $10,500,000 (collectively, the "REFINANCING"), and (ii) thereafter, to
provide financing for general corporate purposes of Borrower and its
Subsidiaries, including working capital, capital expenditures, refinancing,
acquisitions, and investments made in accordance with the terms hereof;
WHEREAS, Borrower may increase the original principal amount of the
credit facility contemplated hereby, at Lead Arranger's and Borrower's mutual
discretion, in an aggregate amount of up to $50,000,000 at any time on or before
the date that is two years after the Closing Date in accordance with the terms
hereof;
WHEREAS, Borrower desires to secure all of the Obligations hereunder
and under the other Loan Documents by granting to Administrative Agent, on
behalf of Lenders, a First Priority Lien (except for existing Liens) on
substantially all of its real, personal and mixed
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property, including a pledge of all of the Capital Stock of each of its domestic
Subsidiaries (if any) and all of the non-voting and 65% of the voting Capital
Stock of its foreign Subsidiaries (if any); and
WHEREAS, all of the domestic Subsidiaries of Borrower have agreed to
guarantee the Obligations hereunder and under the other Loan Documents and to
secure their guaranties by granting to Administrative Agent, on behalf of
Lenders, a First Priority Lien (except for existing Liens) on substantially all
of their real, personal and mixed property, including a pledge of all of the
Capital Stock of each of their domestic Subsidiaries (if any) and 65% of the
voting and 100% of the non-voting Capital Stock of their respective foreign
Subsidiaries (if any):
NOW, THEREFORE, in consideration of the premises and the agreements,
provisions and covenants herein contained, Borrower, Lenders and Administrative
Agent agree as follows:
SECTION 1. DEFINITIONS
1.1 CERTAIN DEFINED TERMS.
The following terms used in this Agreement shall have the following
meanings:
"ACCOUNTS" means all present and future rights of Borrower and its
Subsidiaries to payment for goods sold or leased or for services rendered
(including any such rights evidenced by instruments or chattel paper), whether
due or to become due, whether now existing or hereinafter arising and wherever
arising, and whether or not they have been earned by performance.
"ADDITIONAL MORTGAGED PROPERTY" has the meaning assigned to that
term in subsection 6.9A.
"ADDITIONAL MORTGAGES" has the meaning assigned to that term in
subsection 6.9A.
"ADJUSTED LIBOR" means, for any Interest Rate Determination Date
with respect to an Interest Period for a LIBOR Loan, the rate per annum obtained
by DIVIDING (x) the rate of interest equal to (a) the rate per annum determined
on the basis of the rate for deposits in Dollars for a period equal to such
Interest Period commencing on the first day of such Interest Period and
appearing on Telerate Screen 3750 at or about 11:00 A.M., London time, two
Business Days prior to the commencement of such Interest Period, or (b) if such
a rate does not appear on Telerate Screen 3750, the average of the rates per
annum at which Dollar deposits in immediately available funds are offered to
CIBC in the interbank LIBOR market as at or about 10:00 A.M. (New York City
time) two Business Days prior to the beginning of such Interest Period for
delivery on the first day of such Interest Period, and for a period
approximately equal to such Interest Period, BY (y) a percentage equal to 100%
MINUS the stated maximum rate (expressed as a percentage) of all reserve
requirements (including any marginal, emergency, supplemental, special or other
reserves) applicable on such Interest Rate Determination Date to
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any member bank of the Federal Reserve System in respect of "Eurocurrency
liabilities" as defined in Regulation D (or any successor category of
liabilities under Regulation D).
"ADMINISTRATIVE AGENT" has the meaning assigned to that term in the
introduction to this Agreement and also means and includes any successor
Administrative Agent appointed pursuant to subsection 9.5A.
"ADMINISTRATIVE AGENT'S OFFICE" means (i) the office of
Administrative Agent located at CIBC, 425 Lexington Avenue, New York, NY 10017,
or (ii) such other office of Administrative Agent as may from time to time
hereafter be designated as such in a written notice delivered by Administrative
Agent to Borrower and each Lender.
"AFFECTED LENDER" has the meaning assigned to that term in
subsection 2.6C.
"AFFECTED LOANS" has the meaning assigned to that term in subsection
2.6C.
"AFFILIATE", as applied to any Person, means any other Person
directly or indirectly controlling, controlled by, or under common control with,
that Person. For the purposes of this definition, "control" (including, with
correlative meanings, the terms "controlling", "controlled by" and "under common
control with"), as applied to any Person, means the possession, directly or
indirectly, of the power to direct or cause the direction of the management and
policies of that Person, whether through the ownership of voting securities or
by contract or otherwise. For purposes of this definition, a Person shall be
deemed to be "controlled by" a Person if such Person possesses, directly or
indirectly, power to vote 10% or more of the securities having ordinary voting
power for the election of directors of such Person. Notwithstanding the
foregoing, neither Administrative Agent nor any Lender shall be deemed to be an
Affiliate of any of the Loan Parties.
"AGENTS" means collectively, Administrative Agent and any
documentation agent or syndication agent appointed under this Agreement.
"AGREEMENT" means this Credit Agreement dated as of February 27,
2002.
"APPLICABLE BASE RATE MARGIN" means, as at any date of
determination, with respect to any Type of Loan that is a Base Rate Loan, a
percentage per annum equal to the Applicable LIBOR Margin for such Type of Loan
LESS 1.00%.
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"APPLICABLE LIBOR MARGIN" means with respect to Revolving Loans,
Tranche A Term Loans and Tranche B Term Loans that are LIBOR Loans, a percentage
per annum as set forth below opposite the applicable Consolidated Total Leverage
Ratio:
<Table>
<Caption>
CONSOLIDATED TOTAL REVOLVING LOAN AND TRANCHE B APPLICABLE
LEVERAGE RATIO TRANCHE A APPLICABLE LIBOR MARGIN
LIBOR MARGIN
--------------------------------------------------------------------------
<S> <C> <C>
greater than or equal to 2.75% 2.75%
2.50:1.00
less than 2.50:1.00
but greater than or equal to
2.00:1.00 2.50% 2.50%
less than 2.00:1.00
but greater than or equal to
1.50:1.00 2.25% 2.50%
less than 1.50:1.00 2.00% 2.50%
</Table>
"APPROVED FUND" means any fund that invests (in whole or in part) in
commercial loans or any other fund that is managed or advised by a Lender, the
same investment advisor as such Lender or by an Affiliate of such Lender or
investment advisor.
"ASSET SALE" means the sale (in any single transaction or related
series of transactions) by Borrower or any of its Subsidiaries to any Person
other than Borrower or any of its wholly-owned domestic Subsidiaries of (i) any
of the Capital Stock of any of Borrower's Subsidiaries, (ii) substantially all
of the assets of any division or line of business of Borrower or any of its
Subsidiaries, or (iii) any other assets (whether tangible or intangible) of
Borrower or any of its Subsidiaries (other than (a) Inventory sold in the
ordinary course of business, (b) Capital Stock of Borrower, and (c) sales of
assets from Borrower or any of its Subsidiaries to Borrower or any Subsidiary
Guarantor).
"ASSIGNMENT AGREEMENT" means an Assignment Agreement in
substantially the form of EXHIBIT XII annexed hereto.
"BANKRUPTCY CODE" means Title 11 of the United States Code entitled
"Bankruptcy", as now and hereafter in effect, or any successor statute.
"BASE RATE" means, at any time, the higher of (i) the Reference Rate
and (ii) the rate which is one-half of 1% in excess of the Federal Funds
Effective Rate.
"BASE RATE LOANS" means Loans bearing interest at rates determined
by reference to the Base Rate as provided in subsection 2.2A.
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"BORROWER" has the meaning assigned to that term in the introductory
paragraph to this Agreement.
"BORROWING BASE" means (i) the sum of (a) 90% of the face amount of
Eligible Accounts Receivable, (b) 50% of the lower of the cost or fair market
value of Eligible Inventory, and (c) 50% of the face amount of Eligible Unbilled
Accounts Receivable LESS (ii) the amount of the obligations secured by Permitted
Encumbrances on such Eligible Accounts Receivable, Eligible Unbilled Accounts
Receivable or Eligible Inventory.
"BORROWING BASE CERTIFICATE" means a certificate substantially in
the form of EXHIBIT IV annexed hereto delivered to Administrative Agent and
Lenders by Borrower pursuant to subsection 4.1T or subsection 6.1(i).
"BUSINESS DAY" means (i) any day excluding Saturday, Sunday and any
day which is a legal holiday under the laws of the State of New York or is a day
on which banking institutions located in such state are authorized or required
by law or other governmental action to close, and (ii) with respect to all
notices, determinations, fundings and payments in connection with Adjusted LIBOR
or any LIBOR Loan, any day that (a) is a Business Day described in clause (i)
above, and (b) is a day for trading by and between banks in Dollar deposits in
the London Interbank Market.
"CAPITAL LEASE", as applied to any Person, means any lease of any
property (whether real, personal or mixed) by that Person as lessee that, in
conformity with GAAP, is accounted for as a capital lease on the balance sheet
of that Person.
"CAPITAL STOCK" means (i) in the case of a corporation, capital
stock, (ii) in the case of an association or business entity, any and all
shares, interests, participations, rights or other equivalents (however
designated) of capital stock, (iii) in the case of a partnership, partnership
interests (whether general or limited), (iv) in the case of a limited liability
company, membership interests, and (v) any other interest or participation that
confers on a Person the right to receive a share of the profits and losses of,
or distributions of assets of, the issuing Person.
"CASH" means money, currency or a credit balance in a Deposit
Account.
"CASH EQUIVALENTS" means (i) securities issued or directly and fully
guaranteed or insured by the United States of America or any agency or
instrumentality thereof (provided that the full faith and credit of the United
States of America is pledged in support thereof) having maturities of not more
than twelve months from the date of acquisition ("GOVERNMENT OBLIGATIONS"), (ii)
U.S. dollar denominated (or foreign currency fully hedged) time deposits,
certificates of deposit, Eurodollar time deposits and Eurodollar certificates of
deposit of (y) any domestic commercial bank of recognized standing having
capital and surplus in excess of $250,000,000 or (z) any bank whose short-term
commercial paper rating from S&P is at least A-1 or the equivalent thereof or
from Moody's is at least P-1 or the equivalent thereof (any such bank being an
"APPROVED BANK") in each case with maturities of not more than 364 days from the
date of acquisition, (iii) commercial paper and variable or fixed rate notes
issued by any Approved Bank (or by the parent company thereof) or any variable
rate notes issued by, or guaranteed by any domestic corporation rated A-1 (or
the equivalent thereof) or better by S&P or
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P-1 (or the equivalent thereof) or better by Moody's and maturing within six
months of the date of acquisition, (iv) repurchase agreements with a bank or
trust company (including a Lender) or a recognized securities dealer having
capital and surplus in excess of $500,000,000 for direct obligations issued by
or fully guaranteed by the United States of America, (v) obligations of any
state of the United States or any political subdivision thereof for the payment
of the principal and redemption price of and interest on which there shall have
been irrevocably deposited Government Obligations maturing as to principal and
interest at times and in amounts sufficient to provide such payment, and (vi)
auction preferred stock rated in the highest short-term credit rating category
by S&P or Moody's.
"CERTIFICATE RE: NON-BANK STATUS" means a certificate substantially
in the form of Exhibit XXI annexed hereto delivered by a Lender to
Administrative Agent pursuant to subsection 2.7B(iii).
"CEC" means Continental Electronics Corporation, a Nevada
corporation.
"CEC CHILE" means Continental Electronics Corporation - Chile S.A, a
Chilean company.
"CHANGE IN CONTROL" means the occurrence of any of the following
events: (a) (i) any Person or two or more Persons acting in concert (other than
Veritas and its Affiliates) shall have acquired beneficial ownership, directly
or indirectly, or shall have acquired by contract or otherwise, or shall have
entered into a contract or arrangement that, upon consummation, will result in
its or their acquisition of control over, Voting Stock of Borrower (or other
securities convertible into such Voting Stock) representing 25% or more of the
combined voting power of all Voting Stock of Borrower, and (ii) such Person or
Persons acting in concert have beneficial ownership of more Voting Stock of
Borrower than Veritas and its Affiliates, (b) individuals who were members of
the board of directors of Borrower on the Closing Date, together with any other
individuals whose nomination or election to the board of directors was approved
by a majority of the members of the board of directors then in office, fail to
constitute a majority of the members of the board of directors of Borrower then
in office, or (c) a "change in control" (as such term is defined therein) shall
occur as provided in any agreement with respect to Subordinated Indebtedness. As
used herein, "beneficial ownership" shall have the meaning provided in Rule
13d-3 of the Securities and Exchange Commission promulgated under the Securities
Exchange Act of 1934.
"CLOSING DATE" means the date on which the initial Loans are made.
"CLOSING DATE MORTGAGE" has the meaning assigned to that term in
subsection 4.1N(i).
"CLOSING DATE MORTGAGE POLICIES" has the meaning assigned to that
term in subsection 4.1N(ii).
"CLOSING DATE MORTGAGED PROPERTIES" has the meaning give such term
in section 4.1N(i).
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"COLLATERAL" means, collectively, all of the real, personal and
mixed property (including Capital Stock) in which Liens are purported to be
granted pursuant to the Collateral Documents as security for the Obligations.
"COLLATERAL ACCESS AGREEMENT" means any landlord waiver, mortgagee
waiver, bailee letter or any similar acknowledgement or agreement of any
landlord or mortgagee in respect of any Real Property Asset where any Collateral
is located or any warehouseman or processor in possession of any Inventory of
any Loan Party, substantially in the form of EXHIBIT XVI annexed hereto with
such changes thereto as may be agreed to by Administrative Agent in the
reasonable exercise of its discretion.
"COLLATERAL ACCOUNT" has the meaning assigned to that term in the
Security Agreement.
"COLLATERAL DOCUMENTS" means the Security Agreement, the Mortgages,
the Deposit Account Control Agreement, the Instruments of Assignment and all
other instruments or documents delivered by any Loan Party pursuant to this
Agreement or any of the other Loan Documents in order to grant to Administrative
Agent, on behalf of Lenders, a Lien on any real, personal or mixed property of
that Loan Party as security for the Obligations.
"CO-LEAD ARRANGER" has the meaning assigned to that term in the
introduction to this Agreement.
"COMMITMENTS" means the commitments of Lenders to make Loans as set
forth in subsection 2.1A.
"COMPLIANCE CERTIFICATE" means a certificate substantially in the
form of EXHIBIT IX annexed hereto delivered to Administrative Agent and Lenders
by Borrower pursuant to subsection 6.1(iv).
"CONFORMING LEASEHOLD INTEREST" means any Recorded Leasehold
Interest as to which the lessor has agreed in writing for the benefit of
Administrative Agent (which writing has been delivered to Administrative Agent),
whether under the terms of the applicable lease, under the terms of a Landlord
Consent and Estoppel, or otherwise, to the matters described in the definition
of "Landlord Consent and Estoppel," which interest, if a subleasehold or
sub-subleasehold interest, is not subject to any contrary restrictions contained
in a superior lease or sublease.
"CONSOLIDATED CAPITAL EXPENDITURES" means, for any period, the sum
of the aggregate of all expenditures (whether paid in Cash or other
consideration or accrued as a liability and including that portion of Capital
Leases which is capitalized on the consolidated balance sheet of Borrower and
its Subsidiaries) by Borrower and its Subsidiaries during that period that, in
conformity with GAAP, are included in "additions to property, plant or
equipment" or comparable items reflected in the consolidated statement of cash
flows of Borrower and its Subsidiaries. For purposes of this definition, (a) the
purchase price of equipment that is purchased simultaneously with the trade-in
of existing equipment or with insurance proceeds shall be included in
Consolidated Capital Expenditures only to the extent of the gross amount of such
purchase price less the credit granted by the seller of such equipment
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for the equipment being traded in at such time or the amount of such proceeds,
as the case may be, (b) the aggregate of all expenditures by Borrower and its
Subsidiaries during that period to acquire (by purchase or otherwise) the
business, property or fixed assets of any Person, or the Capital Stock or other
evidence of beneficial ownership of any Person that, as a result of such
acquisition, becomes a Subsidiary of Borrower shall be included in Consolidated
Capital Expenditures and (c) the portion which is capitalized on the
consolidated balance sheet of Borrower and its Subsidiaries for software and
related purchases of software, up to an aggregate maximum of $1,500,000 in each
Fiscal Year, shall be excluded from Consolidated Capital Expenditures.
"CONSOLIDATED CURRENT ASSETS" means, as of any date of
determination, the total assets of Borrower and its Subsidiaries on a
consolidated basis that may properly be classified as current assets in
conformity with GAAP, EXCLUDING Cash and Cash Equivalents.
"CONSOLIDATED CURRENT LIABILITIES" means, as of any date of
determination, the total liabilities of Borrower and its Subsidiaries on a
consolidated basis that may properly be classified as current liabilities in
conformity with GAAP, EXCLUDING the current portions of Funded Debt and Capital
Leases.
"CONSOLIDATED EBITDA" means, for any period, the sum, without
duplication, of the amounts for such period of (i) Consolidated Net Income, PLUS
(ii) an amount that, in the determination of Consolidated Net Income for such
period, has been deducted for (A) Consolidated Interest Expense, (B) total
federal, state, local and foreign income, value added and similar taxes, (C)
losses (or minus gains) on the sale or disposition of assets outside the
ordinary course of business, and (D) depreciation, amortization expense and
other non-cash, non-recurring extraordinary charges reducing Consolidated Net
Income PLUS (iii) management fees to the extent paid as permitted by subsection
7.10A(iii), PLUS (iv) on a one-time basis, costs and expenses incurred by the
Loan Parties in connection with the Transactions (it being understood that any
amount which under clause (ii)(D) above was added back to Consolidated EBITDA
during any period but was paid in cash during a subsequent period will reduce
Consolidated EBITDA to the extent of such payment in such subsequent period),
all of the foregoing components as determined on a consolidated basis for
Borrower and its Subsidiaries in conformity with GAAP; PROVIDED that in
calculating any such items for purposes of Consolidated Total Leverage Ratio for
such period, any Asset Sales or other acquisitions or dispositions of assets
during such period shall have been deemed to have occurred on the first day of
such period.
"CONSOLIDATED EXCESS CASH FLOW" means, for any period, an amount (if
positive) equal to (i) the sum, without duplication, of the amounts for such
period of (a) Consolidated EBITDA (determined by adding back thereto any amount
deducted in the calculation of Consolidated Net Income that was paid, incurred
or accrued in violation of any of the provisions of this Agreement) and (b) the
Consolidated Working Capital Adjustment MINUS (ii) the sum, without duplication,
of the amounts for such period of (a) voluntary and scheduled repayments of
Consolidated Total Debt (excluding repayments of Revolving Loans except to the
extent the Revolving Loan Commitments are permanently reduced in connection with
such repayments), (b) Consolidated Capital Expenditures, (c) Consolidated
Interest Expense, (d) the provision for current taxes based on income of
Borrower and its Subsidiaries and payable in
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Cash with respect to such period and (e) management fees to the extent paid as
permitted by subsection 7.10A(iii) and bank fees paid by Borrower in connection
with the Transactions to the extent not deducted in determining Consolidated
EBITDA.
"CONSOLIDATED FIXED CHARGES" means, for any period, the sum (without
duplication) of the amounts for such period of (i) Consolidated Interest
Expense, (ii) Cash payments for taxes based on income, and (iii) all scheduled
principal payments to be made by Borrower or any of its Subsidiaries (whether or
not such payments are actually made) on all Indebtedness of Borrower and its
Subsidiaries (including the principal component of all Capital Leases), all of
the foregoing as determined on a consolidated basis for Borrower and its
Subsidiaries in conformity with GAAP.
"CONSOLIDATED INTEREST EXPENSE" means, for any period, total cash
interest expense (including that portion attributable to Capital Leases in
accordance with GAAP and capitalized interest) of Borrower and its Subsidiaries
on a consolidated basis with respect to all outstanding Indebtedness of Borrower
and its Subsidiaries, including all commissions, discounts and other fees and
charges owed with respect to letters of credit and bankers' acceptance financing
and net costs under Interest Rate Agreements, but excluding, however, any
amounts referred to in subsection 2.3 payable to Administrative Agent and
Lenders on or before the Closing Date.
"CONSOLIDATED NET INCOME" means, for any period, the net income (or
loss) of Borrower and its Subsidiaries on a consolidated basis for such period
taken as a single accounting period determined in conformity with GAAP, without
giving effect to any non-cash losses as a result of impairment of goodwill as
required by Statement of Financial Accounting Standards No. 142; PROVIDED that
there shall be excluded (i) the income (or loss) of any Person (other than a
Subsidiary of Borrower) in which any other Person (other than Borrower or any of
its Subsidiaries) has a joint interest, except to the extent of the amount of
dividends or other distributions actually paid to Borrower or any of its
Subsidiaries by such Person during such period, (ii) the income (or loss) of any
Person accrued prior to the date it becomes a Subsidiary of Borrower or is
merged into or consolidated with Borrower or any of its Subsidiaries or that
Person's assets are acquired by Borrower or any of its Subsidiaries, (iii) the
income of any Subsidiary of Borrower to the extent that the declaration or
payment of dividends or similar distributions by that Subsidiary of that income
is not at the time permitted by operation of the terms of its charter or any
agreement, instrument, judgment, decree, order, statute, rule or governmental
regulation applicable to that Subsidiary, (iv) any after-tax gains or losses
attributable to Asset Sales or returned surplus assets of any Pension Plan, and
(v) (to the extent not included in clauses (i) through (iv) above) any net
extraordinary gains or net non-cash extraordinary losses.
"CONSOLIDATED NET WORTH" means, as at any date of determination, the
sum of the Capital Stock and additional paid-in capital plus retained earnings
(or minus accumulated deficits) of Borrower and its Subsidiaries on a
consolidated basis determined in conformity with GAAP, without giving effect to
any non-cash losses as a result of impairment of goodwill as required by
Statement of Financial Accounting Standards No. 142.
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"CONSOLIDATED RENTAL PAYMENTS" means, for any period, the aggregate
amount of all rents paid or payable by Borrower and its Subsidiaries on a
consolidated basis during that period under all Operating Leases to which
Borrower or any of its Subsidiaries is a party as lessee.
"CONSOLIDATED TOTAL DEBT" means, as at any date of determination,
the aggregate principal amount of all Indebtedness of Borrower and its
Subsidiaries other than the face amount of performance letters of credit where
the conditions to drawing have not been met LESS the amount of Cash and Cash
Equivalents in excess of $500,000.
"CONSOLIDATED TOTAL LEVERAGE RATIO" means, as at the last day of any
Fiscal Quarter, the ratio of (a) Consolidated Total Debt as of the last day of
such Fiscal Quarter, to (b) Consolidated EBITDA for the four Fiscal Quarter
period then ended.
"CONSOLIDATED WORKING CAPITAL" means, as of any date of
determination, the excess (or deficit) of Consolidated Current Assets over
Consolidated Current Liabilities.
"CONSOLIDATED WORKING CAPITAL ADJUSTMENT" means, for any period on a
consolidated basis, the amount (which may be a negative number) by which
Consolidated Working Capital as of the beginning of such period exceeds (or is
less than) Consolidated Working Capital as of the end of such period.
"CONTINGENT OBLIGATION", as applied to any Person, means any direct
or indirect liability, contingent or otherwise, of that Person (i) with respect
to any Indebtedness, lease, dividend or other obligation of another if the
primary purpose or intent thereof by the Person incurring the Contingent
Obligation is to provide assurance to the obligee of such obligation of another
that such obligation of another will be paid or discharged, or that any
agreements relating thereto will be complied with, or that the holders of such
obligation will be protected (in whole or in part) against loss in respect
thereof, or (ii) under Hedge Agreements. Contingent Obligations shall include
(a) the direct or indirect guaranty, endorsement (otherwise than for collection
or deposit in the ordinary course of business), co-making, discounting with
recourse or sale with recourse by such Person of the obligation of another, (b)
the obligation to make take-or-pay or similar payments if required regardless of
non-performance by any other party or parties to an agreement, and (c) any
liability of such Person for the obligation of another through any agreement
(contingent or otherwise) (1) to purchase, repurchase or otherwise acquire such
obligation or any security therefor, or to provide funds for the payment or
discharge of such obligation (whether in the form of loans, advances, stock
purchases, capital contributions or otherwise) or (2) to maintain the solvency
or any balance sheet item, level of income or financial condition of another if,
in the case of any agreement described under subclauses (1) or (2) of this
sentence, the primary purpose or intent thereof is as described in the preceding
sentence. The amount of any Contingent Obligation shall be equal to the amount
of the obligation so guaranteed or otherwise supported or, if less, the amount
to which such Contingent Obligation is specifically limited.
"CONTRACTUAL OBLIGATION", as applied to any Person, means any
provision of any Security issued by that Person or of any Material Contract to
which that Person is a party or by which it or any of its properties is bound or
to which it or any of its properties is subject.
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"CURRENCY AGREEMENT" means any foreign exchange contract, currency
swap agreement, futures contract, option contract, synthetic cap or other
similar agreement or arrangement to which Borrower or any of its Subsidiaries is
a party.
"DEPOSIT ACCOUNT" means a demand, time, savings, passbook, brokerage
or similar account maintained with a Person or securities intermediary engaged
in the business of banking, including a savings bank, savings and loan
association, credit union or trust company.
"DEPOSIT ACCOUNT CONTROL AGREEMENT" means the Deposit Account
Control Agreement executed and delivered by Borrower and the depository bank at
which certain Deposit Accounts are maintained, substantially in the form of
Exhibit XX annexed hereto.
"DOLLARS" and the sign "$" mean the lawful money of the United
States of America.
"ELIGIBLE ACCOUNTS RECEIVABLE" means, as at any date of
determination, the total face amount of those invoiced Accounts of Borrower and
the Subsidiary Guarantors consisting of ordinary trade accounts receivable owned
by Borrower and the Subsidiary Guarantors, payable in Cash in Dollars on
delivery or at a future date and arising out of the final sale of Inventory or
the provision of services in the ordinary course of business of Borrower and the
Subsidiary Guarantors; PROVIDED that in determining the eligibility of Eligible
Accounts Receivable for Borrower and the Subsidiary Guarantors, there shall be
excluded (to the extent included above):
(i) Accounts with respect to which more than 120 days have elapsed
since the invoice date;
(ii) Accounts with respect to which the Account debtor is a
director, officer, shareholder, employee or an Affiliate of Borrower if
the terms of such Accounts are less favorable to Borrower or any such
Subsidiary than those which might be obtained at the time from a Person
who is not such a director, officer, shareholder, employee or an
Affiliate;
(iii) Accounts with respect to which the Account debtor is the
United States of America or any department, agency or instrumentality
thereof, except for those Accounts as to which Borrower or any such
Subsidiary has assigned its right to payment thereof to the Administrative
Agent, and the assignment has been acknowledged pursuant to the Assignment
of Claims Act of 1940 (31 U.S.C. 3727); provided, however, that until the
date that is 180 days after the Closing Date, such Accounts shall not be
excluded on the basis that the assignment has not been acknowledged
pursuant to the Assignment of Claims Act of 1940;
(iv) Accounts with respect to which the Account debtor is not a
resident of the United States or Canada, unless the Account debtor has
supplied Borrower or any such Subsidiary with (a) an irrevocable
commercial letter of credit, issued by a financial institution, or (b)
credit insurance, in each case in form and substance satisfactory to the
Administrative Agent;
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(v) Accounts with respect to which the Account debtor has asserted a
counterclaim, allowance, deduction, or right to set off or which is
otherwise unearned or disputed, including Accounts which reflect "barter"
activity;
(vi) Accounts with respect to which the Administrative Agent, on
behalf of Lenders and the Issuing Lender, does not have a valid, First
Priority Lien or which are not free of all Liens or other claims of all
other Persons other than Liens permitted under this Agreement;
(vii) Accounts with respect to which the Account debtor is the
subject of bankruptcy or a similar insolvency proceeding, or has made an
assignment for the benefit of creditors, whose assets have been conveyed
to a receiver or trustee, or who has failed or suspended or gone out of
business;
(viii) Accounts with respect to which the Account debtor's
obligation to pay the Account is conditional upon the Account debtor's
approval or otherwise subject to return rights with respect to the goods
purchased giving rise to any such Account (other than return rights based
on product warranties in the ordinary course of business);
(ix) Accounts which are not in full force and effect or do not
constitute legal, valid and binding obligations of the Account debtor
enforceable against the Account debtor in accordance with their terms;
(x) Accounts with respect to which the terms or conditions prohibit
or restrict assignment or collection rights;
(xi) Accounts with respect to which the Account debtor is located in
New Jersey which exceed, individually or in the aggregate, $150,000,
unless Borrower or such Subsidiary has filed, or is exempt from filing, a
Notice of Business Activities Report with the New Jersey Division of
Taxation for the then current year;
(xii) Accounts with respect to which the Account debtor is a
supplier or a creditor of Borrower or any of its Subsidiaries up to an
amount equal to the amount owed by Borrower and its Subsidiaries to such
Account debtor;
(xiii) Accounts evidenced by notes, chattel paper or other
instruments, unless such notes, chattel paper or instruments (a) have been
delivered to and are in the possession of the Administrative Agent, or (b)
the aggregate amount of such Accounts is not greater than $50,000;
(xiv) Accounts (if any) created in connection with any sale where
payment is due on delivery of Inventory sold until the Inventory is
actually delivered; and
(xv) Accounts which fail to meet such other specifications and
requirements as may from time to time to be established by the
Administrative Agent in its reasonable discretion.
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"ELIGIBLE ASSIGNEE" means (A) (i) a commercial bank organized under
the laws of the United States or any state thereof; (ii) a savings and loan
association or savings bank organized under the laws of the United States or any
state thereof; (iii) a commercial bank organized under the laws of any other
country or a political subdivision thereof (PROVIDED that (x) such bank is
acting through a branch or agency located in the United States or (y) such bank
is organized under the laws of a country that is a member of the Organization
for Economic Cooperation and Development or a political subdivision of such
country); and (iv) any other entity which is an "accredited investor" (as
defined in Regulation D under the Securities Act) which extends credit or buys
loans as one of its businesses including insurance companies, mutual funds,
lease financing companies and investment funds and any Approved Funds; (B) a
Lender, an Affiliate of a Lender, or an Approved Fund; or (C) any other Person
(other than a natural Person) approved by (1) Administrative Agent, (2) in the
case of any assignment of a Revolving Loan, Issuing Lender, and (3) unless (x)
such Person is taking delivery of an assignment in connection with physical
settlement of a credit derivatives transaction, or (y) an Event of Default or
Potential Event of Default has occurred and is continuing, Borrower (each such
approval not to be unreasonably withheld or delayed); PROVIDED that no Affiliate
of Borrower and no Person who owns Capital Stock of Holdings shall be an
Eligible Assignee. If the consent of Borrower to an assignment to an Eligible
Assignee is required hereunder (including a consent to an assignment which does
not meet the minimum assignment thresholds specified in subsection 10.1B(i)),
Borrower shall be deemed to have given its consent five Business Days after the
date notice thereof has been delivered by the assigning Lender (through
Administrative Agent) unless such consent is expressly refused by Borrower prior
to such fifth Business Day.
"ELIGIBLE INVENTORY" means, as at any date of determination, the
gross dollar value (valued at the lower of cost (on a "first-in, first-out"
basis) or fair market value) of all Inventory owned by Borrower and the
Subsidiary Guarantors, less appropriate reserves determined in accordance with
GAAP applied on a consistent basis; PROVIDED that in determining the eligibility
of Eligible Inventory for Borrower and the Subsidiary Guarantors, there shall be
excluded (to the extent included above):
(i) Inventory with respect to which the Administrative Agent, on
behalf of Lenders and the Issuing Lender, does not have a valid, First
Priority Lien or which are not free of all Liens or other claims of all
other Persons other than Liens permitted under this Agreement;
(ii) Inventory that fails to meet standards for sale or use imposed
by Government Authorities having a regulatory authority over such
Inventory or its use or sale;
(iii) Inventory that is not useable or saleable at prices
approximating their cost (after taking into account, without duplication,
the amount of any reserves for obsolescence, unsaleability or decline in
value);
(iv) Inventory that is not in the possession and control of Borrower
or a Subsidiary Guarantor (including a common carrier under a bill of
lading in such Person's name), and if located in a warehouse or other
facility leased by Borrower or any of the
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Subsidiary Guarantors, the warehouseman or lessor has not delivered to
Administrative Agent a lien waiver or subordination in such form, if any,
as may be requested by the Administrative Agent; and
(v) Inventory consisting of materials, supplies and work in process.
"ELIGIBLE UNBILLED ACCOUNTS RECEIVABLE" means all Accounts from
Government Contracts or a prime contractor on a Government Contract that would
otherwise be Eligible Accounts Receivables and with respect to which the sale of
Inventory has occurred or the rendering of services has been performed and the
payment obligations therefore are owing but which have not yet been invoiced in
the ordinary course of business.
"EMPLOYEE BENEFIT PLAN" means any "employee benefit plan" as defined
in Section 3.3 of ERISA, which is or was maintained or contributed to by
Borrower, any of its Subsidiaries or any of their respective ERISA Affiliates.
"ENVIRONMENTAL CLAIM" means any investigation, notice, notice of
violation, claim, action, suit, proceeding, demand, abatement order or other
order or directive (conditional or otherwise), by any Governmental Authority or
any other Person, arising (i) pursuant to or in connection with any actual or
alleged violation of any Environmental Law, (ii) in connection with any
Hazardous Materials or any actual or alleged Hazardous Materials Activity, or
(iii) in connection with any actual or alleged damage, injury, threat or harm to
health, safety, natural resources or the environment.
"ENVIRONMENTAL INDEMNITY" has the meaning assigned to that term in
subsection 4.1M.
"ENVIRONMENTAL LAWS" means any and all current or future statutes,
ordinances, orders, rules, regulations, guidance documents, judgments,
Governmental Authorizations, or any other requirements of any Governmental
Authority relating to (i) environmental matters, including those relating to any
Hazardous Materials Activity, (ii) the generation, use, storage, transportation
or disposal of Hazardous Materials, or (iii) occupational safety and health,
industrial hygiene, land use or the protection of human, plant or animal health
or welfare, in any manner applicable to Borrower or any of its Subsidiaries or
any Facility, including the Comprehensive Environmental Response, Compensation,
and Liability Act (42 U.S.C.ss. 9601 ET SEQ.), the Hazardous Materials
Transportation Act (49 U.S.C.ss. 1801 ET SEQ.), the Resource Conservation and
Recovery Act (42 U.S.C.ss. 6901 ET SEQ.), the Federal Water Pollution Control
Act (33 U.S.C.ss. 1251 ET SEQ.), the Clean Air Act (42 U.S.C.ss. 7401 ET SEQ.),
the ToxiC Substances Control Act (15 U.S.C.ss. 2601 ET SEQ.), the Federal
Insecticide, Fungicide and Rodenticide Act (7 U.S.C.ss.136 ET SEQ.), the
Occupational Safety and Health Act (29 U.S.C.ss. 651 ET SEQ.), the Oil Pollution
Act (33 U.S.C.ss. 2701 ET SEQ.) and thE Emergency Planning and Community
Right-to-Know Act (42 U.S.C.ss. 11001 ET SEQ.), each as amended or supplemented,
any analogous present or future state or local statutes or laws, and any
regulations promulgated pursuant to any of the foregoing.
"ERISA" means the Employee Retirement Income Security Act of 1974.
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"ERISA AFFILIATE" means, as applied to any Person (i) any
corporation that is a member of a controlled group of corporations within the
meaning of Section 414(b) of the Internal Revenue Code of which that Person is a
member; (ii) any trade or business (whether or not incorporated) that is a
member of a group of trades or businesses under common control within the
meaning of Section 414(c) of the Internal Revenue Code of which that Person is a
member; and (iii) any member of an affiliated service group within the meaning
of Section 414(m) or (o) of the Internal Revenue Code of which that Person, any
corporation described in clause (i) above or any trade or business described in
clause (ii) above is a member. Any former ERISA Affiliate of a Person or any of
its Subsidiaries shall continue to be considered an ERISA Affiliate of such
Person or such Subsidiary within the meaning of this definition with respect to
the period such entity was an ERISA Affiliate of such Person or such Subsidiary
and with respect to liabilities arising after such period (but attributable to
the period such entity was an ERISA Affiliate of such Person or such Subsidiary)
for which such Person or such Subsidiary could be liable under the Internal
Revenue Code or ERISA.
"ERISA EVENT" means (i) a "reportable event" within the meaning of
Section 4043 of ERISA and the regulations issued thereunder with respect to any
Pension Plan (excluding those for which the provision for 30-day notice to the
PBGC has been waived by regulation); (ii) the failure to meet the minimum
funding standard of Section 412 of the Internal Revenue Code with respect to any
Pension Plan (whether or not waived in accordance with Section 412(d) of the
Internal Revenue Code) or the failure to make by its due date a required
installment under Section 412(m) of the Internal Revenue Code with respect to
any Pension Plan or the failure to make any required contribution to a
Multiemployer Plan, unless the failure is cured within two Business Days after
such failure; (iii) the provision by the administrator of any Pension Plan
pursuant to Section 4041(a)(2) of ERISA of a notice of intent to terminate such
plan in a distress termination described in Section 4041(c) of ERISA; (iv) the
withdrawal by Borrower, any of its Subsidiaries or any of their respective ERISA
Affiliates from any Pension Plan with two or more contributing sponsors or the
termination of any such Pension Plan resulting in liability pursuant to Section
4063 or 4064 of ERISA; (v) the institution by the PBGC of proceedings to
terminate any Pension Plan, or the occurrence of any event or condition which
might reasonably constitute grounds under ERISA for the termination of, or the
appointment of a trustee to administer, any Pension Plan; (vi) the imposition of
liability on Borrower, any of its Subsidiaries or any of their respective ERISA
Affiliates pursuant to Section 4062(e) or 4069 of ERISA or by reason of the
application of Section 4212(c) of ERISA; (vii) the withdrawal of Borrower, any
of its Subsidiaries or any of their respective ERISA Affiliates in a complete or
partial withdrawal (within the meaning of Sections 4203 and 4205 of ERISA) from
any Multiemployer Plan if there is any potential liability therefor, or the
receipt by Borrower, any of its Subsidiaries or any of their respective ERISA
Affiliates of notice from any Multiemployer Plan that it is in reorganization or
insolvency pursuant to Section 4241 or 4245 of ERISA, or that it intends to
terminate or has terminated under Section 4041A or 4042 of ERISA; (viii) the
occurrence of an act or omission which would give rise to the imposition on
Borrower, any of its Subsidiaries or any of their respective ERISA Affiliates of
fines, penalties, taxes or related charges under Chapter 43 of the Internal
Revenue Code or under Section 409, Section 502(c), (i) or (l), or Section 4071
of ERISA in respect of any Employee Benefit Plan any of which would constitute a
Material Adverse Effect; (ix) the assertion of a material claim (other than
routine claims for benefits) against any Employee Benefit Plan other than a
Multiemployer Plan or the assets thereof, or against Borrower, any of its
Subsidiaries or any of their respective ERISA
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Affiliates in connection with any Employee Benefit Plan; (x) receipt from the
Internal Revenue Service of final determination of the failure of any Pension
Plan (or any other Employee Benefit Plan intended to be qualified under Section
401(a) of the Internal Revenue Code) to qualify under Section 401(a) of the
Internal Revenue Code, or the failure of any trust forming part of any Pension
Plan to qualify for exemption from taxation under Section 501(a) of the Internal
Revenue Code which cannot be remedied; or (xi) the imposition of a Lien pursuant
to Section 401(a)(29) or 412(n) of the Internal Revenue Code or pursuant to
ERISA with respect to any Pension Plan.
"EVENT OF DEFAULT" means each of the events set forth in Section 8.
"EXCHANGE ACT" means the Securities Exchange Act of 1934.
"EXISTING CREDIT AGREEMENT" has the meaning assigned to that term in
the Recitals.
"FACILITIES" means all real property (including all buildings,
fixtures or other improvements located thereon) now, hereafter or heretofore
owned, leased, operated or used by Borrower or any of its Subsidiaries or any of
their respective predecessors or Affiliates.
"FEDERAL FUNDS EFFECTIVE RATE" means, for any period, a fluctuating
interest rate equal for each day during such period to 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, for the next preceding Business Day) by the
Federal Reserve Bank of New York, or, if such rate is not so published for any
day which is a Business Day, the average of the quotations for such day on such
transactions received by Administrative Agent from three Federal funds brokers
of recognized standing selected by Administrative Agent.
"FINANCIAL PLAN" has the meaning assigned to that term in subsection
6.1(xii).
"FIRST PRIORITY" means, with respect to any Lien purported to be
created in any Collateral pursuant to any Collateral Document, that (i) such
Lien is perfected and has priority over any other Lien on such Collateral (other
than Permitted Encumbrances) and (ii) such Lien is the only Lien (other than
Liens permitted pursuant to subsection 7.2A) to which such Collateral is
subject.
"FISCAL QUARTER" means a fiscal quarter of any Fiscal Year.
"FISCAL YEAR" means the fiscal year of Borrower and its Subsidiaries
ending on December 31 of each calendar year.
"FLOOD HAZARD PROPERTY" means a Mortgaged Property or an Additional
Mortgaged Property located in an area designated by the Federal Emergency
Management Agency as having special flood or mud slide hazards.
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"FUND" means any Person (other than a natural Person) that is (or
will be) engaged in making, purchasing, holding or otherwise investing in
commercial loans and similar extensions of credit in the ordinary course of its
business.
"FUNDED DEBT", as applied to any Person, means (a) all Indebtedness
of that Person (including any current portions thereof) which by its terms or by
the terms of any instrument or agreement relating thereto matures more than one
year from, or is directly renewable or extendable at the option of that Person
to a date more than one year from (including an option of that Person under a
revolving credit or similar agreement obligating the lender or lenders to extend
credit over a period of one year or more from), the date of the creation
thereof, other than (i) any performance letters of credit (i.e., letters of
credit which can be drawn upon only if Borrower or any of its Subsidiaries fails
to comply with or perform under any material provision of any contract) issued
for the account of such Person, (b) all Funded Debt of others of the type
referred to in clause (a) above secured by (or for which the holder of such
Indebtedness has an existing right, contingent or otherwise, to be secured by)
any Lien on, or payable out of the proceeds of production from, property owned
or acquired by such Person, whether or not the obligations secured thereby have
been assumed, (c) all Contingent Obligations of such Person with respect to
Funded Debt of the type referred to in clause (a) above of another Person and
(d) Funded Debt of the type referred to in clause (a) above of any partnership
or unincorporated joint venture in which such Person is legally obligated or has
a reasonable expectation of being liable with respect thereto.
"FUNDING DATE" means the date of the funding of a Loan.
"GAAP" means, subject to the limitations on the application thereof
set forth in subsection 1.2, generally accepted accounting principles set forth
in opinions and pronouncements of the Accounting Principles Board of the
American Institute of Certified Public Accountants and statements and
pronouncements of the Financial Accounting Standards Board or in such other
statements by such other entity as may be approved by a significant segment of
the accounting profession, in each case as the same are applicable to the
circumstances as of the date of determination.
"GOVERNING BODY" means the board of directors or other body having
the power to direct or cause the direction of the management and policies of a
Person that is a corporation, partnership, trust or limited liability company.
"GOVERNMENTAL AUTHORITY" means any political subdivision or
department thereof, any other governmental or regulatory body, commission,
central bank, board, bureau, organ or instrumentality or any court, in each case
whether federal, state, local or foreign, and any corporation or other entity
owned or controlled, through stock or capital ownership or otherwise, by any of
the foregoing.
"GOVERNMENTAL AUTHORIZATION" means any permit, license,
registration, authorization, plan, directive, consent, order or consent decree
of or from, or notice to, any Governmental Authority.
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"GOVERNMENT CONTRACT" means any contract entered into between
Borrower or any of its Subsidiaries and the government of the United States of
America, the District of Columbia, or any department, agency or instrumentality
thereof.
"HAZARDOUS MATERIALS" means (i) any chemical, material or substance
at any time defined as or included in the definition of "hazardous substances",
"hazardous wastes", "hazardous materials", "extremely hazardous waste", "acutely
hazardous waste", "radioactive waste", "biohazardous waste", "pollutant", "toxic
pollutant", "contaminant", "restricted hazardous waste", "infectious waste",
"toxic substances", or any other term or expression intended to define, list or
classify substances by reason of properties harmful to health, safety or the
indoor or outdoor environment (including harmful properties such as
ignitability, corrosivity, reactivity, carcinogenicity, toxicity, reproductive
toxicity, "TCLP toxicity" or "EP toxicity" or words of similar import under any
applicable Environmental Laws); (ii) any oil, petroleum, petroleum fraction or
petroleum derived substance; (iii) any drilling fluids, produced waters and
other wastes associated with the exploration, development or production of crude
oil, natural gas or geothermal resources; (iv) any flammable substances or
explosives; (v) any radioactive materials; (vi) any asbestos-containing
materials; (vii) urea formaldehyde foam insulation; (viii) electrical equipment
which contains any oil or dielectric fluid containing polychlorinated biphenyls;
(ix) pesticides; and (x) any other chemical, material or substance, exposure to
which is prohibited, limited or regulated by any Governmental Authority or which
poses a hazard to the health and safety of the owners, occupants or any Persons
in the vicinity of any Facility or to the indoor or outdoor environment.
"HAZARDOUS MATERIALS ACTIVITY" means any past, current, proposed or
threatened activity, event or occurrence involving any Hazardous Materials,
including the use, manufacture, possession, storage, holding, presence,
existence, location, Release, threatened Release, discharge, placement,
generation, transportation, processing, construction, treatment, abatement,
removal, remediation, disposal, disposition or handling of any Hazardous
Materials, and any corrective action or response action with respect to any of
the foregoing.
"HEDGE AGREEMENT" means an Interest Rate Agreement or a Currency
Agreement designed to hedge against fluctuations in interest rates or currency
values, respectively.
"HOLDINGS" means IDT Holding, L.L.C., a Delaware limited liability
company.
"INCREASING LENDERS" has the meaning assigned to that term in
subsection 2.1A(iv).
"INDEBTEDNESS", as applied to any Person, means, without
duplication, (a) all obligations of such Person for borrowed money, (b) all
obligations of such Person evidenced by bonds, debentures, notes or similar
instruments, or upon which interest payments are customarily made without regard
to any original issue discount relating thereto, (c) all obligations of such
Person under conditional sale or other title retention agreements relating to
property purchased by such Person (other than customary reservations or
retentions of title under agreements with suppliers entered into in the ordinary
course of business), (d) all obligations of such Person issued or assumed as the
deferred purchase price of property or services purchased by such
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Person (other than trade debt incurred in the ordinary course of business and
due within six months of the incurrence thereof) which would appear as
liabilities on a balance sheet of such Person, (e) all obligations of such
Person under take-or-pay or similar arrangements or under commodities
agreements, (f) all indebtedness of others secured by (or for which the holder
of such Indebtedness has an existing right, contingent or otherwise, to be
secured by) any Lien on, or payable out of the proceeds of production from,
property owned or acquired by such Person, whether or not the obligations
secured thereby have been assumed, (g) all Contingent Obligations of such Person
with respect to Indebtedness of another Person, (h) the principal portion of all
obligations of such Person under Capital Leases, (i) all obligations of such
Person under Hedge Agreements, (j) the maximum amount of all letters of credit
issued or bankers' acceptances facilities created for the account of such Person
and, without duplication, all drafts drawn thereunder (to the extent
unreimbursed), (k) all preferred Capital Stock issued by such Person and which
by the terms thereof could be (at the request of the holders thereof or
otherwise) subject to mandatory sinking fund payments, redemption or other
acceleration, (1) the principal balance outstanding under any synthetic lease,
tax retention operating lease, off-balance sheet loan or similar off-balance
sheet financing product, and (m) the Indebtedness of any partnership or
unincorporated joint venture in which such Person is a general partner or a
joint venturer, but not including any Indebtedness payable to the United States
Armed Forces. Obligations under Interest Rate Agreements and Currency Agreements
constitute (1) in the case of Hedge Agreements, Contingent Obligations, and (2)
in all other cases, Investments, and in neither case constitute Indebtedness.
"INDEMNITEES" has the meaning assigned to that term in subsection
10.3.
"INSTRUMENT OF ASSIGNMENT" means an Instrument of Assignment
executed and delivered by Borrower on the Closing Date and from time to time
thereafter, substantially in the form of EXHIBIT XXII annexed hereto.
"INTELLECTUAL PROPERTY" means (i) all trademarks, service marks,
designs, logos, indicia, tradenames, trade dresses, corporate names, business
names, fictitious business names and/or other source and/or business identifiers
and applications pertaining thereto, used in or necessary for the conduct of the
business of Borrower or any of its Subsidiaries that are material to the
condition (financial or otherwise), business or operations of Borrower and its
Subsidiaries, including the trademarks identified in Schedule 5.5C (all the
foregoing being referred to herein collectively as the "TRADEMARKS"); and all
goodwill associated therewith (the "ASSOCIATED GOODWILL") relating to the
Trademarks; (ii) all registrations that have been or may hereafter be issued or
applied for on the Trademarks in the United States and any state thereof and in
foreign countries (the "TRADEMARK REGISTRATIONS"); (iii) all patents and patent
applications and rights and interests in patents and patent applications that
are used in or necessary for the conduct of the business of Borrower or its
Subsidiaries that are material to the condition (financial or otherwise),
business or operations of Borrower or any of its Subsidiaries, including the
patents and patent applications listed in Schedule 5.5C, and all re-issues,
divisions, continuations, renewals, extensions and continuations-in-part thereof
(all of the foregoing being collectively referred to as the "PATENTS") and all
Associated Goodwill related to such Patents; (iv) various published and
unpublished works of authorship, including, computer programs, computer data
bases, other computer software, including, without limitation, object code and
source code, mask works, semiconductor chips, masks, trade secrets, trade secret
rights, ideas, drawings, designs,
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writings, know-how, techniques, processes and formulas, used in or necessary for
the conduct of the business of Borrower or any of its Subsidiaries that are
material to the condition (financial or otherwise), business or operations of
Borrower and its Subsidiaries (all the foregoing being referred to herein
collectively as the "COPYRIGHTS") and all Associated Goodwill relating to such
Copyrights; (v) all copyright registrations issued to Borrower or any of its
Subsidiaries for any copyright registrations that have been issued or applied
for on the Copyrights in the United States and any state thereof and in foreign
countries (all the foregoing being referred to herein collectively as the
"COPYRIGHT REGISTRATIONS") and all Associated Goodwill relating to such
Copyright Registrations and (vi) all common law and other rights in and to the
Copyrights (including all copyright licenses) in the United States and any state
thereof and in foreign countries used in or necessary for the conduct of the
business of Borrower or its Subsidiaries that are material to the condition
(financial or otherwise), business or operations of Borrower and its
Subsidiaries (all of the foregoing being referred to herein collectively as the
"COPYRIGHT RIGHTS") and all Associated Goodwill relating to such Copyright
Rights.
"INTEREST PAYMENT DATE" means (i) with respect to any Base Rate
Loan, the last Business Day of each March, June, September and December of each
year, commencing on the first such date to occur after the Closing Date, and
(ii) with respect to any LIBOR Loan, the last day of each Interest Period
applicable to such Loan; PROVIDED that in the case of each Interest Period of
six months "Interest Payment Date" shall also include the date that is three
months after the commencement of such Interest Period.
"INTEREST PERIOD" has the meaning assigned to that term in
subsection 2.2B.
"INTEREST RATE AGREEMENT" means any interest rate swap agreement,
interest rate cap agreement, interest rate collar agreement or other similar
agreement or arrangement to which Borrower or any of its Subsidiaries is a
party.
"INTEREST RATE DETERMINATION DATE", with respect to any Interest
Period, means the second Business Day prior to the first day of such Interest
Period.
"INTERNAL REVENUE CODE" means the Internal Revenue Code of 1986, as
amended to the date hereof and from time to time hereafter, and any successor
statute.
"INVENTORY" means, with respect to any Person as of any date of
determination, all goods, merchandise and other personal property which are then
held by such Person for sale or lease, including raw materials and work in
process.
"INVESTMENT" means (i) any direct or indirect purchase or other
acquisition by Borrower or any of its Subsidiaries of, or of a beneficial
interest in, any Securities of any other Person (including any Subsidiary of
Borrower), (ii) any direct or indirect redemption, retirement, purchase or other
acquisition for value, by any Subsidiary of Borrower from any Person other than
Borrower or any of its Subsidiaries, of any equity Securities of such
Subsidiary, (iii) any direct or indirect loan, advance (other than advances to
employees for moving, entertainment and travel expenses, drawing accounts and
similar expenditures in the ordinary course of business) or capital contribution
by Borrower or any of its Subsidiaries to any other Person (other than a
wholly-owned Subsidiary of Borrower), including all indebtedness and accounts
receivable from
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that other Person that are not current assets or did not arise from sales to
that other Person in the ordinary course of business, or (iv) Interest Rate
Agreements or Currency Agreements not constituting Hedge Agreements. The amount
of any Investment shall be the original cost of such Investment PLUS the cost of
all additions thereto, without any adjustments for increases or decreases in
value, or write-ups, write-downs or write-offs with respect to such Investment
(other than adjustments for the repayment of, or the refund of capital with
respect to, the original principal amount of any such Investment).
"IP COLLATERAL" means, collectively, the Collateral consisting of
rights in or to Intellectual Property under the Security Agreement.
"IPO" has the meaning assigned to that such term in the Recitals.
"ISSUING LENDER" means, with respect to any Letter of Credit, the
Lender who agrees or is otherwise obligated to issue such Letter of Credit,
determined as provided in subsection 3.1B(iii).
"JOINT VENTURE" means a joint venture, partnership or other similar
arrangement, whether in corporate, partnership or other legal form; PROVIDED
that in no event shall any corporate Subsidiary of any Person be considered to
be a Joint Venture to which such Person is a party.
"LANDLORD CONSENT AND ESTOPPEL" means, with respect to any Leasehold
Property, a letter, certificate or other instrument in writing from the lessor
under the related lease, satisfactory in form and substance to Administrative
Agent, pursuant to which such lessor agrees, for the benefit of Administrative
Agent, (i) that without any further consent of such lessor or any further action
on the part of the Loan Party holding such Leasehold Property, such Leasehold
Property may be encumbered pursuant to a Mortgage and may be assigned to the
purchaser at a foreclosure sale or in a transfer in lieu of such a sale (and to
a subsequent third party assignee if Administrative Agent, any Lender, or an
Affiliate of either so acquires such Leasehold Property), (ii) that such lessor
shall not terminate such lease as a result of a default by such Loan Party
thereunder without first giving Administrative Agent notice of such default and
at least 60 days (or, if such default cannot reasonably be cured by
Administrative Agent within such period, such longer period as may reasonably be
required) to cure such default, (iii) to the matters contained in a Collateral
Access Agreement, and (iv) to such other matters relating to such Leasehold
Property as Administrative Agent may reasonably request.
"LC REIMBURSEMENT AMOUNT" has the meaning assigned to that term in
subsection 3.3B.
"LEAD ARRANGER" has the meaning assigned to that term in the
introduction to this Agreement.
"LEASEHOLD PROPERTY" means any leasehold interest of any Loan Party
as lessee under any lease of real property.
"LENDER" and "LENDERS" means the Persons identified as "Lenders" and
listed on the signature pages of this Agreement, together with their successors
and permitted assigns
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pursuant to subsection 10.1; PROVIDED that the term "Lenders", when used in the
context of a particular Commitment, shall mean Lenders having that Commitment.
"LETTER OF CREDIT" or "LETTERS OF CREDIT" means any standby letter
of credit or similar instrument issued for the purpose of supporting (i)
Indebtedness of Borrower or any of its Subsidiaries in respect of industrial
revenue or development bonds or financings, (ii) workers' compensation
liabilities of Borrower or any of its Subsidiaries, (iii) the obligations of
third party insurers of Borrower or any of its Subsidiaries arising by virtue of
the laws of any jurisdiction requiring third party insurers, (iv) obligations
with respect to Capital Leases or Operating Leases of Borrower or any of its
Subsidiaries, and (v) performance, payment, deposit or surety obligations of
Borrower or any of its Subsidiaries, in any case if required by law or
governmental rule or regulation or in accordance with custom and practice in the
industry; PROVIDED that Letters of Credit may not be issued for the purpose of
supporting (a) trade payables or (b) any Indebtedness constituting "antecedent
debt" (as that term is used in Section 547 of the Bankruptcy Code).
"LETTER OF CREDIT USAGE" means, as at any date of determination, the
sum of (i) the maximum aggregate amount which is or at any time thereafter may
become available for drawing under all Letters of Credit then outstanding PLUS
(ii) the aggregate amount of all drawings under Letters of Credit honored by
Issuing Lenders and not theretofore reimbursed out of the proceeds of Revolving
Loans pursuant to subsection 3.3B or otherwise reimbursed by Borrower.
"LIBOR LOANS" means Loans bearing interest at rates determined by
reference to Adjusted LIBOR as provided in subsection 2.2A.
"LIEN" means any lien, mortgage, pledge, assignment, security
interest, charge or encumbrance of any kind (including any conditional sale or
other title retention agreement, any lease in the nature thereof, and any
agreement to give any security interest) and any option, trust or other
preferential arrangement having the practical effect of any of the foregoing.
"LOAN" or "LOANS" means one or more of the Tranche A Term Loans,
Tranche B Term Loans or Revolving Loans or any combination thereof.
"LOAN DOCUMENTS" means this Agreement, the Notes, the Letters of
Credit (and any applications for, or reimbursement agreements or other documents
or certificates executed by Borrower in favor of an Issuing Lender relating to,
the Letters of Credit), the Subsidiary Guaranty and the Collateral Documents.
"LOAN PARTY" means each of Borrower and any of Borrower's
Subsidiaries from time to time executing a Loan Document, and "LOAN PARTIES"
means all such Persons, collectively.
"MARGIN DETERMINATION CERTIFICATE" means an Officers' Certificate of
Borrower delivered (a) with respect to each Fiscal Quarter (other than each
fourth Fiscal Quarter), together with the three most recent financial statements
required pursuant to subsection 6.1(ii), and (b) with respect to each fourth
Fiscal Quarter, within 45 days of the last day of such fourth Fiscal Quarter,
setting forth in reasonable detail the Consolidated Total Leverage Ratio that is
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applicable as of the last day of the fiscal period for which such financial
statements and Officers' Certificate are being delivered.
"MARGIN STOCK" has the meaning assigned to that term in Regulation U
of the Board of Governors of the Federal Reserve System as in effect from time
to time.
"MATERIAL ADVERSE EFFECT" means any act, omission, situation,
circumstance, event or undertaking which could reasonably be expected to have,
singly or in any combination with one or more other acts, omissions, situations,
circumstances, events or undertakings, a materially adverse effect upon (a) the
business, assets, properties, liabilities, condition (financial or otherwise),
results of operations or business prospects of Borrower and its Subsidiaries
taken as a whole, (b) the value of the whole or any material part of the
Collateral, or the enforceability or priority of the security interest in the
Collateral, (c) the respective ability of Borrower or any of the other Loan
Parties to perform any obligations under this Agreement or any other Loan
Document to which it is a party, or (d) the legality, validity, binding effect,
enforceability or admissibility into evidence of any Loan Document or the rights
or remedies of Administrative Agent or Lenders under or in connection with any
Loan Document.
"MATERIAL CONTRACT" means any contract, indenture, mortgage, deed of
trust, undertaking, agreement, instrument or other arrangement, whether written
or oral, (a) having annual revenues in excess of $5,000,000, if Borrower or any
of its Subsidiaries is a provider of services, and (b) having remaining payments
in excess of $1,000,000, if Borrower or any of its Subsidiaries is the recipient
of services, inventory, materials or other goods.
"MATERIAL LEASEHOLD PROPERTY" means a Leasehold Property reasonably
determined by Administrative Agent to be of material value as Collateral or of
material importance to the operations of Borrower or any of its Subsidiaries;
PROVIDED, HOWEVER, no Leasehold Property with respect to which the aggregate
amount of all rents payable during any one Fiscal Year never exceeds $500,000
shall be a "Material Leasehold Property".
"MINIMUM AMOUNT" means, with respect to each of the following
actions, the minimum amount and any multiples in excess thereof set forth
opposite such action:
<Table>
<Caption>
MINIMUM MULTIPLES IN
TYPE OF ACTION AMOUNT EXCESS THEREOF
------------------------------- ---------- --------------
<S> <C> <C>
Conversion into Base Rate Loans $150,000 $50,000
Conversion into LIBOR Loans $1,000,000 $100,000
</Table>
"MOODY'S" means Moody's Investors Service, Inc.
"MORTGAGE" means (i) a security instrument (whether designated as a
deed of trust or a mortgage or by any similar title) executed and delivered by
any Loan Party, substantially in the form of EXHIBIT XVII annexed hereto or in
such other form as may be
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approved by Administrative Agent in its sole discretion, in each case with such
changes thereto as may be recommended by Administrative Agent's local counsel
based on local laws or customary local mortgage or deed of trust practices, or
(ii) at Administrative Agent's option, in the case of an Additional Mortgaged
Property, an amendment to an existing Mortgage, in form satisfactory to
Administrative Agent, adding such Additional Mortgaged Property to the Real
Property Assets encumbered by such existing Mortgage. "MORTGAGES" means all such
instruments, including the Additional Mortgages.
"MULTIEMPLOYER PLAN" means any Employee Benefit Plan that is a
"multiemployer plan" as defined in Section 3(37) of ERISA.
"NET ASSET SALE PROCEEDS" means, with respect to any Asset Sale,
Cash payments (including any Cash received by way of deferred payment pursuant
to, or by monetization of, a note receivable or otherwise, but only as and when
so received) received from such Asset Sale, net of any bona fide direct costs
incurred in connection with such Asset Sale, including (i) income taxes
reasonably estimated to be actually payable within two years of the date of such
Asset Sale as a result of any gain recognized in connection with such Asset Sale
and (ii) payment of the outstanding principal amount of, premium or penalty, if
any, and interest on any Indebtedness (other than the Loans) that is secured by
a Lien on the stock or assets in question and that is required to be repaid
under the terms thereof as a result of such Asset Sale.
"NET INSURANCE/CONDEMNATION PROCEEDS" means any Cash payments or
proceeds received by Borrower or any of its Subsidiaries (i) under any business
interruption or casualty insurance policy in respect of a covered loss
thereunder or (ii) as a result of the taking of any assets of Borrower or any of
its Subsidiaries by any Person pursuant to the power of eminent domain,
condemnation or otherwise, or pursuant to a sale of any such assets to a
purchaser with such power under threat of such a taking, in each case net of any
actual and reasonable documented costs incurred by Borrower or any of its
Subsidiaries in connection with the adjustment or settlement of any claims of
Borrower or such Subsidiary in respect thereof.
"NET PENSION PROCEEDS" has the meaning assigned to that term in
subsection 2.4B(iii)(c).
"NET PROCEEDS AMOUNT" has the meaning assigned to that term in
subsection 2.4B(iii)(g).
"NET SECURITIES PROCEEDS" means the Cash proceeds (net of
underwriting discounts and commissions and other reasonable costs and expenses
associated therewith, including reasonable legal fees and expenses) from the (i)
issuance of Capital Stock of or incurrence of Indebtedness by Borrower or any of
its Subsidiaries and (ii) capital contributions made by a holder of Capital
Stock of Borrower.
"NEW LENDER" has the meaning assigned to that term in subsection
2.1A(iv).
"NON-US LENDER" has the meaning assigned to that term in subsection
2.7B(iii)(a).
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"NOTES" means one or more of the Tranche A Term Notes, Tranche B
Term Notes or Revolving Notes or any combination thereof.
"NOTICE OF BORROWING" means a notice substantially in the form of
EXHIBIT I annexed hereto delivered by Borrower to Administrative Agent pursuant
to subsection 2.1B with respect to a proposed borrowing.
"NOTICE OF CONVERSION/CONTINUATION" means a notice substantially in
the form of EXHIBIT II annexed hereto delivered by Borrower to Administrative
Agent pursuant to subsection 2.2D with respect to a proposed conversion or
continuation of the applicable basis for determining the interest rate with
respect to the Loans specified therein.
"NOTICE OF ISSUANCE OF LETTER OF CREDIT" means a notice
substantially in the form of EXHIBIT III annexed hereto delivered by Borrower to
Administrative Agent pursuant to subsection 3.1B(i) with respect to the proposed
issuance of a Letter of Credit.
"OBLIGATIONS" means all obligations of every nature of each Loan
Party from time to time owed to Administrative Agent, Lenders or any of them
under the Loan Documents whether for principal, interest, reimbursement of
amounts drawn under Letters of Credit, fees, expenses, indemnification or
otherwise, whether contingent, direct or otherwise, including post-petition
interest on such amounts accruing subsequent to, and interest that would have
accrued but for, the commencement of a proceeding under the Bankruptcy Code
(whether or not such interest is allowed as a claim in such proceeding).
"OFFICER" means the president, chief executive officer, a vice
president, chief financial officer, treasurer, general partner (if an
individual), managing member (if an individual) or other individual appointed by
the Governing Body or the Organizational Documents of a corporation,
partnership, trust or limited liability company to serve in a similar capacity
as the foregoing.
"OFFICER'S CERTIFICATE," as applied to any Person that is a
corporation, partnership, trust or limited liability company, means a
certificate executed on behalf of such Person by one or more Officers of such
Person or one or more Officers of a general partner or a managing member if such
general partner or managing member is a corporation, partnership, trust or
limited liability company; PROVIDED that every Officers' Certificate with
respect to the compliance with a condition precedent to the making of any Loans
hereunder shall include (i) a statement that the Officer or Officers making or
giving such Officers' Certificate have read such condition and any definitions
or other provisions contained in this Agreement relating thereto, (ii) a
statement that, in the opinion of the signers, they have made or have caused to
be made such examination or investigation as is reasonably necessary to enable
them to express an informed opinion as to whether or not such condition has been
complied with, and (iii) a statement as to whether, in the opinion of the
signers, such condition has been complied with.
"OPERATING LEASE", as applied to any Person, means any lease
(including leases that may be terminated by the lessee at any time) of any
property (whether real, personal or mixed) that is not a Capital Lease other
than any such lease under which that Person is the lessor.
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"ORGANIZATIONAL DOCUMENTS" means the documents (including Bylaws, if
applicable) pursuant to which a Person that is a corporation, partnership, trust
or limited liability company is organized.
"PARTICIPANT" means a purchaser of a participation in the rights and
obligations under this Agreement pursuant to subsection 10.1C.
"PBGC" means the Pension Benefit Guaranty Corporation or any
successor thereto.
"PENSION PLAN" means any Employee Benefit Plan, other than a
Multiemployer Plan, which is subject to Section 412 of the Internal Revenue Code
or Section 302 of ERISA.
"PERMITTED ACQUISITION" means an acquisition of assets or
substantially all of the Capital Stock of any Person where (i) the acquired
Person is in the same line of business as that of Borrower or any of its
Subsidiaries on the Closing Date, (ii) after giving effect to such transaction,
the Revolving Loan Commitments minus the Total Utilization of Revolving Loan
Commitments is not less than $7,500,000, (iii) Borrower or any Subsidiary
Guarantor is the surviving entity, (iv) a description of the acquisition shall
have been delivered to Administrative Agent prior to the consummation of the
acquisition, (v) Borrower shall have demonstrated to Administrative Agent's
reasonable satisfaction pro forma compliance (as of the date of the acquisition
after giving effect to any Loans made or to be made in connection therewith)
with the financial covenants contained in subsection 7.6 and a Consolidated
Total Leverage Ratio at least .15 below the applicable ratio set forth in
subsection 7.6B prior to consummating the acquisition, (vi) Borrower shall have
demonstrated to Administrative Agent's reasonable satisfaction that the acquired
Person has positive pro forma Consolidated EBITDA for the most recent twelve
month period then ended, (vii) Borrower shall have delivered to Administrative
Agent copies of the most recent audited financial statements, if available, of
the acquired Person, together with any other information that Administrative
Agent may reasonably request, and (viii) no Potential Event of Default or Event
of Default shall have occurred or be continuing both before and after giving
effect to the acquisition.
"PERMITTED ENCUMBRANCES" means the following types of Liens
(excluding any such Lien imposed pursuant to Section 401(a)(29) or 412(n) of the
Internal Revenue Code or by ERISA, any such Lien relating to or imposed in
connection with any Environmental Claim, and any such Lien expressly prohibited
by any applicable terms of any of the Collateral Documents):
(i) Liens for taxes, assessments or governmental charges or claims
the payment of which is not, at the time, required by subsection
6.3A or which are being contested in good faith by appropriate
proceedings, PROVIDED that adequate reserves with respect thereto
are maintained on the books of Borrower or its Subsidiaries, as the
case may be, in conformity with GAAP (or, in the case of
Subsidiaries with significant operations outside of the United
States of America, generally accepted accounting principles in
effect from time to time in their respective jurisdictions of
incorporation);
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(ii) statutory Liens of landlords, statutory Liens and rights of
set-off of banks, statutory Liens of carriers, warehousemen,
mechanics, repairmen, workmen and materialmen, and other Liens
imposed by law, in each case incurred in the ordinary course of
business (a) for amounts which are not overdue for a period of more
than 60 days or (b) for amounts that are overdue and that (in the
case of any such amounts overdue for a period in excess of 5 days)
are being contested in good faith by appropriate proceedings, so
long as (1) such reserves or other appropriate provisions, if any,
as shall be required by GAAP shall have been made for any such
contested amounts, and (2) in the case of a Lien with respect to any
portion of the Collateral, such contest proceedings conclusively
operate to stay the sale of any portion of the Collateral on account
of such Lien, and the aggregate amount of such Liens is less than
$75,000;
(iii) Liens incurred or deposits in an aggregate amount not to
exceed $75,000 made in the ordinary course of business in connection
with workers' compensation, unemployment insurance and other types
of social security, so long as no foreclosure, sale or similar
proceedings have been commenced with respect to any portion of the
Collateral on account thereof;
(iv) Deposits in an aggregate amount not to exceed $75,000 made in
the ordinary course of business or to secure the performance of
tenders, statutory obligations, surety and appeal bonds, bids,
leases, government contracts, trade contracts, performance and
return-of-money bonds and other similar obligations (exclusive of
obligations for the payment of borrowed money);
(v) any attachment or judgment Lien not constituting an Event of
Default under subsection 8.8;
(vi) leases or subleases granted to third parties in accordance with
any applicable terms of the Collateral Documents and not interfering
in any material respect with the ordinary conduct of the business of
Borrower or any of its Subsidiaries or resulting in a material
diminution in the value of any Collateral as security for the
Obligations;
(vii) easements, rights-of-way, restrictions, encroachments, and
other minor defects or irregularities in title, in each case which
do not and will not interfere in any material respect with the
ordinary conduct of the business of Borrower or any of its
Subsidiaries or result in a material diminution in the value of any
Collateral as security for the Obligations;
(viii) any (a) interest or title of a lessor or sublessor under any
lease not prohibited by this Agreement, (b) restriction or
encumbrance that the interest or title of such lessor or sublessor
may be subject to, or (c) subordination of the interest of the
lessee or sublessee under such lease to any restriction or
encumbrance referred to in the preceding clause (b), so long as the
holder of such restriction or encumbrance agrees to recognize the
rights of such lessee or sublessee under such lease;
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<Page>
(ix) Liens arising from filing UCC financing statements relating
solely to leases not prohibited by this Agreement; and
(x) matters contained in the Closing Date Mortgage Policies.
"PERSON" means and includes natural persons, corporations, limited
partnerships, general partnerships, limited liability companies, limited
liability partnerships, joint stock companies, Joint Ventures, associations,
companies, trusts, banks, trust companies, land trusts, business trusts or other
organizations, whether or not legal entities, and governments (whether federal,
state or local, domestic or foreign, and including political subdivisions
thereof) and agencies or other administrative or regulatory bodies thereof.
"PLEDGED COLLATERAL" means, collectively, the "Pledged Collateral"
as defined in the Security Agreement.
"POTENTIAL EVENT OF DEFAULT" means a condition or event that, after
notice or lapse of time or both, would constitute an Event of Default.
"PROCEEDINGS" means any action, suit, proceeding (whether
administrative, judicial or otherwise), governmental investigation or
arbitration.
"PRO RATA SHARE" means (i) with respect to all payments,
computations and other matters relating to the Tranche A Term Loan Commitment or
the Tranche A Term Loan of any Lender, the percentage obtained by DIVIDING (x)
the Tranche A Term Loan Exposure of that Lender BY (y) the aggregate Tranche A
Term Loan Exposure of all Lenders; (ii) with respect to all payments,
computations and other matters relating to the Tranche B Term Loan Commitment or
the Tranche B Term Loan of any Lender, the percentage obtained by DIVIDING (x)
the Tranche B Term Loan Exposure of that Lender BY (y) the aggregate Tranche B
Term Loan Exposure of all Lenders; (iii) with respect to all payments,
computations and other matters relating to the Revolving Loan Commitment or the
Revolving Loans of any Lender or any Letters of Credit issued or participations
therein purchased by any Lender, the percentage obtained by DIVIDING (x) the
Revolving Loan Exposure of that Lender BY (y) the aggregate Revolving Loan
Exposure of all Lenders; and (iv) for all other purposes with respect to each
Lender, the percentage obtained by DIVIDING (x) the sum of the Tranche A Term
Loan Exposure, the Tranche B Term Loan Exposure and the Revolving Loan Exposure
of that Lender BY (y) the sum of the aggregate Tranche A Term Loan Exposure,
Tranche B Term Loan Exposure and Revolving Loan Exposure of all Lenders, in any
such case as the applicable percentage may be adjusted by assignments permitted
pursuant to subsection 10.1.
"PTO" means the United States Patent and Trademark Office or any
successor or substitute office in which filings are necessary or, in the opinion
of Administrative Agent, desirable in order to create or perfect Liens on any IP
Collateral.
"REAL PROPERTY ASSET" means, at any time of determination, any
interest then owned by any Loan Party in any real property.
"RECORDED LEASEHOLD INTEREST" means a Leasehold Property with
respect to which a Record Document (as hereinafter defined) has been recorded in
all places necessary or
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desirable, in Administrative Agent's reasonable judgment, to give constructive
notice of such Leasehold Property to third-party purchasers and encumbrancers of
the affected real property. For purposes of this definition, the term "RECORD
DOCUMENT" means, with respect to any Leasehold Property, (a) the lease
evidencing such Leasehold Property or a memorandum thereof, executed and
acknowledged by the owner of the affected real property, as lessor, or (b) if
such Leasehold Property was acquired or subleased from the holder of a Recorded
Leasehold Interest, the applicable assignment or sublease document, executed and
acknowledged by such holder, in each case in form sufficient to give such
constructive notice upon recordation and otherwise in form reasonably
satisfactory to Administrative Agent.
"REDEMPTION PREMIUM" has the meaning assigned to that term in the
Recitals.
"REFERENCE RATE" means the rate that CIBC announces from time to
time as its prime lending rate, as in effect from time to time. The Reference
Rate is a reference rate and does not necessarily represent the lowest or best
rate actually charged to any customer. CIBC or any other Lender may make
commercial loans or other loans at rates of interest at, above or below the
Reference Rate.
"REFINANCING" has the meaning assigned to that term in the Recitals.
"REGISTER" has the meaning assigned to that term in subsection
2.1D(i).
"REGULATION D" means Regulation D of the Board of Governors of the
Federal Reserve System, as in effect from time to time.
"REIMBURSEMENT DATE" has the meaning assigned to that term in
subsection 3.3B.
"RELEASE" means any release, spill, emission, leaking, pumping,
pouring, injection, escaping, deposit, disposal, discharge, dispersal, dumping,
leaching or migration of Hazardous Materials into the indoor or outdoor
environment (including the abandonment or disposal of any barrels, containers or
other closed receptacles containing any Hazardous Materials), including the
movement of any Hazardous Materials through the air, soil, surface water or
groundwater.
"REQUISITE LENDERS" means Lenders having or holding more than 50% of
the sum of the aggregate Tranche A Term Loan Exposures, Tranche B Term Loan
Exposures and Revolving Loan Exposures of all Lenders.
"RESTRICTED JUNIOR PAYMENT" means (i) any dividend or other
distribution, direct or indirect, on account of any Capital Stock of any class
of Capital Stock of Borrower or any of its Subsidiaries now or hereafter
outstanding, except a dividend payable solely in shares of that class of Capital
Stock to the holders of that class, (ii) any redemption, retirement, sinking
fund or similar payment, purchase or other acquisition for value, direct or
indirect, of any Capital Stock of any class of Capital Stock of Borrower or any
of its Subsidiaries now or hereafter outstanding, (iii) any payment made to
retire, or to obtain the surrender of, any outstanding warrants, options or
other rights to acquire Capital Stock of Borrower or any of its Subsidiaries now
or hereafter outstanding, and (iv) any payment or prepayment of principal of,
premium, if any, or interest on,
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or redemption, purchase, retirement, defeasance (including in-substance or legal
defeasance), sinking fund or similar payment with respect to, any Subordinated
Indebtedness.
"REVOLVING LENDER" means a Lender that has a Revolving Loan
Commitment and/or has an outstanding Revolving Loan.
"REVOLVING LOAN COMMITMENT" means the commitment of a Lender to make
Revolving Loans to Borrower pursuant to subsection 2.1A(iii), and "REVOLVING
LOAN COMMITMENTS" means such commitments of all Lenders in the aggregate. The
Revolving Loan Commitments shall be recorded by Administrative Agent in the
Register.
"REVOLVING LOAN COMMITMENT TERMINATION DATE" means March 4, 2007.
"REVOLVING LOAN EXPOSURE" means, with respect to any Lender, as of
any date of determination (i) prior to the termination of the Revolving Loan
Commitments, that Lender's Revolving Loan Commitment, and (ii) after the
termination of the Revolving Loan Commitments, the sum of (a) the aggregate
outstanding principal amount of the Revolving Loans of that Lender PLUS (b) if
Lender is an Issuing Lender, the aggregate Letter of Credit Usage in respect of
all Letters of Credit issued by that Lender (in each case net of any
participations purchased by other Lenders in such Letters of Credit or in any
unreimbursed drawings thereunder) PLUS (c) the aggregate amount of all
participations purchased by that Lender in any outstanding Letters of Credit or
any unreimbursed drawings under any Letters of Credit.
"REVOLVING LOANS" means the Loans made by Lenders to Borrower
pursuant to subsection 2.1A(iii).
"REVOLVING NOTES" means (i) the promissory notes of Borrower issued
pursuant to subsection 2.1E on the Closing Date, (ii) any promissory notes of
Borrower issued pursuant to the last paragraph of subsection 2.1E relating to
any increase in Revolving Loan Commitments made pursuant to subsection 2.1A(iv)
and (iii) any promissory notes issued by Borrower pursuant to the penultimate
sentence of subsection 10.1B(i) in connection with assignments of the Revolving
Loan Commitments and Revolving Loans of any Lenders and any replacements
thereof, in each case substantially in the form of EXHIBIT VII annexed hereto.
"S&P" means Standard & Poor's Ratings Group.
"SECURITIES" means any stock, shares, partnership interests, voting
trust certificates, certificates of interest or participation in any
profit-sharing agreement or arrangement, options, warrants, bonds, debentures,
notes, or other evidences of indebtedness, secured or unsecured, convertible,
subordinated or otherwise, or in general any instruments commonly known as
"securities" or any certificates of interest, shares or participations in
temporary or interim certificates for the purchase or acquisition of, or any
right to subscribe to, purchase or acquire, any of the foregoing.
"SECURITIES ACT" means the Securities Act of 1933, as amended from
time to time, and any successor statute.
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"SECURITY AGREEMENT" means the Security Agreement executed and
delivered by Borrower and its Subsidiaries on the Closing Date, substantially in
the form of EXHIBIT XV annexed hereto.
"SENIOR SUBORDINATED NOTES" has the meaning assigned to that term in
the Recitals.
"SOLVENT" means, with respect to any Person, that as of the date of
determination both (A) (i) the then fair saleable value of the property of such
Person is (y) greater than the total amount of liabilities (including contingent
liabilities) of such Person and (z) not less than the amount that will be
required to pay the probable liabilities on such Person's then existing debts as
they become absolute and matured considering all financing alternatives and
potential asset sales reasonably available to such Person; (ii) such Person's
capital is not unreasonably small in relation to its business or any
contemplated or undertaken transaction; and (iii) such Person does not intend to
incur, or believe (nor should it reasonably believe) that it will incur, debts
beyond its ability to pay such debts as they become due; and (B) such Person is
"solvent" within the meaning given that term and similar terms under applicable
laws relating to fraudulent transfers and conveyances. For purposes of this
definition, the amount of any contingent liability at any time shall be computed
as the amount that, in light of all of the facts and circumstances existing at
such time, represents the amount that can reasonably be expected to become an
actual or matured liability.
"SUBORDINATED INDEBTEDNESS" means any Indebtedness of Borrower
incurred from time to time and subordinated in right of payment to the
Obligations.
"SUBSIDIARY" means, with respect to any Person, any corporation,
partnership, limited liability company, association, joint venture or other
business entity of which more than 50% of the total voting power of shares of
stock or other ownership interests entitled (without regard to the occurrence of
any contingency) to vote in the election of the Person or Persons (whether
directors, managers, trustees or other Persons performing similar functions)
having the power to direct or cause the direction of the management and policies
thereof is at the time owned or controlled, directly or indirectly, by that
Person or one or more of the other Subsidiaries of that Person or a combination
thereof.
"SUBSIDIARY GUARANTOR" means any domestic Subsidiary of Borrower
that executes and delivers the Subsidiary Guaranty at the Closing Date and any
domestic Subsidiary of Borrower that executes and delivers a counterpart of the
Subsidiary Guaranty from time to time thereafter pursuant to subsection 6.8.
"SUBSIDIARY GUARANTY" means the Subsidiary Guaranty to be executed
and delivered by domestic Subsidiaries of Borrower on the Closing Date and from
time to time in accordance with subsection 6.8, substantially in the form of
EXHIBIT XIV annexed hereto.
"SUPPLEMENTAL COLLATERAL AGENT" has the meaning assigned to that
term in subsection 9.1B.
"TAX" or "TAXES" means any present or future tax, levy, impost,
duty, charge, fee, deduction or withholding of any nature and whatever called,
by whomsoever, on whomsoever
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and wherever imposed, levied, collected, withheld or assessed, including
interest, penalties, additions to tax and any similar liabilities with respect
thereto; except that, in the case of a Lender, there shall be excluded (1) taxes
that are imposed on the overall net income or net profits (including franchise
taxes imposed in lieu thereof) (i) by the United States, (ii) by any other
Governmental Authority under the laws of which the Lender is organized or has
its principal office or maintains its applicable lending office, or (iii) by any
jurisdiction solely as a result of a present or former connection between the
Lender (other than any such connection arising solely from the Lender having
executed, delivered or performed its obligations or received a payment under, or
enforced any of the Loan Documents), and (2) any branch profits taxes imposed by
the United States or any similar tax imposed by any other jurisdiction in which
the Lender is located.
"TERM LOANS" means, collectively, the Tranche A Term Loans and the
Tranche B Term Loans.
"TERM LOAN NOTES" means collectively, the Tranche A Term Notes and
Tranche B Term Notes.
"TITLE COMPANY" means one or more other title insurance companies
reasonably satisfactory to Administrative Agent.
"TOTAL UTILIZATION OF REVOLVING LOAN COMMITMENTS" means, as at any
date of determination, the sum of (i) the aggregate principal amount of all
outstanding Revolving Loans PLUS (ii) the Letter of Credit Usage.
"TRANCHE A TERM LOAN COMMITMENT" means the commitment of a Lender to
make a Tranche A Term Loan to Borrower pursuant to subsection 2.1A(i), and
"TRANCHE A TERM LOAN COMMITMENTS" means such commitments of all Lenders in the
aggregate.
"TRANCHE A TERM LOAN EXPOSURE" with respect to any Lender, means, as
of any date of determination (i) prior to the funding of the Tranche A Term
Loans, that Lender's Tranche A Term Loan Commitment, and (ii), after the funding
of the Tranche A Term Loans, the outstanding principal amount of the Tranche A
Term Loan of that Lender.
"TRANCHE A TERM LOANS" means the Loans made by Lenders to Borrower
pursuant to subsection 2.1A(i).
"TRANCHE A TERM NOTES" means (i) the promissory notes of Borrower
issued pursuant to subsection 2.1E on the Closing Date (or any replacements
thereof), (ii) any promissory notes of Borrower issued pursuant to the last
paragraph of subsection 2.1E relating to any increase in the Tranche A Term
Loans made pursuant to subsection 2.1A(iv) and (iii) any promissory notes issued
by Borrower pursuant to the penultimate sentence of subsection 10.1B(i) in
connection with assignments of the Tranche A Loan Commitments or Tranche A Term
Loans of any Lenders, in each case substantially in the form of EXHIBIT V
annexed hereto.
"TRANCHE B TERM LOAN COMMITMENT" means the commitment of a Lender to
make a Tranche B Term Loan to Borrower pursuant to subsection 2.1A(ii), and
"TRANCHE B TERM LOAN COMMITMENTS" means such commitments of all Lenders in the
aggregate.
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"TRANCHE B TERM LOAN EXPOSURE" with respect to any Lender, means, as
of any date of determination (i) prior to the funding of the Tranche B Term
Loans, that Lender's Tranche B Term Loan Commitment and (ii) after the funding
of the Tranche B Term Loans, the outstanding principal amount of the Tranche B
Term Loan of that Lender.
"TRANCHE B TERM LOANS" means the Loans made by Lenders to Borrower
pursuant to subsection 2.1A(ii).
"TRANCHE B TERM NOTES" means (i) the promissory notes of Borrower
issued pursuant to subsection 2.1E on the Closing Date (or any replacements
thereof), (ii) any promissory notes of Borrower issued pursuant to the last
paragraph of subsection 2.1E relating to any increase in the Tranche B Term
Loans made pursuant to subsection 2.1A(iv) and (iii) any promissory notes issued
by Borrower pursuant to the penultimate sentence of subsection 10.1B(i) in
connection with assignments of the Tranche B Loan Commitments or Tranche B Term
Loans of any Lenders, in each case substantially in the form of EXHIBIT VI
annexed hereto.
"TRANSACTIONS" means collectively, the IPO and the Refinancing.
"TRANSACTION COSTS" means the fees, costs and expenses payable by
Borrower on or before the Closing Date in connection with the transactions
contemplated by the Loan Documents.
"T-S HOLDING" means T-S Holding Corporation, a Texas corporation.
"TYPE" means, with respect to any Loan, a Term Loan, or a Revolving
Loan (each of which is a "TYPE" of Loan).
"UCC" means the Uniform Commercial Code (or any similar or
equivalent legislation) as in effect in any applicable jurisdiction, including
on the date hereof Article 9 of the Uniform Commercial Code in effect on the
date hereof.
"UNFUNDED BENEFIT LIABILITY" has the meaning assigned to that term
in subsection 5.11D.
"VOTING STOCK" means, with respect to any Person, Capital Stock
issued by such Person the holders of which are ordinarily, in the absence of
contingencies, entitled to vote for the election of directors (or persons
performing similar functions) of such Person, even though the right so to vote
has been suspended by the happening of such a contingency.
"VERITAS" means The Veritas Capital Fund, L.P.
1.2 ACCOUNTING TERMS; UTILIZATION OF GAAP FOR PURPOSES OF CALCULATIONS
UNDER AGREEMENT.
Except as otherwise expressly provided in this Agreement, all
accounting terms not otherwise defined herein shall have the meanings assigned
to them in conformity with GAAP. Financial statements and other information
required to be delivered by Borrower to Lenders pursuant to clauses (ii), (iii)
and (xii) of subsection 6.1 shall be prepared in accordance
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with GAAP as in effect at the time of such preparation (and delivered together
with the reconciliation statements provided for in subsection 6.1(v)).
Calculations in connection with the definitions, covenants and other provisions
of this Agreement shall utilize GAAP as in effect on the date of determination,
applied in a manner consistent with that used in preparing the financial
statements referred to in subsection 5.3. Borrower shall deliver to the
Administrative Agent at the same time as the delivery of any annual or quarterly
financial statements given in accordance with the provisions of Section 6.1, (i)
a description in reasonable detail of any material change in the application of
accounting principles employed in the preparation of such financial statements
from those applied in the most recently preceding quarterly or annual financial
statements as to which no objection shall have been made in accordance with the
provisions above and (ii) a reasonable estimate of the effect on the financial
statements on account of such changes in application.
1.3 OTHER DEFINITIONAL PROVISIONS AND RULES OF CONSTRUCTION.
A. Any of the terms defined herein may, unless the context otherwise
requires, be used in the singular or the plural, depending on the reference.
B. References to "Sections" and "subsections" shall be to Sections
and subsections, respectively, of this Agreement unless otherwise specifically
provided.
C. The use in any of the Loan Documents of the word "include" or
"including", when following any general statement, term or matter, shall not be
construed to limit such statement, term or matter to the specific items or
matters set forth immediately following such word or to similar items or
matters, whether or not nonlimiting language (such as "without limitation" or
"but not limited to" or words of similar import) is used with reference thereto,
but rather shall be deemed to refer to all other items or matters that fall
within the broadest possible scope of such general statement, term or matter.
D. Each of the parties hereto acknowledges that (i) it has been
represented by counsel in the negotiation and documentation of the terms of this
Agreement, (ii) it has had full and fair opportunity to review and revise the
terms of this Agreement, (iii) this Agreement has been drafted jointly by all of
the parties hereto, and (iv) neither Administrative Agent nor any Lender has any
fiduciary relationship with or duty to Borrower arising out of or in connection
with this Agreement or any of the other Loan Documents, and the relationship
between Administrative Agent and Lenders, on one hand, and Borrower, on the
other hand, in connection herewith or therewith is solely that of debtor and
creditor. Accordingly, each of the parties hereto acknowledges and agrees that
the terms of this Agreement shall not be construed against or in favor of
another party.
E. Any reference in this Agreement or any other Loan Document to any
agreement means such agreement as it may be amended, restated, supplemented or
otherwise modified from time to time; (ii) any reference in this Agreement or
any other Loan Document to any law, statute, regulation, rule or other
legislative action shall mean such law, statute, regulation, rule or other
legislative action as amended, supplemented or otherwise modified from time to
time, and shall include any rule or regulation promulgated thereunder; and (iii)
any
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reference in this Agreement or any other Loan Document to a Person shall include
the successor or assignee of such Person.
SECTION 2. AMOUNTS AND TERMS OF COMMITMENTS AND LOANS
2.1 COMMITMENTS; MAKING OF LOANS; OPTIONAL NOTES.
A. COMMITMENTS. Subject to the terms and conditions of this
Agreement and in reliance upon the representations and warranties of Borrower
herein set forth, each Lender hereby severally agrees to make the Loans as
described in subsections 2.1A(i), 2.1A(ii) and 2.1A(iii).
(i) TRANCHE A TERM LOANS. Each Lender that has a Tranche A Term Loan
Commitment severally agrees to lend to Borrower on the Closing Date an
amount not exceeding its Pro Rata Share of the aggregate amount of the
Tranche A Term Loan Commitments to be used for the purposes identified in
subsection 2.5A. Borrower shall deliver to Administrative Agent a Notice
of Borrowing no later than 12:00 Noon (New York City time) at least one
Business Day prior to the Closing Date, requesting a borrowing of the
Tranche A Term Loans. The Notice of Borrowing shall specify (i) the
proposed Funding Date (which shall be a Business Day), (ii) the amount of
the borrowing, and (iii) that such Loans shall be Base Rate Loans. The
aggregate amount of the Tranche A Term Loan Commitments is $40,000,000;
PROVIDED that the Tranche A Term Loan Commitments of Lenders shall be
adjusted to give effect to (1) any assignments of the Tranche A Term Loan
Commitments pursuant to subsection 10.1B and (2) any increase in Tranche A
Term Loans pursuant to subsection 2.1A(iv). Each Lender's Tranche A Term
Loan Commitment shall expire immediately and without further action on
March 31, 2002 if the Tranche A Term Loans have not been made on or before
that date. Subject to subsection 2.1A(iv), Borrower may make only one
borrowing under the Tranche A Term Loan Commitments. Amounts borrowed
under this subsection 2.1A(i) and subsequently repaid or prepaid may not
be reborrowed.
(ii) TRANCHE B TERM LOANS. Each Lender that has a Tranche B Term
Loan Commitment severally agrees to lend to Borrower on the Closing Date
an amount not exceeding its Pro Rata Share of the aggregate amount of the
Tranche B Term Loan Commitments to be used for the purposes identified in
subsection 2.5A. Borrower shall deliver to Administrative Agent a Notice
of Borrowing no later than 12:00 Noon (New York City time) at least one
Business Day prior to the Closing Date, requesting a borrowing of the
Tranche B Term Loans. The Notice of Borrowing shall specify (i) the
proposed Funding Date (which shall be a Business Day), and (ii) that such
Loans shall be Base Rate Loans. The aggregate amount of the Tranche B Term
Loan Commitments is $45,000,000; PROVIDED that the Tranche B Term Loan
Commitments of Lenders shall be adjusted to (1) give effect to any
assignments of the Tranche B Term Loan Commitments pursuant to subsection
10.1B and (2) any increase in Tranche B Term Loans pursuant to subsection
2.1A(iv). Each Lender's Tranche B Term Loan Commitment shall expire
immediately and without further action on March 31, 2002 if the Tranche B
Term Loans have not been made on or before that date. Subject to
subsection 2.1A(iv), Borrower may make only one borrowing under the
Tranche B Term Loan Commitments. Amounts
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borrowed under this subsection 2.1A(ii) and subsequently repaid or prepaid
may not be reborrowed.
(iii) REVOLVING LOANS. Each Lender severally agrees, subject to the
limitations set forth below with respect to the maximum amount of
Revolving Loans permitted to be outstanding from time to time, to lend to
Borrower from time to time from the Closing Date to but excluding the
Revolving Loan Commitment Termination Date an aggregate amount not
exceeding its Pro Rata Share of the aggregate amount of the Revolving Loan
Commitments to be used for the purposes identified in subsection 2.5B. The
aggregate original amount of the Revolving Loan Commitments is
$40,000,000; PROVIDED that the amount of the Revolving Loan Commitments
shall be reduced from time to time by the amount of any reductions thereto
made pursuant to subsection 2.4B; and PROVIDED FURTHER that the Revolving
Loan Commitments of Lenders shall be adjusted to give effect to (1) any
increase in Revolving Loan Commitments pursuant to subsection 2.1A(iv),
and (2) any assignments of the Revolving Loan Commitments pursuant to
subsection 10.1B. Each Lender's Revolving Loan Commitment shall expire
immediately and without further action on the Revolving Loan Commitment
Termination Date and all Revolving Loans and all other amounts owed
hereunder with respect to the Revolving Loans and the Revolving Loan
Commitments shall be paid in full no later than that date; PROVIDED that
each Lender's Revolving Loan Commitment shall expire immediately and
without further action on March 31, 2002 if the Tranche A Term Loans have
not been not made on or before that date. Amounts borrowed under this
subsection 2.1A(iii) may be repaid and reborrowed to but excluding the
Revolving Loan Commitment Termination Date.
Anything contained in this Agreement to the contrary notwithstanding, the
Revolving Loans and the Revolving Loan Commitments shall be subject to the
limitation that in no event shall the Total Utilization of Revolving Loan
Commitments at any time exceed the lesser of the Revolving Loan Commitments then
in effect and the Borrowing Base then in effect.
(iv) INCREASES OF THE TERM LOANS OR REVOLVING LOAN COMMITMENTS.
(a) At the mutual discretion of Borrower and Lead Arranger,
Borrower may request in writing at any time during the period from
the Closing Date to and including the second anniversary of the
Closing Date that (x) the then effective aggregate principal amount
of any Type or Types of Term Loans be increased, and/or (y) the then
effective aggregate principal amount of Revolving Loan Commitments
be increased; PROVIDED that (1) the aggregate principal amount of
the increases in Term Loans and/or Revolving Loan Commitments
pursuant to this subsection 2.1A(iv) shall not exceed $50,000,000,
(2) Borrower may not make more than three requests for such
increases in Term Loans and/or Revolving Loan Commitments and (3) no
Event of Default or Potential Event of Default shall have occurred
and be continuing or occur as a result of such increases in Term
Loans and/or Revolving Loan Commitments. Any request under this
subsection 2.1A(iv) shall be submitted by Borrower to Administrative
Agent (which shall promptly forward copies to Lenders), specify the
proposed effective date and amount of such increase and be
accompanied by an Officer's Certificate certifying that no Event of
Default or Potential Event of Default exists or will
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occur as a result of such increase. Borrower shall specify any fees
offered to those Lenders (the "INCREASING LENDERS") that agree to
increase the principal amount of their applicable Term Loans or
Revolving Loan Commitments, as the case may be, which fees may be
variable based upon the amount by which any such Lender is willing
to increase the principal amount of its applicable Term Loans or
Revolving Loan Commitment, as the case may be. No Lender shall have
any obligation, express or implied, to offer to increase the
aggregate principal amount of its applicable Term Loans or Revolving
Loan Commitment, as the case may be. Only the consent of each
Increasing Lender shall be required for an increase in the aggregate
principal amount of the applicable Term Loans or Revolving Loan
Commitments, as the case may be, pursuant to this subsection
2.1A(iv). No Lender that elects not to increase the principal amount
of its Term Loan or Revolving Loan Commitment, as the case may be,
may be replaced in respect of its existing applicable Term Loans or
Revolving Loan Commitment, as the case may be, as a result thereof
without such Lender's consent.
(b) Each Increasing Lender shall as soon as practicable
specify the amount of the proposed increase that it is willing to
assume. Borrower may accept some or all of the offered amounts or
designate new lenders that qualify as Eligible Assignees and that
are reasonably acceptable to Administrative Agent as additional
Lenders hereunder in accordance with this subsection 2.1A(iv) (each
such new lender being a "NEW LENDER"), which New Lender may assume
all or a portion of the increase in the aggregate principal amount
of the applicable Term Loans or Revolving Loan Commitments, as the
case may be. Borrower and Administrative Agent shall have discretion
jointly to adjust the allocation of the increased aggregate
principal amount of the applicable Term Loans or Revolving Loan
Commitments, as the case may be, among Increasing Lenders and New
Lenders.
(c) Each New Lender designated by Borrower and reasonably
acceptable to Administrative Agent shall become an additional party
hereto as a New Lender concurrently with the effectiveness of the
proposed increase in the aggregate principal amount of the
applicable Term Loans or Revolving Loan Commitments.
(d) Subject to the foregoing, any increase requested by
Borrower shall be effective upon delivery to Administrative Agent of
each of the following documents: (i) an originally executed copy of