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CREDIT AGREEMENT
among
AAI CORPORATION,
THE LENDERS PARTIES HERETO,
FIRST FIDELITY BANK, NATIONAL ASSOCIATION,
as Issuing Bank,
and
FIRST FIDELITY BANK, NATIONAL ASSOCIATION,
as Agent
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TABLE OF CONTENTS
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PAGE
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SECTION 1. CONSTRUCTION AND DEFINITIONS . . . . . . . . . . . . 1
1.1 Defined Terms . . . . . . . . . . . . . . . . . . . . 1
1.2 Other Definitional Provisions . . . . . . . . . . . . 28
SECTION 2. AMOUNT AND TERMS OF LOAN COMMITMENTS . . . . . . . . 29
2.1 Revolving Credit Commitments . . . . . . . . . . . . 29
2.2 Revolving Credit Notes . . . . . . . . . . . . . . . 30
2.3 Procedure for Revolving Credit Borrowing . . . . . . 30
2.4 Fees and Reduction of Commitments . . . . . . . . . . 32
2.5 Payment at Maturity . . . . . . . . . . . . . . . . . 32
2.6 Optional Prepayments . . . . . . . . . . . . . . . . 32
2.7 Mandatory Prepayments . . . . . . . . . . . . . . . . 33
2.8 Conversion Options; Minimum Amount of Loans . . . . . 33
2.9 Minimum Amounts of Tranches . . . . . . . . . . . . . 33
2.10 Interest Rate and Payment Dates . . . . . . . . . . . 34
2.11 Computation of Interest and Fees . . . . . . . . . . 34
2.12 Inability to Determine Interest Rate . . . . . . . . 35
2.13 Pro Rata Treatment and Payments . . . . . . . . . . . 35
2.14 Illegality . . . . . . . . . . . . . . . . . . . . . 37
2.15 Requirements of Law . . . . . . . . . . . . . . . . . 38
2.16 Taxes . . . . . . . . . . . . . . . . . . . . . . . . 39
2.17 Indemnity . . . . . . . . . . . . . . . . . . . . . . 41
2.18 Certain Calculations . . . . . . . . . . . . . . . . 41
SECTION 3. LETTERS OF CREDIT . . . . . . . . . . . . . . . . . . 41
3.1 Letter of Credit Commitment . . . . . . . . . . . . . 41
3.2 L/C Participations . . . . . . . . . . . . . . . . . 42
3.3 Repayment of Participants . . . . . . . . . . . . . . 43
3.4 Role of the Issuing Bank . . . . . . . . . . . . . . 43
3.5 Lenders' Obligations Absolute . . . . . . . . . . . . 44
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3.6 Reinstatement and Survival . . . . . . . . . . . . . 44
3.7 Procedure for Issuance and Renewal of Letters of
Credit . . . . . . . . . . . . . . . . . . . . . . . 45
3.8 Reimbursement of the Issuing Bank . . . . . . . . . . 46
3.9 Commissions, Fees and Charges . . . . . . . . . . . . 47
3.10 Interest on Amounts Disbursed under Letters of
Credit . . . . . . . . . . . . . . . . . . . . . . . 48
3.11 Computation of Interest and Fees; Payment not on
Business Days . . . . . . . . . . . . . . . . . . . . 48
3.12 Increased Costs . . . . . . . . . . . . . . . . . . . 48
3.13 Nature of Obligations; Indemnities . . . . . . . . . 49
3.14 Resignation of Issuing Bank . . . . . . . . . . . . . 51
SECTION 4. REPRESENTATIONS AND WARRANTIES . . . . . . . . . . . 52
4.1 Financial Condition . . . . . . . . . . . . . . . . . 52
4.2 Borrowing Base . . . . . . . . . . . . . . . . . . . 53
4.3 No Change . . . . . . . . . . . . . . . . . . . . . . 53
4.4 Organization and Good Standing; Compliance with Law . 53
4.5 Authorization; Enforceable Obligations . . . . . . . 53
4.6 No Legal Bar . . . . . . . . . . . . . . . . . . . . 54
4.7 No Material Litigation; Labor Matters . . . . . . . . 54
4.8 No Default . . . . . . . . . . . . . . . . . . . . . 54
4.9 Ownership of Property; Liens . . . . . . . . . . . . 54
4.10 Business Premises . . . . . . . . . . . . . . . . . . 55
4.11 Subsidiaries . . . . . . . . . . . . . . . . . . . . 55
4.12 Ownership of Entities . . . . . . . . . . . . . . . . 55
4.13 Environmental . . . . . . . . . . . . . . . . . . . . 55
4.14 Intellectual Property . . . . . . . . . . . . . . . . 56
4.15 Solvency . . . . . . . . . . . . . . . . . . . . . . 57
4.16 No Burdensome Restrictions . . . . . . . . . . . . . 57
4.17 Taxes . . . . . . . . . . . . . . . . . . . . . . . . 57
4.18 Federal Regulations . . . . . . . . . . . . . . . . . 57
4.19 ERISA . . . . . . . . . . . . . . . . . . . . . . . . 58
4.20 Investment Company Act; Other Regulations . . . . . . 58
4.21 Accuracy and Completeness of Information . . . . . . 58
4.22 Certain Indebtedness . . . . . . . . . . . . . . . . 59
4.23 Primary Banking Relationship . . . . . . . . . . . . 59
4.24 Purpose of Loans . . . . . . . . . . . . . . . . . . 59
PAGE
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SECTION 5. CONDITIONS PRECEDENT . . . . . . . . . . . . . . . . 60
5.1 Conditions to Initial Extensions of Credit . . . . . 60
(a) Credit Documents . . . . . . . . . . . . . . . 60
(b) Private Placement Debt Documents; Certificates;
Conditions . . . . . . . . . . . . . . . . . . 60
(c) Intercreditor Agreement . . . . . . . . . . . . 61
(d) Consents . . . . . . . . . . . . . . . . . . . 61
(e) Related Agreements . . . . . . . . . . . . . . 61
(f) Title Insurance . . . . . . . . . . . . . . . . 61
(g) Environmental Assessment . . . . . . . . . . . 61
(h) Appraisals . . . . . . . . . . . . . . . . . . 61
(i) Borrowing Certificate . . . . . . . . . . . . . 62
(j) Borrowing Base Certificate . . . . . . . . . . 62
(k) Borrower Proceedings . . . . . . . . . . . . . 62
(l) Guarantor Proceedings . . . . . . . . . . . . . 62
(m) Borrower and Guarantor Incumbency Certificate . 62
(n) Borrower and Guarantor Organizational
Documents . . . . . . . . . . . . . . . . . . . 63
(o) Good Standing Certificates . . . . . . . . . . 63
(p) Financial Information . . . . . . . . . . . . . 63
(q) Litigation . . . . . . . . . . . . . . . . . . 63
(r) No Violation . . . . . . . . . . . . . . . . . 63
(s) Consents, Licenses, Approval, Etc. . . . . . . 63
(t) Delivery of Stock Certificates . . . . . . . . 64
(u) Fees . . . . . . . . . . . . . . . . . . . . . 64
(v) Filings, Registrations and Recordings . . . . . 64
(w) Lien Searches . . . . . . . . . . . . . . . . . 64
(x) Insurance . . . . . . . . . . . . . . . . . . . 64
(y) Legal Opinions . . . . . . . . . . . . . . . . 64
(z) Accounts Dilution . . . . . . . . . . . . . . . 65
(aa) Landlord Agreements . . . . . . . . . . . . . . 65
(bb) Title Insurance Company Charges . . . . . . . . 65
5.2 Conditions to Each Loan and Each Letter of Credit . . 65
(a) Representations and Warranties . . . . . . . . 65
(b) No Default . . . . . . . . . . . . . . . . . . 66
(c) No Material Litigation . . . . . . . . . . . . 66
(d) No Material Adverse Change . . . . . . . . . . 66
(e) Additional Documents . . . . . . . . . . . . . 66
(f) Additional Matters . . . . . . . . . . . . . . 66
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SECTION 6. AFFIRMATIVE COVENANTS . . . . . . . . . . . . . . . . 66
6.1 Financial Information . . . . . . . . . . . . . . . . 66
6.2 Payment of Obligations . . . . . . . . . . . . . . . 69
6.3 Conduct of Business and Maintenance of Existence . . 70
6.4 Maintenance of Property; Insurance . . . . . . . . . 70
6.5 Inspection of Property; Books and Records;
Discussions . . . . . . . . . . . . . . . . . . . . . 70
6.6 Notices . . . . . . . . . . . . . . . . . . . . . . . 71
6.7 Government Regulations . . . . . . . . . . . . . . . 72
6.8 Environmental . . . . . . . . . . . . . . . . . . . . 72
6.9 Subsidiary Documents . . . . . . . . . . . . . . . . 74
6.10 Facility Fee . . . . . . . . . . . . . . . . . . . . 74
6.11 Real Property Surveys . . . . . . . . . . . . . . . . 74
6.12 Transit Investment . . . . . . . . . . . . . . . . . 75
SECTION 7. NEGATIVE COVENANTS . . . . . . . . . . . . . . . . . 75
7.1 Financial Condition Covenants . . . . . . . . . . . . 75
(a) Maintenance of Capital Base . . . . . . . . . . 75
(b) Leverage Ratio . . . . . . . . . . . . . . . . 76
(c) Cash Flow Coverage Ratio . . . . . . . . . . . 76
(d) Capital Expenditures . . . . . . . . . . . . . 76
7.2 Limitation on Indebtedness . . . . . . . . . . . . . 76
7.3 Limitation on Liens . . . . . . . . . . . . . . . . . 78
7.4 Limitation on Contingent Obligations . . . . . . . . 80
7.5 Limitations on Fundamental Changes . . . . . . . . . 80
7.6 Limitation on Acquisitions . . . . . . . . . . . . . 81
7.7 Limitation on Sale of Assets . . . . . . . . . . . . 81
7.8 Limitation on Restricted Payments . . . . . . . . . . 82
7.9 Limitation on Transactions with Affiliates . . . . . 83
7.10 Limitation on Subsidiaries . . . . . . . . . . . . . 84
7.11 Limitation on Investments, Loans and Advances . . . . 84
7.12 Limitation on Optional Payments and Modifications . . 85
7.13 Limitation on Sale and Leaseback . . . . . . . . . . 85
7.14 Fiscal Year . . . . . . . . . . . . . . . . . . . . . 85
7.15 Places of Business . . . . . . . . . . . . . . . . . 85
7.16 Change of Name . . . . . . . . . . . . . . . . . . . 86
7.17 Compliance with ERISA . . . . . . . . . . . . . . . . 86
7.18 Environmental . . . . . . . . . . . . . . . . . . . . 86
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7.19 Limitation on Negative Pledge Clauses . . . . . . . . 87
7.20 Limitation on Inconsistent Agreements . . . . . . . . 87
SECTION 8. EVENTS OF DEFAULT . . . . . . . . . . . . . . . . . . 87
8.1 Events of Default . . . . . . . . . . . . . . . . . . 87
8.2 Confession of Judgment . . . . . . . . . . . . . . . 93
SECTION 9. THE AGENT . . . . . . . . . . . . . . . . . . . . . . 94
9.1 Appointment . . . . . . . . . . . . . . . . . . . . . 94
9.2 Delegation of Duties . . . . . . . . . . . . . . . . 94
9.3 Exculpatory Provisions . . . . . . . . . . . . . . . 94
9.4 Reliance by Agent . . . . . . . . . . . . . . . . . . 95
9.5 Notice of Default . . . . . . . . . . . . . . . . . . 95
9.6 Non-Reliance on Agent and Other Lenders . . . . . . . 96
9.7 Indemnification . . . . . . . . . . . . . . . . . . . 96
9.8 Agent in Its Individual Capacity . . . . . . . . . . 97
9.9 Successor Agent . . . . . . . . . . . . . . . . . . . 97
9.10 Authority to Execute Intercreditor Agreement . . . . 97
SECTION 10. MISCELLANEOUS . . . . . . . . . . . . . . . . . . . . 97
10.1 Amendments and Waivers . . . . . . . . . . . . . . . 97
10.2 More Restrictive Provisions . . . . . . . . . . . . . 99
10.3 Notices . . . . . . . . . . . . . . . . . . . . . . . 99
10.4 No Waiver; Cumulative Remedies . . . . . . . . . . . 100
10.5 Survival of Representations and Warranties . . . . . 100
10.6 Payment of Expenses and Taxes . . . . . . . . . . . . 100
10.7 Further Assurances . . . . . . . . . . . . . . . . . 101
10.8 Unenforceability . . . . . . . . . . . . . . . . . . 102
10.9 Indemnification Concerning Fees . . . . . . . . . . . 102
10.10 Waiver of Trial by Jury . . . . . . . . . . . . . . . 102
10.11 Additional Waivers . . . . . . . . . . . . . . . . . 103
10.12 Successors and Assigns; Participations; Purchasing
Lenders . . . . . . . . . . . . . . . . . . . . . . . 103
10.13 Adjustments; Periodic Charging of Accounts; Setoff . 106
10.14 Additional Lenders and Additional Credit . . . . . . 107
10.15 Counterparts . . . . . . . . . . . . . . . . . . . . 107
10.16 GOVERNING LAW . . . . . . . . . . . . . . . . . . . . 107
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10.17 Submission To Jurisdiction . . . . . . . . . . . . 108
10.18 Payments in Foreign Currency . . . . . . . . . . . . 108
10.19 Acknowledgment Concerning Intercreditor Agreement . . 109
Schedule I Borrower Business Premises
Schedule II Lending Offices and Commitments
Schedule III Industry Lane Real Property Proposed To Be Sold
Schedule IV Real Property Collateral
Schedule V York Road Real Property Proposed To Be Sold
Schedule 4.7 Litigation Matters
Schedule 4.8 Contractual Obligations
Schedule 4.13 Environmental Matters
Schedule 4.14 Intellectual Property Domestically Registered
Schedule 4.19 ERISA Matters
Schedule 7.3 Permitted Liens
Exhibit A Form of Commercial Letter of Credit Application
Exhibit B Form of Standby Letter of Credit Application
Exhibit C Form of Officer Default Certificate
Exhibit D Form of Officer Financial Covenant Certificate
Exhibit E Form of Officer Reliance Certificate
Exhibit F Form of Revolving Credit Note
Exhibit G Form of Borrowing Certificate
Exhibit H Form of Commitment Transfer Supplement
CREDIT AGREEMENT
THIS CREDIT AGREEMENT is made as of the 13th day of October,
1994, by and among AAI CORPORATION, a Maryland corporation (the
"Borrower"), the Lenders parties to this Agreement (collectively, the
"Lenders"), FIRST FIDELITY BANK, NATIONAL ASSOCIATION, as Agent (in
such capacity as further defined hereinafter, the "Agent"), and FIRST
FIDELITY BANK, NATIONAL ASSOCIATION, as Issuing Bank (in such capacity
as further defined hereinafter, the "Issuing Bank").
The parties hereto hereby agree as follows:
SECTION 1. CONSTRUCTION AND DEFINITIONS
1.1 Defined Terms. As used in this Agreement, the
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following terms have the following meanings:
"ACCOUNTANT DEFAULT CERTIFICATE": a certificate, in form
and content satisfactory to the Required Lenders, of the independent
certified public accountants who examined and audited annual financial
statements of the Borrower and its Subsidiaries certifying to the
Lenders whether, in the course of such examination and audit, any
information came to their attention causing them to know or believe
that any Default or Event of Default existed and, if so, setting forth
the facts relevant thereto.
"ACCOUNTS CREDIT PERCENTAGE": eighty percent (80%) in the
case of Eligible Accounts which did not arise from progress billings,
and sixty-five percent (65%) in the case of Eligible Accounts which
arose from progress billings, or in either case, such lesser
percentage or percentages as shall from time to time be established by
the Required Lenders, in the discretion of the Required Lenders
exercised in good faith, and communicated to the Borrower in writing
by the Agent, with respect to Eligible Accounts, specific Eligible
Accounts or categories, types or components of Eligible Accounts.
Such lesser percentage or percentages may be based upon evaluations of
risk by the Lenders or any other factors deemed relevant by the
Lenders, whether or not such factors have theretofore been used,
contemplated or foreseen as a basis for adjusting the Accounts Credit
Percentage.
"AFFILIATE": as to any Person: (a) any Person in which
such Person legally or beneficially owns or holds, directly or
indirectly, five percent (5%) or more of the capital stock,
partnership interests or other equity interests; (b) any partnership
in which such Person is a general partner or any joint venture in
which such Person is a joint venturer; (c) any
Person that is a director, officer or employee of any of the foregoing
or of such Person or that legally or beneficially owns or holds,
directly or indirectly, five percent (5%) or more of the capital
stock, partnership interests or other equity interests in any of the
foregoing or in such Person; and (d) any Person that directly or
indirectly has the right or power to direct the management or policies
of any of the foregoing or of such Person and any Person whose
management or policies any of the foregoing or such Person directly or
indirectly has the right or power to direct.
"AGGREGATE BORROWING BASE CHARGE": at a particular time,
the sum of (a) the Aggregate Loans Outstanding of all Lenders as at
such time and (b) the L/C Exposure as at such time.
"AGGREGATE LOANS OUTSTANDING": as to any Lender at a
particular time, the aggregate principal amount of the Revolving
Credit Loans of such Lender outstanding as at such time.
"AGREEMENT": this Credit Agreement, as amended, modified,
extended, renewed, supplemented or replaced from time to time.
"APPLICABLE MARGIN":
(a) With respect to Base Rate Loans: (i) one-half of
one percent (.50%) at all times that the Private Placement Debt
Balance is greater than Twelve Million Five Hundred Thousand Dollars
($12,500,000.00); (ii) one-quarter of one percent (.25%) at all times
that the Private Placement Debt Balance is greater than zero but less
than or equal to Twelve Million Five Hundred Thousand Dollars
($12,500,000.00); and (iii) zero at all times that the Private
Placement Debt Balance is zero; and
(b) With respect to Eurodollar Loans: (i) two percent
(2%) at all times that the Private Placement Debt Balance is greater
than Twelve Million Five Hundred Thousand Dollars ($12,500,000.00);
(ii) one and three-quarters percent (1.75%) at all times that the
Private Placement Debt Balance is greater than zero but less than or
equal to Twelve Million Five Hundred Thousand Dollars
($12,500,000.00); and (iii) one and one-half percent (1.5%) at all
times that the Private Placement Debt Balance is zero.
"AUTHORIZED OFFICER": in the case of any Person, the
President, Vice President or Treasurer of such Person whose name
appears on a certificate of incumbency of such Person delivered
concurrently with the execution of this Agreement, as such certificate
of incumbency may be amended from time to time.
NYFS11...:\95\78495\0001\7120\AGR02794.U10
"AVAILABLE COMMITMENT": as to any Lender at a particular
time, the amount, if any, by which (a) the amount of such Lender's
Revolving Credit Commitment as at such time, exceeds (b) the Total
Usage with respect to such Lender as at such time.
"BASE RATE": the rate of interest established by First
Fidelity as its reference rate in making loans, which does not reflect
the rate of interest charged to any particular borrower or class of
borrowers. The Borrower acknowledges that the Base Rate is not tied
to any external rate of interest or index. Any rate of interest under
this Agreement or any of the other Credit Documents which is based
upon the Base Rate shall, automatically and effective as of the
opening of business on the day on which any change in the Base Rate is
announced, change in an amount equal to any such increase or decrease
in the Base Rate, without notice to the Borrower.
"BASE RATE LOANS": Revolving Credit Loans at such time as
they are made and/or being maintained at a rate of interest based upon
the Base Rate.
"BORROWER BUSINESS PREMISES": the collective reference to
the Borrower Chief Executive Office and the other premises of the
Borrower identified in Schedule I.
"BORROWER CHIEF EXECUTIVE OFFICE": the real property and
improvements located in Baltimore County, Maryland, owned by the
Borrower and known as York Road and Industry Lane, Hunt Valley,
Maryland 21030.
"BORROWER PLEDGE AGREEMENT": as amended, modified,
extended, renewed, supplemented or replaced from time to time, the
Pledge and Security Agreement to be executed and delivered by the
Borrower in favor of the Agent, for the ratable benefit of the
Lenders, the Issuing Bank and the Private Placement Debt Holders,
pursuant to which the Borrower shall, among other things, grant to the
Agent a security interest in the Borrower Subsidiary Pledged Stock.
"BORROWER SECURITY AGREEMENT": as amended, modified,
extended, renewed, supplemented or replaced from time to time, the
Security Agreement to be executed and delivered by the Borrower in
favor of the Agent, for the ratable benefit of the Lenders, the
Issuing Bank and the Private Placement Debt Holders, pursuant to which
the Borrower shall, among other things, grant to the Agent a security
interest in all present and future accounts, chattel paper,
instruments, documents of title, general intangibles, equipment,
inventory and other assets of the Borrower.
"BORROWER SUBSIDIARY PLEDGED STOCK": all capital stock
owned by the Borrower as of the Closing Date in each Subsidiary of the
Borrower other than Transit.
"BORROWING BASE": at a particular time, the product of
(a) Eligible Accounts as at such time, and (b) the Accounts Credit
Percentage.
"BORROWING BASE CERTIFICATE": a Certified report or
schedule in form and content satisfactory to the Required Lenders
containing such information as the Required Lenders may require from
time to time concerning the Borrowing Base, collections or other
proceeds of accounts of the Borrower or Eligible Affiliates and/or any
other matter or matters as the Required Lenders may require from time
to time, including, without limitation, information concerning cost
accounting by the Borrower and Eligible Affiliates with respect to
accounts or contracts of the Borrower or Eligible Affiliates and
information concerning the cost to complete contracts of the Borrower
or Eligible Affiliates.
"BORROWING DATE": any Business Day or Working Day specified
in a notice pursuant to Subsection 2.3 as a date on which the Borrower
requests the Lenders to make Revolving Credit Loans hereunder.
"BUSINESS DAY": a day other than a Saturday, Sunday or
other day on which commercial banks in Philadelphia, Pennsylvania, are
authorized or required by law to close.
"CAPITAL BASE": at a particular date, the sum of
(a) Tangible Net Worth as at such date and (b) the UIC-DEL Standby
Subordinated Debt Balance as at such date.
"CAPITAL EXPENDITURES": for a particular period, the
aggregate amount of expenditures made or accrued by the Borrower, its
Subsidiaries (other than Transit) and Symtron during such period
(including expenditures made with respect to Financing Leases) which,
in conformity with GAAP, are required to be included in a property,
plant, equipment or comparable fixed asset account reflected in a
consolidated balance sheet of the Borrower and its Subsidiaries (other
than Transit) and Symtron, but excluding expenditures made in
connection with the replacement or restoration of assets to the extent
reimbursed or financed from insurance proceeds paid on account of loss
of or damage to the assets being replaced or restored or from awards
of compensation arising from the taking by condemnation or eminent
domain of the assets being replaced or restored.
"CARSHELL": AAI California Carshell, Inc., a Maryland
corporation.
"CASH COLLATERAL ACCOUNT": a deposit account established at
First Fidelity or at one or more banking institution or institutions
acceptable to the Agent, each of which deposit accounts shall be under
the exclusive control of and subject to the sole order of the Agent
pursuant to such agreements and executed by such Persons as shall be
satisfactory to the Agent.
"CASH EQUIVALENTS": (a) securities issued or directly and
fully guaranteed or insured by the United States of America, or any
agency or instrumentality thereof, having maturities of not more than
six (6) months from the date of acquisition; (b) time deposits with
First Fidelity, certificates of deposit issued by First Fidelity, and
time deposits with, and certificates of deposit issued by, any
commercial bank incorporated under the laws of the United States of
America or any state thereof which has a combined capital, surplus and
undivided profits at least equal to Five Hundred Million Dollars
($500,000,000.00), and having maturities of not more than six (6)
months from the date of acquisition; (c) repurchase obligations with a
term of not more than seven (7) days for underlying securities of the
types described in clauses (a) and (b) above entered into with First
Fidelity or with any commercial bank incorporated under the laws of
the United States of America or any state thereof which has a combined
capital, surplus and undivided profits at least equal to Five Hundred
Million Dollars ($500,000,000.00); and (d) commercial paper of First
Fidelity or the holding company controlling First Fidelity and
commercial paper rated at least A-1 or the equivalent thereof by
Standard & Poor's Corporation or P-1 or the equivalent thereof by
Moody's Investors Service, Inc., and, in either case, maturing within
six (6) months after the date of acquisition.
"CASH FLOW COVERAGE RATIO": for any period, the ratio of
(a) EBITDA for such period, to (b) the sum of (i) the aggregate amount
of Long-Term Debt which will be due and payable within twelve (12)
months after the end of such period, (ii) Interest Expense for such
period and (iii) the aggregate amount of payments which will be due
and payable within twelve (12) months after the end of such period on
account of all leases of any property (real, personal or mixed) by the
Borrower, any of its Subsidiaries (other than Transit) or Symtron as
lessee, other than Financing Leases.
"CERTIFIED": in the case of any statement, schedule, report
or other document of any Person, containing a representation by an
Authorized Officer of such Person that, to such Authorized Officer's
knowledge and belief after diligent inquiry, such statement, schedule,
report or other document, and the information contained therein, is
true and complete in all material respects.
"CHANGE OF CONTROL": (a) any Person, or two or more Persons
acting in concert, shall directly or indirectly acquire, after the
date of this Agreement, beneficial ownership (within the meaning of
Rule 13d-3 of the Securities and Exchange Commission under the
Securities Exchange Act of 1934) of twenty percent (20%) or more of
the issued and outstanding voting capital stock of the Borrower on a
fully-diluted basis; or (b) individuals who, as of the date of this
Agreement, constitute the Board of Directors of the Borrower (together
with any new director whose election by or whose nomination for
election was approved by a vote of at least two-thirds (2/3) of the
directors then still in office who either were directors as of such
time or whose election or nomination for election was previously so
approved), shall for any reason cease to constitute a majority of the
Board of Directors of the Borrower.
"CLOSING DATE": the date on which the Lenders make their
initial Revolving Credit Loans.
"CODE": the Internal Revenue Code of 1986, as amended from
time to time.
"COLLATERAL": all property, interests and rights, and the
products and proceeds thereof, now or hereafter directly or indirectly
securing any of the Obligations or any Indebtedness or obligation of
any Other Obligor with respect to any of the Obligations.
"COMMERCIAL L/C EXPOSURE": at a particular time, the sum,
as at such time, of (a) that portion of the L/C Aggregate Undrawn
Amount which is attributable to commercial Letters of Credit, and
(b) that portion of the L/C Reimbursement Obligations which is
attributable to commercial Letters of Credit.
"COMMERCIAL L/C MAXIMUM EXPOSURE": Ten Million Dollars
($10,000,000.00).
"COMMERCIAL L/C NEGOTIATION FEE RATE": three-eighths of one
percent (3/8%).
"COMMITMENT PERCENTAGE": as to any Lender, the "Commitment
Percentage" indicated for such Lender in Schedule II.
"COMMITMENT PERIOD": the period from and including the date
of this Agreement to but not including the Termination Date or such
earlier date as the Commitments shall terminate as provided herein.
"COMMITMENTS": the collective reference to the Revolving
Credit Commitments and the L/C Commitment.
"COMMONLY CONTROLLED ENTITY": an entity, whether or not
incorporated, which is under common control with the Borrower or any
Other Obligor within the meaning of Section 4001 of ERISA.
"COMPENSABLE PREPAYMENT": any payment of all or any portion
of any of the Revolving Credit Loans prior to the date which is
fifteen (15) months after the date of this Agreement with funds
derived from any source other than the revenues of the business
operations of the Borrower, any of its Subsidiaries or any Guarantor,
whether made by the Borrower or any other Person, including, without
limitation, any such payment made with funds borrowed from any source
or with funds derived from the issuance or offering of Indebtedness or
securities of the Borrower or any other Person, but not including any
such payment (a) made after acceleration of the Revolving Credit
Loans, (b) made with proceeds of, or as a result of (i) any damage or
casualty to, or loss with respect to, or any sale, assignment, lease,
rental, exchange, liquidation, condemnation, taking or other
disposition of, any of the Collateral, or (ii) application of any
proceeds of any of the foregoing or of any insurance, (c) made with
proceeds of, or as a result of, sales of assets permitted under
Subsection 7.7, or (d) made with proceeds of, or as a result of,
payments of principal or interest made on account of the Indebtedness
evidenced by the Excluded UIC-DEL Note (as defined in the Guarantor
Security Agreement).
"CONTINGENT OBLIGATION": as to any Person, any obligation
of such Person guaranteeing or in effect guaranteeing any
Indebtedness, leases, dividends, letters of credit or other
obligations (the "primary obligations") of any other Person (the
"primary obligor") in any manner, whether directly or indirectly,
including, without limitation, any obligation of such Person, whether
or not contingent (a) to purchase any such primary obligation or any
property constituting direct or indirect security therefor, (b) to
advance or supply funds (i) for the purchase or payment of any such
primary obligation or (ii) to maintain working capital or equity
capital of the primary obligor or otherwise to maintain the net worth
or solvency of the primary obligor, (c) to purchase property,
securities or services primarily for the purpose of assuring the owner
of any such primary obligation of the ability of the primary obligor
to make payment of such primary obligation or (d) otherwise to assure
or hold harmless the owner of any such primary obligation against loss
in respect thereof.
"CONTRACTUAL OBLIGATION": as to any Person, any provision
of any security issued by such Person or of any agreement, instrument
or undertaking to which such Person is a party or by which it or any
of its property is bound.
"CREDIT DOCUMENTS": the collective reference to this
Agreement, the Notes, the Borrower Security Agreement, the Borrower
Pledge Agreement, the Deed of Trust, the Intellectual Property
Assignments, the Guaranty, the Guarantor Security Agreement, the UIC
Pledge Agreement, the UIC Subordination Agreement, the UIC-DEL
Subordination Agreement, the L/C Agreements and each other agreement,
contract, promissory note or other instrument, security agreement,
assignment, pledge agreement, indemnification agreement, subordination
agreement, mortgage, deed of trust, guaranty and other document now or
hereafter evidencing, guaranteeing, securing (directly or indirectly),
subordinating other obligations of the Borrower or any Other Obligor
to, or containing any warranties, covenants, agreements or
representations of any Person relating to, any Indebtedness or
liability of the Borrower or any Other Obligor arising under this
Agreement, the Notes, the L/C Agreements or the Guaranty, as each of
the documents referred to in this definition may be amended, modified,
extended, renewed, supplemented or replaced from time to time.
"DEED OF TRUST": as amended, modified, extended, renewed,
supplemented or replaced from time to time, a Deed of Trust and
Security Agreement to be executed and delivered by the Borrower to
trustees for the benefit of the Agent encumbering the Real Property
Collateral for the ratable benefit of the Lenders, the Issuing Bank
and the Private Placement Debt Holders.
"DEFAULT": the occurrence of any event which, with the
giving of notice or the lapse of time, or both, would constitute an
Event of Default.
"DOLLARS" and "$": dollars in lawful currency of the United
States of America.
"DOMESTIC LENDING OFFICE": initially, the office of each
Lender designated as such in Schedule II; thereafter, such other
office of such Lender, if any, located within the United States of
America, which shall be making or maintaining Base Rate Loans.
"EBIT": for any period, the consolidated net income of the
Borrower, its Subsidiaries (other than Transit) and Symtron for such
period, determined in conformity with GAAP consistently applied, plus,
to the extent deducted in determining such net income but without
duplication, Interest Expense for such period and provision for taxes
applicable to such period.
"EBITDA": for any period, EBIT for such period, adjusted by
adding thereto the amount of depreciation and amortization deducted in
determining EBIT for such period.
"ELIGIBLE ACCOUNTS": at a particular time, the aggregate
amount, as at such time, of accounts of the Borrower and Eligible
Affiliates which have been billed to the account debtors thereon,
which are payable in conformity with such billings and which are, but
only in the amounts such accounts are, acceptable to the Agent as at
such time, in the discretion of the Agent exercised in good faith, as
a basis for extensions of credit to the Borrower under this Agreement.
Except as otherwise agreed by the Agent from time to time, Eligible
Accounts shall not include: (a) any account which has remained unpaid
for ninety (90) days or more after the billing thereof; (b) any
account due from any Person other than the United States of America if
fifty percent (50%) or more of all of the accounts due to the Borrower
and Eligible Affiliates from such Person has remained unpaid for
ninety (90) days or more after the billing thereof; (c) any account
which arose out of any contract with the United States of America if
fifty percent (50%) or more of the total amount due under such
contract has remained unpaid for ninety (90) days or more after the
billing thereof; (d) any account which is not lawfully owned by the
Borrower or an Eligible Affiliate, which has been assigned to the
Borrower or an Eligible Affiliate, which is subject to any Lien except
for Permitted Liens, or in which the Borrower or the Eligible
Affiliate, as the case may be, does not have the right and power to
grant a security interest to the Agent in conformity with the Borrower
Security Agreement, the Guarantor Security Agreement or the applicable
Subsidiary Security Agreement, as the case may be, including any
account the assignment of which is prohibited, limited or conditioned
under any underlying or related contract; (e) any account with respect
to which any transaction giving rise to or relating to the account was
unlawful or not solicited and entered into in compliance with
Requirements of Law; (f) any account which is not valid or enforceable
or does not represent bona fide, undisputed Indebtedness to the
Borrower or an Eligible Affiliate of each obligor thereon; (g) any
account in which the Agent does not have a perfected first priority
security interest; (h) any account evidenced in whole or in part by
any instrument or chattel paper unless such instrument or chattel
paper has been delivered to the Agent, together with such endorsements
or assignments as the Agent may reasonably require; (i) any account to
the extent that the account is subject to any defense, setoff,
counterclaim, credit, discount, allowance, adjustment, deduction or
reduction of any kind; (j) any account to the extent that such account
includes any finance or similar charges on account of past due
amounts; (k) any account with respect to which any obligor thereon is
a Person of whom the Borrower or the Eligible Affiliate, as the case
may be, is or becomes an account debtor or obligor by virtue of any
obligation of the Borrower or such Eligible Affiliate to such Person
not relating to accounts due or to become due from such Person to the
Borrower or such Eligible Affiliate; (l) any account to the extent
that any goods, the sale or lease of which gave rise to the account,
have been returned, rejected, lost or damaged prior to acceptance of
such goods by the purchaser or lessee thereof; (m) any account which
arose from the sale of goods, if such sale was not an absolute sale or
was a sale on consignment, on approval or on a sale-or-
return basis, or if such sale is subject to any repurchase or return
agreement, or if such sale is subject to any other term by reason of
which the obligation of any obligor thereon is contingent or
conditional; (n) any account which did not arise in the ordinary
course of business of the Borrower or the Eligible Affiliate, as the
case may be; (o) any account which arose out of a contract with the
United States of America or any state, county, municipality or other
Governmental Authority, or any department or agency thereof, to the
extent that sums due or to become due in connection therewith have not
been duly assigned to the Agent in accordance with the Federal
Assignment of Claims Act and/or any other applicable federal, state
and local laws, rules and regulations relating to the assignment or
payment of such contract and sums; (p) any account with respect to
which any obligor thereon is insolvent (as defined in Section 101(32
of the United States Bankruptcy Code), is unable to pay its debts as
they mature, or is the subject of any pending, imminent or threatened
bankruptcy, reorganization, insolvency, readjustment of debt,
trusteeship, receivership, dissolution or liquidation law, statute or
proceeding; (q) any account which arose out of a contract which is
subject to any bonding or other similar arrangement as security for
any obligations of the Borrower, any of its Subsidiaries or any
Guarantor in connection with which any Lien has been granted, incurred
or assumed upon any property, assets or revenues, whether now owned or
hereafter acquired, of any of Borrower, any of its Subsidiaries or any
Guarantor; (r) any account with respect to which any obligor thereon
is an Affiliate of the Borrower or any Other Obligor; (s) any account
with respect to which the principal place of business of any obligor
thereon is not located in the United States of America, except to the
extent that such account is (i) secured by a letter of credit or bond
satisfactory to the Agent issued or confirmed by a bank or provided by
a surety which is satisfactory to the Agent and which is organized
under the laws of the United States of America or any state thereof or
(ii) guaranteed by the United States of America or an agency thereof
on terms and conditions satisfactory to the Agent; or (t) any account
which arose out of a contract with the United States of America or any
other Governmental Authority to the extent that (i) funds for the
payment of such account have not been appropriated by the United
States of America or such other Governmental Authority or (ii) the
Agent is not satisfied, in its discretion exercised in good faith,
that such account and contract is enforceable against the full faith
and credit of the United States of America or such other Governmental
Authority and that funds for the payment of such account are
available. Notwithstanding the provisions of clause (s) of this
definition, accounts of the Borrower due from Marubun Corporation, a
Japanese corporation ("Marubun"), which otherwise qualify as Eligible
Accounts may constitute Eligible Accounts even though they would
otherwise be excluded by such clause (s), provided that, except as
--------
otherwise agreed by the Agent from time to time: (i) notwithstanding
the provisions of clause (a) of this definition, no account of the
Borrower due from Marubun shall constitute an Eligible Account if such
account has remained unpaid for thirty (30) days or more after the
billing thereof; (ii) notwithstanding the
provisions of clause (b) of this definition, no account of the
Borrower due from Marubun shall constitute an Eligible Account if
fifty percent (50%) or more of all of the accounts due to the Borrower
and Eligible Affiliates from such Person has remained unpaid for
thirty (30) days or more after the billing thereof; and (iii) the
product of (x) the Accounts Credit Percentage and (y) the aggregate
amount of accounts of the Borrower due from Marubun constituting
Eligible Accounts, shall not at any time exceed Two Hundred Fifty
Thousand Dollars ($250,000.00). The Agent may determine from time to
time in its discretion exercised in good faith and notwithstanding any
previous contrary determinations made by the Agent, to exclude from or
include in Eligible Accounts specific accounts (including accounts due
from Marubun), categories or types of accounts (including accounts due
from Marubun), or specific components of accounts (including accounts
due from Marubun). Such determinations may be based upon evaluations
of risk by the Agent or any other factors deemed relevant by the
Agent, whether or not such factors have theretofore been used,
contemplated or foreseen as a basis for limiting Eligible Accounts.
Any such determinations by the Agent will be promptly communicated in
writing to the Borrower.
"ELIGIBLE AFFILIATE": at a particular time (a) each
Eligible Borrower Subsidiary as at such time and (b) Symtron, provided
--------
that the Guaranty is subsisting as at such time with respect to
Symtron, the Guarantor Security Agreement is subsisting as at such
time with respect to Symtron and that the security interests granted
by Symtron pursuant to the Guarantor Security Agreement are duly
perfected as at such time and subject only to Permitted Liens.
"ELIGIBLE BORROWER SUBSIDIARY": at a particular time, a
Subsidiary of the Borrower which has executed and delivered to the
Agent a Subsidiary Guaranty subsisting as at such time, a Subsidiary
Security Agreement subsisting as at such time, such financing
statements as may be required by the Agent and such other documents
and instruments as may be required pursuant to any of the Credit
Documents, provided that the security interests granted by such
--------
Subsidiary pursuant to such Subsidiary Security Agreement are duly
perfected as at such time and subject only to Permitted Liens.
"ENGINEERING": AAI Engineering Support Inc., a Maryland
corporation.
"ENVIRONMENTAL ASSESSMENT": an environmental site
assessment, including such audits, tests and procedures as the Agent,
the Borrower or the contractor performing the same may deem necessary,
together with a written report thereon, performed and prepared by an
experienced, responsible and reputable contractor satisfactory to the
Agent.
"ENVIRONMENTAL CLAIM": shall mean any letter, notice,
claim, demand, summons, citation, directive or other written
communication and any investigation, action, suit, proceeding,
litigation, judgment or decree by or from the United States
Environmental Protection Agency or any other Person alleging or
otherwise relating to any Hazardous Substance Contamination or any
violation of any Environmental Law.
"ENVIRONMENTAL LAWS": the Resource Conservation and
Recovery Act, the Comprehensive Environmental Response, Compensation
and Liability Act, the Toxic Substances Control Act, the Federal
Insecticide, Fungicide, and Rodenticide Act, the Federal Water
Pollution Control Act, the Safe Drinking Water Act, the Clean Air Act,
the Solid Waste Disposal Act, the Emergency Planning and Community
Right-To-Know Act, as each of the foregoing may be amended from time
to time, and all rules, regulations, codes, orders, decrees,
judgments, injunctions, notices and demand letters now or hereafter
enacted, promulgated, approved, issued or entered thereunder, as the
same may be amended from time to time, and all other federal, state,
local and foreign laws, rules, regulations, codes, permits,
directives, orders, decrees, judgments, injunctions, notices and
demand letters now or hereafter enacted, promulgated, approved, issued
or entered, and as amended from time to time, relating to the
protection of the health of human beings or other living things or
relating to pollution or protection of air, water, land or any other
aspect of the environment, including, without limitation, all of the
same relating to the presence, manufacture, generation, production,
processing, use, handling, treatment, storage, disposal, importation,
transportation, distribution or registration, or the release,
emission, discharge or spilling into air, water, land or any other
aspect of the environment, of any Hazardous Substance.
"ERISA": the Employee Retirement Income Security Act of
1974, as amended from time to time.
"EUROCURRENCY RESERVE REQUIREMENTS": for any day as applied
to a Eurodollar Loan, the aggregate (without duplication) of the rates
(expressed as a decimal fraction) of reserve requirements in effect on
such day (including, without limitation, basic, supplemental, marginal
and emergency reserves under any regulations of the Board of Governors
of the Federal Reserve System or other Governmental Authority having
jurisdiction with respect thereto), dealing with reserve requirements
prescribed for eurocurrency funding (currently referred to as
"Eurocurrency Liabilities" in Regulation D of such Board) maintained
by a member bank of such System.
"EURODOLLAR BASE RATE": with respect to each day during
each Interest Period pertaining to a Eurodollar Loan, the rate per
annum for deposits in Dollars for a period equal to such Interest
Period which appears on the Telerate Page 3750 as of 11:00 A.M.,
London
time, on the day that is two (2) Working Days prior to the
commencement of such Interest Period. If such rate does not appear on
the Telerate Page 3750, the rate to be utilized shall be the offered
rate which appears, or if two or more such rates appear, the average
(rounded up to the next higher 1/16 of 1%) of the offered rates which
appear, on the Reuters Screen LIBO Page as of 11:00 A.M., London time,
on the day that is two (2) Working Days prior to the commencement of
such Interest Period.
"EURODOLLAR LENDING OFFICE": initially, the office of each
Lender designated as such in Schedule II; thereafter, such other
office of such Lender, if any, which shall be making or maintaining
Eurodollar Loans.
"EURODOLLAR LOANS": Revolving Credit Loans hereunder at
such time as they are made and/or are being maintained at a rate of
interest based upon the Eurodollar Rate.
"EURODOLLAR RATE": with respect to each day during each
Interest Period pertaining to a Eurodollar Loan, a rate per annum
determined for such day in accordance with the following formula
(rounded upwards to the nearest whole multiple of 1/100th of one
percent):
Eurodollar Base Rate
------------------------------------------------
1.00 - Eurocurrency Reserve Requirements
"EVENT OF DEFAULT": any of the events specified in
Section 8.
"EXISTING BORROWER SUBSIDIARIES": the collective reference
to Systems, Technologies, Engineering, Transit, Carshell,
International, Microflite, Medical and Seti.
"FEDERAL FUNDS RATE": with respect to each day during any
period, a fluctuating per annum rate of interest 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 Philadelphia, 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 the Agent
from three Federal funds brokers of recognized standing selected by
it.
"FINANCING LEASE": in the case of any Person, any lease of
any property (real, personal or mixed) by such Person as lessee which,
in conformity with GAAP, would be required to be capitalized on a
balance sheet of such Person.
"FIRST FIDELITY": First Fidelity Bank, National
Association.
"FIRST FIDELITY CASH COLLATERAL ACCOUNT": the Cash
Collateral Account established at First Fidelity.
"GAAP": generally accepted accounting principles in the
United States of America in effect from time to time. In the event of
a change in GAAP affecting any of the covenants contained in
Subsection 7.1 or definitions contained in Section 1 relating to such
covenants, such covenants and definitions shall continue to be applied
as though such change in GAAP had not occurred unless and until the
Borrower and the Required Lenders shall agree in writing to amend or
adjust such covenants or definitions as deemed necessary as a result
of such change in GAAP.
"GOOD FAITH": with respect to any determination, request or
other action to be made or taken by any party hereto "in good faith,"
that such party shall make or take such determination, request or
other action honestly and not maliciously.
"GOVERNMENTAL AUTHORITY": any nation or government, any
state or other political subdivision thereof and any entity exercising
executive, legislative, judicial, regulatory or administrative
functions of or pertaining to government, and any Person owned or
controlled directly or indirectly by any of the foregoing, whether
domestic or foreign.
"GUARANTOR SECURITY AGREEMENT": as amended, modified,
extended, renewed, supplemented or replaced from time to time, the
Security Agreement to be executed and delivered by the Guarantors
(other than UIC) in favor of the Agent, for the ratable benefit of the
Lenders, the Issuing Bank and the Private Placement Debt Holders,
pursuant to which each of the Guarantors (other than UIC) shall, among
other things, grant to the Agent a security interest in all of its
present and future accounts, chattel paper, instruments, documents of
title, general intangibles, equipment, inventory and other assets.
"GUARANTORS": the collective reference to UIC, Symtron,
UIC-DEL, Systems, Technologies, Engineering, Carshell, International,
Microflite, Medical, Seti and each other Subsidiary of the Borrower
which after the date of this Agreement executes and delivers to the
Agent a Subsidiary Guaranty.
"GUARANTY": as amended, modified, extended, renewed,
supplemented or replaced from time to time, the Guaranty to be
executed and delivered by the Guarantors in favor of the Agent, the
Lenders and the Issuing Bank pursuant to which each of the
Guarantors shall, among other things, guarantee payment of the
Obligations jointly and severally with each other of the Guarantors.
"HAZARDOUS SUBSTANCE": any hazardous substance, hazardous
material, hazardous waste, toxic substance, toxic material, toxic
waste, industrial waste, medical waste, infectious waste, biomedical
waste, biohazardous waste, pollutant, contaminant, chemical, acid,
solvent, caustic, oil, petroleum, petroleum-based product, asbestos,
asbestos-containing substance or material, flammable substance,
flammable material, explosive substance, explosive material, radon,
radioactive substance, radioactive material, urea formaldehyde foam
insulation, polychlorinated biphenyls, methane and any other substance
or material the presence, manufacture, generation, production,
processing, use, handling, treatment, storage, disposal, release,
emission, discharge, spilling, importation, transportation,
distribution or registration of which is prohibited or regulated by
any Environmental Law. The meaning of each term used in this
definition shall include, without limitation, the meaning or meanings
assigned to such term by any Environmental Laws.
"HAZARDOUS SUBSTANCE CONTAMINATION": (a) the
contamination, as a result of any Hazardous Substance, of any Obligor
Use Property; or (b) the contamination, as a result of any
manufacture, generation, production, processing, use, handling,
treatment, storage, disposal, release, emission, discharge or spilling
of any Hazardous Substance on or from any Obligor Use Property, of any
surrounding, adjacent or nearby air, water, land or other property or
other aspect of the environment which requires remedial action under
any Environmental Law.
"INDEBTEDNESS": as to any Person, without duplication:
(a) any obligation, indebtedness or liability of such Person which, in
conformity with GAAP, should be included in the liability section of a
balance sheet of such Person or in a note to the liability section of
a balance sheet of such Person, excluding reserves to the extent that
such reserves do not constitute obligations; (b) any obligation,
indebtedness or liability of such Person arising under any conditional
sale or other title retention agreement with respect to property
acquired by such Person, notwithstanding that the remedies of the
seller, lender or lessor under such agreement in case of default are
limited to repossession or sale of property; (c) any obligation,
indebtedness or liability of any Person secured directly or indirectly
by any contingent or noncontingent security interest or other Lien in
or upon any present or future property of such Person, whether or not
such Person is personally liable for such obligation, indebtedness or
liability; and (d) any obligation, indebtedness or liability of such
Person in connection with any Financing Lease.
"INDEMNIFIED LETTERS OF CREDIT": the collective reference
to the letters of credit issued by Signet Bank/Maryland for the
account of the Borrower and subject to the Issuing Bank L/C
Indemnification Agreement.
"INDUSTRY LANE REAL PROPERTY PROPOSED TO BE SOLD": the
collective reference to the real property described in Schedule III,
together with all improvements thereon.
"INSOLVENCY" or "INSOLVENT": at any particular time, a
Multiemployer Plan which is insolvent within the meaning of Section
4245 of ERISA.
"INTELLECTUAL PROPERTY ASSIGNMENT": as amended, modified,
extended, renewed, supplemented or replaced from time to time, an
assignment in form and content satisfactory to the Required Lenders
assigning to the Agent, for the ratable benefit of the Agent, the
Lenders, the Issuing Bank and the Private Placement Debt Holders,
rights of the Borrower or any other Person relating to any patent
rights, trademark rights, servicemark rights, copyright rights,
license rights or other intellectual property.
"INTERCREDITOR AGREEMENT": as amended, modified, extended,
renewed, supplemented or replaced from time to time, an Intercreditor
Agreement in form and content satisfactory to the Agent, the Issuing
Bank and the Lenders to be executed and delivered among the Agent, the
Issuing Bank, the Lenders and the Private Placement Debt Holders
pursuant to which the relative rights of the Lenders, the Issuing Bank
and the Private Placement Debt Holders relating to Collateral and
other relative rights of the parties thereto shall be established.
"INTEREST EXPENSE": for any period, the total interest
expense of the Borrower, its Subsidiaries (other than Transit) and
Symtron for such period on a consolidated basis.
"INTEREST PAYMENT DATE": (a) as to any Base Rate Loan, the
first day of each month, and (b) as to any Eurodollar Loan, the first
day of each month and the last day of the Interest Period applicable
thereto.
"INTEREST PERIOD": as to any Eurodollar Loan:
(a) initially, the period commencing on the borrowing or
conversion date, as the case may be, with respect to such
Eurodollar Loan and ending one (1), three (3) or six (6) months
thereafter, as selected by the Borrower in its notice of
borrowing as provided in Subsection 2.3 or its notice of
conversion as provided in Subsection 2.9, as the case may be; and
(b) thereafter, each period commencing on the last day of
the next preceding Interest Period applicable to such Eurodollar
Loan and ending one (1), three (3) or six (6) months thereafter,
as selected by the Borrower by irrevocable notice to the Agent
not less than five (5) Working Days prior to the last day of the
then current Interest Period with respect to such Eurodollar
Loan;
provided that all of the foregoing provisions relating to Interest
--------
Periods are subject to the following:
(i) if any Interest Period with respect to a Eurodollar
Loan would otherwise end on a day which is not a Working Day,
that Interest Period shall be extended to the next succeeding
Working Day unless the result of such extension would be to carry
such Interest Period into another calendar month, in which event
such Interest Period shall end on the immediately preceding
Working Day;
(ii) no Interest Period shall end after the Termination
Date;
(iii) if the Borrower shall fail to give notice as
provided above, the Borrower shall be deemed to have selected a
Base Rate Loan to replace the affected Eurodollar Loan;
(iv) any Interest Period with respect to a Eurodollar Loan
that begins on the last Working Day of a calendar month (or on a
day for which there is no numerically corresponding day in the
calendar month at the end of such Interest Period) shall end on
the last Working Day of a calendar month; and
(v) the Borrower shall select Interest Periods so as not to
require a payment or prepayment of any Eurodollar Loan during an
Interest Period for such Loan.
"INTERNATIONAL": AAI International, Inc., a Delaware
corporation.
"INVESTMENT": legal or beneficial ownership of any capital
stock, partnership interest, joint venture interest or other equity
interest in, or any promissory note, bond, debenture or other
Indebtedness of or issued by, or any capital contribution to, or any
other investment in or security (as defined in the Securities Act of
1933 or the Securities Exchange
Act of 1934, or any successor legislation, as amended from time to
time) of or issued by, any corporation, partnership, joint venture or
other Person.
"ISSUING BANK": as of the date of this Agreement, First
Fidelity and, after the date of this Agreement, the Person from time
to time party to this Agreement as "Issuing Bank."
"ISSUING BANK L/C INDEMNIFICATION AGREEMENT": as amended,
modified, extended, renewed, supplemented or replaced from time to
time, a letter agreement to be executed and delivered between the
Issuing Bank and Signet Bank/Maryland, satisfactory in form and
content to the Issuing Bank, pursuant to which the Issuing Bank shall
indemnify Signet Bank/Maryland in connection with certain letters of
credit issued by Signet Bank/Maryland for the account of the Borrower.
"L/C AGGREGATE UNDRAWN AMOUNT": at a particular date, the
aggregate undrawn amount, as at such date, of all Letters of Credit
and all Indemnified Letters of Credit issued and outstanding.
"L/C AGREEMENTS": as amended, modified, extended, renewed,
supplemented or replaced from time to time, applications and
reimbursement and other agreements in form and content and executed by
Persons satisfactory to the Issuing Bank requesting issuance of one or
more Letters of Credit and setting forth reimbursement obligations and
other terms and conditions relating thereto.
"L/C APPLICATION": in the case of a commercial Letter of
Credit, an Application in the form of Exhibit A or in such other form
as the Issuing Bank may from time to time require, appropriately
completed and duly executed, and, in the case of a standby Letter of
Credit, an application in the form of Exhibit B or in such other form
as the Issuing Bank may from time to time require, appropriately
completed and duly executed.
"L/C COMMITMENT": as defined in Subsection 3.1.
"L/C EXPOSURE": at a particular time, the sum of (a) the
L/C Aggregate Undrawn Amount as at such time and (b) L/C Reimbursement
Obligations as at such time.
"L/C MAXIMUM EXPOSURE": Ten Million Dollars
($10,000,000.00).
"L/C REIMBURSEMENT OBLIGATIONS": at a particular time, the
aggregate amount of all drawings made under Letters of Credit and
Indemnified Letters of Credit
which, as at such time, have not been reimbursed by the Borrower to
the Issuing Bank or Signet Bank/Maryland, as the case may be.
"LENDERS": as of the date of this Agreement, First Fidelity
and The Bank of Baltimore and, after the date of this Agreement, all
Persons from time to time parties to this Agreement as "Lenders."
"LETTERS OF CREDIT": as defined in Subsection 3.1.
"LEVERAGE RATIO": at a particular date, the ratio of
(a) Senior Liabilities as at such date to (b) Capital Base as at such
date.
"LIEN": any mortgage, pledge, hypothecation, assignment,
deposit arrangement, encumbrance, lien (statutory or other) or
preference, priority or other security agreement or preferential
arrangement of any kind or nature whatsoever (including, without
limitation, any conditional sale or other title retention agreement,
any Financing Lease having substantially the same economic effect as
any of the foregoing, and the filing of any financing statement under
the Uniform Commercial Code or comparable law of any jurisdiction in
respect of any of the foregoing).
"LOAN": any Revolving Credit Loan.
"LONG-TERM DEBT": at a particular time, all Indebtedness of
the Borrower, each of its Subsidiaries (other than Transit) and
Symtron as at such time which was payable more than one (1) year from
the date of creation of such Indebtedness (excluding reserves for
deferred income taxes and other reserves to the extent that such
reserves do not constitute obligations).
"MATERIAL ADVERSE EFFECT": a material adverse effect with
respect to the business, assets, operations, business prospects or
financial condition of the Borrower, any of its Subsidiaries or any
Other Obligor, or a material adverse effect with respect to the risks
to the Lenders or the Issuing Bank attending the Collateral, with
respect to the risks to the Lenders or the Issuing Bank attending any
commitments of the Lenders or the Issuing Bank which could give rise
to any Obligations, or with respect to the prospect for payment or
collection in full of the Obligations; provided that the failure of
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Transit to be awarded a contract by the Miami Valley Transit Authority
for the supply of electric trolley buses shall not be deemed to have a
"Material Adverse Effect."
"MATERIAL LITIGATION": in the case of any Person, any
litigation, action, suit, proceeding or investigation pending or
overtly threatened against such Person or any Subsidiary of such
Person, or any of their property, at law or in equity, which, if
determined adversely to such Person or such Subsidiary, as the case
may be, could reasonably be expected to have a material adverse effect
on the business, assets, operations, business prospects or financial
condition of such Person or any Subsidiary of such Person, or a
material adverse effect with respect to the risks to the Lenders or
the Issuing Bank attending the Collateral, with respect to the risks
to the Lenders or the Issuing Bank attending any commitments of the
Lenders or the Issuing Bank which could give rise to any Obligations,
or with respect to the prospect for payment or collection in full of
the Obligations.
"MEDICAL": AAI Medical Corporation, a Maryland corporation.
"MICROFLITE": AAI Microflite Simulation International
Corporation, a Maryland corporation.
"MULTIEMPLOYER PLAN": a Plan which is a multiemployer plan
as defined in Section 4001(a) (3) of ERISA.
"NOTES": the collective reference to the Revolving Credit
Notes.
"OBLIGATIONS": as amended, modified, extended, renewed,
supplemented, increased, refinanced, consolidated or replaced from
time to time, all present and future Indebtedness of the Borrower to
the Agent, the Lenders and the Issuing Bank of every kind and nature
arising under or in connection with this Agreement or the other Credit
Documents (including, without limitation, all Revolving Credit Loans,
L/C Reimbursement Obligations and all other principal amounts,
including future advances, interest charges, fees, commissions,
indemnification obligations and all other charges and sums, as well as
all costs and expenses, including attorneys' fees and expenses,
payable or reimbursable by the Borrower under or pursuant to this
Agreement and the other Credit Documents), whether direct or indirect,
contingent or noncontingent, matured or unmatured, accrued or not
accrued, liquidated or unliquidated, secured or unsecured, whether or
not now contemplated, whether arising in contract, tort or otherwise,
including, without limitation, all claims against the Borrower arising
or re-arising on account of or as a result of any payment made by the
Borrower or any Other Obligor with respect to any obligations included
in this definition which is rescinded or recovered from or restored or
returned by the Agent, any Lender or the Issuing Bank under authority
of any law, rule, regulation, order of court or Governmental
Authority, or in connection with any compromise or settlement relating
thereto
or relating to any pending or threatened action, suit or proceeding
relating thereto, whether arising out of any proceedings under the
United States Bankruptcy Code or otherwise.
"OBLIGOR USE PROPERTY": the collective reference to any
real property owned, leased, subleased, occupied, used or operated by
the Borrower, any of its Subsidiaries, Symtron or any Other Obligor.
"OFFICER DEFAULT CERTIFICATE": an appropriately completed
certificate in form substantially similar to Exhibit C, but in form
and content satisfactory to the Required Lenders, signed by the chief
financial officer of the Borrower certifying whether, as at a
particular time and to the knowledge and belief of such officer after
diligent inquiry, any Default or Event of Default existed and, if so,
setting forth all relevant facts with respect thereto.
"OFFICER FINANCIAL COVENANT CERTIFICATE": an appropriately
completed certificate substantially similar to Exhibit D, but in form
and content satisfactory to the Required Lenders, signed by the chief
financial officer of the Borrower setting forth calculations of the
covenants contained in Subsection 7.1 as at a particular time or for a
particular period.
"OFFICER RELIANCE CERTIFICATE": an appropriately completed
certificate substantially similar to Exhibit E, but in form and
content satisfactory to the Required Lenders, signed by the chief
financial officer of the Borrower certifying that financial statements
with respect to which such certificate is issued present fairly in all
material respects the financial position of the Borrower and its
Subsidiaries as at a particular time and the results of operations of
the Borrower and its Subsidiaries for the period or periods ending at
such time, subject to normal year-end adjustments.
"OTHER OBLIGOR": each of the Guarantors and each other
Person other than the Borrower that is now or hereafter primarily or
secondarily, or contingently or noncontingently, liable for or
obligated upon or in connection with any of the Obligations, or,
whether or not so liable, that has granted any lien or security
interest to or for the benefit of the Lenders as security for any of
the Obligations or any obligations of any other Person in connection
with any of the Obligations.
"PBGC": the Pension Benefit Guaranty Corporation
established pursuant to Subtitle A of Title IV of ERISA.
"PERMITTED EQUIPMENT PMSI": any purchase money security
interest (including Financing Leases, leases intended as security and
title retention agreements) created under the Uniform Commercial Code
of any jurisdiction in equipment of the Borrower, any of its
Subsidiaries or Symtron, provided that (a) such security interest is
assumed or created by the Borrower, such Subsidiary or Symtron
contemporaneously with the Borrower's, such Subsidiary's or Symtron's
acquisition of rights in such equipment, (b) such security interest
secures no obligations of the Borrower, such Subsidiary or Symtron
other than Indebtedness incurred by the Borrower, such Subsidiary or
Symtron in connection with the acquisition of such equipment, (c) such
security interest attaches to no property of the Borrower, such
Subsidiary or Symtron other than such equipment and the proceeds
thereof, (d) such security interest becomes junior and subordinate to
the Agent's security interest in such equipment and the proceeds
thereof upon the Borrower's, such Subsidiary's or Symtron's payment of
such Indebtedness incurred in connection with the acquisition of such
equipment, and (e) neither the assumption or creation by the Borrower,
such Subsidiary or Symtron of such security interest nor incurrence by
the Borrower, such Subsidiary or Symtron of such Indebtedness violates
any provision of this Agreement or any of the other Credit Documents.
"PERMITTED LIENS": as defined in Subsection 7.3.
"PERSON": an individual, partnership, corporation, limited
liability company, business trust, joint stock company, trust,
unincorporated association, joint venture, Governmental Authority or
other entity of whatever nature.
"PIONEER": Pioneer U.A.V., Inc., a Delaware corporation.
"PLAN": at a particular time, any employee benefit plan
which is covered by ERISA and in respect of which the Borrower, any
Other Obligor or a Commonly Controlled Entity is (or, if such plan
were terminated at such time, would under Section 4069 of ERISA be
deemed to be) an "employer" as defined in Section 3(5) of ERISA.
"PREPAYMENT PREMIUM": in the case of any Compensable
Prepayment, a premium in an amount equal to one percent (1%) of the
amount of such Compensable Prepayment.
"PRIVATE PLACEMENT DEBT": the Indebtedness of the Borrower
to the Private Placement Debt Holders pursuant to the Private
Placement Debt Documents.
"PRIVATE PLACEMENT DEBT BALANCE": at a particular time, the
unpaid principal balance of the Private Placement Debt as at such
time.
"PRIVATE PLACEMENT DEBT DOCUMENTS": the collective
reference to the Note Purchase Agreement dated as of July 15, 1994,
among the Borrower and the Private Placement Debt Holders, the
-
promissory notes of the Borrower issued pursuant thereto and each
other agreement, contract, promissory note or other instrument,
security agreement, assignment, pledge agreement, indemnification
agreement, subordination agreement, mortgage, deed of trust, guaranty
and other documents now or hereafter evidencing, guaranteeing,
securing (directly or indirectly), subordinating other obligations of
the Borrower or any Guarantor to, or containing any warranties,
covenants, agreements or representations of any Person relating to,
any Indebtedness or liability of the Borrower or any Guarantor arising
under such Note Purchase Agreement or such promissory notes, as each
of the documents referred to in this definition have been or may
hereafter be waived, amended, modified, extended, renewed,
supplemented or replaced from time to time.
"PRIVATE PLACEMENT DEBT HOLDERS": the collective reference
to Principal Mutual Life Insurance Company, an Iowa corporation, and
The Travelers Insurance Company, a Connecticut corporation, their
successors and assigns.
"REAL PROPERTY COLLATERAL": the collective reference to the
real property described in Schedule IV, together with all improvements
now or hereafter constructed or placed on such real property and
related rights and interests.
"REORGANIZATION": with respect to any Multiemployer Plan,
the condition that such plan is in reorganization within the meaning
of such term as used in Section 4241 of ERISA.
"REPORTABLE EVENT": any of the events set forth in Section
4043(b) of ERISA, other than those events as to which the thirty day
notice period is waived under subsections .13, .14, .16, .l8, .19 or
.20 of PBGC Reg. Section 2615.
"REQUIRED LENDERS": at a particular time, a Lender or
Lenders holding more than sixty percent (60%) of the Aggregate Loans
Outstanding of all Lenders as at such time or, if no Lender has any
Revolving Credit Loans outstanding, a Lender or Lenders whose
Commitment Percentages aggregate more than sixty percent (60%) as at
such time.
"REQUIREMENT OF LAW": as to any Person, the certificate of
incorporation and by-laws or other organizational or governing
documents of such Person, and any law, treaty,
rule or regulation or determination of an arbitrator or a court or
other Governmental Authority, in each case applicable to or binding
upon such Person or any of its property or to which such Person or any
of its property is subject.
"RESTRICTED PAYMENT": any payment or other transfer of
money or other tangible or intangible property of any kind of the
Borrower, any of its Subsidiaries or any Guarantor to any Affiliate of
any of them, including, without limitation, any dividend or other
distribution on account of capital stock or other securities, any
loan, advance or capital contribution, any repayment of any loan,
advance or capital contribution, any redemption or other repurchase of
any securities, and any payment for services.
"REUTERS SCREEN LIBO PAGE": the display designated as page
"LIBO" on the Reuter Monitor Money Rates Service (or such other page
as may replace the LIBO page on that Service for the purpose of
displaying London interbank offered rates of major banks).
"REVOLVING CREDIT COMMITMENT": as defined in
Subsection 2.1.
"REVOLVING CREDIT LOAN": as defined in Subsection 2.1.
"REVOLVING CREDIT NOTE": as defined in Subsection 2.2.
"SENIOR LIABILITIES": at a particular date, Total
Liabilities as at such date, exclusive of the UIC-DEL Standby
Subordinated Debt Balance as at such date.
"SINGLE EMPLOYER PLAN": any Plan which is covered by Title
IV of ERISA, but which is not a Multiemployer Plan.
"SETI": Seti, Inc., a Pennsylvania corporation.
"STANDBY L/C COMMISSION RATE": (a) one and three-quarters
percent (1.75%) per annum at all times that the Private Placement Debt
Balance is greater than Twelve Million Five Hundred Thousand Dollars
($12,500,000.00); (b) one and one-half percent (1.5%) per annum at all
times that the Private Placement Debt Balance is greater than zero but
less than or equal to Twelve Million Five Hundred Thousand Dollars
($12,500,000.00); and (c) one and one-quarter percent (1.25%) per
annum at all times that the Private Placement Debt Balance is zero.
"STANDBY L/C EXPOSURE": at a particular time, the sum of
(a) the L/C Aggregate Undrawn Amount as at such time which is
attributable to standby Letters of Credit
and (b) L/C Reimbursement Obligations as at such time which are
attributable to standby Letters of Credit.
"STANDBY L/C MAXIMUM EXPOSURE": Ten Million Dollars
($10,000,000.00).
"SUBSIDIARY": as to any Person, (a) a corporation of which
shares of capital stock having voting power to elect a majority of the
board of directors or other managers of such corporation are owned, or
the management of which is otherwise controlled, directly or
indirectly, or both, through one or more intermediaries, by such
Person, and (b) any partnership, limited liability company,
association, joint venture or other business entity of which more than
fifty percent (50%) of the voting equity interests is owned, or the
management of which is otherwise controlled, directly or indirectly,
or both, through one or more intermediaries, by such Person.
"SUBSIDIARY GUARANTY": as amended, modified, extended,
renewed, supplemented or replaced from time to time, a Guaranty in
form substantially similar to the Guaranty, but in form and content
satisfactory to the Required Lenders, pursuant to which a Subsidiary
of the Borrower shall, among other things, guarantee payment of the
Obligations.
"SUBSIDIARY SECURITY AGREEMENT": as amended, modified,
extended, renewed, supplemented or replaced from time to time, a
Security Agreement in form substantially similar to the Guarantor
Security Agreement, but in form and content satisfactory to the
Required Lenders, executed and delivered between the Agent and a
Subsidiary of the Borrower pursuant to which such Subsidiary shall,
among other things, grant to the Agent, for the ratable benefit of the
Lenders, the Issuing Bank and the Private Placement Debt Holders, a
security interest in all accounts, chattel paper, documents of title,
general intangibles, instruments, equipment, inventory and other
assets of such Subsidiary.
"SYMTRON": Symtron Systems, Inc., a New Jersey corporation.
"SYSTEMS": AAI Systems Management, Inc., a Maryland
corporation.
"TANGIBLE NET WORTH": at a particular date, the amount
(after any adjustment on account of FAS 87 of the Financial Accounting
Standards Board) by which (a) the aggregate amount which, in
conformity with GAAP, would be included in a total assets or
comparable account reflected in a consolidated balance sheet of the
Borrower, its Subsidiaries (other than Transit) and Symtron as at such
date, exclusive of goodwill, trademarks, trade names, licenses and
such other assets as are properly classified as intangible assets in
conformity with GAAP, exclusive of all transactions with, and all
amounts due or to become
due to the Borrower, its Subsidiaries (other than Transit) or Symtron
from, and all Investments in, Affiliates, exceeds (b) Total
Liabilities as at such date.
"TECHNOLOGIES": AAI/ACL Technologies, Inc., a Maryland
corporation.
"TELERATE PAGE 3750": the display designated as "Page 3750"
on the Dow Jones Telerate Service (or such other page as may replace
that page on that Service for the purpose of displaying London
interbank offered rates of major banks).
"TERMINATION DATE": the earlier of (a) September 20, 1996,
or (b) the date which is one hundred fifty (150) days after the date
on which the Agent shall have given written notice to the Borrower, at
the direction of the Required Lenders and whether or not an Event of
Default shall have occurred, that the Obligations shall be due in full
on such date.
"TOTAL LIABILITIES": at a particular date, the aggregate
amount which, in conformity with GAAP, would be included in a total
liabilities or comparable account reflected in a consolidated balance
sheet of the Borrower, its Subsidiaries (other than Transit) and
Symtron as at such date.
"TOTAL USAGE": as to any Lender at a particular date, the
sum of (a) the Aggregate Loans Outstanding of such Lender as at such
time, and (b) such Lender's Commitment Percentage of the L/C Exposure
as at such time.
"TRANCHE": the collective reference to Eurodollar Loans
having the same Interest Periods (whether or not originally made on
the same day); Tranches may be identified as "Eurodollar Tranches".
"TRANSIT": Electric Transit, Inc., an Ohio corporation.
"TRANSIT INVESTMENT": any Investment in Transit after the
date hereof, or any advance, loan or other extension of credit to
Transit (including accounts due from Transit) after the date hereof.
"TYPE": as to any Revolving Credit Loan, its nature as a
Base Rate Loan or an Eurodollar Loan.
"UIC": United Industrial Corporation, a Delaware
corporation.
"UIC PLEDGE AGREEMENT": as amended, modified, extended,
renewed, supplemented or replaced from time to time, the Pledge and
Security Agreement to be executed and delivered by UIC in favor of the
Agent, for the ratable benefit of the Lenders, the Issuing Bank and
the Private Placement Debt Holders, pursuant to which UIC shall, among
other things, grant to the Agent a security interest in the UIC
Subsidiary Pledged Stock.
"UIC SUBSIDIARY PLEDGED STOCK": all capital stock of each
of AAI and Symtron owned by UIC as of the Closing Date.
"UIC SUBORDINATED DEBT": all present and future
Indebtedness of the Borrower to UIC.
"UIC SUBORDINATED DEBT BALANCE": at a particular date, the
aggregate principal amount of Indebtedness of the Borrower to UIC for
loans by UIC to the Borrower which, as at such date, is subordinated
on the terms and conditions set forth in the UIC Subordination
Agreement.
"UIC SUBORDINATION AGREEMENT": as amended, modified,
extended, renewed, supplemented or replaced from time to time, the
Subordination Agreement to be executed and delivered by UIC in favor
of the Agent, for the ratable benefit of the Lenders and the Issuing
Bank, pursuant to which UIC shall subordinate the UIC Subordinated
Debt to the Obligations on terms and conditions satisfactory to the
Required Lenders.
"UIC-DEL": UIC - DEL. Corporation, a Delaware corporation.
"UIC-DEL STANDBY SUBORDINATED DEBT": at a particular date,
Indebtedness of the Borrower to UIC-DEL (including the Indebtedness
evidenced by the Creditor Note (as defined in the UIC-DEL
Subordination Agreement)) with respect to which, as at such date, no
payments of principal are permitted to be made under the UIC-DEL
Subordination Agreement without the prior written consent of the Agent
and which is otherwise subordinated on the terms and conditions set
forth in the UIC-DEL Subordination Agreement.
"UIC-DEL STANDBY SUBORDINATED DEBT BALANCE": at a
particular date, the aggregate principal amount of UIC-DEL Standby
Subordinated Debt.
"UIC-DEL SUBORDINATED DEBT": all present and future
Indebtedness of the Borrower to UIC-DEL.
"UIC-DEL SUBORDINATED DEBT BALANCE": at a particular date,
the aggregate principal amount of Indebtedness of the Borrower to UIC-
DEL for loans by UIC-DEL to the Borrower which, as at such date, is
subordinated on the terms and conditions set forth in the UIC-DEL
Subordination Agreement.
"UIC-DEL SUBORDINATION AGREEMENT": as amended, modified,
extended, renewed, supplemented or replaced from time to time, the
Subordination Agreement to be executed and delivered by UIC-DEL in
favor of the Agent, for the ratable benefit of the Lenders and the
Issuing Bank, pursuant to which UIC-DEL shall subordinate the UIC-DEL
Subordinated Debt to the Obligations on terms and conditions
satisfactory to the Required Lenders.
"YORK ROAD REAL PROPERTY PROPOSED TO BE SOLD": the
collective reference to the real property described in Schedule V,
together with all improvements thereon.
"WORKING DAY": any Business Day on which dealings in
foreign currencies and exchange between banks may be carried on in
London, England.
1.2 Other Definitional Provisions. (a) Unless otherwise
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specified therein, all terms defined in this Agreement shall have the
defined meanings when used in the Notes or any other Credit Document.
(b) As used herein, in the Notes and in any other
Credit Document, accounting terms not defined in Subsection 1.1 and
accounting terms partly defined in Subsection 1.1, to the extent not
defined, shall have the respective meanings given to them under GAAP.
(c) As used herein, in the Notes and in any other
Credit Document, terms defined by the Uniform Commercial Code as in
effect in the State of Maryland on the date hereof shall, except to
the extent that the context otherwise requires, have the respective
meanings given to them under such Uniform Commercial Code.
(d) Unless the context otherwise requires, each
reference in this Agreement, the Notes or any other Credit Document to
this Agreement, the Notes or any other Credit Document shall be deemed
to refer to this Agreement, the Notes or such other Credit Document as
the same may be amended, modified, extended, renewed, supplemented or
replaced from time to time.
(e) The words "hereof", "herein" and "hereunder" and
words of similar import when used in this Agreement shall refer to
this Agreement as a whole and not to any particular provision of this
Agreement, and Section, Subsection, Schedule and Exhibit references
are to this Agreement unless otherwise specified.
(f) The use of the singular in this Agreement shall
also refer to the plural and vice versa, and the use of any gender,
including the neuter, shall also refer to each of the other genders,
including the neuter.
(g) The captions and headings contained in this
Agreement are for convenience of reference only and shall not affect
the meaning, or the construction or interpretation, of this Agreement.
(h) The phrases "satisfactory to the Required
Lenders," "acceptable to the Required Lenders," "satisfactory to the
Agent," "acceptable to the Agent," "satisfactory to the Issuing Bank,"
and "acceptable to the Issuing Bank" and similar phrases shall mean
satisfactory or acceptable to the Required Lenders, the Agent or the
Issuing Bank, as the case may be, in their or its discretion exercised
in good faith.
(i) In the event of any inconsistency between any
provisions of this Agreement and any provisions of any other Credit
Document, the provisions of this Agreement shall control, but all of
the provisions of this Agreement and the other Credit Documents shall
be construed and interpreted so as to give effect, in the absence of
irreconcilable conflict, to all of the provisions of this Agreement
and other Credit Documents.
SECTION 2. AMOUNT AND TERMS OF LOAN COMMITMENTS
2.1 Revolving Credit Commitments. (a) Subject to the
----------------------------
terms and conditions hereof, each Lender severally agrees to make
revolving credit loans (individually, a "Revolving Credit Loan," and,
collectively, the "Revolving Credit Loans") to the Borrower from time
to time during the Commitment Period in an aggregate principal amount
at any time outstanding not to exceed the amount set forth for such
Lender in Schedule II (individually, a "Revolving Credit Commitment,"
and, collectively, the "Revolving Credit Commitments"); provided that
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at no time shall the Aggregate Borrowing Base Charge exceed the
Borrowing Base. During the Commitment Period and subject to the
provisions hereof, the Borrower may use the Revolving Credit
Commitments by borrowing, repaying the
Revolving Credit Loans in whole or in part, and reborrowing, all in
accordance with the terms and conditions hereof.
(b) The Revolving Credit Loans may be (i) Eurodollar
Loans, (ii) Base Rate Loans, or (iii) a combination thereof, as
determined by the Borrower and notified to the Agent in accordance
with Subsection 2.3; provided that no Eurodollar Loan shall be made
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after the day that is one month prior to the Termination Date.
Eurodollar Loans shall be made and maintained by each Lender at its
Eurodollar Lending Office, and Base Rate Loans shall be made and
maintained by each Lender at its Domestic Lending Office.
2.2 Revolving Credit Notes. The Revolving Credit Loans
----------------------
made by each Lender shall be evidenced by a promissory note of the
Borrower, substantially in the form of Exhibit F, appropriately
completed (individually, as amended, modified, extended, renewed,
supplemented or replaced from time to time, a "Revolving Credit Note,"
and, collectively, the "Revolving Credit Notes"), payable to the order
of such Lender and further evidencing the obligation of the Borrower
to pay with interest the Aggregate Loans Outstanding of such Lender.
Each Lender is hereby authorized to record the date, Type and amount
of each Revolving Credit Loan made or converted by such Lender, and
the date and amount of each payment or prepayment of principal
thereof, and, in the case of Eurodollar Loans, the Interest Period
with respect thereto, on the schedule annexed to and constituting a
part of its Revolving Credit Note, and any such recordation shall
constitute prima facie evidence, absent manifest error, of the
----- -----
accuracy of the information so recorded; provided that no failure of
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any Lender to so record any such information shall relieve the
Borrower of its obligation to repay any Revolving Credit Loan or
interest thereon. Each Revolving Credit Note shall (a) be dated the
Closing Date, (c) be stated to mature on the Termination Date and (b)
bear interest on the unpaid principal amount thereof from time to time
outstanding at the applicable interest rate per annum determined as
provided in Subsections 2.10 and 2.11. Interest on each Revolving
Credit Note shall be payable on the dates specified in
Subsection 2.10(d).
2.3 Procedure for Revolving Credit Borrowing. The Borrower
----------------------------------------
may borrow under the Revolving Credit Commitments during the
Commitment Period on any Working Day if the borrowing is a Eurodollar
Loan or on any Business Day if the borrowing is a Base Rate Loan;
provided that the Borrower shall give the Agent irrevocable notice,
--------
which must be received by the Agent prior to 10:00 A.M., Philadelphia,
Pennsylvania, time, (a) four (4) Working Days prior to the requested
Borrowing Date, in the case of Eurodollar Loans, and (b) on the
requested Borrowing Date, in the case of Base Rate Loans, specifying
(i) the amount to be borrowed, (ii) the requested Borrowing Date,
(iii) whether the borrowing is to
be a Eurodollar Loan, a Base Rate Loan or a combination thereof, and
(iv) if the borrowing is to be entirely or partly a Eurodollar Loan,
the length of the Interest Period for such Eurodollar Loan. Each
borrowing of Eurodollar Loans pursuant to the Revolving Credit
Commitments shall be in an aggregate principal amount of One Million
Dollars ($1,000,000.00) or a whole multiple of Two Hundred Fifty
Thousand Dollars ($250,000.00) in excess thereof; provided that no
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borrowing pursuant to the Revolving Credit Commitments shall exceed an
amount which is equal to the lesser of (i) the then Available
Commitments and (ii) the amount, if any, by which (1) the then
Borrowing Base exceeds (2) the then Aggregate Borrowing Base Charge.
Upon receipt of such notice from the Borrower, the Agent shall
promptly notify each Lender thereof. Each Lender will make the amount
of its pro rata share of each borrowing available to the Agent for the
--- ----
account of the Borrower at the office of the Agent set forth in
Subsection 10.2 prior to 11:00 A.M. Philadelphia, Pennsylvania, time
on the Borrowing Date requested by the Borrower in funds immediately
available to the Agent, subject to the provisions hereinafter set
forth in this Subsection. The proceeds of all Revolving Credit Loans
will be made available to the Borrower by the Agent at such office of
the Agent by transfer of such proceeds in immediately available funds
to a deposit account of the Borrower at First Fidelity designated for
such purpose, subject to the provisions hereinafter set forth in this
Subsection. The Borrower may give the Agent telephonic notices of
borrowings (to be promptly confirmed by the Borrower in writing if
requested by the Agent); provided that the Agent shall have the right
--------
at any time to require that all subsequent notices of borrowings be
made in writing. The Borrower hereby acknowledges and assumes all
risks of errors (including errors in speaking, hearing and
transcription), impersonation, lack of authority, and all other risks
inherent in telephonic notices of borrowings, and the Borrower agrees
that none of the Agent, the Lenders and the Issuing Bank, or any of
their directors, officers, employees or other agents, shall have any
liability to the Borrower on account of, and no Obligations arising in
connection with any Revolving Credit Loans made by the Lenders shall
be affected by, any such risks. Anything to the contrary in this
Subsection notwithstanding, the Agent may determine, for
administrative convenience, to conduct weekly settlements between the
Agent and the Lenders in order to settle and account for, among
themselves, Revolving Credit Loans made to the Borrower and payments
of the Obligations received by the Agent for the account of the
Lenders; provided, that the Agent shall have the right to require at
--------
any time that such settlements be conducted more often or in
accordance with the preceding provisions of this Subsection.
Accordingly, the Agent may, but shall not be required to, fund
Revolving Credit Loans requested by the Borrower pending receipt by
the Agent of each Lender's pro rata share thereof. In the case of
--- ----
such Revolving Credit Loans funded by the Agent, interest thereon
shall accrue for the account of the Agent until and except to the
extent that the Agent shall have received the pro rata shares thereof
--- ----
of the Lenders.
2.4 Fees and Reduction of Commitments. (a) The Borrower
---------------------------------
agrees to pay to the Agent, for the account of each Lender, an unused
facility fee from and including the first day of the Commitment Period
to the Termination Date, computed at the rate of one-half of one
percent (.5%) per annum on the average daily amount of the Available
Commitment of such Lender during the period for which payment is made,
payable quarterly on the last day of each March, June, September and
December and on the Termination Date or such earlier date as the
Revolving Credit Commitments shall terminate as provided herein,
commencing on the first of such dates to occur after the date hereof.
(b) The Borrower shall have the right, upon not less
than ten (10) Business Days' written notice to the Agent, to reduce
the amount of the Revolving Credit Commitments, provided that (i) no
--------
such reduction shall be permitted if, after giving effect thereto and
to any prepayments of the Revolving Credit Loans made on the effective
date thereof, the Aggregate Borrowing Base Charge would exceed the
amount of the Revolving Credit Commitments then in effect and (ii) the
Revolving Credit Commitments may be reduced only to the extent that
the amount thereof exceeds Twenty Million Dollars ($20,000,000.00).
Each such reduction shall be in an amount of Two Hundred Fifty
Thousand Dollars ($250,000.00), or a whole multiple thereof, and shall
reduce permanently and pro rata the aggregate amount of the Revolving
--- ----
Credit Commitments then in effect.
(c) The Borrower also agrees to pay to the Agent, for
the account of the Agent, on the first day of each month, a collateral
monitoring fee equal to Three Thousand Dollars ($3,000.00).
2.5 Payment at Maturity. The Borrower shall pay in full on
-------------------
the Termination Date the Aggregate Loans Outstanding of each Lender,
together with all accrued and unpaid interest thereon.
2.6 Optional Prepayments. The Borrower may on the last day
--------------------
of the relevant Interest Period if the Revolving Credit Loans to be
prepaid are in whole or in part Eurodollar Loans, or at any time and
from time to time if the Revolving Credit Loans to be prepaid are Base
Rate Loans, prepay the Revolving Credit Loans, in whole or in part,
upon at least two (2) Business Days' irrevocable notice to the Agent
(except in the case of any prepayment of Base Rate Loans resulting
from application by First Fidelity of funds on deposit from time to
time in the First Fidelity Cash Collateral Account pursuant to
Subsection 2.4 of the Borrower Security Agreement), specifying the
date and amount of prepayment and whether the prepayment is of
Eurodollar Loans or Base Rate Loans or a combination thereof, and if
of a combination thereof, the amount of prepayment allocable to each;
provided that each Compensable Prepayment shall be accompanied by
--------
payment of the
applicable Prepayment Premium. Upon receipt of any such prepayment
notice the Agent shall promptly notify each Lender thereof. If any
such prepayment notice is given by the Borrower, the payment amount
specified in such notice shall be due and payable on the date
specified therein. Partial prepayments may only be made if, after
giving effect thereto, Subsection 2.9 shall not have been contravened.
2.7 Mandatory Prepayments. The Borrower shall immediately
---------------------
prepay the Revolving Credit Loans in an amount equal to any amount by
which (a) the Aggregate Borrowing Base Charge from time to time
exceeds (b) the Borrowing Base.
2.8 Conversion Options; Minimum Amount of Loans. (a) The
-------------------------------------------
Borrower may elect from time to time to convert Eurodollar Loans to
Base Rate Loans by giving the Agent at least three (3) Business Days'
prior irrevocable notice of such election; provided that any such
--------
conversion of Eurodollar Loans shall only be made on the last day of
an Interest Period with respect thereto. The Borrower may elect from
time to time to convert Base Rate Loans to Eurodollar Loans by giving
the Agent at least three (3) Working Days' prior irrevocable notice of
such election; provided that no Base Rate Loan shall be converted to a
--------
Eurodollar Loan after the day that is one (1) month prior to the
Termination Date. Upon receipt of such notice, the Agent shall
promptly notify each Lender thereof. All or any part of outstanding
Eurodollar Loans and Base Rate Loans may be converted as provided
herein; provided that (i) no Revolving Credit Loan may be converted
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into a Eurodollar Loan when any Default or Event of Default has
occurred and is continuing, (ii) partial conversions shall, subject to
Subsection 2.9, be in an aggregate principal amount of Two Hundred
Fifty Thousand Dollars ($250,000.00) or a whole multiple thereof, and
(iii) any such conversion may only be made if, after giving effect
thereto, Subsection 2.9 shall not have been contravened.
(b) Any Eurodollar Loans may be continued as such upon
the expiration of an Interest Period with respect thereto by
compliance by the Borrower with the notice provisions contained in
Subsection 2.8(a); provided, that no Eurodollar Loan may be continued
---------
as such when any Default or Event of Default has occurred and is
continuing, but shall be automatically converted to a Base Rate Loan
on the last day of the then current Interest Period with respect
thereto. The Agent shall notify the Lenders and the Borrower promptly
that such automatic conversion contemplated by this Subsection 2.8(b)
will occur.
2.9 Minimum Amounts of Tranches. All borrowings,
---------------------------
conversions, payments, prepayments and selection of' Interest Periods
hereunder shall be in such amounts and be made pursuant to such
elections so that, after giving effect thereto, the aggregate
principal amount of any Eurodollar Tranche shall not be less than One
Million Dollars ($1,000,000.00).
2.10 Interest Rate and Payment Dates. (a) The Revolving
-------------------------------
Credit Loans comprising each Eurodollar Tranche shall bear interest
for each day during each Interest Period with respect thereto on the
unpaid principal amount thereof at a rate per annum equal to the
Eurodollar Rate plus the Applicable Margin.
(b) Base Rate Loans shall bear interest for the period
from and including the Borrowing Date or date of conversion thereof on
the unpaid principal amount thereof at a rate per annum equal to the
Base Rate plus the Applicable Margin.
(c) If an Event of Default has occurred and is
continuing, each Eurodollar Loan shall be converted to a Base Rate
Loan at the end of the last Interest Period with respect thereto, and
all Revolving Credit Loans, and any judgment or order of any
Governmental Authority entered for payment of all or any part thereof
or other amounts bearing interest under this Agreement, shall, at the
Agent's election, bear interest at a rate per annum which is three
percent (3%) above the rate which would otherwise be applicable
pursuant to Subsection 2.10(a) or (b).
(d) Interest shall be payable in arrears on each
Interest Payment Date.
2.11 Computation of Interest and Fees. (a) Unused facility
--------------------------------
fees and interest in respect of the Revolving Credit Loans shall be
calculated on the basis of a 360 day year for the actual days elapsed
(including the first but excluding the last day of the relevant
period). The Agent shall as soon as practicable notify the Borrower
and the Lenders of each determination of a Eurodollar Rate. Any
change in the interest rate on Revolving Credit Loans resulting from a
change in the Base Rate or the Eurocurrency Reserve Requirements shall
become effective as of the opening of business on the day on which
such change in the Base Rate is announced, or such change in the
Eurocurrency Reserve Requirements shall become effective, as the case
may be. The Agent shall as soon as practicable notify the Borrower
and the Lenders of the effective date and the amount of each such
change.
(b) Each determination of an interest rate by the
Agent pursuant to any provision of this Agreement shall be conclusive
and binding on the Borrower and the Lenders in the absence of manifest
error. The Agent shall, at the request of the Borrower, deliver to
the Borrower a statement showing the quotations used by the Agent in
determining any interest rate pursuant to Subsection 2.10(a).
2.12 Inability to Determine Interest Rate. In the event
------------------------------------
that:
(a) the Agent shall have determined (which
determination shall be conclusive and binding upon the Borrower)
that, by reason of circumstances affecting the interbank
eurodollar market, adequate and reasonable means do not exist for
ascertaining the Eurodollar Rate for any requested Interest
Period; or
(b) the Agent shall have received notice prior to the
first day of such Interest Period from any Lender that the
interest rate determined pursuant to Subsection 2.10(a) for such
Interest Period does not accurately reflect the cost to such
Lender (as conclusively certified to the Borrower by such Lender
in a writing setting forth in reasonable detail the facts giving
rise to such determination) of making or maintaining such
Lender's affected Eurodollar Loans during such Interest Period,
with respect to (a) proposed Revolving Credit Loans that the Borrower
has requested be made as Eurodollar Loans, (b) Eurodollar Loans that
will result from the requested conversion of Base Rate Loans into
Eurodollar Loans or (c) the continuation of Eurodollar Loans beyond
the expiration of the then current Interest Period with respect
thereto, the Agent shall forthwith give telecopy or telephonic notice
of such determination to the Borrower and the Lenders at least one (1)
day prior to, as the case may be, the requested Borrowing Date for
such Eurodollar Loans, the conversion date of such Base Rate Loans or
the last day of such Interest Period. If such notice is given, unless
the Borrower withdraws its notice of borrowing, conversion or
continuation, (i) any requested Eurodollar Loans shall be made as Base
Rate Loans, (ii) any Base Rate Loans that were to have been converted
to Eurodollar Loans shall be continued as Base Rate Loans and
(iii) any outstanding Eurodollar Loans shall be converted, on the last
day of the then current Interest Period with respect thereto, to Base
Rate Loans. Until such notice has been withdrawn by the Agent, no
further Eurodollar Loans shall be made, nor shall the Borrower have
the right to convert Base Rate Loans to Eurodollar Loans.
2.13 Pro Rata Treatment and Payments. (a) Each borrowing
-------------------------------
by the Borrower from the Lenders, each purchase by a Lender of a
participation in a Letter of Credit or an Indemnified Letter of
Credit, each payment by the Borrower on account of any unused facility
fees hereunder and any reduction of the Revolving Credit Commitments
of the Lenders hereunder shall be made pro rata according to the
--- ----
respective Commitment Percentages of the Lenders. Each payment
(including each prepayment) by the Borrower on account of principal of
and interest on the Revolving Credit Loans shall be made pro rata
--- ----
according to the respective Aggregate Loans Outstanding of each
Lender. All payments (including prepayments) to be made by the
Borrower under this Agreement, the Notes or any
other Credit Document, for the account of the Lenders, whether on
account of principal, interest, fees, expenses or other amounts, shall
be made without deduction, setoff or counterclaim and shall be made to
the Agent, for the account of the Lenders, at the Agent's office set
forth in Subsection 10.2, in lawful money of the United States of
America and in immediately available funds. The Agent shall
distribute such payments to the Lenders promptly upon receipt in like
funds as received. If any payment hereunder (other than payments on
the Eurodollar Loans) becomes due and payable on a day other than a
Business Day, such payment shall be extended to the next succeeding
Business Day, and, with respect to payments of principal, interest
thereon shall be payable at the then applicable rate during such
extension. If any payment on a Eurodollar Loan becomes due and
payable on a day other than a Working Day, the maturity thereof shall
be extended to the next succeeding Working Day unless the result of
such extension would be to extend such payment into another calendar
month, in which event such payment shall be made on the immediately
preceding Working Day.
(b) Unless the Agent shall have been notified in
writing by any Lender prior to a Borrowing Date that such Lender will
not make the amount which would constitute its Commitment Percentage
of the borrowing on such date available to the Agent, the Agent may
assume that such Lender will make such amount available to the Agent,
and the Agent may, in reliance upon such assumption, make available to
the Borrower a corresponding amount. If such amount is made available
to the Agent on a date after such amount is due to the Agent, whether
at a periodic settlement or on such Borrowing Date in accordance with
Subsection 2.3, such Lender shall pay to the Agent on demand interest
on such amount during the period from and including the date such
amount is due to but not including the date on which such Lender makes
such amount immediately available to the Agent at the rate specified
in Subsection 2.13(c). A certificate of the Agent submitted to any
Lender with respect to any amounts owing under this Subsection 2.13(b)
shall be conclusive, absent manifest error. If such Lender's
Commitment Percentage of such borrowing is not in fact made available
to the Agent by such Lender within three (3) Business Days of such
date, the Agent shall be entitled to recover such amount from the
Borrower on demand, with interest thereon at the rate per annum
applicable to Base Rate Loans hereunder. The Borrower agrees that the
obligations of the Lenders under this Agreement, including, without
limitation, their obligations to make Revolving Credit Loans and to
fund participations in Letters of Credit and Indemnified Letters of
Credit, are several, and that no Lender shall be liable for the
performance or nonperformance of the obligations of any other Lender
under this Agreement or any other Credit Document.
(c) In the event that any Lender shall fail to pay to
the Agent any amount payable by such Lender to the Agent under the
terms of this Agreement and with
respect to which this Agreement does not otherwise provide for the
payment of interest by such Lender to the Agent, or in the event that
the Agent shall fail to pay to any Lender any amount due to such
Lender from the Agent under the terms of this Agreement and with
respect to which this Agreement does not otherwise provide for the
payment of interest by the Agent to such Lender, then such Lender
shall pay to the Agent on demand, or the Agent shall pay to such
Lender on demand, as the case may be, interest on such amount during
the period from and including the day such payment was due to but not
including the day such payment is made in immediately available funds,
equal to the product of (i) the Federal Funds Rate, (ii) the amount of
such payment and (iii) a fraction, the numerator of which is the
number of days during such period and the denominator of which is 360.
2.14 Illegality. Notwithstanding any other provisions
----------
herein, if any Requirement of Law or any change therein or in the
interpretation or application thereof shall in the opinion of counsel
to any Lender (which may include in-house counsel) make it unlawful
for such Lender to make or maintain Eurodollar Loans as contemplated
by this Agreement, (a) the Revolving Credit Commitment of such Lender
hereunder to make Eurodollar Loans or convert Base Rate Loans to
Eurodollar Loans shall forthwith be canceled and (b) such Lender's
Revolving Credit Loans then outstanding as Eurodollar Loans, if any,
shall be converted automatically to Base Rate Loans on the respective
last days of the then current Interest Periods for such Eurodollar
Loans or within such earlier period as required by law. The Agent
agrees to notify the Borrower in writing of any such conversion of
Eurodollar Loans to Base Rate Loans, provided that the Agent shall
--------
have no liability to the Borrower or any other Person on account of
any failure of the Agent to so give such written notification to the
Borrower, and no failure of the Agent to so give such written
notification to the Borrower shall impair, limit, diminish or in any
way affect any of the Obligations or any rights, interests or remedies
of the Agent, any Lender or Issuing Bank. If any such conversion of a
Eurodollar Loan occurs on a day which is not the last day of the
current Interest Period with respect thereto, the Borrower shall pay
to such Lender, within ten (10) days after demand by such Lender, such
amounts, if any, as may be required pursuant to Subsection 2.17.
2.15 Requirements of Law. (a) In the event that any
-------------------
Requirement of Law or any change therein or in the interpretation or
application thereof or compliance by any Lender with any request or
directive (whether or not having the force of law) from any central
bank or other Governmental Authority arising from and after the
Closing Date:
(i) does or shall subject any Lender to any additional
tax of any kind whatsoever with respect to this Agreement, any
Note or any Eurodollar Loans made by it, or change the basis of
taxation of payments to such Lender of principal,
fees, interest or any other amount payable hereunder (except for
changes in the rate of tax on the overall net income of such
Lender);
(ii) does or shall impose, modify or hold applicable
any reserve, special deposit, assessment, capital adequacy,
compulsory loan or similar requirement against assets held by, or
deposits or other liabilities in or for the account of, advances
or loans by, or other credit extended by, or any other
acquisition of funds by, any office of such Lender; or
(iii) does or shall impose on such Lender any other
condition;
and the result of any of the foregoing is to increase the cost to such
Lender, by any amount which such Lender deems to be material, of
making, renewing or maintaining advances or extensions of credit or to
reduce any amount receivable hereunder, then, in any such case, the
Borrower shall pay such Lender, within ten (10) days after demand by
such Lender, any additional amounts necessary to compensate such
Lender for such additional cost or reduced amount receivable, together
with interest on such additional amounts from the date demand is made
until payment in full thereof at the rate that would be applicable to
Base Rate Loans. If a Lender becomes entitled to claim any additional
amounts pursuant to this Subsection, it shall promptly notify the
Borrower, through the Agent, of the event by reason of which it has
become so entitled. A certificate as to any additional amounts
payable pursuant to the foregoing sentence submitted by such Lender,
through the Agent, to the Borrower shall show the means by which such
additional amounts have been calculated and shall be conclusive in the
absence of manifest error. This covenant shall survive the
termination of this Agreement and payment of the outstanding Notes for
a period of one (1) year with respect to amounts for which written
notice has been received by the Borrower prior to payment of the
outstanding Notes.
(b) In the event that any Lender shall have determined
that the adoption from and after the Closing Date of any law, rule,
regulation or guideline regarding capital adequacy, or any change from
and after the Closing Date therein or in the interpretation or
application thereof or compliance by any Lender or any corporation
controlling such Lender with any request or directive regarding
capital adequacy (whether or not having the force of law) from any
central bank or Governmental Authority, including, without limitation,
the issuance of any final rule, regulation or guideline, does or shall
have the effect of reducing the rate of return on such Lender's or
such corporation's capital as a consequence of its obligations
hereunder to a level below that which such Lender or such corporation
could have achieved but for such adoption, change or compliance
(taking into consideration such Lender's or such corporation's
policies with respect to capital adequacy)
by an amount deemed by such Lender to be material, then from time to
time, after submission by such Lender to the Borrower (with a copy to
the Agent) of a written request therefor showing the means by which
such additional amounts have been calculated and stating in reasonable
detail the reasons therefor, the Borrower shall pay to such Lender
such additional amount or amounts as will compensate such Lender for
such reduction.
2.16 Taxes. (a) All payments made by the Borrower under
-----
this Agreement shall be made free and clear of, and without reduction
or withholding for or on account of, any present or future income,
stamp or other taxes, levies, imposts, duties, charges, fees,
deductions or withholdings, now or hereafter imposed, levied,
collected, withheld or assessed by any Governmental Authority
excluding, in the case of the Agent, the Issuing Bank and each Lender,
net income and franchise taxes imposed on the Agent, the Issuing Bank
or such Lender by the jurisdiction under the laws of which the Agent,
the Issuing Bank or such Lender is organized or any political
subdivision or taxing authority thereof or therein, or by any
jurisdiction in which the Agent's, the Issuing Bank's or such Lender's
Domestic Lending Office or Eurodollar Lending Office, as the case may
be, is located or any political subdivision or taxing authority
thereof or therein, and excluding in the case of any Lender that is
not incorporated under the laws of the United States of America or a
state thereof, any tax imposed as a result of the failure of such
Lender to deliver the United States Internal Revenue Service Forms
required by Subsection 2.16(b) (all such non-excluded taxes, levies,
imposts, deductions, charges or withholdings being hereinafter called
"Taxes"). If any Taxes are required to be withheld from any amounts
payable to the Agent, the Issuing Bank or any Lender hereunder, under
the Notes or under any other Credit Document, the amounts so payable
to the Agent, the Issuing Bank or such Lender shall be increased to
the extent necessary to yield to the Agent, the Issuing Bank or such
Lender (after payment of all Taxes, including those payable on
additional amounts paid pursuant to this Subsection 2.16(a)) interest
or other amounts payable hereunder at the rates or in the amounts
specified in this Agreement, the Notes or any other Credit Document.
Whenever any Taxes are payable by the Borrower, as promptly as
possible thereafter, the Borrower shall send to the Agent for its own
account or for the account of the Issuing Bank or such Lender, as the
case may be, a certified copy of an original official receipt received
by the Borrower showing payment thereof. If the Borrower fails to pay
any Taxes when due to the appropriate taxing authority or fails to
remit to the Agent the required receipts or other required documentary
evidence, the Borrower shall indemnify the Agent, the Issuing Bank and
the Lenders for any incremental taxes, interest or penalties that may
become payable by the Agent, the Issuing Bank or any Lender as a
result of any such failure.
(b) Prior to the first Interest Payment Date, each
Lender that is not incorporated under the laws of the United States of
America or a state thereof agrees that it
will deliver to the Borrower and the Agent (i) two duly completed
copies of United States Internal Revenue Service Form 1001 or 4224 or
successor applicable form, as the case may be, certifying in each case
that such Lender is entitled to receive payments under this Agreement,
the Notes and the other Credit Documents without deduction or
withholding of any United States federal income taxes, and (ii) a
United States Internal Revenue Service Form W-8 or W-9 or successor
applicable form, as the case may be, to establish an exemption from
United States backup withholding tax. Each Lender which delivers to
the Borrower and the Agent a Form 1001 or 4224 and Form W-8 or W-9, or
successor applicable forms, pursuant to the next preceding sentence
further undertakes to deliver to the Borrower and the Agent two
further copies of the said Form 1001 or 4224 and Form W-8 or W-9, or
successor applicable forms, or other manner of certification, as the
case may be, on or before the date that any such form expires or
becomes obsolete or after the occurrence of any event requiring a
change in the most recent form previously delivered by it to the Agent
and the Borrower, and such extensions or renewals thereof as may
reasonably be requested by the Agent or the Borrower, certifying in
the case of a Form 1001 or 4224 that such Lender is entitled to
receive payments under this Agreement, the Notes and the other other
Credit Documents without deduction or withholding of any United States
federal income taxes, unless in any such cases an event (including,
without limitation, any change in treaty, law or regulation) has
occurred after the date of this Agreement and prior to the date on
which any such delivery would otherwise be required which renders all
such forms inapplicable or which would prevent such Lender from duly
completing and delivering any such form with respect to it and such
Lender advises the Agent and the Borrower that it is not capable of
receiving payments without any deduction or withholding of United
States federal income tax, and in the case of a Form W-8 or W-9,
establishing an exemption from United States backup withholding tax.
(c) The agreements in Subsection 2.16(a) shall survive
the termination of this Agreement and the payment of the Notes and all
other amounts payable hereunder and under the other Credit Documents
for a period of one (1) year.
2.17 Indemnity. The Borrower agrees to indemnify each
---------
Lender and to hold each Lender harmless from any loss or expense which
such Lender may sustain or incur as a consequence of (a) default by
the Borrower in payment when due of the principal amount of or
interest on any Eurodollar Loans of such Lender, (b) default by the
Borrower in making a borrowing or conversion after the Borrower has
given a notice of borrowing in accordance with Subsection 2.6 or a
notice of conversion pursuant to Subsection 2.8, except in accordance
with Subsection 2.12, (c) default by the Borrower in making any
prepayment after the Borrower has given a notice in accordance with
Subsection 2.6, or (d) the making of a prepayment of a Eurodollar Loan
on a day which is not the last day of an Interest Period
with respect thereto, including, without limitation, in each case, any
such loss or expense arising from the reemployment of funds obtained
by it to maintain its Eurodollar Loans hereunder or from fees payable
to terminate the deposits from which such funds were obtained. This
covenant shall survive termination of this Agreement and payment of
the outstanding Notes and all other amounts payable hereunder and
under the other Credit Documents for a period of one (1) year.
2.18 Certain Calculations. Calculations of all amounts
--------------------
payable to the Lenders and other determinations under
Subsections 2.12, 2.14, 2.15 and 2.17 shall be made as though each of
the Lenders had actually funded each of its relevant Eurodollar Loans
either (i) by obtaining a Eurodollar deposit bearing interest at the
rate such Lender would have offered to first-class banks in the
interbank market selected by such Lender for Dollar deposits in same
day funds in an amount equal to the amount of such Eurodollar Loan and
having a maturity comparable to the relevant Interest Period or
(ii) through the transfer of such a Eurodollar deposit from an
offshore office of such Lender to a domestic office of such Lender in
the United States of America; provided, that each of the Lenders
--------
reserves the right to fund each of its Eurodollar Loans in any manner
it sees fit and the foregoing assumptions shall be utilized only for
the purposes of calculating amounts payable and making other
determinations pursuant to said Subsections.
SECTION 3. LETTERS OF CREDIT
3.1 Letter of Credit Commitment. Subject to the terms and
---------------------------
conditions hereof, the Issuing Bank, on behalf of the Lenders, and in
reliance on the agreements of the Lenders set forth in Subsection 3.3,
agrees to issue for the account of the Borrower commercial and standby
letters of credit for such purposes, in such amounts, for the benefit
of such Persons and subject to such terms and conditions as may be
acceptable to the Issuing Bank and the Required Lenders in their
discretion exercised in good faith (individually, as amended,
modified, extended, renewed, supplemented or replaced from time to
time, a "Letter of Credit," and, collectively, the "Letters of
Credit"), from and including the date of this Agreement to but not
including the date which is thirty (30) days prior to the Termination
Date (the "L/C Commitment"); provided that the L/C Exposure shall not
--------
exceed the lesser of (a) the L/C Maximum Exposure and (b) the excess,
if any, of the Revolving Credit Commitments over the Aggregate Loans
Outstanding of all Lenders; provided further that the Standby L/C
-------- -------
Exposure shall not exceed the Standby L/C Maximum Exposure; provided
--------
further that the Commercial L/C Exposure shall not exceed the
-------
Commercial L/C Maximum Exposure; provided further that at no time
-------- -------
shall the Aggregate Borrowing Base Charge exceed the Borrowing Base;
and provided further that no Letter of Credit (including
-------- -------
any renewal or extension thereof, whether or not automatic) shall have
an expiry date which is later than the date which is thirty (30) days
prior to the Termination Date.
3.2 L/C Participations. The Issuing Bank irrevocably
------------------
grants, and in order to induce the Issuing Bank to issue its Letters
of Credit hereunder and to execute and deliver the Issuing Bank L/C
Indemnification Agreement, each Lender irrevocably accepts and hereby
purchases from the Issuing Bank, on the terms and conditions
hereinafter stated, for its own account and risk an undivided interest
equal to such Lender's Commitment Percentage in (a) the Issuing Bank's
obligations and rights under each Letter of Credit issued hereunder
and the amount of each drawing paid by the Issuing Bank thereunder and
(b) the Issuing Bank's obligations with respect to each Indemnified
Letter of Credit and the amount of each drawing paid by Signet
Bank/Maryland thereunder. The Issuing Bank shall notify the Agent and
each Lender as promptly as possible of the date and amount of each
drawing under a Letter of Credit and of the date and amount of each
payment by the Issuing Bank under the Issuing Bank L/C Indemnification
Agreement. Each Lender unconditionally and irrevocably agrees with
the Issuing Bank that it will pay to the Issuing Bank on demand its
Commitment Percentage of each drawing paid under a Letter of Credit
and each payment made by the Issuing Bank under the Issuing Bank L/C
Indemnification Agreement for which the Issuing Bank is not reimbursed
by the Borrower. Any such demand may be oral if promptly confirmed in
writing (including telecopy transmission). If any Lender fails to
make any such payment to the Issuing Bank after such Lender receives
demand as provided above, then such Lender shall pay to the Issuing
Bank on demand interest on such Lender's obligation to make such
payment during the period from and including the day on which demand
for such payment was made by the Issuing Bank to but not including the
day such Lender makes such payment (or if earlier, the date on which
the Borrower reimburses the Issuing Bank for such drawing or payment)
at the rate specified in Subsection 2.13(c).
3.3 Repayment of Participants. Upon and only upon receipt
-------------------------
by the Issuing Bank of funds (a) in full or partial reimbursement of
any drawing paid under a Letter of Credit or of any payment made by
the Issuing Bank under the Issuing Bank L/C Indemnification Agreement
with respect to which any Lender has theretofor paid the Issuing Bank
in full for such Lender's participation pursuant to Subsection 3.2,
(b) in full or partial payment of interest on any such drawing or
payment, or (c) arising from the realization of any collateral
security for the L/C Reimbursement Obligations of the Borrower with
respect to such drawing or payment, the Issuing Bank will pay to such
Lender, in the same funds as those received by the Issuing Bank, such
Lender's Commitment Percentage of such funds.
3.4 Role of the Issuing Bank. The Issuing Bank will
------------------------
exercise and give the same care and attention to each Letter of Credit
as it gives to its other letters of credit and
similar obligations, and the Issuing Bank's sole liability to each
Lender shall be to distribute promptly to such Lender, as and when
received by the Issuing Bank, as stated in Subsection 3.3, such
Lender's Commitment Percentage of any payments received by the Issuing
Bank and described in Subsection 3.3. Each Lender agrees that, in
paying any drawing under a Letter of Credit or making any payment
under the Issuing Bank L/C Indemnification Agreement, the Issuing Bank
shall not have any responsibility to obtain any document (other than
as required by any Letter of Credit) or to ascertain or inquire as to
the validity or accuracy of any such document or the authority of any
Person delivering any such document. Neither the Issuing Bank nor any
of its representatives, officers, employees or agents shall be liable
to any Lender for (a) any action taken or omitted to be taken in
connection herewith at the request or with the approval of the
Required Lenders or all the Lenders, as required by the terms of this
Agreement, (b) any action taken or omitted to be taken in the absence
of gross negligence or willful misconduct, (c) any recitals,
statements, representations or warranties contained in any document
distributed to any Lender, (d) the creditworthiness of the Borrower or
(e) the execution, effectiveness, genuineness, validity or
enforceability of this Agreement, any Letter of Credit, any L/C
Agreement or any other document contemplated hereby or thereby. The
Issuing Bank shall not incur any liability (i) by acting in reliance
upon any notice (including any notice from the Agent or any Lender
that a Default or an Event of Default has occurred or is continuing),
consent, certificate, statement or other writing (which may be a bank
wire, telex or similar writing) believed by it to be genuine or to be
signed by the proper party or parties or (ii) by acting as permitted
under Subsection 3.13.
3.5 Lenders' Obligations Absolute. Each Lender
-----------------------------
acknowledges that its obligations to the Issuing Bank under this
Section 3, including the obligation to purchase and fund a
participation in the obligations and rights of the Issuing Bank under
each Letter of Credit, any unreimbursed drawing under any Letter of
Credit and the Issuing Bank L/C Indemnification Agreement, is absolute
and unconditional and shall not be affected by any circumstance
whatsoever, including, without limitation, (i) the occurrence and
continuance of a Default or Event of Default, (ii) the fact that a
condition precedent to the issuance of any Letter of Credit was not in
fact satisfied, (iii) any failure or inability of any other Lender to
purchase or fund such a participation hereunder or (iv) any other
failure by any other Lender to fulfill its obligations hereunder.
Each payment by each Lender to the Issuing Bank for its own account or
to the Agent for the account of the Issuing Bank shall be made,
without any offset, abatement, withholding or reduction whatsoever.
Without affecting the rights and remedies of the Issuing Bank, the
Agent and the Lenders with respect to the Borrower in the event any
such condition precedent is not in fact satisfied, each Lender
authorizes the Agent in its sole discretion and on behalf of such
Lender (but without obligating the Issuing Bank), without notice to
such Lender, to waive any condition precedent set forth in Section 5
to the
issuance of the Letter of Credit (or deem each such condition
precedent satisfied) in connection with each issuance of the Letters
of Credit unless the Issuing Bank shall have received by the close of
its business, Philadelphia, Pennsylvania, time, on the Business Day
immediately preceding the day of such issuance written instructions
from any Lender not to waive such condition precedent and such written
instructions have not been withdrawn by such Lender.
3.6 Reinstatement and Survival. Notwithstanding anything
--------------------------
herein to the contrary, if the Issuing Bank is required at any time,
whether before or after the Termination Date, to make any payment
under the Issuing Bank L/C Indemnification Agreement or under a Letter
of Credit which was outstanding on or before the Termination Date,
each Lender shall pay over to the Issuing Bank, in accordance with the
provisions of this Section, the amount of such Lender's Commitment
Percentage of such amount. If any payment made by the Borrower or any
Other Obligor to the Issuing Bank is rescinded or recovered from or
restored or returned by the Issuing Bank under authority of any law,
rule, regulation, order of court or other Governmental Authority, or
in connection with any compromise or settlement relating thereto or
relating to pending or threatened action, suit or proceeding relating
thereto, whether arising out of any proceedings under the United
States Bankruptcy Code or otherwise, whether before or after the
Termination Date, each Lender shall, on demand of the Issuing Bank,
forthwith pay over to the Issuing Bank such Lender's Commitment
Percentage of such amount.
3.7 Procedure for Issuance and Renewal of Letters of
------------------------------------------------
Credit. (a) The Borrower may request the Issuing Bank to issue a
------
Letter of Credit by delivering to the Issuing Bank at its office
specified in Subsection 10.3, and to the Agent at its office specified
in Subsection 12.2 a copy of (i) such L/C Agreements as may be
required by the Issuing Bank, completed to the satisfaction of the
Issuing Bank, including an L/C Application signed by the Borrower and
a written approval thereof by the Agent, (ii) the proposed form of
such Letter of Credit (which shall comply with the applicable
requirements set forth herein) and (iii) such other certificates,
documents and other papers and information as the Issuing Bank may
reasonably request. Within three (3) Business Days following the
latest to occur of (i) the date on which the Issuing Bank shall have
received such documents and other papers and information and (ii) the
satisfaction of all other conditions to the issuance thereof, then,
unless the Required Lenders shall have notified the Issuing Bank that
the purpose, amount or terms and conditions of such Letter of Credit
are not acceptable to the Required Lenders or that a condition
precedent to the issuance thereof has not been satisfied, the Issuing
Bank shall issue such Letter of Credit (if the Borrower shall have
requested that such Letter of Credit be issued immediately) or (if the
Borrower shall have requested in the related L/C Application that such
Letter of Credit be issued at a later date) the Issuing Bank shall
notify
the Borrower that the Issuing Bank shall issue such Letter of Credit
on such later date or that the Issuing Bank shall not issue such
Letter of Credit by reason of a provision set forth herein.
Notwithstanding any approval by the Agent or any Lender and without
further approval by the Agent or such Lender, and without in any way
affecting any obligations of such Lender under Subsections 3.2 and
3.6, the Issuing Bank may make or agree to any changes in the terms of
the Letter of Credit, other than the amount thereof or the expiry date
applicable thereto. Promptly following issuance of each Letter of
Credit by the Issuing Bank, the Issuing Bank shall provide to the
Agent copies thereof and of the related L/C Agreements, certificates,
documents and papers. Upon each receipt by the Agent of copies of
Letters of Credit, L/C Agreements and other certificates, documents
and papers relating to a Letter of Credit as described in this
Subsection, the Agent shall promptly provide copies thereof to each
Lender.
(b) The Borrower may request the extension or renewal
of a Letter of Credit issued hereunder by giving written notice to the
Issuing Bank, and a copy thereof to the Agent, at least three (3)
Business Days prior to the then current expiry date of such Letter of
Credit (provided that the Issuing Bank may accommodate notices on
shorter notice in its sole discretion). If no Default or Event of
Default has occurred and all conditions set forth in this Agreement to
the renewal or extension of such Letter of Credit shall have been
satisfied, the Issuing Bank shall promptly issue such extension or
renewal and shall furnish the Agent and each Lender with a copy of
such extended or renewed Letter of Credit.
(c) Notwithstanding anything to the contrary in this
Agreement, on and after the Termination Date, the Issuing Bank shall
have no obligation to extend or renew any Letter of Credit issued
hereunder, and each Lender shall have no obligation to purchase a
participation in the Issuing Bank's obligations and rights under any
Letter of Credit extended or renewed on or after the Termination Date.
3.8 Reimbursement of the Issuing Bank. In the case of each
---------------------------------
drawing paid under any Letter of Credit and each payment made by the
Issuing Bank under the Issuing Bank L/C Indemnification Agreement, the
Issuing Bank shall promptly notify the Borrower, the Agent and each
Lender of such drawing or payment and of the amount thereof, and the
Borrower (i) shall reimburse the Issuing Bank for the amount of such
drawing or payment not later than the close of business on the first
Business Day following the day on which the Borrower received notice
of such drawing or payment, and (ii) shall pay (A) all charges and
expenses relating to such drawing or payment as may be payable in
accordance with Subsection 3.9 or applicable L/C Agreements and (B)
interest at the rate specified in Subsection 3.10 on the amount of
such drawing or payment for the period commencing on and including the
date of payment of such drawing or payment and ending on and including
the date the Borrower reimburses the Issuing Bank for such drawing or
payment. The Borrower shall pay the Issuing Bank in Dollars for any
such drawing or payment drawn or paid in Dollars. In the case of any
such drawing or payment drawn or paid in a currency other than
Dollars, the Borrower shall pay the Issuing Bank the equivalent amount
of such drawing or payment in immediately available funds in Dollars
at the Issuing Bank's selling rate of exchange (or, if applicable, its
correspondent's selling rate of exchange) for cable transfers to the
place where the Issuing Bank pays such drawing or makes such payment.
Notwithstanding any other provision of this Agreement, the payment by
the Issuing Bank of each drawing under a Letter of Credit and each
amount due to Signet Bank/Maryland under the Issuing Bank L/C
Indemnification Agreement shall be deemed to constitute an irrevocable
notice of borrowing by the Borrower under Subsection 2.3 and, at any
time after such request, the Agent is irrevocably authorized by the
Borrower and the Lenders to, and the Agent may, for the account of the
Lenders and unless directed otherwise by the Required Lenders, make
Revolving Credit Loans constituting Base Rate Loans to the Borrower in
an amount equal to the amount of such payment and any charges,
expenses or interest referred to in clauses (A) and (B) of this
Subsection, notwithstanding any limitations set forth in
Subsection 2.3, and transfer the proceeds of such Revolving Credit
Loans to the Issuing Bank in payment of the Borrower's L/C
Reimbursement Obligations and other obligations in connection with
such payment. If an Event of Default has occurred and is continuing,
the Borrower agrees to pledge to the Issuing Bank and grant to the
Issuing Bank a security interest in cash, cash equivalents or other
liquid assets acceptable to the Issuing Bank in its discretion
exercised in good faith as security for the amount of the L/C Exposure
from time to time.
3.9 Commissions, Fees and Charges. (a) In the case of
-----------------------------
each issuance, renewal or extension of any commercial Letter of
Credit, the Borrower agrees to pay to the Agent, for the account of
each Lender ratably according to its Commitment Percentage of the face
amount of such Letter of Credit, a negotiation fee equal to the
product of (i) the Commercial L/C Negotiation Fee Rate and (ii) the
face amount of such Letter of Credit.
(b) In the case of each issuance, renewal or extension
of any standby Letter of Credit, the Borrower agrees to pay (i) to the
Issuing Bank, a set-up charge equal to One Hundred Twenty-Five Dollars
($125.00), and (ii) to the Agent, for the account of each Lender
ratably according to its Commitment Percentage of the face amount of
such Letter of Credit, a commission on the face amount of such Letter
of Credit calculated at the Standby L/C Commission Rate, based upon a
year of 360 days and payable for the actual number of days in the
original term, the renewal term or the extended term of such Letter of
Credit.
(c) Payment of the fees set forth in this Subsection
shall be a condition to the issuance of each Letter of Credit;
provided that, in the case of any automatic renewal or automatic
--------
extension of any Letter of Credit in accordance with the terms
thereof, such fees shall be paid by the Borrower prior to the date of
such automatic renewal or automatic extension.
(d) In addition to the fees referred to in
Subsections 3.9(a) and (b), the Borrower agrees to pay or reimburse
the Issuing Bank for such normal and customary fees, costs and
expenses as are incurred or charged by the Issuing Bank or any
correspondents of the Issuing Bank in issuing, effecting payment
under, maintaining or administering any Letter of Credit (including,
without limitation, amendment fees, correspondent bank fees,
reissuance costs and cancellation fees) upon notice and invoice of
such costs and expenses.
(e) The Agent shall promptly distribute to each Lender
all letter of credit fees and commissions received by the Agent for
the account of such Lender.
3.10 Interest on Amounts Disbursed under Letters of Credit.
-----------------------------------------------------
The Borrower agrees to pay to the Issuing Bank interest on any and all
amounts drawn under any Letter of Credit or paid under the Issuing
Bank L/C Indemnification Agreement until reimbursed in full at a
fluctuating rate per annum equal to the rate that would be applicable
to Base Rate Loans. Interest accrued hereunder shall be payable on
demand. For the purposes of computing the number of days for which
interest shall accrue on amounts disbursed under Letters of Credit,
payments received by the Issuing Bank after 1:00 P.M., Philadelphia,
Pennsylvania, time shall be deemed to have been received on the next
following Business Day. All payments by the Borrower to the Issuing
Bank shall be made in lawful currency of the United States and in
immediately available funds without setoff or counterclaim to the
Issuing Bank at its office specified in Subsection 10.3.
3.11 Computation of Interest and Fees; Payment not on
------------------------------------------------
Business Days. (a) Any change in any interest rate under this
-------------
Section 3 resulting from a change in the Base Rate shall become
effective as of the opening of business on the day on which such
change in the Base Rate becomes effective.
(b) If any payment under this Section 3 becomes due
and payable on a day which is not a Business Day, the maturity thereof
shall be extended to the next succeeding Business Day, and, in the
case of any amount drawn under a Letter of Credit or paid under the
Issuing Bank L/C Indemnification Agreement, interest thereon shall be
payable at the then applicable rate during such extension.
3.12 Increased Costs. If any law or regulation or any
---------------
change in the interpretation or application thereof by any
Governmental Authority charged with the administration thereof shall
either (a) impose, modify, assess or deem applicable any reserve,
special deposit, assessment, capital adequacy or similar requirement
against letters of credit issued by the Issuing Bank or any Lender or
(b) impose on the Issuing Bank or any Lender any other condition
regarding any Letter of Credit, and the result of any event referred
to in clauses (a) or (b) above shall be to increase the cost to the
Issuing Bank or such Lender of issuing or maintaining such Letter of
Credit from and after the Closing Date or a participation therein, as
the case may be, then, within ten (10) Business Days after delivery to
the Borrower by the Issuing Bank or such Lender of a certificate as to
the fact and amount of such increased cost, the Borrower shall pay to
the Issuing Bank or such Lender such additional amounts which shall be
sufficient to compensate the Issuing Bank or such Lender for such
increased cost, together with interest on each such amount from the
date such certificate is received by the Borrower until payment in
full thereof at the rate provided in Subsection 3.10. A certificate
as to the fact and amount of such increased cost incurred by the
Issuing Bank or any Lender as a result of any event mentioned in
clauses (a) or (b) above, submitted by the Issuing Bank or any such
Lender to the Borrower, shall show the means by which such additional
amounts have been calculated and shall be conclusive, absent manifest
error. This covenant shall survive the termination of this Agreement
and payment of the outstanding Notes for a period of one year.
3.13 Nature of Obligations; Indemnities. (a) The
----------------------------------
obligations of the Borrower under this Section 3 shall be absolute and
unconditional under any and all circumstances and irrespective of any
setoff, counterclaim or defense to payment which the Borrower may have
or have had against the Issuing Bank, any correspondents of the
Issuing Bank, the Agent, any Lender or any beneficiary of a Letter of
Credit; provided that this provision shall be deemed a waiver by the
--------
Borrower of the assertion of a compulsory counterclaim only to the
extent permitted by applicable law. The Borrower assumes all risks of
the acts or omissions of the users of the Letters of Credit and all
risks of the misuse of the Letters of Credit. None of the Issuing
Bank, the Agent, any Lender, or any of their respective
correspondents, shall be responsible: (i) for the form, validity,
sufficiency, accuracy, genuineness or legal effect of any draft drawn
under any Letter of Credit or any document specified in any
applications for any of the Letters of Credit, even if it should in
fact prove to be in any or all respects invalid, insufficient,
inaccurate, fraudulent, or forged and even if the Borrower shall have
notified the Issuing Bank, the Agent, any Lender, or any of their
respective correspondents, thereof; (ii) for the validity or
sufficiency of any instrument transferring or assigning or purporting
to transfer or assign any of the Letters of Credit or any of the
rights or benefits thereunder or proceeds thereof in whole or in part,
which may prove to be invalid or ineffective for any reason; (iii) for
failure of any draft to
bear any reference or adequate reference to any of the Letters of
Credit, or failure of any document to accompany any draft upon
presentation thereof, or failure of any Person to note the amount of
any draft on the reverse of any of the Letters of Credit or to
surrender or to take up any of the Letters of Credit or to send
forward any such document apart from drafts as required by the terms
of any of the Letters of Credit, each of which provisions, if
contained in a Letter of Credit itself, it is agreed, may be waived by
the Issuing Bank; (iv) for errors, omissions, interruptions or delays
in transmission or delivery of any messages, by mail, cable,
telegraph, telex or otherwise, whether or not in cipher; (v) for any
error, neglect, default, suspension or insolvency of any
correspondents of the Issuing Bank; (vi) for errors in translation or
for errors in interpretation of technical terms; (vii) for any loss or
delay, in the transmission or otherwise, of any such document or draft
or of proceeds thereof; (viii) for any failure of any draft or
document presented under a Letter of Credit to comply with, or for any
determination by the Issuing Bank whether the same complies with, the
terms of such Letter of Credit; (ix) compliance or non-compliance with
any Requirements of Law or customs which may from time to time be in
effect in foreign countries or jurisdictions in any way relating to
any Letter of Credit or the negotiation and/or payment of any drawing
under any Letter of Credit; (x) violation by any Person of any
Requirement of Law; or (xi) for any other circumstances whatsoever in
making or failing to make payment under a Letter of Credit; provided
--------
that the Borrower shall have a claim against the Issuing Bank, and
the Issuing Bank shall be liable to the Borrower, to the extent, but
only to the extent, of any direct, as opposed to consequential,
damages suffered by the Borrower which the Borrower proves were caused
by the Issuing Bank's willful misconduct or gross negligence. None of
the above shall affect, impair or prevent the vesting of any of the
rights or powers of the Issuing Bank, the Agent or any of the Lenders.
The Issuing Bank or the Agent shall have the right to transmit the
terms of the Letter of Credit as requested without translating them.
(b) In furtherance and extension and not in limitation
of the specific provisions hereinabove in this Section 3 set forth,
(i) any action taken or omitted by the Issuing Bank, the Agent, any
Lender or by any of their respective correspondents under or in
connection with any of the Letters of Credit, if taken or omitted in
good faith or pursuant to instructions of the Borrower, shall be
binding upon the Borrower and shall not put the Issuing Bank, the
Agent, any Lender or their respective correspondents under any
resulting liability to the Borrower and (ii) the Issuing Bank may
accept documents that appear on their face to be in order, without
responsibility for further investigation, regardless of any notice or
information to the contrary. The Issuing Bank and its correspondents
may, but shall not be required to, accept as complying with the terms
of a Letter of Credit any drawing under the Letter of Credit or any
other document, otherwise in order, signed or issued by the
administrator, executor, trustee in bankruptcy, debtor in possession,
assignee for benefit of
creditors, liquidator, receiver or other legal representative of the
beneficiary of the Letter of Credit or of any other party who is
authorized to draw under the Letter of Credit or who is authorized or
required to execute documents in connection with the Letter of Credit.
(c) The Borrower hereby agrees at all times to
protect, indemnify and save harmless each of the Issuing Bank, the
Agent, each Lender, and their respective correspondents, from and
against any and all claims, actions, suits and other legal
proceedings, and from and against any and all losses, claims, demands,
liabilities, damages, costs, charges, reasonable counsel fees and
other expenses which they or any of them may, at any time, sustain or
incur by reason of or in consequence of or arising out of the issuance
of any of the Letters of Credit; it being the intention of the parties
that this Agreement shall be construed and applied to protect and
indemnify each of the Issuing Bank, the Agent, each Lender, and their
respective correspondents, against any and all risks involved in the
issuance of all of the Letters of Credit, all of which risks, whether
or not foreseeable, being hereby assumed by the Borrower, including,
without limitation, any and all risks of all acts by any Governmental
Authority, domestic or foreign; provided that the Borrower shall not
--------
be liable for the payment of any portion of such losses, liabilities,
damages, costs, charges, counsel fees or other expenses resulting from
any willful misconduct or gross negligence of the Person otherwise
entitled to be indemnified. None of the Issuing Bank, the Agent or
any Lender, or any of their respective correspondents, shall in any
way be liable for any failure by any of them or any other Person to
pay a draft drawn under any of the Letters of Credit as a result of
any acts, whether rightful or wrongful, of any Governmental Authority,
or any other cause not readily within their control or the control of
their respective correspondents, agents or sub-agents. Without
limiting the generality of the foregoing, the Borrower shall reimburse
each of the Issuing Bank, the Agent, each Lender, and their respective
correspondents, and shall pay and indemnify each of the Issuing Bank,
the Agent, each Lender, and their respective correspondents, against
payment of, out-of-pocket costs and expenses, withholding taxes,
liabilities and damages, including, without limitation, counsel fees,
incurred or sustained by any of them in connection with any of the
Letters of Credit or by reason of any such failure to pay. Also,
without limiting the generality of the foregoing, the Borrower shall
be responsible for, and shall reimburse the Issuing Bank, the Agent
and each Lender forthwith upon its receipt of any demand therefor, any
and all commissions, fees and other charges paid or payable by the
Issuing Bank, the Agent or any Lender to any bank which shall be an
advising bank or a beneficiary of a Letter of Credit which shall, in
reliance thereon, have issued its own letter of credit in respect of
obligations of the Borrower.
3.14 Resignation of Issuing Bank. The Issuing Bank may
---------------------------
resign as such by giving at least forty-five (45) days prior written
notice to the Lenders, the Agent and the
Borrower of such resignation, specifying the date on which such
resignation shall become effective. On and after the effective date
of such resignation, the Issuing Bank shall have no obligation to
issue any Letters of Credit; provided that such resignation shall not
--------
affect any rights or obligations of the resigning Issuing Bank with
respect to the Issuing Bank L/C Indemnification Agreement or any
Letters of Credit issued prior to the effective date of such
resignation. In the event that the Issuing Bank shall give notice of
its resignation as provided herein, the Required Lenders and the
Borrower may appoint a successor Issuing Bank that is acceptable to
the Required Lenders and the Borrower. Such successor Issuing Bank
shall undertake its duties as such upon execution and delivery by such
Persons of such documents, including amendments of this Agreement, as
shall be satisfactory to the Required Lenders and the Borrower.
SECTION 4. REPRESENTATIONS AND WARRANTIES
To induce the Lenders to enter into this Agreement and to
make the Revolving Credit Loans, and to induce the Issuing Bank to
issue Letters of Credit and the Issuing Bank L/C Indemnification
Agreement, the Borrower hereby represents and warrants to the Agent,
the Issuing Bank and each Lender that:
4.1 Financial Condition. The following financial
-------------------
statements of the Borrower have been delivered to the Agent, the
Issuing Bank and each Lender:
(a) the unaudited consolidated statement of income and
retained earnings of the Borrower and its Subsidiaries for the fiscal
year of the Borrower ended December 31, 1993, and the unaudited
consolidated statement of cash flows of the Borrower and its
Subsidiaries for such fiscal year, and the unaudited consolidated
balance sheet of the Borrower and its Subsidiaries as at the end of
such fiscal year;
(b) the unaudited consolidated statement of income and
retained earnings of the Borrower and its Subsidiaries and Symtron for
the quarterly accounting period of the Borrower ended June 30, 1994,
and the unaudited consolidated statement of cash flows of the Borrower
and its Subsidiaries for such quarterly accounting period, and the
unaudited consolidated balance sheet of the Borrower and its
Subsidiaries as at the end of such quarterly accounting period;
(c) The audited consolidated statement of income and
retained earnings of UIC and its Subsidiaries for the fiscal year of
UIC ended December 31, 1993, and the audited consolidated statement of
cash flows of UIC and its Subsidiaries for such
fiscal year, and the audited consolidated balance sheet of UIC and its
Subsidiaries as at the end of such fiscal year;
The documents listed in this Subsection 4.1 have been prepared in
conformity with GAAP consistently applied, are correct and complete,
subject to normal year-end audit adjustments in the case of unaudited
interim financial statements, and present fairly the financial
position of the Borrower, its Subsidiaries and Symtron, and UIC and
its Subsidiaries, as the case may be, as of the dates of such
statements and the results of operations of the Borrower, its
Subsidiaries and Symtron, and UIC and its Subsidiaries, as the case
may be, for the periods indicated in such statements.
4.2 Borrowing Base. All accounts reported to the Agent or
--------------
any Lender as Eligible Accounts, or included in any calculation of
Eligible Accounts provided to the Agent or any Lender, shall be, to
the knowledge and belief of the Borrower, at the time so reported or
so included in such calculation, Eligible Accounts.
4.3 No Change. As of the Closing Date, there has been no
---------
material adverse change in the business, operations, property or
financial or other condition of the Borrower and its Subsidiaries or
of UIC and its Subsidiaries from the date of the most recent financial
statements referred to in Subsection 4.1 hereof.
4.4 Organization and Good Standing; Compliance with Law.
---------------------------------------------------
The Borrower (a) is a corporation duly organized, validly existing and
in good standing under the laws of the State of Maryland, (b) has the
legal right to own and operate its property, to lease the property it
operates as lessee and to conduct the business in which it is
currently engaged, (c) is duly qualified and in good standing under
the laws of each jurisdiction where the failure to be so qualified or
in good standing would have a material adverse effect on its ability
to own, lease or operate its property or conduct its business and (d)
is in compliance with all Requirements of Law except to the extent
that the failure to comply therewith could not, in the aggregate,
reasonably be expected to have a Material Adverse Effect.
4.5 Authorization; Enforceable Obligations. The Borrower
--------------------------------------
has the legal right to make, deliver and perform the Credit Documents
to which it is a party and to borrow hereunder and has taken all
necessary action to authorize the borrowings on the terms and
conditions of this Agreement and the Notes and to authorize the
execution, delivery and performance of the Credit Documents to which
it is a party. No consent or authorization of, filing with or other
act by or in respect of any Governmental Authority is required in
connection with the borrowings hereunder or with the execution,
delivery, performance, validity or enforceability of the Credit
Documents to which the Borrower is a party except
those which have been obtained or performed and are in full force and
effect and those required to perfect Liens. This Agreement has been,
and each other Credit Document to which it is a party will be, duly
executed and delivered on behalf of the Borrower. This Agreement
constitutes, and each other Credit Document to which it is a party
when executed and delivered will constitute, a legal, valid and
binding obligation of the Borrower enforceable against the Borrower in
accordance with its terms, except as enforceability may be limited by
applicable bankruptcy, insolvency, reorganization, moratorium or
similar laws affecting the enforcement of creditors' rights generally
and by general equitable principles (whether enforcement is sought by
proceedings in equity or at law).
4.6 No Legal Bar. The execution, delivery and performance
------------
of the Credit Documents to which the Borrower is a party, the
borrowings hereunder and the use of the proceeds thereof, will not
violate any Requirement of Law or any Contractual Obligation of the
Borrower, and will not result in, or require, the creation or
imposition of any Lien on any of its properties or revenues pursuant
to any Requirement of Law or Contractual Obligation, except as
contemplated by the Credit Documents.
4.7 No Material Litigation; Labor Matters. No litigation,
-------------------------------------
investigation or proceeding of or before any arbitrator or
Governmental Authority is pending or, to the knowledge of the
Borrower, threatened by or against the Borrower or against any of its
properties or revenues (a) with respect to any of the Credit Documents
or any of the transactions contemplated hereby or thereby, or
(b) which, if determined adversely to the Borrower, could reasonably
be expected to have a Material Adverse Effect. There are no strikes,
work stoppages, grievance proceedings or other controversies pending
or, to the knowledge and belief of the Borrower, imminent or
threatened between the Borrower and any employees of the Borrower or
between the Borrower and any union or other collective bargaining unit
representing employees of the Borrower which could reasonably be
expected to have a Material Adverse Effect. Except as set forth in
Schedule 4.7, there is no litigation, investigation or proceeding of
or before any arbitrator or Governmental Authority pending or, to the
knowledge of the Borrower, threatened by or against the Borrower or
against any of its properties or revenues.
4.8 No Default. There exists, as of the Closing Date, no
----------
"Event of Default," as defined in any of the Private Placement Debt
Documents, and there exists no event which, with the giving of notice
or the lapse of time, or both, could constitute an "Event of Default,"
as defined in any of the Private Placement Debt Documents. Except as
set forth in Schedule 4.8, the Borrower is not in default under or
with respect to any other Contractual Obligation in any respect which
could reasonably be expected to have a Material Adverse Effect. No
Default or Event of Default has occurred and is continuing.
4.9 Ownership of Property; Liens. The Borrower has good
----------------------------
record and marketable title in fee simple to the Real Property
Collateral, and good title to all of its other property, and none of
such property is subject to any Lien, except as permitted by
Subsection 7.3.
4.10 Business Premises. The Borrower does not own, lease,
-----------------
sublease, occupy, use or operate any real property or improvements
other than the Borrower Business Premises. The Borrower's chief
executive office (within the meaning of Section 9-103 of the Maryland
Uniform Commercial Code) is located at the Borrower Chief Executive
Office. All books and records of the Borrower are located at the
Borrower Business Premises.
4.11 Subsidiaries. The Borrower has no Subsidiaries other
------------
than the Existing Borrower Subsidiaries.
4.12 Ownership of Entities. All of the issued and
---------------------
outstanding capital stock of each of the Borrower, Symtron and UIC -
DEL is legally and beneficially owned by UIC and UIC has the
discretionary power and right to exercise all rights and privileges,
including voting rights, with respect to such capital stock and, more
particularly, to elect all of the members of the Board of Directors of
each of the Borrower, Symtron and UIC-DEL and to approve any action of
each of the Borrower, Symtron and UIC-DEL, including extraordinary
actions, required to be approved by the stockholders thereof. All of
the issued and outstanding capital stock of each of Systems,
Technologies, Engineering, Carshell, International, Microflite,
Medical and Seti is legally and beneficially owned by the Borrower and
the Borrower has the discretionary power and right to exercise all
rights and privileges, including voting rights, with respect to such
capital stock and, more particularly, to elect all of the members of
the Board of Directors of each of such corporations and to approve any
action of each of such corporations, including extraordinary actions,
required to be approved by the stockholders of such corporations. The
Borrower legally and beneficially owns fifty-three percent (53%) of
the issued and outstanding capital stock of Transit and has the
discretionary power and right to exercise all rights and privileges,
including voting rights, with respect to such capital stock.
4.13 Environmental. To the Borrower's knowledge and except
-------------
as set forth in Schedule 4.13: (a) no Hazardous Substance has been
released, discharged, emitted or disposed of on any of the Obligor Use
Property except in compliance with Environmental Laws and except as
could not reasonably be expected to result in the imposition of a Lien
upon any of the property, assets or revenues of the Borrower, any of
its Subsidiaries or any Other Obligor or exposure of the Borrower, any
of its Subsidiaries or any Other Obligor to potential liability,
whether for the cost of cure or remediation or otherwise, in excess of
One
Hundred Thousand Dollars ($100,000.00); (b) there is no existing
Hazardous Substance Contamination of any of the Obligor Use Property
which could reasonably be expected to result in the imposition of a
Lien upon any of the property, assets or revenues of the Borrower, any
of its Subsidiaries or any Other Obligor or exposure of the Borrower,
any of its Subsidiaries or any Other Obligor to potential liability,
whether for the cost of cure or remediation or otherwise, in excess of
One Hundred Thousand Dollars ($100,000.00); (c) all of the Obligor Use
Property, and all operations now or previously conducted on the
Obligor Use Property by the Borrower or any Guarantor, comply with all
Environmental Laws, except for any non-compliance which could not
reasonably be expected to result in the imposition of a Lien upon any
of the property, assets or revenues of the Borrower, any of its
Subsidiaries or any Other Obligor or exposure of the Borrower, any of
its Subsidiaries or any Other Obligor to potential liability, whether
for the cost of cure or remediation or otherwise, in excess of One
Hundred Thousand Dollars ($100,000.00); (d) no underground storage
tanks are located on any of the Obligor Use Property; and (e) neither
the Borrower nor any Guarantor has received, or is aware of, any
Environmental Claim against, relating to or affecting in any way the
Borrower, any Guarantor or any of the Obligor Use Property or any
operations conducted on any of the Obligor Use Property by the
Borrower or any other Person which could reasonably be expected to
result in the imposition of a Lien upon any of the property, assets or
revenues of the Borrower, any of its Subsidiaries or any Other Obligor
or exposure of the Borrower, any of its Subsidiaries or any Other
Obligor to potential liability, whether for the cost of cure or
remediation or otherwise, in excess of One Hundred Thousand Dollars
($100,000.00).
4.14 Intellectual Property. The only patents, patent
---------------------
applications, trademarks, trademark applications, servicemarks,
servicemark applications, copyrights and copyright applications filed
or registered in the name of the Borrower or any Guarantor (other than
UIC) with the United States Patent and Trademark Office or the United
States Copyright Office and not expired are set forth in
Schedule 4.14. The Borrower, each of its Subsidiaries and each
Guarantor owns, or is licensed to use, all patents, trademarks,
servicemarks, trade names, copyrights, technology, know-how and
processes necessary for the conduct of its business as currently
conducted (the "Intellectual Property"). Except as set forth in
Schedule 4.14, no claim has been asserted and is pending by any Person
with respect to the use of any such Intellectual Property, or
challenging or questioning the validity or effectiveness of any such
Intellectual Property, which, if determined adversely to the Borrower
or any Guarantor, as the case may be, could reasonably be expected to
have a Material Adverse Effect, and the Borrower does not know of any
valid basis for any such claim. Except as set forth in Schedule 4.14,
the use of such Intellectual Property by the Borrower does not
infringe on the rights of any Person, subject to such claims and
infringements as do not, in the aggregate, give rise to any material
liability on the part of the Borrower.
4.15 Solvency. On the first Borrowing Date and after giving
--------
effect to the borrowing hereunder on such date and to all other
Indebtedness being incurred on such date in connection therewith
(a) the sum of the assets, at a fair valuation, of the Borrower will,
as of such date, exceed the Borrower's debts, (b) the present fair
saleable value of the assets of the Borrower will, as of such date, be
greater than the amount that will be required to pay the Borrower's
liability on its debts as such debts become absolute and matured, and
(c) the Borrower will have, as of such date, sufficient capital with
which to conduct its business. For purposes of this Subsection,
"debt" means "liability on a claim", "claim" means any (i) right to
payment, whether or not such a right is reduced to judgment,
liquidated, unliquidated, fixed, contingent, matured, unmatured,
disputed, undisputed, legal, equitable, secured or unsecured, or
(ii) right to an equitable remedy for breach of performance if such
breach gives rise to a right to payment, whether or not such right to
an equitable remedy is reduced to judgment, fixed, contingent,
matured, unmatured, disputed, undisputed, secured or unsecured.
4.16 No Burdensome Restrictions. No Contractual Obligation
--------------------------
of the Borrower and no Requirement of Law materially adversely
affects, or insofar as the Borrower could reasonably foresee may so
affect, the business, operations, property or financial or other
condition of the Borrower.
4.17 Taxes. Except as set forth in Schedule 4.17, the
-----
Borrower has filed or caused to be filed all federal income and other
material tax returns which are required to be filed by the Borrower,
and the Borrower has paid all taxes shown to be due and payable on
said returns or on any assessments made against it or any of its
property and all other taxes, fees or other charges imposed on it or
any of its property by any Governmental Authority (other than any
taxes the amount or validity of which are currently being contested in
good faith by appropriate proceedings and with respect to which
reserves in conformity with GAAP have been provided on the books of
the Borrower); and no tax lien has been filed and, to the knowledge of
the Borrower, no claim is being asserted with respect to any such tax,
fee or other charge.
4.18 Federal Regulations. No part of the proceeds of any
-------------------
Revolving Credit Loans hereunder will be used for "purchasing" or
"carrying" any "margin stock" within the respective meanings of each
of the quoted terms under Regulation U of the Board of Governors of
the Federal Reserve System as now and from time to time hereafter in
effect or
for any purpose which violates the provisions of the Regulations of
such Board of Governors.
If requested by any Lender or the Agent, the Borrower will furnish to
the Agent and each Lender a statement to the foregoing effect in
conformity with the requirements of FR Form U-I referred to in said
Regulation U.
4.19 ERISA. Except as set forth in Schedule 4.19, to the
-----
Borrower's knowledge, no Reportable Event has occurred during the
five-year period prior to the date on which this representation is
made or deemed made with respect to any Plan, and each Plan has
complied in all material respects with the applicable provisions of
ERISA and the Code. Except as set forth in Schedule 4.19, the present
value of all benefits vested under each Single Employer Plan
maintained by the Borrower or any Commonly Controlled Entity (based on
those assumptions used to fund the Plans) did not, as of the last
annual valuation date, exceed the value of the assets of such Plan
allocable to such vested benefits. Neither the Borrower nor any
Commonly Controlled Entity has had a complete or partial withdrawal
from any Multiemployer Plan and neither the Borrower nor any Commonly
Controlled Entity would become subject to any liability under ERISA if
the Borrower or any such Commonly Controlled Entity were to withdraw
completely from all Multiemployer Plans as of the valuation date most
closely preceding the date hereof. No such Multiemployer Plan is in
Reorganization or Insolvent.
4.20 Investment Company Act; Other Regulations. The
-----------------------------------------
Borrower is not an "investment company", or a company "controlled" by
an "investment company", within the meaning of the Investment Company
Act of 1940, as amended. The Borrower is not subject to regulation
under any Federal or state statute or regulation which limits its
ability to incur Indebtedness.
4.21 Accuracy and Completeness of Information. At the time
----------------------------------------
furnished, no information, report or other paper or data with respect
to the Borrower, any of its Subsidiaries or any of the Guarantors
(other than projections) furnished to the Agent, the Issuing Bank or
the Lenders by the Borrower, any of its Subsidiaries or any of the
Guarantors, or on behalf of the Borrower, any of its Subsidiaries or
any of the Guarantors, contained any untrue statement of a material
fact or omitted to state a fact necessary to make the information or
statements contained therein not materially misleading in light of the
circumstances under which the same were made. All projections with
respect to the Borrower, any of its Subsidiaries or any of the
Guarantors, so furnished by the Borrower, any of its Subsidiaries or
any of the Guarantors, as supplemented, were prepared and presented in
good faith, it being recognized by the Agent, the Issuing Bank and the
Lenders that such projections as to future events are not to be viewed
as facts and that actual results during the period or periods covered
by any such projections will differ from the projected results. As of
the Closing Date, no fact is known to the Borrower which materially
and
adversely affects or in the future may (so far as the Borrower can
reasonably be expected to foresee) materially and adversely affect the
business, assets or liabilities, financial condition, results of
operations or business prospects of the Borrower, any of its
Subsidiaries or any of the Guarantors, which has not been set forth in
the financial statements referred to in Subsection 4.1 or in such
information, reports, papers and data or otherwise disclosed in
writing to the Agent, the Issuing Bank and the Lenders prior to the
Closing Date. No document furnished or statement made in writing to
the Agent, the Issuing Bank or the Lenders by the Borrower in
connection with the negotiation, preparation or execution of this
Agreement contains any untrue statement of a material fact, or omits
to state any fact necessary in order to make the statements contained
therein not misleading in any material respect, in either case which
has not been corrected, supplemented or remedied by subsequent
documents furnished or statements made in writing to the Lenders.
4.22 Certain Indebtedness. After giving effect to any
--------------------
payment or prepayment thereof occurring on the date hereof: (a) the
Private Placement Debt Balance is Twenty Million Dollars
($20,000,000.00); (b) the UIC Subordinated Debt Balance is zero;
(c) the UIC-DEL Standby Subordinated Debt Balance is Twelve Million
Dollars ($12,000,000.00); and (d) the UIC-DEL Subordinated Debt
Balance is Seventeen Million Five Hundred Thousand Dollars
($17,500,000.00).
4.23 Primary Banking Relationship. The primary deposit
----------------------------
accounts, concentration accounts and disbursement accounts of the
Borrower are located at First Fidelity.
4.24 Purpose of Loans. The proceeds of the Revolving Credit
----------------
Loans shall be used by the Borrower (a) to pay in full all
Indebtedness of the Borrower and the Guarantors to Signet
Bank/Maryland, except for contingent Indebtedness relating to the
Indemnified Letters of Credit, (b) to finance the carry of accounts,
the purchase of inventory, the funding of Capital Expenditures not
prohibited by this Agreement, and other ordinary course business
activities, (c) to make or fund any Transit Investment permitted under
Subsection 7.11(e), and (d) to make loans or capital contributions to
any Eligible Affiliate, the proceeds of which loans or capital
contributions shall be used by such Eligible Affiliate to finance the
carry of accounts, the purchase of inventory, the funding of Capital
Expenditures not prohibited by this Agreement, and other ordinary
course business activities.
SECTION 5. CONDITIONS PRECEDENT
5.1 Conditions to Initial Extensions of Credit. The
------------------------------------------
agreement of each Lender to make the initial Revolving Credit Loans
requested to be made by it and the agreement of the Issuing Bank to
open the initial Letters of Credit are subject to the satisfaction,
immediately prior to or concurrently with the making of such Revolving
Credit Loan on the Closing Date or the opening of such Letters of
Credit, as the case may be, of the following conditions precedent:
(a) Credit Documents. The Agent shall have received
----------------
in form and content satisfactory to the Required Lenders (i) this
Agreement, duly executed and delivered by an Authorized Officer of the
Borrower and by each of the other parties hereto, with a counterpart
for each Lender and the Issuing Bank, (ii) for the account of each
Lender, a Revolving Credit Note, conforming to the requirements hereof
and duly executed and delivered by an Authorized Officer of the
Borrower, (iii) the Borrower Security Agreement, the Borrower Pledge
Agreement, the Deed of Trust and a related Assignment of Leases and
Rents, such L/C Agreements as may be required by the Issuing Bank, and
such Intellectual Property Assignments as may be required by the
Required Lenders, each duly executed and delivered by an Authorized
Officer of the Borrower, with a counterpart or a conformed copy for
each Lender and the Issuing Bank, (iv) the Guaranty, duly executed and
delivered by an Authorized Officer of each of the Guarantors, (v) the
Guarantor Security Agreement, duly executed by an Authorized Officer
of each of the Guarantors (other than UIC), (vi) such Intellectual
Property Assignments as the Agent may require to be executed by any of
Guarantors (other than UIC), each duly executed and delivered by an
Authorized Officer of each of such Guarantors, (vii) the UIC Pledge
Agreement and the UIC Subordination Agreement, each duly executed and
delivered by an Authorized Officer of UIC and by each of the other
parties thereto, (viii) the UIC-DEL Subordination Agreement, duly
executed and delivered by an Authorized Officer of UIC-DEL and by each
of the other parties thereto, and (ix) such financing statements,
security agreements, assignments and other documents executed by such
Persons as the Agent may reasonably require to further evidence or
perfect the rights and interests granted or contemplated to be granted
to or for the benefit of the Agent, the Lenders or the Issuing Bank
pursuant to this Agreement and the other Credit Documents.
(b) Private Placement Debt Documents; Certificates;
-----------------------------------------------
Conditions. The Agent shall have received a true and correct copy of
----------
each of the Private Placement Debt Documents, including all schedules
and exhibits thereto and side letters affecting the terms thereof or
otherwise delivered in connection therewith.
(c) Intercreditor Agreement. The Agent shall have
-----------------------
received, with a counterpart or a conformed copy for each Lender and
the Issuing Bank, the Intercreditor Agreement duly executed and
delivered by an Authorized Officer of each of the other parties
thereto.
(d) Consents. The Agent shall have received, with
--------
copies and executed certificates for each Lender and the Issuing Bank,
true copies (in each case certified as to authenticity on such date by
an Authorized Officer of the Borrower) of all documents and
instruments, including all consents, authorizations and filings,
required or advisable under any Requirement of Law or by Contractual
Obligations of the Borrower or any Guarantor in connection with the
execution, delivery, performance, validity and enforceability of this
Agreement, the Notes, the other Credit Documents and the Intercreditor
Agreement, and such consents, authorizations, and filings shall be
satisfactory in form and substance to the Required Lenders and in full
force and effect.
(e) Related Agreements. The Agent shall have
------------------
received, with a counterpart or a conformed copy for each Lender and
the Issuing Bank, true and correct copies, certified as to
authenticity by the Borrower, of such contracts, documents or
instruments to which the Borrower or any Guarantor is a party as may
be reasonably requested by the Agent or any Lender, including, without
limitation, a copy of any debt instrument or security agreement to
which the Borrower or any Guarantor is a party.
(f) Title Insurance. The Agent shall have received a
---------------
written commitment by a title insurance company to issue title
insurance insuring the Deed of Trust, which commitment and which
company shall be satisfactory to the Agent, the Issuing Bank and the
Required Lenders.
(g) Environmental Assessment. The Agent shall have
------------------------
received an Environmental Assessment relating to the Real Property
Collateral performed by a contractor satisfactory to the Agent, the
Issuing Bank and the Required Lenders, which Environmental Assessment
shall be satisfactory to the Agent, the Issuing Bank and the Required
Lenders.
(h) Appraisals. The Agent shall have received, with a
----------
counterpart for each Lender and the Issuing Bank, an appraisal or
appraisals of the Real Property Collateral and other fixed assets of
the Borrower performed by an appraiser or appraisers satisfactory to
the Agent, which appraisal or appraisals shall indicate that the Real
Property Collateral (on a market value basis) and the other fixed
assets of the Borrower (on a forced sale value basis) have an
aggregate value of at least Twenty Million Dollars ($20,000,000.00),
and which appraisals shall be satisfactory to the Agent.
(i) Borrowing Certificate. The Agent shall have
---------------------
received, with a counterpart for each Lender, a Borrowing Certificate
of the Borrower, dated the Closing Date, substantially in the form of
Exhibit G, with appropriate insertions and attachments, satisfactory
in form and substance to the Agent and its counsel, duly executed by
an Authorized Officer of the Borrower.
(j) Borrowing Base Certificate. The Agent shall have
--------------------------
received, with a counterpart for each Lender, a Borrowing Base
Certificate, dated the Closing Date, fully completed and duly executed
by an Authorized Officer of the Borrower.
(k) Borrower Proceedings. The Agent shall have
--------------------
received, with a counterpart for each Lender and the Issuing Bank, a
copy of all corporate proceedings undertaken by the Borrower, in form
and substance satisfactory to the Required Lenders, authorizing
(i) the execution, delivery and performance of the Intercreditor
Agreement, this Agreement, the Notes and the other Credit Documents to
which it is a party, (ii) the borrowings contemplated hereunder and
(iii) the granting by it of the security interests and other Liens
granted by it pursuant to the Credit Documents, certified as to
authenticity by an Authorized Officer of the Borrower, as of the
Closing Date, which certificate shall state that the proceedings
thereby certified are in full force and effect and have not been
amended, modified, revoked or rescinded as of the date of such
certificate.
(l) Guarantor Proceedings. The Agent shall have
---------------------
received, with a counterpart for each Lender and the Issuing Bank, a
copy of all corporate proceedings undertaken by each of the
Guarantors, in form and substance satisfactory to the Required Lenders
authorizing (i) the execution, delivery and performance of each of the
Credit Documents to which it is a party, and (ii) the granting by it
of the security interests and other Liens granted by it pursuant to
the Credit Documents, certified as to authenticity by an Authorized
Officer of such Guarantor as of the Closing Date, which certificate
shall state that the proceedings thereby certified are in full force
and effect and have not been amended, modified, revoked or rescinded
as of the date of such certificate.
(m) Borrower and Guarantor Incumbency Certificate.
---------------------------------------------
The Agent shall have received, with a counterpart for each Lender and
the Issuing Bank, a certificate of an Authorized Officer of each of
the Borrower and each Guarantor, dated the Closing Date, as to the
incumbency and signature of the Authorized Officers of the Borrower
and the Guarantors executing any Credit Document, satisfactory in form
and substance to the Required Lenders and their counsel, duly executed
by an Authorized Officer of the Borrower and each of the Guarantors.
(n) Borrower and Guarantor Organizational Documents.
-----------------------------------------------
The Agent shall have received, with a counterpart for each Lender and
the Issuing Bank, true and complete copies of the certificate of
incorporation and bylaws of the Borrower and each of the Guarantors,
certified as of the Closing Date as true and complete copies thereof
by an Authorized Officer of the Borrower and each of the Guarantors.
(o) Good Standing Certificates. The Agent shall have
--------------------------
received copies of certificates dated as of a recent date from the
Secretary of State or other appropriate authority of such
jurisdiction, evidencing the good standing of the Borrower and each of
the Guarantors in each state where the ownership, lease or operation
of property or the conduct of the business of the Borrower or any of
the Guarantors requires it to qualify and where the failure to so
qualify could not reasonably be expected to have a Material Adverse
Effect, assuming the Agent were liquidating all of the Collateral.
(p) Financial Information. The Agent shall have
---------------------
received, with a counterpart for each Lender and the Issuing Bank, a
copy of each of the financial statements referred to in
Subsection 4.1.
(q) Litigation. No suit, action, investigation,
----------
inquiry or other proceeding (including, without limitation, the
enactment or promulgation of a statute or rule) by or before any
arbitrator or any Governmental Authority shall be pending and no
preliminary or permanent injunction or order by a state or federal
court shall have been entered (i) in connection with any Credit
Document, the Private Placement Debt Documents, the Intercreditor
Agreement or any of the transactions contemplated hereby or thereby or
(ii) which, in any such case, in the judgment of the Required Lenders,
would have a Material Adverse Effect.
(r) No Violation. The consummation of the
------------
transactions contemplated hereby and by the Intercreditor Agreement
shall not contravene, violate or conflict with, nor involve the Agent,
any Lender or the Issuing Bank in a violation of, any Requirement of
Law.
(s) Consents, Licenses, Approval, Etc. The Agent
---------------------------------
shall have received, with a counterpart for each Lender and the
Issuing Bank, a certificate of an Authorized Officer of the Borrower
either (i) attaching copies of all consents, licenses and approvals
required in connection with the execution, delivery and performance by
the Borrower and the Guarantors, and the validity and enforceability
against the Borrower and the Guarantors of, the Credit Documents, and
such consents, licenses and approvals shall be
in full force and effect, or (ii) stating that no such consents,
licenses or approvals are so required.
(t) Delivery of Stock Certificates. There shall have
------------------------------
been delivered to the Agent, together with stock powers relating
thereto duly executed in blank, stock certificates evidencing the
Borrower Subsidiary Pledged Stock and the UIC Subsidiary Pledged
Stock.
(u) Fees. The Agent shall have received, for the
----
account of the Lenders, pro rata according to their Commitment
--- ----
Percentages, a facility fee equal to Seventy-Five Thousand Dollars
($75,000.00).
(v) Filings, Registrations and Recordings. All
-------------------------------------
filings, registrations and recordings necessary, in the judgment of
the Agent, any Lender or the Issuing Bank, to perfect or make
enforceable any security interest or other Lien granted to or for the
benefit of the Agent, any Lender or the Issuing Bank pursuant to the
Credit Documents shall have been properly filed, registered or
recorded. The Agent shall have received evidence satisfactory to the
Required Lenders of each such filing, registration or recordation and
of the payment of any necessary fee, tax or expense relating thereto.
(w) Lien Searches. The Agent shall have received in
-------------
writing the results of recent searches by a Person satisfactory to the
Agent, of the Uniform Commercial Code filings which may have been
filed with respect to personal property of the Borrower and each of
the Guarantors, which searches shall indicate that there are no
financing statements on file against the Borrower or any of the
Guarantors except for financing statements publicizing Permitted Liens
and financing statements for which duly executed termination
statements in recordable form have been delivered to counsel to the
Agent for filing.
(x) Insurance. The Agent shall have received evidence
---------
satisfactory to the Required Lenders that the Borrower and each of the
Guarantors has obtained such insurance in such amounts, against such
risks and issued by such companies as shall be satisfactory to the
Required Lenders.
(y) Legal Opinions. The Agent shall have received,
--------------
with a counterpart for each Lender, the executed legal opinion of in-
house counsel to the Borrower and the Guarantors, in form and content
satisfactory to the Required Lenders. Such legal opinion shall cover
such matters incident to the transactions contemplated by this
Agreement,
the other Credit Documents, the Private Placement Debt Documents and
the Intercreditor Agreement as the Agent or any Lender may reasonably
require.
(z) Accounts Dilution. The Agent shall have completed
-----------------
a field examination relating to the accounts of the Borrower and its
Subsidiaries, and the Agent shall have concluded on the basis of such
examination that noncash items chargeable to such accounts do not
exceed seven and one-half percent (7.5%) of the aggregate amount of
such accounts.
(aa) Landlord Agreements. The Agent shall have
-------------------
received in form and content satisfactory to the Agent a written
agreement of each owner of the business premises of the Borrower at
2801 Professional Parkway, Ocoee, Florida, the business premises of
Symtron at 17-01 Pollitt Drive, Fair Lawn, New Jersey, and the
business premises of Systems and Engineering at 11101 Gilroy Road,
Hunt Valley, Maryland, in each case, consenting to, and subordinating
liens against the Collateral of such owner to, the security interests
in the Collateral granted to the Agent and enforcement of the Agent's
rights in connection therewith.
(bb) Title Insurance Company Charges. Not later than
-------------------------------
immediately after the Lenders make their initial Revolving Credit
Loans on the Closing Date, there shall have been paid by the Borrower
in full all costs, title examination fees and title insurance premiums
payable to the title insurance company insuring the Deed of Trust.
5.2 Conditions to Each Loan and Each Letter of Credit. The
-------------------------------------------------
agreement of each Lender to make any Revolving Credit Loan requested
to be made by it on any date (including, without limitation, its
initial Revolving Credit Loan requested to be made by it) and the
agreement of the Issuing Bank to open, renew or extend any Letter of
Credit requested to be opened, renewed or extended on any date, is
subject to the satisfaction of the following conditions precedent as
of the date such Revolving Credit Loan or Letter of Credit is
requested to be made, opened, renewed or extended:
(a) Representations and Warranties. Each of the
------------------------------
representations and warranties made by the Borrower and the Guarantors
in or pursuant to the Credit Documents, except for those made as of a
named date only and except as otherwise agreed from time to time in
accordance with the provisions of this Agreement, shall be true and
complete in all material respects on and as of such date as if made on
and as of such date.
(b) No Default. No Default or Event of Default shall
----------
be continuing on such date or after giving effect to the Revolving
Credit Loans or the Letters of Credit requested to be made, opened,
renewed or extended, as the case may be, on such date.
(c) No Material Litigation. No Material Litigation
----------------------
shall be pending or overtly threatened against the Borrower or any of
the Guarantors.
(d) No Material Adverse Change. There shall not have
--------------------------
occurred any event since the date of the financial statements referred
to in Subsection 4.1 which had a Material Adverse Effect.
(e) Additional Documents. The Agent shall have
--------------------
received each additional document, instrument, legal opinion or item
of information reasonably requested by the Agent, any Lender or the
Issuing Bank.
(f) Additional Matters. All corporate and other
------------------
proceedings, and all documents, instruments and other legal matters in
connection with the transactions contemplated by this Agreement, the
other Credit Documents, the Private Placement Debt Documents and the
Intercreditor Agreement shall be satisfactory in form and substance to
the Agent, in its discretion reasonably exercised, and the Agent shall
have received such other documents, legal opinions and other opinions
in respect of any aspect or consequence of the transactions
contemplated hereby or thereby as the Agent or any Lender shall
reasonably request. Each borrowing by the Borrower hereunder and
issuance, renewal or extension of each Letter of Credit shall
constitute a representation and warranty by the Borrower as of the
date of such borrowing, issuance, renewal or extension, as the case
may be, that the conditions contained in this Subsection 5.2 have been
satisfied.
SECTION 6. AFFIRMATIVE COVENANTS
The Borrower hereby agrees that, so long as the Commitments
remain in effect, any Note or L/C Reimbursement Obligation remains
outstanding and unpaid, any Letter of Credit remains outstanding or
any amount is owing to any Lender, the Agent or the Issuing Bank
hereunder or under any other of the Credit Documents, the Borrower
shall:
6.1 Financial Information. Furnish to the Agent, each
---------------------
Lender and the Issuing Bank in writing:
(a) on each Business Day, a Borrowing Base Certificate
as of the close of business on the preceding Business Day;
(b) not later than twenty (20) days after the end of
each monthly accounting period of the Borrower and in form and content
satisfactory to the Required Lenders, in their discretion reasonably
exercised (i) a Certified schedule and aging of accounts payable of
the Borrower, its Subsidiaries (other than Transit) and each other of
the Guarantors (other than UIC) as at the end of such monthly
accounting period, (ii) a Certified schedule and aging of accounts of
the Borrower, its Subsidiaries (other than Transit) and each other of
the Guarantors (other than UIC) as at the end of such monthly
accounting period, (iii) an aged backlog report of the Borrower, its
Subsidiaries (other than Transit) and each other of the Guarantors
(other than UIC), (iv) a listing of open contracts of the Borrower,
its Subsidiaries (other than Transit) and each other of the Guarantors
(other than UIC), with a status report as to each, and (v) a
reconciliation of the accounts of the Borrower, its Subsidiaries
(other than Transit) and each other of the Guarantors (other than
UIC);
(c) not later than forty-five (45) days after the end
of each of the first three (3) quarterly accounting periods of the
Borrower in each fiscal year of the Borrower and in form and content
satisfactory to the Required Lenders, in their discretion reasonably
exercised, a consolidated and consolidating statement of income and
retained earnings of the Borrower and its Subsidiaries (other than
Transit) and Symtron for such quarterly accounting period and for the
current fiscal year of the Borrower through the end of such quarterly
accounting period, and a consolidated and consolidating statement of
cash flows of the Borrower and its Subsidiaries (other than Transit)
and Symtron for such quarterly accounting period and for the current
fiscal year of the Borrower through the end of such quarterly
accounting period, and a consolidated and consolidating balance sheet
of the Borrower and its Subsidiaries (other than Transit) and Symtron
as at the end of such quarterly accounting period, all prepared in
accordance with GAAP consistently applied and accompanied by (i) an
Officer Reliance Certificate with respect to such financial
statements, (ii) an Officer Default Certificate as at the end of such
quarterly accounting period, and (iii) an Officer Financial Covenant
Certificate as at the end of such quarterly accounting period;
(d) not later forty-five (45) days after the end of
each of the first three (3) quarterly accounting periods in each
fiscal year of UIC and in form and content satisfactory to the
Required Lenders in their discretion reasonably exercised, a
consolidated statement of income and retained earnings of UIC and its
Subsidiaries for such quarterly accounting period and for the current
fiscal year of UIC through the end of such quarterly
accounting period, and a consolidated statement of cash flows of UIC
and its Subsidiaries for such quarterly accounting period and for the
current fiscal year of UIC through the end of such quarterly
accounting period, and a consolidated balance sheet of UIC and its
Subsidiaries as at the end of such quarterly accounting period, all
prepared in accordance with GAAP consistently applied;
(e) not later than fifteen (15) days after the end of
each quarterly accounting period of the Borrower and in form and
content satisfactory to the Agent in its discretion reasonably
exercised, a report concerning the status of pending litigation and
proceedings involving the Borrower or any Eligible Affiliate;
(f) not later than ninety (90) days after the end of
each fiscal year of the Borrower, a consolidated statement of income
and retained earnings of the Borrower and its Subsidiaries (other than
Transit) for such fiscal year, and a consolidated statement of cash
flows of the Borrower and its Subsidiaries (other than Transit) for
such fiscal year, and a consolidated balance sheet of the Borrower and
its Subsidiaries (other than Transit) as at the end of such fiscal
year, setting forth in each case in comparative form corresponding
figures for the preceding fiscal year of the Borrower, all prepared in
accordance with GAAP consistently applied and examined and audited by
independent certified public accountants satisfactory to the Required
Lenders in their discretion reasonably exercised, and accompanied by
(i) a clean unqualified report of such independent certified public
accountants with respect to such financial statements, (ii) copies of
each management report, management letter or the like issued by such
independent certified public accountants in connection with such
financial statements (unless the same have not previously been
delivered to the Borrower or UIC, in which event the same shall be
furnished not later than fourteen (14) days after receipt by the
Borrower or UIC), (iii) an Accountant Default Certificate, (iv) an
Officer Financial Covenant Certificate as at the end of such fiscal
year, and (v) an Officer Default Certificate as at the end of such
fiscal year;
(g) not later than ninety (90) days after the end of
each fiscal year of UIC, a consolidated statement of income and
retained earnings of UIC and its Subsidiaries for such fiscal year,
and a consolidated statement of cash flows of UIC and its Subsidiaries
for such fiscal year, and a consolidated balance sheet of UIC and its
Subsidiaries as at the end of such fiscal year, setting forth in each
case in comparative form corresponding figures for the preceding
fiscal year of UIC, all prepared in accordance with GAAP consistently
applied and examined and audited by independent certified public
accountants satisfactory to the Required Lenders in their discretion
reasonably exercised, and accompanied by (i) a clean unqualified
report of such independent certified public accountants with respect
to such financial statements, and (ii) copies of each management
report, management letter or the
like issued by such independent certified public accountants in
connection with such financial statements (unless the same have not
previously been delivered to the Borrower or UIC, in which event the
same shall be furnished not later than fourteen (14) days after
receipt by the Borrower or UIC);
(h) not later than forty-five (45) days after the end
of each fiscal year of the Borrower and in form and content
satisfactory to the Required Lenders in their discretion reasonably
exercised, projections by the Borrower, on a quarter-by-quarter basis,
of the financial condition and results of operations of the Borrower
and its Subsidiaries (other than Transit) for the succeeding fiscal
year of the Borrower, accompanied by a certificate of an Authorized
Officer of the Borrower to the effect that such projections have been
prepared in good faith on the basis of sound financial planning
practice and reasonable assumptions;
(i) promptly after transmission thereof, copies of all
registration statements and all regular, special or periodic reports
which UIC, any of its Subsidiaries, the Borrower or any of its
Subsidiaries files with the United States Securities and Exchange
Commission (or any successor thereto) or with any stock exchange, and
copies of all press releases and other statements issued by UIC, any
of its Subsidiaries, the Borrower or any of its Subsidiaries to the
public;
(j) promptly after request by the Agent, any Lender or
the Issuing Bank, copies of any or all purchase orders, invoices,
evidences of shipment, delivery or other contract performances of the
Borrower or any of the Guarantors, and other documents relating to any
contracts, accounts or inventory of the Borrower or any of the
Guarantors; and
(k) promptly, such additional financial and other
information as the Agent, any Lender or the Issuing Bank may from time
to time reasonably request.
6.2 Payment of Obligations. Pay, discharge or otherwise
----------------------
satisfy at or before maturity or before they become delinquent, as the
case may be, all of its obligations to the Private Placement Debt
Holders under or in connection with the Private Placement Debt
Documents, all of its obligations to Signet Bank/Maryland under or in
connection with the Indemnified Letters of Credit and all
reimbursement and other agreements relating thereto, and all of its
obligations of whatever nature; and cause each of its Subsidiaries and
each Guarantor to pay, discharge or otherwise satisfy at or before
maturity or before they become delinquent, as the case may be, all of
its obligations of whatever nature; provided that nothing contained in
--------
this Subsection shall be construed to require the Borrower, any of
its Subsidiaries or any Guarantor to refrain from contesting the
validity, enforceability, amount, maturity or delinquency of any
alleged obligations.
6.3 Conduct of Business and Maintenance of Existence.
------------------------------------------------
Continue to, and cause each of its Subsidiaries to continue to, engage
in business of the same general type as now conducted by it; and
preserve, renew and keep in full force and effect, and cause each of
its Subsidiaries to preserve, renew and keep in full force and effect,
its corporate existence; take, and cause each of its Subsidiaries to
take, all reasonable action to maintain all rights, privileges and
franchises necessary or desirable in the normal conduct of its
business; comply with, and cause each of its Subsidiaries to comply
with, all Contractual Obligations and Requirements of Law except to
the extent that failure to comply therewith could not, in the
aggregate, reasonably be expected to have a Material Adverse Effect.
6.4 Maintenance of Property; Insurance. (a) Keep, and
----------------------------------
cause each of its Subsidiaries to keep, all property useful and
necessary in its business in good working order and condition; and
(b) maintain, and cause each of its Subsidiaries to maintain, with
financially sound and reputable insurance companies such insurance in
at least such amounts and against at least such risks (but including
in any event property casualty, liability, product liability and
business interruption) as would be reasonably prudent, all such
insurance to be acceptable to the Required Lenders, in their
discretion reasonably exercised; and furnish to the Agent, each Lender
and the Issuing Bank, upon written request, full information as to the
insurance carried.
6.5 Inspection of Property; Books and Records; Discussions.
------------------------------------------------------
Keep, and cause each of its Subsidiaries to keep, proper books of
records and account in which true and complete entries in conformity
with GAAP and all Requirements of Law shall be made of all dealings
and transactions in relation to its business and activities; permit
representatives of the Agent, any Lender and the Issuing Bank to visit
and inspect any of its properties and examine and make abstracts from
any of its books and records at any reasonable time and as often as
may reasonably be desired, and to discuss the business, operations,
properties and financial and other condition of the Borrower and any
of its Subsidiaries with any of the Authorized Officers of the
Borrower and with its independent certified public accountants; the
Borrower hereby acknowledging the intention of the Lenders to, and the
Borrower hereby authorizing and agreeing that the Lenders may (a) at
the Borrower's expense, conduct field examinations of the contracts,
accounts, cost accountings and other matters relating to the Borrower
and its Subsidiaries (other than Transit) as often as the Lenders
desire to do so, the Lenders hereby agreeing in connection with any
such examination to execute and deliver to the Borrower, if requested
by the Borrower and reasonably determined by the Borrower to be
necessary to protect proprietary information, an agreement not to
disclose such information,
subject to requirements of law and legal process and other customary
exceptions, and (b) verify accounts of the Borrower and its
Subsidiaries (other than Transit) by such means as the Lenders may
determine, including, without limitation, written and oral
communications with account debtors and other obligors of the Borrower
and its Subsidiaries.
6.6 Notices. Promptly give notice to the Agent, each
-------
Lender and the Issuing Bank:
(a) of the occurrence of any Default or Event of
Default;
(b) of any (i) material default or material event of
default under or as defined in any Contractual Obligation of the
Borrower, any of its Subsidiaries or any of the Guarantors, or
(ii) Material Litigation pending or overtly threatened against the
Borrower, any of its Subsidiaries or any of the Guarantors;
(c) of any litigation or proceeding affecting the
Borrower, any of its Subsidiaries or any of the Guarantors involving
an uninsured amount of Five Hundred Thousand Dollars ($500,000.00) or
more or in which injunctive or similar relief is sought;
(d) of the following events and not later than fifteen
(15) days after the Borrower knows or has reason to know thereof: (i)
the occurrence or expected occurrence of any Reportable Event with
respect to any Plan, or any withdrawal from, or the termination,
Reorganization or Insolvency of, any Multiemployer Plan or (ii) the
institution of proceedings or the taking of any other action by the
PBGC or the Borrower or any Commonly Controlled Entity or any
Multiemployer Plan with respect to the withdrawal from, or the
terminating, Reorganization or Insolvency of, any Plan; and
(e) of the occurrence of any event which could
reasonably be expected to have a Material Adverse Effect.
Each notice pursuant to this Subsection shall be accompanied by a
statement of an Authorized Officer setting forth details of the
occurrence referred to therein and stating what action the Borrower
proposes to take with respect thereto. For all purposes of clause (d)
of this Subsection, to the extent provided in ERISA, the Borrower
shall be deemed to have all knowledge or knowledge of all facts
attributable to the administrator of such Plan.
6.7 Government Regulations. Comply with all applicable
----------------------
Requirements of Law relating to the conduct of its business,
including, without limitation, regulations relating
to defense procurement, the failure with which to comply could
reasonably be expected to have a Material Adverse Effect.
6.8 Environmental. Except as set forth in Schedule 4.13,
-------------
cause all operations now or hereafter conducted on any Obligor Use
Property to be conducted in compliance in all material respects with
all applicable Environmental Laws and so that no non-compliance could
reasonably be expected to have a Material Adverse Effect or result in
the imposition of a Lien upon any of the property, assets or revenues
of the Borrower, any of its Subsidiaries or any Other Obligor or
exposure of the Borrower, any of its Subsidiaries or any Other Obligor
to potential liability, whether for the cost of cure or remediation or
otherwise, in excess of One Hundred Thousand Dollars ($100,000.00);
promptly deliver to the Agent copies of all reports prepared by any
Governmental Authority, any environmental auditor or engineer, or any
other Person, relating to or in connection with compliance by the
Borrower, any of its Subsidiaries or any of the Guarantors with any
Environmental Laws, unless the Borrower cannot obtain such reports or
copies thereof; notify the Agent, each Lender and the Issuing Bank in
writing within thirty (30) days after the Borrower, any of its
Subsidiaries or any of the Guarantors shall have received any
Environmental Claim which could reasonably be expected to have a
Material Adverse Effect or result in the imposition of a Lien upon any
of the property, assets or revenues of the Borrowers, any of its
Subsidiaries or any Other Obligor or exposure of the Borrower, any of
its Subsidiaries or any Other Obligor to potential liability, whether
for the cost of cure or remediation or otherwise, in excess of One
Hundred Thousand Dollars ($100,000.00); in the event that, to the
knowledge of the Borrower, any of its Subsidiaries or any of the
Guarantors, any Hazardous Substance Contamination shall occur, or the
Borrower shall become aware of any non-compliance in any respect with
any Environmental Law by the Borrower, any of its Subsidiaries or any
of the Guarantors, any Obligor Use Property or any operations
previously, now or hereafter conducted on any Obligor Use Property,
and, in either case, the same could reasonably be expected to have a
Material Adverse Effect or result in the imposition of a Lien upon any
of the property, assets or revenues of the Borrower, any of its
Subsidiaries or any Other Obligor or exposure of the Borrower, any of
its Subsidiaries or any Other Obligor to potential liability, whether
for the cost of cure or remediation or otherwise, in excess of One
Hundred Thousand Dollars ($100,000.00) (i) notify the Agent thereof in
writing within ten (10) Business Days, (ii) if requested by the
Required Lenders, engage, at the Borrower's expense, and deliver to
the Agent as promptly as feasible, with sufficient copies for each
Lender and the Issuing Bank, an Environmental Assessment with respect
thereto containing or accompanied by a plan and budget in form and
content satisfactory to the Required Lenders for the remediation or
cure thereof, (iii) as promptly as feasible, commence and diligently
pursue to completion, or cause to be promptly commenced and diligently
pursued to completion, all actions which are necessary to comply with
Environmental Laws or to
remediate or cure the same, all contractors to perform any work in
connection therewith to be satisfactory to the Required Lenders, in
their discretion reasonably exercised, and (iv) if requested by the
Required Lenders, deliver to the Agent, within fifteen (15) days after
request therefor by the Required Lenders, a bond, letter of credit or
similar financial assurance reasonably satisfactory to the Required
Lenders evidencing that the funds necessary are available to pay the
cost of any cure or remediation; and indemnify, protect and defend
each of the Agent, the Lenders and the Issuing Bank, and their
officers, directors, employees, attorneys and agents, and save
harmless the Agent, the Lenders and the Issuing Bank, and their
officers, directors, employees, attorneys and agents, from and against
any and all claims, demands, damages, losses, liabilities,
obligations, penalties, litigation, defenses, judgments, decrees,
orders, directives, suits, actions, proceedings, costs and expenses
(including, without limitation, reasonable counsel fees and expenses
and reasonable experts' fees and expenses) of any kind or nature
whatsoever which may at any time be imposed upon, paid or incurred by
or asserted or awarded against any of them relating to, resulting from
or arising out of (i) the presence, manufacture, generation,
production, processing, use, handling, treatment, storage, disposal,
transportation or distribution on or about any Obligor Use Property of
any Hazardous Substance, (ii) any Hazardous Substance Contamination,
(iii) any non-compliance with any applicable Environmental Law by the
Borrower, any of its Subsidiaries or any of the Guarantors, any
Obligor Use Property or any operations previously, now or hereafter
conducted on any Obligor Use Property, or (iv) any costs associated
with any remedial or curative action relating to any Hazardous
Substances, any Hazardous Substance Contamination or any violation of
any applicable Environmental Laws; provided that nothing contained in
--------
this Subsection shall be deemed to preclude the Borrower, any of its
Subsidiaries or any of the Guarantors from joining as a potentially
responsible party any group convened for the remediation or cure of
any site and proposing that the Borrower's obligations under this
Subsection be alternatively satisfied by prudent action taken in
concert with such group; and provided further that nothing contained
-------- -------
in this Subsection shall obligate the Borrower to indemnify, protect
or defend any of the Agent, the Lenders or the Issuing Bank, or any of
their officers, directors, employees, attorneys or agents, or to save
harmless any of the Agent, the Lenders or the Issuing Bank, or any of
their officers, directors, employees, attorneys or agents, from or
against any claims, demands, damages, losses, liabilities,
obligations, penalties, litigation, defenses, judgments, decrees,
orders, directives, suits, actions, proceedings, costs or expenses
resulting from or arising out of any act of the Person, or any
officer, director, employee, attorney or agent of the Person,
otherwise entitled to be indemnified. The indemnification obligations
of the Borrower under this Subsection shall survive the termination of
this Agreement and payment of the outstanding Notes for a period of
two (2) years.
6.9 Subsidiary Documents. In the case of each Subsidiary
--------------------
of the Borrower formed or acquired after the date of this Agreement:
(a) cause such Subsidiary to duly execute and deliver to the Agent,
appropriately completed in each case (i) a Subsidiary Guaranty and
(ii) a Subsidiary Security Agreement; (b) duly execute and deliver to
the Agent, and cause such Subsidiary to duly execute and deliver to
the Agent, such financing statements as may be required by the
Required Lenders; (c) duly execute and deliver to the Agent, and cause
other Persons to duly execute and deliver to the Agent, such
additional Credit Documents as the Required Lenders may require in
good faith in order to assure to the Agent, the Lenders and the
Issuing Bank their rights and interests under this Agreement and the
other Credit Documents; (d) deliver to the Agent evidence satisfactory
to the Required Lenders that all agreements, instruments and documents
executed and delivered to the Agent pursuant to this Subsection have
been duly authorized, executed and delivered; and (e) do, make,
execute, deliver, and cause such Subsidiary to do, make, execute and
deliver, all such additional and further acts, things, deeds,
assurances, instruments and documents as the Required Lenders may
request in good faith to vest and assure to the Agent, the Lenders and
the Issuing Bank their rights and interests under this Agreement.
6.10 Facility Fee. On the first anniversary of the date of
------------
this Agreement or the Termination Date, whichever is earlier, pay to
the Agent, for the ratable benefit of the Lenders as of the date
hereof according to their Commitment Percentages, a facility fee equal
to Fifty Thousand Dollars ($50,000.00).
6.11 Real Property Surveys. Within sixty (60) days after
---------------------
the date of this Agreement, deliver to the Agent, in form and content
satisfactory to the Agent, surveys of the Real Property Collateral,
with surveyors' certificates, sufficient to induce the title insurance
company insuring the Deed of Trust to remove any survey exceptions
from the title insurance policy without adding any additional
exceptions based upon such surveys.
6.12 Transit Investment. Commencing March 15, 1995, cause
------------------
the UIC-DEL Standby Subordinated Debt Balance arising on account of
loans or advances made to the Borrower by UIC-DEL, exclusive of the
Indebtedness evidenced by the Creditor Note (as defined in the UIC-DEL
Subordination Agreement), at all times to equal, at least, the
aggregate amount of the Transit Investments made by the Borrower, its
Subsidiaries, Symtron and Other Obligors.
SECTION 7. NEGATIVE COVENANTS
The Borrower hereby covenants and agrees that, so long as
the Commitments remain in effect, any Note or L/C Reimbursement
Obligation remains outstanding and unpaid, any Letter of Credit
remains outstanding or any amount is owing to any Lender, the Agent
or the Issuing Bank hereunder or under any other of the Credit
Documents, the Borrower shall not, directly or indirectly:
7.1 Financial Condition Covenants.
-----------------------------
(a) Maintenance of Capital Base. Permit Capital Base
---------------------------
to be less than the amounts indicated below at any time during the
periods indicated below:
Period Capital Base Amount
------ -------------------
12/31/94 through 3/30/95 $66,000,000.01
3/31/95* through 6/29/95 $66,500,000.01
6/30/95* through 9/29/95 $67,000,000.01
9/30/95* through 12/30/95 $67,500,000.01
12/31/95 through 3/30/96 $68,400,000.01
3/31/96* through 6/29/96 $68,900,000.01
6/30/96* through 9/29/96 $69,400,000.01
9/30/96* through 12/30/96 $69,900,000.01
12/31/96 and thereafter $70,800,000.01
*In the case of the $500,000.00 increases in the
required amount of Capital Base becoming effective on 3/31/95,
6/30/95, 9/30/95, 3/31/96, 6/30/96 and 9/30/96, notwithstanding any
other provision of this Agreement, it shall not constitute an Event of
Default until and unless the Borrower shall fail to achieve any of
such $500,000.00 increases by the end of the succeeding quarterly
accounting period of the Borrower. For example, if the Borrower
maintains Capital Base at least equal to $66,000,000.01 but less
than $66,500,000.01 during the period 3/31/95 through 6/29/95, no
Event of Default on account thereof shall occur until and unless the
Borrower does not achieve Capital Base at least equal to
$66,500,000.01 on 6/30/95.
(b) Leverage Ratio. Permit Leverage Ratio to be
--------------
greater than 1.25 to 1.00 as at any time from the date of this
Agreement through August 31, 1995; or permit Leverage Ratio to be
greater than 1.15 to 1.00 as at any time after August 31, 1995.
(c) Cash Flow Coverage Ratio. As at the end of the
------------------------
quarterly accounting periods of the Borrower ending on the dates
indicated below, permit Cash Flow Coverage Ratio for the four (4)
consecutive quarterly accounting periods of the Borrower then ending
to be less than the ratio indicated:
Quarter End Ratio
----------- -----
12/31/94 2.00 to 1.00
3/31/95 2.00 to 1.00
6/30/95 1.80 to 1.00
9/30/95 and each quarter .90 to 1.00*
end thereafter
*This ratio shall be increased to 1.80 to 1.00 upon
payment in full of the Private Placement Debt.
(d) Capital Expenditures. Permit Capital Expenditures
--------------------
in any fiscal year of the Borrower to exceed Three Million Dollars
($3,000,000.00).
7.2 Limitation on Indebtedness. Create, incur, assume or
--------------------------
suffer to exist any Indebtedness, or suffer or permit any of its
Subsidiaries or Symtron to create, incur, assume or suffer to exist
any Indebtedness, except:
(a) Indebtedness of the Borrower, any of its
Subsidiaries or Symtron under this Agreement and the other Credit
Documents;
(b) Indebtedness of the Borrower, any of its
Subsidiaries or Symtron in connection with trade accounts payable,
payroll related costs, taxes, insurance premiums and other liabilities
incurred in the ordinary course of business;
(c) Post-retirement benefits required by FAS 106 and
FAS 212 of the Financial Accounting Standards Board;
(d) Indebtedness of the Borrower and its Subsidiaries
and Symtron for advances made to them by their customers in the
ordinary course of business in connection with contracts between the
Borrower, any of its Subsidiaries or Symtron and any of their
customers;
(e) Indebtedness of the Borrower, any of its
Subsidiaries or Symtron for overpayments made to them by their
customers in connection with contracts between them and their
customers;
(f) Indebtedness payable under the existing contracts
pursuant to which UIC acquired the capital stock of Symtron and the
Borrower acquired the assets of Technologies;
(g) Indebtedness of the Borrower to the Private
Placement Debt Holders under the Private Placement Debt Documents, as
in effect on the date hereof;
(h) Contingent Indebtedness to Signet Bank/Maryland on
account of reimbursement obligations and related obligations in
connection with the Indemnified Letters of Credit;
(i) UIC Subordinated Debt and UIC-DEL Subordinated
Debt;
(j) Indebtedness subordinated to the Obligations on
terms and conditions satisfactory to the Agent, the Required Lenders
and the Issuing Bank;
(k) Indebtedness specifically consented to in writing
by the Agent;
(l) Indebtedness permitted under Subsection 7.8(c);
(m) Indebtedness of Transit to any Person other than
the Borrower or any Other Obligor, or Indebtedness of Transit to the
Borrower or any Other Obligor
created and existing without violation of this Agreement or any of the
other Credit Documents;
(n) Indebtedness of the Borrower, any of its
Subsidiaries or Symtron on account of any judgment, decree or award
entered against it, the existence of which does not constitute an
Event of Default under Subsection 8.1(o);
(o) Existing Indebtedness of Symtron to UIC not
exceeding, in the aggregate, Five Hundred Thousand Dollars
($500,000.00); and
(p) Indebtedness of the Borrower, any of its
Subsidiaries or Symtron secured by Permitted Equipment PMSIs and other
Indebtedness of the Borrower, any of its Subsidiaries or Symtron not
described in clauses (a) through and including (o) above in an
aggregate amount not to exceed Five Hundred Thousand Dollars
($500,000.00).
7.3 Limitation on Liens. Create, incur, assume or suffer
-------------------
to exist, or suffer or permit any of its Subsidiaries or Symtron to
create, incur, assume or suffer to exist, any Lien upon any of its
property, assets or revenues, whether now owned or hereafter acquired,
except for the following (each a "Permitted Lien" and, collectively,
"Permitted Liens"):
(a) Liens for taxes not yet due or which are being
contested in good faith by appropriate proceedings, provided that
--------
adequate reserves with respect thereto are maintained on the books of
the Borrower or such Subsidiary or Symtron, as the case may be, in
conformity with GAAP and that no notice of lien with respect thereto
is filed in any recording office;
(b) carriers', warehousemen's, mechanics',
materialmen's, repairmen's, landlords', or other like Liens arising in
the ordinary course of business with respect to obligations which are
not due or which are being contested in good faith by appropriate
proceedings in a manner which will not jeopardize or diminish any
interest of the Agent or the Lenders;
(c) pledges or deposits in connection with workers'
compensation, unemployment insurance and other social security
legislation and deposits securing liability to insurance carriers
under insurance or self-insurance arrangements and otherwise made in
the ordinary course of business;
(d) deposits to secure the performance of bids,
contracts (other than for borrowed money), leases, statutory
obligations, surety and appeal bonds, performance bonds and other
obligations of a like nature incurred in the ordinary course of
business;
(e) easements, rights-of-way, restrictions and other
similar encumbrances incurred in the ordinary course of business
which, in the aggregate, are not substantial in amount and which do
not in any case materially detract from the value of the property
subject thereto or materially interfere with the ordinary conduct of
the business of the Borrower or such Subsidiary;
(f) Liens in favor of the Agent created pursuant to
the Credit Documents;
(g) Permitted Equipment PMSIs permitted under
Subsection 7.2(p);
(h) Liens in favor of prime contractors and customers
of the Borrower, its Subsidiaries and Symtron, including Governmental
Authorities, arising by operation of law (including the FAR and DFAR)
as a result of the receipt under a contract of progress-billings in
the ordinary course of business and encumbering inventory, work-in-
process or other assets identified or chargeable to such contract;
(i) intellectual property license arrangements entered
into without violation of any of the provisions of this Agreement or
any of the other Credit Documents;
(j) Liens in favor of or for the benefit of the
Issuing Bank in or upon cash, cash equivalents or other liquid assets
pledged to the Issuing Bank in connection with, or in or upon bills of
lading or other shipping or transportation documents, warehouse
receipts or other documents and writings relating to, and insurance
and other similar rights arising in connection with, the L/C
Agreements or the issuance and payment of drawings under Letters of
Credit;
(k) Liens in favor of or for the benefit of the Agent
or First Fidelity in or upon cash, cash equivalents, marketable
securities or other liquid assets and other rights relating to or in
connection with overnight investments or other investments made or
managed by First Fidelity for or on behalf of the Borrower, any of its
Subsidiaries or Symtron;
(l) Liens, if any, described in Schedule 7.3 and
constituting Permitted Equipment PMSIs permitted under
Subsection 7.2(g); or
(m) Liens securing Indebtedness of Transit permitted
under Subsection 7.2.
7.4 Limitation on Contingent Obligations. Create, incur,
------------------------------------
assume or suffer to exist, or suffer or permit any of its Subsidiaries
or Symtron to create, incur, assume or suffer to exist, any Contingent
Obligation except:
(a) Contingent Obligations arising in connection with
Letters of Credit or otherwise arising under or in connection with the
Credit Documents;
(b) Contingent Obligations in the nature of
performance bonds and performance guaranties arising in the ordinary
course of business, including guaranties by the Borrower, any of its
Subsidiaries or Symtron of any lease obligations of the Borrower, any
of its Subsidiaries or Symtron;
(c) Contingent Obligations of the Borrower not
exceeding at any time Seven Hundred Seventy-Five Thousand Dollars
($775,000.00) in connection with a guaranty by the Borrower of
obligations of Pioneer to The Bank of Baltimore;
(d) Contingent Obligations of the Borrower under that
certain Guaranty of AAI Corporation dated May 25, 1993, executed and
delivered by the Borrower for the benefit of Federal Laboratories,
Inc., a Delaware corporation;
(e) Contingent Obligations incurred or assumed by
Transit;
(f) Contingent Obligations to Signet Bank/Maryland on
account of reimbursement obligations and related obligations in
connection with the Indemnified Letters of Credit; and
(g) Contingent Obligations to Transit incurred or
assumed by the Borrower pursuant to the Electric Transit, Inc., Stock
Subscription and Stockholders' Agreement dated as of February 18,
1994.
7.5 Limitations on Fundamental Changes. Enter into, or
----------------------------------
suffer or permit any of its Subsidiaries or Symtron to enter into, any
merger, consolidation, amalgamation or share exchange, or suffer or
permit any business, assets, operations or books and records of the
Borrower or any of its Subsidiaries or Symtron to be merged,
consolidated or commingled with any business, assets, operations or
books and records of any other Person, or make any material change in
the present method of conducting business; provided that
--------
nothing contained in this Subsection shall be deemed to prohibit the
transfer by the Borrower and Systems to Symtron of the firefighter
trainer systems business and related contracts, intellectual property
and other assets.
7.6 Limitation on Acquisitions. Purchase or otherwise
--------------------------
acquire, or suffer or permit any of its Subsidiaries or Symtron to
purchase or otherwise acquire, all or substantially all of the assets
of any other Person, or any assets of any other Person in a
transaction which is subject to the Bulk Transfers Title of the
Uniform Commercial Code of any jurisdiction.
7.7 Limitation on Sale of Assets. Convey, sell, assign,
----------------------------
transfer, lease or otherwise dispose of, or suffer or permit any of
its Subsidiaries or Symtron to convey, sell, assign, transfer, lease
or otherwise dispose of, any of its property, business or assets,
whether now owned or hereafter acquired except:
(a) obsolete or worn-out equipment or other property
or assets disposed of in the ordinary course of business in exchange
for, at least, the fair market value thereof, and equipment or other
property or assets no longer necessary in the conduct of its business
disposed of in exchange for, at least, the fair market value thereof,
provided that this clause (a) shall not constitute such a consent or
--------
authorization to any such disposition as would authorize the
disposition free of any Lien of the Agent and all such dispositions
shall be made subject to all Liens of the Agent except as otherwise
agreed by the Agent in writing;
(b) the sale or lease of inventory in the ordinary
course of business;
(c) the sale of the Industry Lane Real Property
Proposed To Be Sold, provided that net cash proceeds of such sale in
--------
an amount not less than Four Million Seven Hundred Fifty Thousand
Dollars ($4,750,000.00) are paid to the Agent in immediately available
funds for application on account of the Obligations and/or the Private
Placement Debt in accordance with the provisions of the Intercreditor
Agreement;
(d) the sale of the York Road Real Property Proposed
To Be Sold, provided that net cash proceeds of such sale in an amount
--------
not less than One Million Three Hundred Thousand Dollars
($1,300,000.00) are paid to the Agent in immediately available funds
for application on account of the Obligations and/or the Private
Placement Debt in accordance with the provisions of the Intercreditor
Agreement;
(e) the transfer by the Borrower and Systems to
Symtron of the firefighter trainer systems business and related
contracts, intellectual property and other assets;
(f) the transfer by the Borrower to IMAX Corporation
or Ridefilm Corporation, or any of their successors or assigns, of
assets of the Borrower's Entertainment Business in connection with the
sale of the Borrower's Entertainment Business; or
(g) the transfer to Reflectone, Inc., or its
successors or assign, of existing assets or liabilities of Microflite.
7.8 Limitation on Restricted Payments. Make or commit to
---------------------------------
make, or suffer or permit any of its Subsidiaries or Symtron to make
or commit to make, any Restricted Payments except:
(a) if no Default or Event of Default has occurred and
is continuing or will result from such Restricted Payment, and if no
violation of the UIC Subordination Agreement or the UIC-DEL
Subordination Agreement will result from such Restricted Payment,
(i) payments of interest on account of the UIC Subordinated Debt and
the UIC-DEL Subordinated Debt, (ii) payments of principal on account
of the UIC-DEL Subordinated Debt, other than the UIC-DEL Standby
Subordinated Debt, and (iii) payments of principal on account of the
UIC Subordinated Debt, provided that all such Restricted Payments are
--------
used by UIC or UIC-DEL, as the case may be, to pay dividends, to
purchase common stock of UIC to be held by UIC as treasury stock (in
the case of such Restricted Payments made to UIC), to make loans to
UIC (in the case of such Restricted Payments made to UIC-DEL), to make
loans to the Borrower, to pay taxes, Indebtedness to third parties
incurred in the ordinary course of business, judgments and awards with
respect to Indebtedness or other obligations incurred in the ordinary
course of business, compensation to directors, officers, employees and
independent contractors in the ordinary course of business, expenses
incurred by Subsidiaries of UIC in the ordinary course of business or
other expenses incurred in the ordinary course of business acceptable
to the Required Lenders, in their discretion reasonably exercised,
and, to the extent of an amount not exceeding One Million Five Hundred
Thousand Dollars ($1,500,000.00), to make loans or capital
contributions to Subsidiaries of UIC (other than the Borrower), to
fund acquisitions of assets or Investments or to fund Capital
Expenditures not prohibited by this Agreement;
(b) payments or other transfers to the Borrower by any
Affiliate of the Borrower;
(c) loans or capital contributions by the Borrower to
any Eligible Affiliate, the proceeds of which loans or capital
contributions shall be used by such Eligible Affiliate to finance the
carry of accounts, the purchase of inventory, the funding of Capital
Expenditures not prohibited by this Agreement and other ordinary
course of business activities;
(d) payment of compensation and reimbursement of
expenses to employees of the Borrower or any Eligible Affiliate in the
ordinary course of business;
(e) payments in consideration of purchases of
equipment or other property or assets disposed of pursuant to and in
accordance with Subsection 7.7(a);
(f) payments in consideration of purchases of
inventory in the ordinary course of business in accordance with
Subsection 7.9;
(g) payments in consideration of purchases of products
or services in accordance with Subsection 7.9;
(h) payments in consideration of the lease or sublease
of any property at fair market rates in accordance with
Subsection 7.9;
(i) payments to UIC in reimbursement of expenses of
the Borrower, any of its Subsidiaries or Symtron paid by UIC on its
behalf;
(j) payments of fees to UIC by the Borrower, any of
its Subsidiaries, Symtron and UIC-DEL not exceeding in any fiscal year
of the Borrower, any of its Subsidiaries, Symtron or UIC-DEL, as the
case may be, one percent (1%) of its gross sales for such fiscal year;
(k) payments under the existing contract pursuant to
which the capital stock of Symtron was acquired by UIC;
(l) payments or other transfers by Transit to any
Affiliate of Transit; and
(m) payments by Symtron to UIC in satisfaction of the
existing Indebtedness of Symtron to UIC not exceeding, in the
aggregate, Five Hundred Thousand Dollars ($500,000.00) referred to in
Subsection 7.2(m).
7.9 Limitation on Transactions with Affiliates. Enter
------------------------------------------
into, or suffer or permit any of its Subsidiaries (other than Transit)
or Symtron to enter into, any transaction with any Affiliate except
for transactions with Affiliates entered into in the ordinary course
of business on terms no less favorable than would apply in a
comparable arm's-length transaction with a Person that is not an
Affiliate.
7.10 Limitation on Subsidiaries. Form or acquire, or suffer
--------------------------
or permit any of its Subsidiaries (other than Transit) or Symtron to
form or acquire, any Subsidiary.
7.11 Limitation on Investments, Loans and Advances. Give
---------------------------------------------
any value for any Investment or make any advance, loan or extension of
credit to any Person, or suffer or permit any of its Subsidiaries or
Symtron to give any value for any Investment or make any advance, loan
or extension of credit to any Person, except:
(a) extensions of trade credit in the ordinary course
of business and advances to suppliers and vendors in the ordinary
course of business;
(b) Investments in Cash Equivalents;
(c) loans to officers or employees of the Borrower,
any of its Subsidiaries (other than Transit) or Symtron not exceeding,
in the case of any single officer or employee, an aggregate amount of
One Hundred Thousand Dollars ($100,000.00) at any time outstanding and
not exceeding, in the case of all such loans to all such officers and
employees, an aggregate amount of Five Hundred Thousand Dollars
($500,000.00) at any time outstanding;
(d) existing loans (not including any additional
advances) by the Borrower to Pioneer not exceeding Three Hundred
Sixty-One Thousand Dollars ($361,000.00);
(e) any Transit Investment, provided that (i) the
--------
aggregate amount of all Transit Investments made by the Borrower, its
Subsidiaries, Symtron and Other Obligors shall not at any time exceed
Four Million Dollars ($4,000,000.00), (ii) the aggregate amount of all
Transit Investments made by the Borrower, its Subsidiaries, Symtron
and Other Obligors shall not at any time on or after March 15, 1995,
exceed the UIC-DEL Standby Subordinated Debt Balance arising on
account of loans or advances made to the Borrower by UIC-DEL,
exclusive of the Indebtedness evidenced by the Creditor Note (as
defined in the UIC-DEL Subordination Agreement), and (iii) the Agent
shall have been granted a perfected first priority security interest
in all Indebtedness and other obligations of
Transit or any other Person to the Borrower, any of its Subsidiaries
or any of the Guarantors (other than UIC) in connection with any such
Transit Investment; and
(f) other Investments specifically permitted by other
provisions of this Agreement.
7.12 Limitation on Optional Payments and Modifications. (a)
-------------------------------------------------
Make, or suffer or permit any of its Subsidiaries (other than Transit)
or Symtron to make, any optional payment or prepayment on or
redemption of any Indebtedness (other than Indebtedness pursuant to
this Agreement), (b) amend, modify or change, or consent or agree to
any amendment, modification or change to, any of the terms of any
Indebtedness (other than any such amendment, modification or change
which would extend the maturity or reduce the amount of any payment of
principal thereof or which would reduce the rate or extend the date
for payment of interest thereon), or (c) amend any of the terms or
provisions of any of the Private Placement Debt Documents, any of the
Indemnified Letters of Credit or any documents or instruments
evidencing, guaranteeing, securing or otherwise relating to the UIC
Subordinated Debt or the UIC-DEL Subordinated Debt.
7.13 Limitation on Sale and Leaseback. Enter into, or
--------------------------------
suffer or permit any of its Subsidiaries (other than Transit) or
Symtron to enter into, any arrangement with any Person providing for
the leasing by the Borrower or such Subsidiary or Symtron of real or
personal property which has been or is to be sold or transferred by
the Borrower or such Subsidiary or Symtron to such Person or to any
other Person to whom funds have been or are to be advanced by such
Person on the security of such property or rental obligations of the
Borrower or such Subsidiary or Symtron.
7.14 Fiscal Year. Permit the fiscal year of the Borrower to
-----------
end on a day other than December 31.
7.15 Places of Business. Change, or suffer or permit to be
------------------
changed, the location of the Borrower Chief Executive Office or the
chief executive office of any Subsidiary of the Borrower, Symtron or
any Guarantor, or the location of any of their books and records, to
any location outside the United States of America or, unless the Agent
shall have received ninety (90) days prior written notice of the
change, to any location within the United States of America; or have
or maintain, other than the Borrower Business Premises, any business,
office or storage location, or suffer or permit any Subsidiary of the
Borrower (other than Transit) or Symtron to have or maintain any new
business, office or storage location, unless the Agent shall have
received ninety (90) days prior written notice of the new location.
7.16 Change of Name. Change, or suffer or permit to be
--------------
changed, the name of the Borrower or any of its Subsidiaries (other
than Transit) or Symtron, or use any trade name, or permit any of its
Subsidiaries (other than Transit) or Symtron to use any trade name,
other than its true corporate name, unless the Agent shall have
received ninety (90) days prior written notice of such change or use.
7.17 Compliance with ERISA. (a) Terminate or permit to be
---------------------
terminated any Plan so as to result in any material liability to the
PBGC, (b) engage in, or suffer or permit any Other Obligor to engage
in, any "prohibited transaction" (as defined in Section 4975 of the
Code) involving any Plan which would result in a material liability of
the Borrower or any Other Obligor for an excise tax or civil penalty
in connection therewith, (c) incur or suffer to exist, or suffer or
permit any Other Obligor to incur or suffer to exist, any material
"accumulated funding deficiency" (as defined in section 302 of ERISA),
whether or not waived, involving any Plan which would materially
increase the amounts required to be contributed to such Plan by the
Borrower or any Other Obligor, or (d) allow or suffer to exist any
event or condition which presents a material risk of the Borrower or
any Other Obligor incurring a material liability to the PBGC by reason
of termination of any Plan. The Agent, the Lenders and the Issuing
Bank acknowledge that the Borrower has informed them that the Borrower
is planning a change in a Plan which will include freezing earned
benefits under the Plan as now in effect and the introduction of a
cash balance plan supplemented by direct contributions by the
Borrower, matching 401(k) contributions by the Borrower and a profit
sharing feature, and the Borrower acknowledges that it has informed
the Agent, the Lenders and the Issuing Bank that such change will be
effected in accordance with all requirements of ERISA and other
Requirements of Law.
7.18 Environmental. Except as set forth in Schedule 4.13,
-------------
permit any Hazardous Substance to be present, manufactured, generated,
produced, processed, used, handled, treated, stored or disposed of on
any Obligor Use Property in violation of any applicable Environmental
Law which could reasonably be expected to have a Material Adverse
Effect or result in the imposition of a Lien upon any of the property,
assets or revenues of the Borrower, any of its Subsidiaries or any
Other Obligor or exposure of the Borrower, any of its Subsidiaries or
any Other Obligor to potential liability, whether for the cost of cure
or remediation or otherwise, in excess of One Hundred Thousand Dollars
($100,000.00); permit to occur any Hazardous Substance Contamination
which could reasonably be expected to have a Material Adverse Effect
or result in the imposition of a Lien upon any of the property, assets
or revenues of the Borrower, any of its Subsidiaries or any Other
Obligor or exposure of the Borrower, any of its Subsidiaries or any
Other Obligor to potential liability, whether for the cost of cure or
remediation or otherwise, in excess of One Hundred Thousand Dollars
($100,000.00); or, except for underground storage tanks
identified in Schedule 4.13, permit any underground storage tanks to
be located on any Obligor Use Property.
7.19 Limitation on Negative Pledge Clauses. Enter into, or
-------------------------------------
suffer or permit any of its Subsidiaries (other than Transit) or
Symtron to enter into, any agreement, other than pursuant to this
Agreement or the other Credit Documents, any industrial revenue bonds,
purchase money mortgages, Financing Leases or Permitted Equipment
PMSIs permitted by this Agreement (in which cases, any prohibition or
limitation shall only be effective against the assets financed
thereby), with any Person which prohibits or limits the ability of the
Borrower or such Subsidiary (other than Transit) or Symtron to create,
incur, assume or suffer to exist any Lien upon any of its property,
assets or revenues, whether now owned or hereafter acquired.
7.20 Limitation on Inconsistent Agreements. Enter into, or
-------------------------------------
suffer or permit any of its Subsidiaries (other than Transit) or any
Other Obligor to enter into, any agreement which is inconsistent with
any obligations of the Borrower, any of its Subsidiaries or any Other
Obligor under this Agreement or any of the other Credit Documents.
SECTION 8. EVENTS OF DEFAULT
8.1 Events of Default.
-----------------
Upon and at any time after the occurrence of any of the
following events:
(a) The Borrower or any Other Obligor shall fail to
pay any amount due to the Agent, any Lender or the Issuing Bank,
including, without limitation, principal and interest on the Notes,
L/C Reimbursement Obligations, fees or expenses; or
(b) Any representation or warranty made or deemed made
by the Borrower or any Other Obligor herein or in the other Credit
Documents or which is contained in any certificate, document or
financial or other statement furnished at any time under or in
connection with this Agreement or any such other Credit Document shall
prove to have been incorrect in any material respect on or as of the
date made or deemed made; or
(c) The Borrower shall default in the observance or
performance of any agreement contained in Section 7, or the Borrower
or any Other Obligor shall default in the observance or performance of
any negative covenant of the Borrower or such Other
Obligor contained in any of the other Credit Documents, or the
Borrower shall default in the observance or performance of any of the
agreements of the Borrower contained in Subsection 6.1 or
Subsection 6.4(b); or
(d) The Borrower or any Other Obligor shall default in
the observance or performance of any other agreement contained in this
Agreement or any of the other Credit Documents (other than as provided
in (a) through (c) above) and such default shall continue unremedied
for a period of fifteen (15) days; or
(e) (i) This Agreement or any of the other Credit
Documents shall be, or shall be held by a court of competent
jurisdiction to be, invalid or unenforceable in any respect deemed
material by the Required Lenders or, in the case of any provision of
Section 3 of this Agreement or any provision of any L/C Agreement, by
the Issuing Bank, (ii) the Intercreditor Agreement shall be, or shall
be held by a court of competent jurisdiction to be, invalid or
unenforceable in any respect deemed material by the Required Lenders
or the Issuing Bank, or (iii) the security interests and other Liens
created in favor of or for the benefit of the Agent, the Lenders or
the Issuing Bank shall cease to be enforceable and of the same effect
and priority purported to be created thereby; or
(f) The Borrower or any Other Obligor shall revoke or
terminate, or attempt to revoke or terminate, or notify the Agent, any
Lender or the Issuing Bank of revocation or termination of, any
continuing obligations or agreements of the Borrower or such Other
Obligor relating in any way to this Agreement or any of the other
Credit Documents; or
(g) The Borrower or any Other Obligor shall (i)
default in any payment of any Indebtedness (other than Indebtedness
referred to in paragraph (a) above) or in the payment of any
Contingent Obligation exceeding Two Hundred Fifty Thousand Dollars
($250,000.00) in the aggregate, beyond any period of grace but whether
or not any required notice has been given; or (ii) default in the
observance or performance of any other agreement or condition
otherwise relating to any such Indebtedness or Contingent Obligation
or contained in any instrument or agreement evidencing, securing or
otherwise relating thereto, or any other event shall occur or
condition exist, the effect of which default or other event or
condition is to cause, or to permit the holder or holders of such
Indebtedness or beneficiary or beneficiaries of such Contingent
Obligation (or a trustee or agent on behalf of such holder or holders
or beneficiary or beneficiaries) to cause, with the giving of notice
if required, such Indebtedness to become due prior to its stated
maturity or such Contingent Obligation to become payable; provided
--------
that nothing contained in this clause (g) shall be construed to
require the Borrower or any Other Obligor to refrain from contesting
the
validity, enforceability, amount or maturity of any alleged
Indebtedness or Contingent Obligation or any agreement or condition
relating thereto, or the existence of any default with respect
thereto; or
(h) (i) The Borrower or any Other Obligor shall
commence any case, proceeding or other action (A) under any existing
or future law of any jurisdiction, domestic or foreign, relating to
bankruptcy, insolvency, reorganization or relief of debtors, seeking
to have an order for relief entered with respect to it, or seeking to
adjudicate it a bankrupt or insolvent, or seeking reorganization,
arrangement, adjustment, winding-up, liquidation, dissolution,
composition or other relief with respect to it or its debts, or (B)
seeking appointment of a receiver, trustee, custodian or other similar
official for it or for all or any substantial part of its assets, or
the Borrower or any Other Obligor shall make a general assignment for
the benefit of its creditors, whether or not any court assumes
jurisdiction thereof; or (ii) there shall be commenced against the
Borrower or any Other Obligor any case, proceeding or other action of
a nature referred to in clause (i) above which (A) results in the
entry of an order for relief or any such adjudication or appointment
or (B) remains undismissed, undischarged or unbonded for a period of
sixty (60) days; or (iii) there shall be commenced against the
Borrower or any Other Obligor any case, proceeding or other action
seeking issuance of a warrant of attachment, execution, distraint or
similar process against all or any substantial part of its assets
which results in the entry of an order for any such relief which shall
not have been vacated, discharged, or stayed or bonded pending appeal,
within sixty (60) days from the entry thereof; or (iv) the Borrower or
any Other Obligor shall take any action in furtherance of, or
indicating its consent to, approval of, or acquiescence in, any of the
acts set forth in clause (i), (ii) or (iii) above; or (v) the Borrower
or any Other Obligor shall be insolvent (as defined in Section 101(32)
of the United States Bankruptcy Code, or any successor legislation),
or generally not, or shall be unable to, or shall admit in writing its
inability to, pay its debts as they become due; or
(i) Dissolution or liquidation of, or the entry of any
unstayed judgment, order, award or decree for the dissolution or
liquidation of, the Borrower or any Other Obligor; or
(j) Injunction or restraint of the Borrower or any
Other Obligor in any manner from conducting its business in whole or
in part deemed material by the Required Lenders in good faith; or
(k) Any assets of the Borrower, any Subsidiary of the
Borrower or any Other Obligor which are determined by the Required
Lenders in good faith to be material shall be attached, levied upon,
seized or repossessed; or
(l) There shall occur any event or condition which the
Required Lenders reasonably determine has a material adverse effect on
the business or prospects of the Borrower, whether or not such event
or condition otherwise constitutes an Event of Default, provided that
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the failure of Transit to be awarded a contract by the Miami Valley
Transit Authority for the supply of electric trolley buses shall not
be deemed to have a material adverse effect on the business or
prospects of the Borrower; or
(m) The occurrence of any event which, in the judgment
of the Required Lenders exercised reasonably, materially impairs the
financial condition of the Borrower or any Other Obligor; or
(n) (i) Any Person shall engage in any "prohibited
transaction" (as defined in Section 406 of ERISA or Section 4975 of
the Code) involving any Plan, (ii) any "accumulated funding
deficiency" (as defined in Section 302 of ERISA), whether or not
waived, shall exist with respect to any Plan which would materially
increase the amounts required to be contributed to such Plan by the
Borrower or any Other Obligor, (iii) a Reportable Event shall occur
with respect to, or proceedings shall commence to have a trustee
appointed, or a trustee shall be appointed, to administer or to
terminate, any Single Employer Plan, which Reportable Event or
commencement of proceedings or appointment of a trustee is, in the
judgment of the Required Lenders exercised in good faith, likely to
result in the termination of such Plan for purposes of Title IV of
ERISA, (iv) any Single Employer Plan shall terminate for purposes of
Title IV of ERISA, (v) the Borrower or any Commonly Controlled Entity
shall, or in the judgment of the Required Lenders exercised in good
faith is likely to, incur any liability in connection with a
withdrawal from, or the Insolvency or Reorganization of, a
Multiemployer Plan, or (vi) any other event or condition shall occur
or exist, with respect to a Plan; and in each case in clauses (i)
through (vi) above, such event or condition, together with all other
such events or conditions, if any, could reasonably be expected to
subject the Borrower or any Other Obligor to any tax, penalty or other
liabilities in the aggregate material, in the judgment of the Required
Lenders exercised in good faith, in relation to the business,
operations, property or financial or other condition of the Borrower,
provided that the termination of the Symtron Systems, Inc. Employee
--------
Savings and Retirement Plan shall constitute an Event of Default only
if such termination could reasonably be expected, in the judgment of
the Required Lenders exercised in good faith, to subject the Borrower,
Symtron or any Other Obligor to any liability in excess of Two Hundred
Fifty Thousand Dollars ($250,000.00); or
(o) One or more judgments or decrees shall be entered
against the Borrower or any Other Obligor involving in the aggregate a
liability (not paid or fully covered by insurance) of Two Hundred
Fifty Thousand Dollars ($250,000.00) or more and
all such judgments or decrees shall not have been vacated, discharged,
paid, stayed or dismissed within thirty (30) days from the entry
thereof or, if stayed, shall not have been vacated, discharged, paid
or dismissed within thirty (30) days after termination of such stay;
or
(p) UIC shall not legally and beneficially own all of
the issued and outstanding capital stock of the Borrower and UIC-DEL,
or UIC or the Borrower shall not legally and beneficially own all of
the issued and outstanding capital stock of Symtron, in each case,
with the discretionary power and right to exercise all rights and
privileges, including voting rights, with respect to such capital
stock and, more particularly, to elect all of the members of the Board
of Directors of each thereof and to approve any action of each
thereof, including extraordinary actions, required to be approved by
stockholders thereof; or
(q) AAI shall not legally and beneficially own all of
the issued and outstanding capital stock of each of Systems,
Technologies, Engineering, Carshell, International, Microflite,
Medical and Seti, with the discretionary power and right to exercise
all rights and privileges, including voting rights, with respect
thereto and, more particularly, to elect all of the members of the
Board of Directors of each thereof and to approve any action of each
thereof, including extraordinary actions, required to be approved by
stockholders of each thereof; or
(r) AAI shall not legally and beneficially own at
least fifty-three percent (53%) of the issued and outstanding capital
stock of Transit, with the discretionary power and right to exercise
all rights and privileges, including voting rights, with respect
thereto and, more particularly, to elect sixty percent (60%) of the
members of the Board of Directors of Transit; or
(s) Richard R. Erkeneff shall for any reason cease to
be, or to perform the functions of, the President and chief executive
officer of the Borrower, or Paul J. Michaud shall cease to be, or to
perform the functions of, the chief financial officer of the Borrower,
unless (i) a replacement President and chief executive officer
satisfactory to the Required Lenders or a replacement chief financial
officer satisfactory to the Required Lenders, as the case may be,
shall have been employed by the Borrower within ninety (90) days
thereafter, or (ii) a management plan satisfactory to the Required
Lenders shall have been presented to the Agent within ninety (90) days
thereafter; or
(t) Any of the Private Placement Debt Holders or any
of their successors, or any assignee of any of the Private Placement
Debt Holders permitted under Section 6 of the Intercreditor Agreement
shall sell or assign any interest in any of the Private
Placement Debt otherwise than in accordance with Section 6 of the
Intercreditor Agreement; or
(u) The Borrower, any of its Subsidiaries (other than
Transit) or any Other Obligor shall be convicted of an offense
punishable under any domestic or foreign criminal statute or law as a
felony or by imprisonment or fine in excess of One Hundred Thousand
Dollars ($100,000.00); or
(v) There shall occur a Change of Control; or
(w) There shall occur any "Event of Default," as
defined in any of the other Credit Documents; or
(x) There shall occur any "Event of Default," as
defined in any of the Private Placement Debt Documents, which has not
been waived in writing by the Private Placement Debt Holders; or
(y) A "Collateral Distribution Period," as defined in
the Intercreditor Agreement, shall commence; or
(z) UIC shall sell or assign any interest in any of
the UIC Subordinated Debt, or UIC-DEL shall sell or assign any
interest in any of the UIC-DEL Subordinated Debt; or
(aa) Any proceeding shall be commenced to suspend or
debar the Borrower, any of its Subsidiaries or any Other Obligor from
contracting with any Governmental Authority of the United States of
America and such proceeding shall remain undismissed for a period of
ninety (90) days; or
(bb) The Borrower, any of its Subsidiaries or any Other
Obligor shall be suspended or debarred from contracting with any
Governmental Authority of the United States of America, either as a
result of a final decision of a Governmental Authority of the United
States of America concerning suspension or debarment or as a result of
the pendency of any suspension or debarment proceeding;
then, (A) if such event is an Event of Default specified in
paragraph (i) or in clause (i) or (ii) of paragraph (h) above
automatically the Commitments shall immediately terminate and the
Revolving Credit Loans (with accrued interest thereon) and all other
amounts owing under this Agreement, the Notes and the other Credit
Documents shall immediately become due
and payable, and (B) if such event is any other Event of Default and
is continuing, either or both of the following actions may be taken:
(i) with the consent of the Required Lenders, the Agent may, or upon
the request of the Required Lenders, the Agent shall, by notice to the
Borrower, declare the Commitments to be terminated forthwith,
whereupon the Commitments shall immediately terminate; and (ii) with
the consent of the Required Lenders, the Agent may, or upon the
request of the Required Lenders, the Agent shall, by notice to the
Borrower, declare the Revolving Credit Loans hereunder (with accrued
interest thereon) and all other amounts owing under this Agreement and
the other Credit Documents to be due and payable forthwith, whereupon
the same shall immediately become due and payable. Except as expressly
provided above in this Section, presentment, demand, protest and all
other notices of any kind are hereby expressly waived.
8.2 Confession of Judgment. The Borrower hereby authorizes
----------------------
any clerk of court or any attorney-at-law to appear for the Borrower
before any court, having jurisdiction, within the United States or
elsewhere, and, after one or more complaints filed, confess judgment
against the Borrower as of any time after any of the Obligations are
due (whether by demand, stated maturity, acceleration or otherwise)
for the unpaid balance of the Obligations, including principal,
interest, fees, court costs and expenses, together with attorneys'
fees equal to fifteen percent (15%) of the amount of such Obligations,
for collection and release of all errors, and without stay of
execution, and inquisition and extension upon any levy on real estate
is hereby waived and condemnation agreed to, and the exemption of
personal property from levy and sale is also hereby expressly waived,
and no benefit of exemption shall be claimed under any exemption law
now in force or which may be hereafter adopted. The foregoing
authority and power to confess judgment shall not be exhausted by one
or more exercises of it or by any imperfect exercise of it, shall not
be extinguished by any judgment entered because of it and may be
exercised before, during or after sale, liquidation or other
disposition by the Agent or any other Person of any property directly
or indirectly securing any of the Obligations or exercise or
enforcement by the Agent, any Lender, the Issuing Bank or any other
Person of any other right or remedy with respect to the Obligations.
The Borrower agrees that any agreements of the Borrower contained in
this Agreement or any of the other Credit Documents to pay any costs
or expenses, including attorneys' fees and expenses, paid or incurred
by the Agent, any Lender or the Issuing Bank shall not be merged into,
or otherwise impaired by, any such judgment by confession, but none of
the Agent, the Lenders and the Issuing Bank shall be entitled to
recover on account of such costs or expenses any amount in excess of
the greater of (a) such costs or expenses included in any judgment by
confession, or (b) such costs or expenses actually paid or incurred by
the Agent, the Lenders and the Issuing Bank.
SECTION 9. THE AGENT
9.1 Appointment. Each Lender and the Issuing Bank each
-----------
hereby irrevocably designates and appoints First Fidelity as its Agent
under this Agreement and the other Credit Documents, and each such
Lender and the Issuing Bank each irrevocably authorizes First
Fidelity, as its Agent, to take such action on its behalf under the
provisions of this Agreement and the other Credit Documents and to
exercise such powers and perform such duties as are expressly
delegated to the Agent by the terms of this Agreement and such other
Credit Documents, together with such other powers as are reasonably
incidental thereto. Notwithstanding any provision to the contrary
elsewhere in this Agreement or such other Credit Documents, the Agent
shall not have any duties or responsibilities, except those expressly
set forth herein and therein, or any fiduciary relationship with any
Lender or the Issuing Bank, and no implied covenants, functions,
responsibilities, duties, obligations or liabilities shall be read
into this Agreement or the other Credit Documents or otherwise exist
against the Agent.
9.2 Delegation of Duties. The Agent may execute any of its
--------------------
duties under this Agreement and the other Credit Documents by or
through agents or attorneys-in-fact and shall be entitled to advice of
counsel concerning all matters pertaining to such duties. The Agent
shall not be responsible for the negligence or misconduct of any
agents or attorneys-in-fact selected by it with reasonable care.
9.3 Exculpatory Provisions. Neither the Agent nor any of
----------------------
its officers, directors, employees, agents, attorneys, attorneys-in-
fact or Affiliates shall be (i) liable for any action lawfully taken
or omitted to be taken by it or such Person under or in connection
with this Agreement, the other Credit Documents or the Intercreditor
Agreement (except for its or such Person's own gross negligence or
willful misconduct), or (ii) responsible in any manner to any of the
Lenders or the Issuing Bank for any recitals, statements,
representations or warranties made by the Borrower or any Other
Obligor or any officer thereof contained in this Agreement, the other
Credit Documents or the Intercreditor Agreement or in any certificate,
report, statement or other document referred to or provided for in, or
received by the Agent under or in connection with, this Agreement, the
other Credit Documents or the Intercreditor Agreement or for the
value, validity, effectiveness, genuineness, enforceability or
sufficiency of this Agreement, the other Credit Documents or the
Intercreditor Agreement or for any failure of the Borrower or any
Other Obligor to perform its obligations hereunder or thereunder. The
Agent shall not be under any obligation to any Lender or the Issuing
Bank to ascertain or to inquire as to the observance or performance of
any of the agreements contained in, or conditions of, this Agreement,
any other Credit Document or the
Intercreditor Agreement, or to inspect the properties, books or
records of the Borrower or any Other Obligor.
9.4 Reliance by Agent. The Agent shall be entitled to
-----------------
rely, and shall be fully protected in relying, upon any Note, writing,
resolution, notice, consent, certificate, affidavit, letter,
cablegram, telegram, telecopy, telex or teletype message, statement,
order or other document or conversation believed by it to be genuine
and correct and to have been signed, sent or made by the proper Person
or Persons, and upon advice and statements of legal counsel
(including, without limitation, counsel to the Borrower or any Other
Obligor), independent accountants and other experts selected by the
Agent. The Agent may deem and treat the payee of any Note as the
owner thereof for all purposes unless a written notice of assignment,
negotiation or transfer thereof shall have been filed with the Agent.
The Agent shall be fully justified in failing or refusing to take any
action under this Agreement, the other Credit Documents or the
Intercreditor Agreement unless it shall first receive such advice or
concurrence of such Persons as it deems appropriate or it shall first
be indemnified to its satisfaction against any and all liability and
expense which may be incurred by it by reason of taking or continuing
to take any such action. The Agent shall in all cases be fully
protected in acting, or in refraining from acting, under this
Agreement, the other Credit Documents and the Intercreditor Agreement
in accordance with a request of any Lender, the Required Lenders, all
the Lenders or the Issuing Bank, as required by the terms of this
Agreement, and such request and any action taken or failure to act
pursuant thereto shall be binding upon all the Lenders, all future
holders of the Notes and the Issuing Bank.
9.5 Notice of Default. The Agent shall not be deemed to
-----------------
have knowledge or notice of the occurrence of any Default or Event of
Default (other than a Default or Event of Default under
Subsection 10(a) resulting from a failure of the Borrower to pay when
due any amount payable to the Agent, whether for its own account or
for the account of one or more of the Lenders) unless the Agent has
received notice from a Lender, the Issuing Bank or the Borrower
referring to this Agreement, describing such Default or Event of
Default and stating that such notice is a "notice of default". In the
event that the Agent receives such a notice, the Agent shall give
notice thereof to the Lenders and the Issuing Bank. The Agent shall
take such action with respect to such Default or Event of Default as
shall be reasonably directed by the Required Lenders; provided that
--------
unless and until the Agent shall have received such directions, the
Agent may (but shall not be obligated to) take such action, or refrain
from taking such action, with respect to such Default or Event of
Default as it shall deem advisable.
9.6 Non-Reliance on Agent and Other Lenders. Each of the
---------------------------------------
Lenders and the Issuing Bank expressly acknowledges that neither the
Agent nor any of its officers,
directors, employees, agents, attorneys, attorneys-in-fact or
Affiliates has made any representations or warranties to it and that
no act by the Agent hereafter taken, including any review of the
affairs of the Borrower or any Other Obligor, shall be deemed to
constitute any representation or warranty by the Agent to any of the
Lenders or the Issuing Bank. Each of the Lenders and the Issuing Bank
represents to the Agent that it has, independently and without
reliance upon the Agent or any other of the Lenders or the Issuing
Bank, and based on such documents and information as it has deemed
appropriate, made its own appraisal of and investigation into the
business, operations, property, financial and other condition and
creditworthiness of the Borrower and the Other Obligors and made its
own decision to make its Revolving Credit Loans, to issue Letters of
Credit and to purchase participations in Letters of Credit and enter
into this Agreement. Each of the Lenders and the Issuing Bank also
represents that it will, independently and without reliance upon the
Agent or any other of the Lenders and the Issuing Bank, and based on
such documents and information as it shall deem appropriate at the
time, continue to make its own credit analysis, appraisals and
decisions in taking or not taking action under this Agreement and the
other Credit Documents, and to make such investigation as it deems
necessary to inform itself as to the business, operations, property,
financial and other condition and creditworthiness of the Borrower and
the Other Obligors. Except for notices, reports and other documents
expressly required to be furnished to the Lenders or the Issuing Bank
by the Agent hereunder or by the other Credit Documents, the Agent
shall not have any duty or responsibility to provide any of the
Lenders or the Issuing Bank with any credit or other information
concerning the business, operations, property, financial and other
condition or creditworthiness of the Borrower or any of the Other
Obligors which may come into the possession of the Agent or any of its
officers, directors, employees, agents, attorneys, attorneys-in-fact
or Affiliates.
9.7 Indemnification. The Lenders agree to indemnify the
---------------
Agent in its capacity as such (to the extent not reimbursed by the
Borrower and without limiting the obligation of the Borrower to do
so), ratably according to their Commitment Percentages, from and
against any and all liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, costs, expenses or disbursements
of any kind whatsoever which may at any time (including, without
limitation, at any time following the payment of the Notes) be imposed
on, incurred by or asserted against the Agent in any way relating to
or arising out of this Agreement, the other Credit Documents, the
Intercreditor Agreement or any documents contemplated by or referred
to herein or therein or the transactions contemplated hereby or
thereby or any action taken or omitted by the Agent under or in
connection with any of the foregoing; provided that no Lender shall be
--------
liable for the payment of any portion of such liabilities,
obligations, losses, damages, penalties, actions, judgments, suits,
costs, expenses or disbursements resulting from the Agent's gross
negligence or willful misconduct. The
agreements in this Subsection shall survive the payment of the Notes
and all other amounts payable hereunder.
9.8 Agent in Its Individual Capacity. The Agent and its
--------------------------------
Affiliates may make loans to, accept deposits from and generally
engage in any kind of business with the Borrower and the Other
Obligors as though the Agent were not the Agent hereunder. With
respect to its Revolving Credit Loans made or renewed by it, any Note
issued to it and its participations relating to Letters of Credit, the
Agent shall have the same rights and powers under this Agreement and
the other Credit Documents as any Lender and may exercise the same as
though it were not the Agent, and the terms "Lender" and "Lenders"
shall include the Agent in its individual capacity.
9.9 Successor Agent. The Agent may resign as Agent by
---------------
giving the Lenders, the Issuing Bank and the Borrower at least thirty
(30) days prior written notice. If the Agent shall resign as Agent
under this Agreement, then the Required Lenders shall appoint a
successor agent for the Lenders, whereupon such successor agent shall
succeed to the rights, powers and duties of the Agent, and the term
"Agent" shall mean such successor agent effective upon its
appointment, and the former Agent's rights, powers and duties as Agent
shall be terminated, without any other or further act or deed on the
part of such former Agent or any of the parties to this Agreement or
any holders of the Notes. After any retiring Agent's resignation
hereunder as Agent, the provisions of this Section 9 shall inure to
its benefit as to any actions taken or omitted to be taken by it while
it was Agent under this Agreement:
9.10 Authority to Execute Intercreditor Agreement. Each
--------------------------------------------
Lender and the Issuing Bank expressly authorizes the Agent to execute
the Intercreditor Agreement as its Agent.
SECTION 10. MISCELLANEOUS
10.1 Amendments and Waivers. Neither this Agreement, any
----------------------
Note or any other Credit Document, nor any terms hereof or thereof may
be amended, modified, extended, renewed, supplemented, replaced or
waived except in accordance with the provisions of this Subsection.
With the written consent of the Required Lenders and, with respect to
any amendment, modification, extension, renewal, supplement,
replacement or waiver of any of the provisions of Section 3, with the
consent of the Issuing Bank, the Agent and the Borrower may, or, in
the case of L/C Agreements, the Issuing Bank and the Borrower may,
from time to time enter into written amendments, modifications,
extensions,
renewals, supplements, replacements or waivers for the purpose of
amending, modifying, extending, renewing, supplementing, replacing or
waiving any provisions of this Agreement or the other Credit Documents
or changing in any manner the rights of the parties hereunder or
thereunder or waiving, on such terms and conditions as the Agent may
specify in such instrument, any of the requirements of this Agreement
or the other Credit Documents or any Default or Event of Default and
its consequences; provided, that no such waiver and no such amendment,
--------
modification, extension, renewal, supplement or replacement shall
(a) extend the maturity of any payment due hereunder or under any of
the other Credit Documents, (b) reduce the rate of interest on any
obligations payable by the Borrower under this Agreement and the other
Credit Documents, (c) reduce any amount payable by the Borrower
hereunder or under any of the other Credit Documents, (d) change the
amount of any Lender's Commitment or Commitment Percentage, (e) amend,
modify or waive any provision of this Subsection, (f) reduce the
percentage specified in the definition of Required Lenders,
(g) consent to the assignment or transfer by the Borrower of any of
its rights or obligations under this Agreement or any of the other
Credit Documents, (h) extend the expiry date of any Letter of Credit
to a date which is later than the last Business Day prior to the
Termination Date, (i) release any Collateral having an aggregate value
exceeding Five Hundred Thousand Dollars ($500,000.00), or (j) amend or
modify the definitions contained in this Agreement of "Aggregate
Borrowing Base," "Accounts Credit Percentage" or "L/C Maximum
Exposure," in each case without the written consent of all the Lenders
and, in the case of any amendment, modification, extension, renewal,
supplement, replacement or waiver affecting the provisions of
Section 3 or any L/C Agreements, without the written consent of the
then Issuing Bank and, in the case of any amendment, modification,
extension, renewal, supplement, replacement or waiver affecting the
provisions of Section 9, without the written consent of the then
Agent. Any such waiver and any such amendment, modification,
extension, renewal, supplement or replacement shall apply equally to
each of the Lenders and shall be binding upon the Borrower, the
Lenders, the Agent and all future holders of the Notes. In the case
of any waiver, the Borrower, the Lenders and the Agent shall be
restored to their former position and rights hereunder and under the
outstanding Notes, and any Default or Event of Default waived shall be
deemed to be cured; but no such waiver shall extend to any subsequent
or other Default or Event of Default, or impair any right consequent
thereupon. With the consent of the Required Lenders, the Agent may,
or upon the request of the Required Lenders, the Agent shall, enter
into any amendments of the Intercreditor Agreement or issue or grant
consents or waivers relating thereto.
10.2 More Restrictive Provisions. In the event that, after
---------------------------
the date of this Agreement, the Borrower enters into or becomes bound
by any credit agreement or other loan agreement, document or
instrument, or any amendment, modification, supplement or restatement
thereof, which requires the Borrower to comply with any financial
covenants
which are in addition to or more restrictive (the "Additional/More
Restrictive Provisions") than the covenants contained in
Subsection 7.1 of this Agreement, this Agreement shall be and shall be
deemed to be automatically and immediately amended to include such
Additional/More Restrictive Provisions. In the event that such credit
agreement or other loan agreement or document which contains the
Additional/More Restrictive Provisions, or the Additional/More
Restrictive Provisions, are terminated and of no further force or
effect, then any amendment of this Agreement effected as a result of
the provisions of this Subsection shall be of no further force or
effect and this Agreement shall be and shall be deemed to be
automatically and immediately amended to conform to the terms of this
Agreement prior to such amendment of this Agreement effected pursuant
to this Subsection as a result of such Additional/More Restrictive
Provisions. In the event that, after an amendment of this Agreement
effected pursuant to this Subsection as a result of Additional/More
Restrictive Provisions, such Additional/More Restrictive Provisions
shall be amended or modified and the result of such amendment or
modification is to cause some or all of such Additional/More
Restrictive Provisions to be more restrictive or less restrictive, but
in any event more restrictive than the financial covenants contained
in Subsection 7.1 of this Agreement prior to such amendment of this
Agreement, then this Agreement shall be and shall be deemed to be
automatically and immediately amended to conform to such
Additional/More Restrictive Provisions, as so amended or modified.
Upon request of the Required Lenders at any time or from time to time,
the Borrower shall execute and deliver to the Agent, with sufficient
copies for each of the Lenders and the Issuing Bank, such amendments
of this Agreement, and such other agreements, instruments and
documents, as may be requested by the Required Lenders to further
memorialize amendments of this Agreement pursuant to this Subsection.
10.3 Notices. All notices, requests and demands to or upon
-------
the respective parties hereto to be effective shall be in writing
(including by telecopy transmission), and, unless otherwise expressly
provided herein, shall be deemed to have been duly given or made when
delivered by hand, or, if earlier, three (3) days after being
deposited in the mail, postage prepaid, or, in the case of notice by
telecopy transmission, when transmitted, addressed as follows in the
case of the Borrower and the Agent, and as set forth in Schedule II in
the case of the other parties hereto, or to such other address as may
be hereafter notified by the respective parties hereto and any future
holders of the Notes:
The Borrower: York Road and Industry Lane
Hunt Valley, Maryland 21030
Telecopy: 410/683-6488
The Agent: First Fidelity Bank, National Association
123 South Broad Street
Philadelphia, Pennsylvania 19109
Attention: Michael W. Coiley
Telecopy: 215/985-6079
The Issuing Bank: First Fidelity Bank, National Association
123 South Broad Street
Philadelphia, Pennsylvania 19109
Attention: Michael W. Coiley
Telecopy: 215/985-6079
provided that any notice, request or demand to or upon the Agent or
--------
the Lenders pursuant to Subsections 2.3, 2.5, 2.7 and 2.9, or to or
upon the Issuing Bank pursuant to Subsections 3.2 and 3.8, shall not
be effective until received.
10.4 No Waiver; Cumulative Remedies. No failure to exercise
------------------------------
and no delay in exercising, on the part of the Agent, the Issuing Bank
or any Lender, any right, remedy, power or privilege hereunder or
under the Credit Documents, shall operate as a waiver thereof; nor
shall any single or partial exercise of any right, remedy, power or
privilege hereunder or thereunder preclude any other or further
exercise thereof or the exercise of any other right, remedy, power or
privilege. The rights, remedies, powers and privileges herein
provided or provided in the other Credit Documents are cumulative and
not exclusive of any rights, remedies, powers and privileges provided
by law.
10.5 Survival of Representations and Warranties. All
------------------------------------------
representations and warranties made hereunder, in the other Credit
Documents and in any document, certificate or statement delivered
pursuant hereto or in connection herewith shall survive the execution
and delivery of this Agreement, the Letters of Credit and the Notes.
10.6 Payment of Expenses and Taxes. The Borrower agrees
-----------------------------
(a) to pay or reimburse the Agent for all its out-of-pocket costs and
expenses incurred in connection with the development, preparation and
execution of', and any amendment, modification, extension, renewal,
supplement or replacement of, this Agreement, the other Credit
Documents, the Intercreditor Agreement and any other documents
prepared in connection herewith or therewith, and the preservation of
any rights or interests thereunder, and the consummation of the
transactions contemplated hereby and thereby, including, without
limitation, the reasonable fees and disbursements of counsel to the
Agent, (b) to pay or reimburse each Lender, the Issuing Bank and the
Agent for all their costs and expenses
incurred in connection with the enforcement of any rights under this
Agreement, the other Credit Documents, the Intercreditor Agreement and
any such other documents, including, without limitation, reasonable
fees and disbursements of counsel to the Agent, the Lenders and the
Issuing Bank, (c) to pay, indemnify, and hold each Lender, the Issuing
Bank and the Agent harmless from, any and all recording and filing
fees and any and all liabilities with respect to, or resulting from
any delay in paying, stamp, excise and other taxes, if any, which may
be payable or determined to be payable in connection with the
execution and delivery of, or consummation of any of the transactions
contemplated by, or any amendment, modification, extension, renewal,
supplement or replacement of, or any waiver or consent under or in
respect of, this Agreement, the other Credit Documents and any such
other documents, and (d) to pay, indemnify, and hold each Lender, the
Agent and the Issuing Bank harmless from and against any and all other
liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, costs, expenses or disbursements of any kind or
nature whatsoever with respect to the execution, delivery,
enforcement, performance and administration of this Agreement, the
other Credit Documents and any such other documents (all the
foregoing, collectively, the "indemnified liabilities"), provided,
--------
that the Borrower shall have no obligation hereunder to the Agent, any
Lender or the Issuing Bank with respect to indemnified liabilities
arising from (i) the gross negligence or willful misconduct of the
Agent, any such Lender or the Issuing Bank, (ii) legal proceedings
commenced against the Agent, any such Lender or the Issuing Bank by
any security holder or creditor thereof arising out of and based upon
rights afforded any such security holder or creditor solely in its
capacity as such, or (iii) legal proceedings commenced against the
Agent, any such Lender or the Issuing Bank by any other Lender, the
Agent, the Issuing Bank or by any Transferee (as defined in
Subsection 10.12). The agreements in this Subsection shall survive
the termination of this Agreement and payment of the outstanding Notes
for a period of two (2) years.
10.7 Further Assurances. The Borrower agrees promptly to
------------------
do, make, execute and deliver all such additional and further acts,
things, deeds, assurances, instruments and documents as the Agent, the
Issuing Bank or any Lender may reasonably request to vest in and
assure to the Agent, the Issuing Bank or any Lender its rights under
this Agreement or any of the other Credit Documents.
10.8 Unenforceability. If any term, provision or condition,
----------------
or any part thereof, of this Agreement or any of the other Credit
Documents shall for any reason be found or held invalid or
unenforceable by any court or Governmental Authority, such invalidity
or unenforceability shall not affect the remainder of such term,
provision or condition, nor any other term, provision or condition,
and this Agreement and the other Credit Documents shall survive and be
construed as if such invalid or unenforceable term,
provision or condition had not been contained herein or therein;
provided, however, that if any rate of interest provided under this
Agreement or any of the other Credit Documents does or shall exceed
the maximum interest rate permitted by law, then such rate of interest
shall immediately be deemed to be reduced to such maximum rate and all
previous payments of interest in excess of the maximum rate shall be
deemed to have been payments in reduction of principal and not of
interest.
10.9 Indemnification Concerning Fees. The Borrower agrees
-------------------------------
to indemnify, protect and defend the Agent, the Issuing Bank and each
Lender, and save the Agent, the Issuing Bank and each Lender harmless,
from and against any and all claims, demands, damages, losses,
liabilities, obligations, penalties, litigation, defenses, judgments,
suits, actions, proceedings, costs and expenses (including, without
limitation, counsel fees and expenses) of any kind or nature
whatsoever which may at any time be imposed upon, paid or incurred by
or asserted or awarded against the Agent, the Issuing Bank or any of
the Lenders relating to, resulting from or arising out of any broker's
or finder's fee or commission which the Agent, the Issuing Bank or
such Lender, as the case may be, did not directly contract or agree to
pay.
10.10 Waiver of Trial by Jury. Each of the Borrower,
-----------------------
the Agent, each Lender and the Issuing Bank agrees that any action,
suit or proceeding involving any claim, counterclaim or cross-claim
arising out of or in any way relating, directly or indirectly, to this
Agreement or any of the other Credit Documents, or any liabilities,
rights or interests of the Borrower, the Agent, the Issuing Bank, any
Lender or any other Person arising out of or in any way relating,
directly or indirectly, to any of the foregoing, shall be tried by a
court and not by a jury. Each of the Borrower, the Agent, the Issuing
Bank and each Lender hereby waives any right to trial by jury in any
such action, suit or proceeding, with the understanding and agreement
that this waiver constitutes a waiver of trial by jury of all claims,
counterclaims and cross-claims against all parties to such actions,
suits or proceedings, including claims, counterclaims and cross-claims
against parties who are not parties to this Agreement or the other
Credit Documents. This waiver is knowingly, willingly and voluntarily
made by each of the parties hereto, and each of the parties hereto
acknowledges and agrees that this waiver of trial by jury is a
material aspect of the agreements among them and that no
representations of fact or opinion have been made by any Person to
induce this waiver of trial by jury or to modify, limit or nullify its
effect.
10.11 Additional Waivers. The Borrower hereby waives,
------------------
to the extent the same may be waived under applicable law: (a) notice
of acceptance of this Agreement or any of the other Credit Documents
by any other party hereto; (b) all claims, causes of action and rights
of the Borrower against the Agent, the Issuing Bank or any Lender on
account of
actions taken or not taken by any of them in the exercise of any of
their rights or remedies under this Agreement or any of the other
Credit Documents, or under law, provided that the same did not arise
from their gross negligence or willful misconduct; and (c) all claims
and causes of action of the Borrower against the Agent, the Issuing
Bank or any Lender for punitive, exemplary, consequential, special or
other indirect or non-compensatory damages.
10.12 Successors and Assigns; Participations; Purchasing
--------------------------------------------------
Lenders. (a) This Agreement shall be binding upon and inure to the
-------
benefit of the Borrower, the Lenders, the Agent, the Issuing Bank, all
future holders of the Notes and their respective successors and
assigns, except that the Borrower may not assign or transfer any of
its rights or obligations under this Agreement without the prior
written consent of each Lender and, in the case of any of its rights
or obligations under L/C Agreements or otherwise relating to Letters
of Credit, without the prior written consent of the Issuing Bank.
(b) Any Lender may, in the ordinary course of its
commercial banking business and in accordance with applicable law, at
any time sell to one or more entities ("Participants") participating
interests in any Revolving Credit Loans owing to such Lender, any
Notes held by such Lender, any Commitments of such Lender or any other
interests of such Lender hereunder. In the event of any such sale by
a Lender to a Participant of a participating interest in such Lender's
obligations under this Agreement, such Lender shall remain the holder
of any such Notes for all purposes under this Agreement and the other
Credit Documents, and the Borrower, the Agent and the Issuing Bank
shall continue to deal solely and directly with such Lender in
connection with such Lender's rights and obligations under this
Agreement and the other Credit Documents. The Borrower agrees that if
amounts outstanding under this Agreement or the Notes are due or
unpaid, or shall have been declared or shall have become due and
payable as a result of the occurrence of an Event of Default, each
Participant shall be deemed to have the right of setoff in respect of
its participating interest in amounts owing under this Agreement and
any Notes to the same extent as if the amount of its participating
interest were owing directly to it as a Lender under this Agreement or
any Notes, provided that such right of setoff shall be subject to the
--------
obligation of such Participant to share with the Lenders and the
Issuing Bank, and the Lenders and the Issuing Bank agree to share
with such Participant, as provided in Subsection 10.13. The Borrower
also agrees that each Participant shall be entitled to the benefits of
Subsections 2.16, 2.17, and 2.18 with respect to its participation in
the Commitments and the Eurodollar Loans outstanding from time to
time; provided that no Participant shall be entitled to receive any
--------
greater amount pursuant to such Subsections than the transferor Lender
would have been entitled to receive in respect of the amount of the
participation transferred by such transferor Lender to such
Participant had no such transfer occurred.
(c) Any Lender may, in the ordinary course of its
commercial banking business, in accordance with applicable law, at any
time sell to any Affiliate of such Lender or to any other Lender ,
and, with the consent of the Borrower and the Agent (which in each
case shall not be unreasonably withheld), to one or more additional
financial institutions ("Purchasing Lenders") all or any part of its
rights and obligations under this Agreement and the other Credit
Documents pursuant to a Commitment Transfer Supplement, substantially
in the form of Exhibit H, executed by such Purchasing Lender, such
transferor Lender and the Agent (and, in the case of a Purchasing
Lender that is not then a Lender or an Affiliate thereof, by the
Borrower). Upon (i) such execution of such Commitment Transfer
Supplement, (ii) delivery of an executed copy thereof to the Borrower
and (iii) payment by such Purchasing Lender, such Purchasing Lender
shall for all purposes be a Lender party to this Agreement and shall
have all the rights and obligations of a Lender under this Agreement,
to the same extent as if it were an original party hereto with the
Commitment Percentage of the Commitments set forth in such Commitment
Transfer Supplement. Such Commitment Transfer Supplement shall be
deemed to amend this Agreement to the extent, and only to the extent,
necessary to reflect the addition of such Purchasing Lender and the
resulting adjustment of Commitment Percentages arising from the
purchase by such Purchasing Lender of all or a portion of the rights
and obligations of such transferor Lender under this Agreement and the
Notes. Upon the consummation of any transfer to a Purchasing Lender,
pursuant to this paragraph (c), the transferor Lender, the Agent and
the Borrower shall make appropriate arrangements so that, if required,
replacement Notes are issued to such transferor Lender and new Notes
or, as appropriate, replacement Notes, are issued to such Purchasing
Lender, in each case in principal amounts reflecting their Commitment
Percentages or, as appropriate, reflecting their outstanding Revolving
Credit Loans as adjusted pursuant to such Commitment Transfer
Supplement.
(d) In the case of each sale by a Lender pursuant to
Section 10.12(b) or 10.12(c), the selling Lender shall pay to the
Agent an administration fee equal to Two Thousand Five Hundred Dollars
($2,500.00).
(e) The Borrower authorizes the Agent and each Lender
to disclose to any Participant or Purchasing Lender (each, a
"Transferee") and any prospective Transferee any and all financial
information in the Agent's or such Lender's possession concerning the
Borrower or the Other Obligors which has been delivered to the Agent
or such Lender pursuant to this Agreement or the other Credit
Documents or which has been delivered to the Agent or such Lender by
the Borrower or the Other Obligors in connection with credit
evaluation of the Borrower prior to entering into this Agreement.
(f) If, pursuant to this Subsection, any interest in
this Agreement or any Note is transferred to any Transferee which is
organized under the laws of any jurisdiction other than the United
States of America or any state thereof, the transferor Lender shall
cause such Transferee, concurrently with the effectiveness of such
transfer, (i) to represent to the transferor Lender (for the benefit
of the transferor Lender, the Agent and the Borrower) that under
applicable law and treaties no taxes will be required to be withheld
by the Agent, the Borrower or the transferor Lender with respect to
any payments to be made to such Transferee in respect of the Revolving
Credit Loans, (ii) to furnish to the transferor Lender, the Agent and
the Borrower either U.S. Internal Revenue Service Form 4224 or U.S.
Internal Revenue Service Form 1001 completed in accordance with
clauses (i) and (ii) of Subsection 2.16(b) (wherein such Transferee
claims entitlement to complete exemption from U.S. federal withholding
tax on all interest payments hereunder), (iii) to furnish to the
transferor Lender, the Agent and the Borrower an Internal Revenue
Service Form W-8 or W-9 or successor applicable form, as the case may
be, to establish an exemption from United States backup withholding
tax, and (iv) to agree (for the benefit of the transferor Lender, the
Agent and the Borrower) to provide the transferor Lender, the Agent
and the Borrower a new Form 4224 or Form 1001, or a new Form W-8 or W-
9, upon the obsolescence of any previously delivered form, and
comparable statements in accordance with applicable laws and
regulations, and amendments, duly executed and completed by such
Transferee, and to comply from time to time with all applicable laws
and regulations with regard to such withholding tax exemption.
(g) The Borrower acknowledges that First Fidelity, or
its holding company, is acquiring The Bank of Baltimore and that, upon
any merger of First Fidelity and The Bank of Baltimore, one hundred
percent (100%) of the Commitments held by First Fidelity and The Bank
of Baltimore, as Lenders hereunder, as of the date of this Agreement
will, together with all rights and interests relating thereto,
thereafter be held by the survivor of such merger.
10.13 Adjustments; Periodic Charging of Accounts;
-------------------------------------------
Setoff. (a) If any Lender (a "benefitted Lender") shall at any time
------
receive any payment of all or part of the obligations owing to it
under this Agreement or any of the other Credit Documents, or interest
thereon, or receive any collateral in respect thereof (whether
voluntarily or involuntarily, by setoff, pursuant to events or
proceedings of the nature referred to in clause (h) of Section 8, or
otherwise) in a greater proportion than any such payment to and
collateral received by any other Lender with respect to corresponding
obligations owing to such other Lender under this Agreement or any of
the other Credit Documents, or interest thereon, such benefitted
Lender shall purchase for cash from the other Lender such portion of
the obligations owing to such other Lender under this Agreement or the
other Credit
Documents, or shall provide such other Lender with the benefits of any
such collateral, or the proceeds thereof, as shall be necessary to
cause such benefitted Lender to share the excess payment or benefits
of such collateral or proceeds ratably with such other Lender;
provided that if all or any portion of such excess payment or benefits
--------
is thereafter recovered from such benefitted Lender, such purchase
shall be rescinded, and the purchase price and benefits returned, to
the extent of such recovery, with interest on the same ratable basis
if the benefitted Lender is required to pay interest on the amount
recovered from the benefitted Lender. The Borrower agrees that each
Lender so purchasing a portion of such obligations owing to another
Lender may exercise all rights of payment (including, without
limitation, rights of setoff) with respect to such portion as fully as
if such Lender were the direct holder of such portion.
(b) The Borrower specifically authorizes the Agent to,
but the Agent shall not be required to, charge and deduct from any
Cash Collateral Account or from any checking account, collection
account, disbursement account, concentration account or any other
deposit account of the Borrower at First Fidelity, when and as the
same become due, any payments on account of Revolving Credit Loans or
L/C Reimbursement Obligations, including principal and interest, or on
account of indemnification liabilities, fees, commissions, costs or
expenses. In addition, the Agent, each Lender and the Issuing Bank
shall have the right, without prior notice to the Borrower, any such
notice being expressly waived by the Borrower to the extent permitted
by applicable law, upon any amount becoming due and payable by the
Borrower hereunder or under the other Credit Documents (whether by
demand, stated maturity, acceleration or otherwise) to setoff and
appropriate and apply against any and all deposits (general or
special, time or demand, provisional or final), in any currency, and
any other credits, Indebtedness or claims, in any currency, in each
case whether direct or indirect, absolute or contingent, matured or
unmatured, at any time held or owing by the Agent, such Lender or the
Issuing Bank to or for the credit or the account of the Borrower.
Each of the Agent, each Lender and the Issuing Bank agrees promptly to
notify each other party to this Agreement after any such setoff and
application made by it, provided that the failure to give such notice
--------
shall not affect the validity of such setoff and application.
10.14 Additional Lenders and Additional Credit. The
----------------------------------------
Agent agrees to use reasonable efforts to identify an additional
financial institution or financial institutions which will, pursuant
to such amendments of this Agreement and other Credit Documents as are
satisfactory to the Agent and the Required Lenders, become a Lender or
Lenders under this Agreement and issue, upon the terms and conditions
hereof, additional Revolving Credit Commitments aggregating Ten
Million Dollars ($10,000,000.00) so that the aggregate Revolving
Credit Commitments will then be Thirty Million Dollars
($30,000,000.00). In
such event (a) it is contemplated by the parties hereto that the L/C
Maximum Exposure, the Commercial L/C Maximum Exposure and the Standby
L/C Maximum Exposure will each be increased to Fifteen Million Dollars
($15,000,000.00), and (b) the Borrower shall pay to the Agent a
facility fee equal to three-quarters of one percent (.75%) of the
aggregate amount of such additional Revolving Credit Commitments. In
no event shall the Agent have any liability to any Person, and in no
event shall any obligations of any Person be diminished or reduced, on
account of any failure of the Agent to so identify any such financial
institution or financial institutions.
10.15 Counterparts. This Agreement may be executed by
------------
one or more of the parties to this Agreement on any number of separate
counterparts and all of said counterparts taken together shall be
deemed to constitute one and the same instrument.
10.16 GOVERNING LAW. THIS AGREEMENT, THE NOTES AND THE
-------------
OTHER CREDIT DOCUMENTS, AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES
HEREUNDER AND THEREUNDER, SHALL BE GOVERNED BY, AND CONSTRUED AND
INTERPRETED IN ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE OF
MARYLAND, EXCLUSIVE OF PRINCIPLES OF CONFLICTS OF LAWS. IN ADDITION,
SECTION 3 OF THIS AGREEMENT, L/C AGREEMENTS AND LETTERS OF CREDIT, AND
ALL TRANSACTIONS THEREUNDER, SHALL BE GOVERNED BY, AND CONSTRUED AND
INTERPRETED IN ACCORDANCE WITH, THE UNIFORM CUSTOMS AND PRACTICE FOR
DOCUMENTARY CREDITS OF THE INTERNATIONAL CHAMBER OF COMMERCE IN EFFECT
FROM TIME TO TIME, TO THE EXTENT NOT INCONSISTENT WITH SUCH INTERNAL
LAWS OF THE STATE OF MARYLAND.
10.17 Submission To Jurisdiction. The Borrower hereby
--------------------------
irrevocably and unconditionally:
(a) submits for itself and its property in any legal
action or proceeding relating to this Agreement or any of the other
Credit Documents, or for recognition and enforcement of any judgment
in respect thereof, to the non-exclusive general jurisdiction of any
state or federal court in the State of Maryland and appellate courts
from any thereof, and, in the case of any legal action or proceeding
relating to any Letter of Credit or any L/C Agreement, or for
recognition and enforcement of any judgment in respect thereof, to the
non-exclusive general jurisdiction of any state or federal court in
the Commonwealth of Pennsylvania, and appellate courts from any
thereof, in addition to such other courts in which jurisdiction may be
appropriate;
(b) consents that any such action or proceeding may be
brought in such courts, and waives any objection that it may now or
hereafter have to the venue of any such action or proceeding in any
such court or that such action or proceeding was brought in an
inconvenient court and agrees not to plead or claim the same;
(c) agrees that service of process in any such action
or proceeding may be effected by mailing a copy thereof by registered
or certified mail (or any substantially similar form of mail), postage
prepaid, to the Borrower at its address set forth in Subsection 10.3
or at such other address of which the Agent shall have been notified
pursuant thereto; and
(d) agrees that nothing herein shall affect the right
to effect service of process in any other manner permitted by law or
shall limit the right to sue in any other jurisdiction.
10.18 Payments in Foreign Currency. Subject to the
----------------------------
applicable provisions of Subsection 3.8, if any payment on account of
any Indebtedness or any other obligation or liability of the Borrower
under this Agreement or any of the other Credit Documents shall be
made to or for the account of the Agent, the Issuing Bank or any
Lender, or received by or for the account of the Agent, the Issuing
Bank or any Lender, in a currency other than Dollars, whether pursuant
to a judgment or order of any Governmental Authority or otherwise,
such payment shall constitute a discharge of such Indebtedness or such
other obligation or liability of the Borrower only to the extent of
the amount of Dollars which the Agent, the Issuing Bank or such
Lender, as the case may be, is able to purchase on the spot market,
through the office of the Agent indicated in Subsection 10.3, the
office of the Issuing Bank indicated in Subsection 10.3 or the
Domestic Lending Office of such Lender, as the case may be, at the
opening of business on the date of receipt of such payment, in
accordance with the usual foreign exchange practices of the Agent, the
Issuing Bank or such Lender, as the case may be, with the amount of
such currency so received. If the amount of Dollars which the Agent,
the Issuing Bank or such Lender is so able to purchase is less than
the amount of Dollars originally payable to the Agent, the Issuing
Bank or such Lender, the Borrower shall indemnify and save harmless
the Agent, the Issuing Bank or such Lender, as the case may be, from
and against any loss or damage arising as a result of such deficiency.
This indemnity shall constitute an obligation of the Borrower but
separate and independent from the other obligations of the Borrower
under this Agreement and the other Credit Documents, shall give rise
to a separate and independent cause of action, shall apply
irrespective of any indulgence granted to the Borrower by the Agent,
the Issuing Bank or any Lender from time to time and shall continue in
full force and effect notwithstanding any judgment or order for a
liquidated sum in respect of such Indebtedness or any such other
obligation or liability of the Borrower so paid in a currency other
than Dollars. The agreements in this Subsection shall survive the
termination of this Agreement and payment of the outstanding Notes for
a period of two (2) years.
10.19 Acknowledgment Concerning Intercreditor Agreement.
-------------------------------------------------
The Borrower hereby acknowledges and consents to all of the provisions
of the Intercreditor Agreement, including the provisions relating to
the amendment, modification or waiver thereof. The Borrower
specifically acknowledges and assumes all of the risks that, as a
result of provisions of the Intercreditor Agreement, decisions may be
made by the Lenders or the Issuing Bank to cease extending credit to
the Borrower or to take or omit to take other actions which, but for
the existence of the Intercreditor Agreement, the Lenders or the
Issuing Bank might not decide to take or omit to take.
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed under seal and delivered by their proper
and duly authorized officers as of the day and year first above
written.
ATTEST/WITNESS: AAI CORPORATION
By: (SEAL)
--------------------------------
Paul J. Michaud
Vice President
FIRST FIDELITY BANK, NATIONAL
ASSOCIATION, as Agent, as a
Lender and as Issuing Bank
By: (SEAL)
--------------------------------
Michael W. Coiley
Vice President
THE BANK OF BALTIMORE
By: (SEAL)
--------------------------------
Robert C. Brennan
Senior Vice President
Schedule I
to Credit Agreement
-------------------
BORROWER BUSINESS PREMISES
--------------------------
York Road and Industry Lane
Hunt Valley, Maryland 21030-0126
10139 York Road
Cockeysville, Maryland 21030
Building 200
11101 Gilroy Road
Hunt Valley, Maryland 21031
2801 Professional Parkway
Ocoee, Florida 32801
One Crystal Park
2011 Crystal Drive, Suite 107
Arlington, Virginia 22202
1235 Jefferson Davis Highway
Suite 1, Crystal Gateway 1
Arlington, Virginia 22201
Stoneridge Atrium, Suite 270
5776 Stoneridge Mall Road
Pleasanton, California 94588
4027 Colonel Glenn Highway
Office No. 407
Beavercreek, Ohio 45431-1672
370 South 500 East
Suites 126 and 130
Clearfield, Utah 84015
1300 East Grand
Clovis, New Mexico 88101
7323 Highway 90 West, Suite 405
San Antonio, Texas 78227
Schedule II
to Credit Agreement
-------------------
LENDING OFFICES AND COMMITMENTS
--------------------------------
Lending Offices:
----------------
Domestic Eurodollar
Lender Lending Office Lending Office
------ -------------- --------------
First Fidelity Banks 123 South Broad Street 123 South Broad Street
National Association Philadelphia, PA 19109 Philadelphia, PA 19109
The Bank of Baltimore 120 East Baltimore 120 East Baltimore
Street Street
Baltimore, MD 21202 Baltimore, MD 21202
Revolving Credit Commitments:
-----------------------------
Commitment
Lender Amount Percentage
------ ------ ----------
First Fidelity Bank, $12,500,000.00 62.5%
National Association
The Bank of Baltimore $ 7,500,000.00 37.5%
(continued)
LENDING OFFICES AND COMMITMENTS
--------------------------------
(continued)
Notice Addresses:
----------------
Lender Notice Address
------ --------------
First Fidelity Bank, National 123 South Broad Street
Association Philadelphia, PA 19109
Attention: Michael Coiley
Telecopy: 215/985-6079
The Bank of Baltimore 120 East Baltimore Street
Baltimore, MD 21202
Attention: James T. Pierce
Telecopy: 410/539-0136
Schedule III
to Credit Agreement
-------------------
INDUSTRY LANE REAL PROPERTY PROPOSED TO BE SOLD
-----------------------------------------------
Buildings known as Buildings 115, 116, 117, 118, 119, 120 and 121 and
the land described in the Industry Lane Real Property Exhibit attached
to this Schedule located at:
York Road and Industry Lane
South side Industry Lane
Hunt Valley, Maryland 21030
Schedule IV
to Credit Agreement
-------------------
REAL PROPERTY COLLATERAL
------------------------
Schedule V
to Credit Agreement
-------------------
YORK ROAD REAL PROPERTY PROPOSED TO BE SOLD
-------------------------------------------
Building known as Building 130 and the land described in the York Road
Real Property Exhibit attached to this Schedule located at:
10139 York Road
Cockeysville, Maryland 21030
Schedule 4.7
to Credit Agreement
-------------------
LITIGATION MATTERS
------------------
Schedule 4.8
to Credit Agreement
-------------------
CONTRACTUAL OBLIGATIONS
-----------------------
Schedule 4.13
to Credit Agreement
-------------------
ENVIRONMENTAL MATTERS
---------------------
Schedule 4.14
to Credit Agreement
-------------------
INTELLECTUAL PROPERTY DOMESTICALLY REGISTERED
---------------------------------------------
Schedule 4.19
to Credit Agreement
-------------------
ERISA MATTERS
-------------
Schedule 7.3
to Credit Agreement
-------------------
PERMITTED LIENS
---------------
STATE OF MARYLAND, CITY OF BALTIMORE, SS:
I HEREBY CERTIFY that on this 13th day of October, 1994,
before me, the undersigned, a Notary Public of said State, personally
appeared Paul J. Michaud, who acknowledged himself to be the Vice
President of AAI Corporation, and that he, as such, being authorized
so to do, executed the foregoing instrument for the purposes therein
contained.
WITNESS my hand and Notarial Seal.
-----------------------------------
Notary Public
My Commission expires:
10/1/97
-------
STATE OF MARYLAND, CITY OF BALTIMORE, SS:
I HEREBY CERTIFY that on this 13th day of October, 1994,
before me, the undersigned, a Notary Public of said State, personally
appeared Michael W. Coiley, who acknowledged himself to be the Vice
President of First Fidelity Bank, National Association, as Agent,
Lender and Issuing Bank, and that he, as such, being authorized so to
do, executed the foregoing instrument for the purposes therein
contained.
WITNESS my hand and Notarial Seal.
-----------------------------------
Notary Public
My Commission expires:
10/1/97
-------
STATE OF MARYLAND, CITY OF BALTIMORE, SS:
I HEREBY CERTIFY that on this 13th day of October, 1994,
before me, the undersigned, a Notary Public of said State, personally
appeared Robert C. Brennan, who acknowledged himself to be the Senior
Vice President of The Bank of Baltimore, and that he, as such, being
authorized so to do, executed the foregoing instrument for the
purposes therein contained.
WITNESS my hand and Notarial Seal.
-----------------------------------
Notary Public
My Commission expires:
10/1/97
-------
EXHIBIT A
to Credit Agreement
-------------------
APPLICATION FOR COMMERCIAL LETTER OF CREDIT
ADVISING BANK (if applicable):
APPLICANT (Hereinafter collectively/singularly "We", "Us", or "Our"):
BENEFICIARY (Herein after called "Beneficiary"):
AMOUNT:
EXPIRATION DATE:
Please issue and transmit by the method indicated below your
Irrevocable Letter of Credit (hereinafter called "Credit") to be
available to the Beneficiary by sight payment at your counters (unless
otherwise required in Special Conditions below) against presentation
of the following documents on or before the Expiration Date;
Transmit this Credit via
[_] mail/airmail
[_] tele-transmission (telex, cable, or Swift at your option)
[_] courier [_] Other ____________________
Available by draft/s at sight drawn on you, your affiliate, or
correspondent at your option, or you may waive draft accompanied by
[_] Beneficiary's signed and dated statement(s) that
___________
[_] Other documents as indicated on the reverse hereof
Note: Documents that do not specify issuer, wording,
or data content will be accepted as tendered
[_] Please issue your letter of credit in accordance with
the attached specimen or attached sheet which is an
integral part of this application and which has been
signed or countersigned and dated by us
[_] Special
Conditions:_________________________________________
[_] Only one drawing up to amount of credit permitted
[_] Only one drawing for the amount of credit permitted
Partial drawings will be allowed if one of these blocks is not checked
Jointly and severally with intent to be legally bound hereby and to
induce you or at your request any of your correspondents or affiliates
to establish the Credit, we agree that this application is to be
issued pursuant to applicant's most recently delivered to you Standby
Letter of Credit Agreement, including WAIVER OF JURY TRIAL THEREIN,
all of which are incorporated herein by reference and made a part
hereof. We agree that any of us may agree to increase, extension of
maturity, or time for negotiation, or any other modification of the
terms of the Credit, with or without notice to the others, by any
actions you take in accordance with such increase, extension, or
modification.
Date: ________________ ___, 19__
Applicant's Name__________________________________
Authorized Signature of Applicant_______________________________
Name/Title: __________________________________
Name/Title: __________________________________
Telephone# (_____) _________________
If signed by a Financial Institution as Applicant, countersignature of
Financial Institution's Customer requesting issuance of Letter of
Credit
Financial Institution's Customer Name________________________
Signature __________________________________
Date: ______________ ___, 19___
EXHIBIT B
to Credit Agreement
-------------------
APPLICATION FOR STANDBY LETTER OF CREDIT
PLEASE ISSUE AN IRREVOCABLE LETTER OF CREDIT (TOGETHER WITH ANY
AMENDMENTS THERETO, THE "CREDIT") SUBSTANTIALLY AS SET FORTH BELOW,
AND FORWARD VIA
[_] Mail/Airmail [_] Airmail With Preliminary Advice By
Teletransmission
[_] Full Details By Teletransmission [_] Courier
ADVISING BANK (If left blank and if applicable, we will select one of
our correspondents):
APPLICANT: __________________________________
BENEFICIARY: ________________________________
AMOUNT: ____________________________
EXPIRATION DATE ___________/______/_______
Month Day Year
AT THE COUNTERS OF THE PAYING, ACCEPTING, OR NEGOTIATING BANK AS THE
CASE MAY BE
CREDIT IS TO BE AVAILABLE WITH:
ANY NEGOTIATING BANK (FREELY NEGOTIABLE) OR AS CHECKED BELOW
[_] YOURSELVES (RESTRICTED TO YOUR COUNTERS)
[_] ________________________________________
DRAFTS MAY BE DRAWN ON YOU, YOUR CORRESPONDENT, OR AFFILIATE AT YOUR
OPTION OR YOU MAY WAIVE DRAFTS.
[_] INSURANCE WILL BE COVERED BY US. WE AGREE TO KEEP INSURANCE
COVERAGE IN FORCE UNTIL WE REIMBURSE YOU FOR ALL OBLIGATIONS
UNDERTAKEN BY YOU HEREUNDER.
CREDIT IS TO BE AVAILABLE BY:
[_] SIGHT PAYMENT
[_] ACCEPTANCE
___ DAYS SIGHT
___ DAYS DATE
[_] FROM TRANSPORT DOCUMENT DATE
[_] FROM INVOICE DATE
[_] ____________________________
[_] DEFERRED PAYMENT ____________________________
DOCUMENTS REQUIRED
[_] SIGNED COMMERCIAL INVOICE [_] PACKING LIST
[_] CERTIFICATE OF ORIGIN
[_] SPECIAL CUSTOMS INVOICE FORM # ___________________________
[_] NEGOTIABLE INSURANCE POLICY
OR CERTIFICATE COVERING [_] MARINE [_] AIR [_] WAR
[_] ALL RISKS [_] OTHER RISKS _____
_______________ for _______________% of the Trade Term Value if
and as indicated below
[_] FULL SET OF CLEAN ON BOARD OCEAN BILLS OF LADING ISSUED TO ORDER
OF FIRST FIDELITY BANK, NATIONAL ASSOCIATION
[_] FULL SET OF CLEAN ON BOARD OCEAN BILLS OF LADING ISSUED TO ORDER
OF SHIPPER AND ENDORSED IN BLANK
[_] MULTIMODAL TRANSPORT DOCUMENT ISSUED TO THE ORDER OF FIRST
FIDELITY BANK, NATIONAL ASSOCIATION
[_] AIR WAYBILL CONSIGNED TO ___________________________________
[_] TRUCK OR FAIL BILL OF LADING CONSIGNED TO __________________
[_] OTHER TRANSPORT DOCUMENT (please specify) __________________
TRANSPORT DOCUMENT MUST BE MARKED
[_] FREIGHT PREPAID [_] FREIGHT COLLECT
AND MUST BE MARKED NOTIFY _______________________________________
[_] OTHER DOCUMENTS AND SPECIAL INSTRUCTIONS ___________________
MERCHANDISE DESCRIPTION
COVERING MERCHANDISE TO BE DESCRIBED IN THE INVOICE AS FOLLOWS AND
INDICATING A TRADE TERM IF AND AS INDICATED BELOW:
(Note: please avoid using excessive merchandise description)
SHIPMENT FROM: _________________________
SHIPMENT TO: __________________________
TRADE TERMS
DEPARTURE MAIN CARRIAGE
[_] EXW UNPAID
[_] FCA [_] FAS [_] FOB
MAIN CARRIAGE
PAID ARRIVAL
[_] CFR [_] CIF [_] DAF [_] DES [_] DEQ
[_] CPT [_] CIP [_] DDU [_] DDP
OTHER TERMS
NAMED PLACE, PORT OF SHIPMENT, OR PORT OR PLACE OF DESTINATION
-------
SHIPPING TERMS
Transport document to be __________/__________/__________
dated not later than Month Day Year
[_] PARTIAL SHIPMENT/DRAWING NOT PERMITTED
[_] TRANSHIPMENT NOT PERMITTED
NOTE: Partial shipment/drawing & transhipment is allowed unless
otherwise indicated
OTHER TERMS
DOCUMENTS MUST BE PRESENTED TO THE NEGOTIATING/PAYING/ACCEPTING BANK
WITHIN ____ DAYS AFTER DATE OF ISSUANCE OF TRANSPORT DOCUMENTS BUT
WITHIN VALIDITY OF CREDIT (IF LEFT BLANK, IT WILL BE UNDERSTOOD TO BE
21 DAYS)
[_] ALL BANKING CHARGES OTHER THAN ISSUING BANK CHARGES ARE FOR THE
ACCOUNT OF THE BENEFICIARY
[_] DISCOUNT CHARGES (IF ANY) ARE FOR THE ACCOUNT OF THE APPLICANT
[_] PLEASE REFER TO THE REVERSE HEREOF OR TO THE ATTACHED SIGNED AND
DATED SHEET WHICH FORMS AN INTEGRAL PART HEREOF
MAILING INSTRUCTIONS
YOU ARE AUTHORIZED TO INSTRUCT YOUR CORRESPONDENT TO FORWARD ALL
DOCUMENTS TO YOU IN ONE REGISTERED MAIL/AIRMAIL ENVELOPE
FORWARD DOCUMENTS TO
IN CASE OF NEED CONTACT WHO IS AUTHORIZED TO GIVE INSTRUCTIONS
Contact Name ________________________
Telephone # __________________ FAX # ______________________
JOINTLY AND SEVERALLY WITH INTENT TO BE LEGALLY BOUND HEREBY AND TO
INDUCE YOU, OR AT YOUR REQUEST ANY OF YOUR CORRESPONDENTS OR
AFFILIATES, TO ESTABLISH THE CREDIT, WE AGREE THAT THIS APPLICATION IS
TO BE ISSUED PURSUANT TO APPLICANT'S MOST RECENTLY DELIVERED TO YOU
CONTINUING AGREEMENT FOR COMMERCIAL LETTERS OF CREDIT, INCLUDING
WAIVER OF JURY TRIAL THEREIN, ALL OF WHICH IS INCORPORATED HEREIN BY
REFERENCE AND MADE A PART HEREOF, WE AGREE THAT ANY OF US MAY AGREE TO
INCREASE, EXTENSION OF MATURITY OR TIME FOR NEGOTIATION, OR ANY OTHER
MODIFICATION OF THE TERMS OF THE CREDIT, WITH OR WITHOUT NOTICE TO THE
OTHERS, BY ANY ACTIONS YOU TAKE IN ACCORDANCE WITH SUCH INCREASE,
EXTENSION, OR MODIFICATION.
Date: ___________________, 19__
APPLICANT'S NAME __________________________
AUTHORIZED SIGNATURE OF APPLICANT __________________________
_____signed by a Financial Institution as Applicant, countersignature
of Financial Institution's Customer requesting issuance of Letter of
Credit.
Date: ___________________, 19__
Financial Institution's Customer Name __________________________
Signature(s) __________________________
EXHIBIT C
to Credit Agreement
-------------------
OFFICER DEFAULT CERTIFICATE
I, _______________________, pursuant to the Credit Agreement
(the "Credit Agreement") dated October 13, 1994, among AAI
CORPORATION, a Maryland corporation ("Borrower"), the person party
thereto as Agent ("Agent"), the persons parties thereto as Lenders
("Lenders"), and the person party thereto as Issuing Bank ("Issuing
Bank"), hereby certify to Agent, each Lender and Issuing Bank, that:
1. I am the chief financial officer of Borrower.
2. I have conducted a diligent inquiry concerning whether, as
at ___________________, 19__, there existed any Default (as defined in
the Credit Agreement) or any Event of Default (as defined in the
Credit Agreement).
3. Based upon such inquiry, to my knowledge and belief, as at
such date, [there existed no Default (as defined in the Credit
--------------------------------------------------
Agreement) or Event of Default (as defined in the Credit Agreement).]
-------------------------------------------------------------------
[the following Default[s] (as defined in the Credit Agreement) and
-----------------------------------------------------------------
Event[s] of Default (as defined in the Credit Agreement)] existed and
---------------------------------------------------------------------
the relevant facts with respect thereto are as follows:]
-------------------------------------------------------
WITNESS my signature of this _______ day of _____________,
19_____.
-----------------------------------
Name:
Title:
EXHIBIT D
to Credit Agreement
-------------------
OFFICER FINANCIAL COVENANT CERTIFICATE
I, _______________________, pursuant to the Credit Agreement
(the "Credit Agreement") dated _________________, 1994, among AAI
CORPORATION, a Maryland corporation ("Borrower"), the person party
thereto as Agent ("Agent"), the persons parties thereto as Lenders
("Lenders"), and the person party thereto as Issuing Bank ("Issuing
Bank"), hereby certify to Agent, each Lender and Issuing Bank, that:
1. I am the chief financial officer of Borrower.
2. As at ______________, 19__ (all capitalized terms used
hereinafter without definition having the meanings assigned to such
terms in the Credit Agreement):
(a) Tangible Net Worth equalled $___________
(i) Total Assets equalled . . . . $___________
(ii) Intangible Assets equalled . . $___________
(iii) Total Liabilities equalled . . $___________
(b) Leverage Ratio equalled . . . . . . ___________ to
1.00
(i) UIC-DEL. Standby Subordinated
Debt Balance equalled . . . . $___________
(c) Cash Flow Coverage Ratio equalled . ___________ to
1.00
(i) EBIT for the four quarters
then
ended equalled . . . . . $___________
(ii) Depreciation, amortization and
non-cash charges deducted in
determining such EBIT equalled $___________
(iii) Current portion of Long-Term
Debt equalled . . . . . . . . $___________
(iv) Interest Expense for the four
quarters then ended equalled . $___________
(v) Operating lease payments due
within 12 months equalled . . $___________
WITNESS my signature of this _______ day of _____________,
199_.
-----------------------------------
-
Name: Paul J. Michaud
Title: Vice President & CFO
EXHIBIT E
to Credit Agreement
-------------------
OFFICER RELIANCE CERTIFICATE
I, _______________________, pursuant to the Credit Agreement
(the "Credit Agreement") dated October 13, 1994, among AAI
CORPORATION, a Maryland corporation ("Borrower"), the person party
thereto as Agent ("Agent"), the persons parties thereto as Lenders
("Lenders"), and the person party thereto as Issuing Bank ("Issuing
Bank"), hereby certify to Agent, each Lender and Issuing Bank, that:
1. I am the chief financial officer of Borrower.
2. The financial statements of Borrower and its
Subsidiaries for the quarterly accounting period ending _____________,
19__, which have been delivered to Agent, each Lender and Issuing
Bank, were prepared under my supervision.
3. Such financial statements present fairly in all
material respects the financial condition of Borrower and its
Subsidiaries as at such date and the results of operations of Borrower
and its Subsidiaries for the quarterly accounting period then ended
and for the current fiscal year of Borrower through the end of such
quarterly accounting period, subject to normal year-end adjustments.
WITNESS my signature of this _______ day of _____________,
19_____.
-----------------------------------
-
Name: Paul J. Michaud
Title: Vice President & CFO
EXHIBIT F
to Credit Agreement
-------------------
REVOLVING CREDIT NOTE
[$ ] [ ], 1994
------------------- ----------------
FOR VALUE RECEIVED, the undersigned, AAI CORPORATION, a
Maryland corporation, hereby unconditionally promises to pay on the
Termination Date, to the order of [______________________________]
(the "Lender"), for the account of the Lender's Domestic Lending
Office in respect of Base Rate Loans or for the account of the
Lender's Eurodollar Lending Office in respect of Eurodollar Loans, at
the office of First Fidelity Bank, National Association, as Agent (the
"Agent"), 123 South Broad Street, Philadelphia, Pennsylvania 19109, in
lawful money of the United States of America and in immediately
available funds, the principal amount of the lesser of (a) [
----------
($ )], and (b) the aggregate unpaid
-------------------------------------
principal amount of all Revolving Credit Loans made by the Lender to
the undersigned pursuant to the Credit Agreement dated as of
October 13, 1994, among the undersigned, the Agent, the Lenders
parties thereto and the Issuing Bank party thereto (as the same may be
waived, amended, modified, extended, renewed, supplemented or replaced
from time to time, the "Credit Agreement"). Capitalized terms
hereinbefore or hereinafter used without definition shall have the
meanings assigned to such terms in the Credit Agreement.
The undersigned further agrees to pay interest in like money
at such office on the unpaid principal amount hereof from time to time
from the date hereof until and after such amount shall become due and
payable (whether at stated maturity, by demand, by acceleration or
otherwise) on the dates and at the applicable rates per annum as
provided in Subsection 2.10 of the Credit Agreement.
The holder of this Note is authorized to endorse the date,
Type and amount of each Revolving Credit Loan made or converted by the
Lender, and the date and amount of each payment or prepayment of
principal thereof, and the unpaid principal balance thereof, on
Schedules A and B annexed hereto and made a part hereof, or on a
continuation thereof, which endorsement shall constitute prima facie
----- -----
evidence of the accuracy of the information endorsed, absent manifest
error; provided that no failure of any holder to so endorse any such
--------
information shall relieve the undersigned of any of its obligations in
respect of Revolving Credit Loans, including interest accrued thereon.
If any payment under this Note (other than payments on
Eurodollar Loans) becomes due and payable on a day other than a
Business Day, such payment shall be extended to the next succeeding
Business Day, and, with respect to payments of principal, interest
thereon shall be payable at the then applicable rate during such
extension. If any payment on a Eurodollar Loan becomes due and
payable on a day other than a Working Day, the maturity thereof shall
be extended to the next succeeding Working Day unless the result of
such extension would be to extend such payment into another calendar
month, in which event such payment shall be made on the immediately
preceding Working Day.
This Note is one of the Revolving Credit Notes referred to
in the Credit Agreement and is entitled to the security and other
benefits thereof and of the other Credit Documents and is subject to
optional and mandatory prepayment in whole or in part as provided in
the Credit Agreement.
Upon the occurrence of any one or more Events of Default,
all amounts then remaining unpaid on this Note shall become, or may be
declared to be, immediately due and payable, all as provided in the
Credit Agreement.
Except as expressly provided herein, the undersigned hereby
waives presentment, demand, protest, notice of protest and all other
notices of any kind.
The Lender, by its acceptance hereof, and the undersigned
each agrees that any action, suit or proceeding involving any claim,
counterclaim or cross-claim arising out of or in any way relating,
directly or indirectly, to this Note, or any liabilities, rights or
interests of the undersigned or the Lender arising out of or in any
way relating, directly or indirectly, to this Note, shall be tried by
a court and not by a jury. The Lender, by its acceptance hereof, and
the undersigned each hereby waives any right to trial by jury in any
such action, suit or proceeding, with the understanding and agreement
that this waiver constitutes a waiver of trial by jury of all claims,
counterclaims and cross-claims against all parties to such actions,
suits or proceedings, including claims, counterclaims and cross-claims
against parties who are not parties to this Note, the Credit Agreement
or the other Credit Documents. This waiver is knowingly, willingly
and voluntarily made by the Lender and the undersigned, and each of
the Lender and the undersigned acknowledges and agrees that this
waiver of trial by jury is a material aspect of the agreements among
them and that no representations of fact or opinion have been made by
any Person to induce this waiver of trial by jury or to modify, limit
or nullify its effect.
This Note shall be governed by, and construed and
interpreted in accordance with, the internal laws of the State of
Maryland, exclusive of principles of conflicts of laws.
IN WITNESS WHEREOF, the undersigned has duly executed, or
caused to be duly executed, this Note under seal the day and year
first above written.
ATTEST/WITNESS AAI CORPORATION
By:
----------------------- -------------------------------------
(SEAL) Name:
Title:
SCHEDULE A
to Revolving Credit Note
------------------------
BASE RATE LOANS AND CONVERSIONS
AND REPAYMENTS OF BASE RATE LOANS
---------------------------------
Amount of
Loans Amount of
Converted Loans
Amount from Converted Unpaid
of Eurodollar from Base Principal
Base Rate Amount of Rate to Balance of
Rate to Base Base Rate Eurodollar Base
Date Loans Rate Loans Repaid Rate Rate Loans
---- ----- ---------- ------------ ---------- ----------
STATE OF _____________________, ______________________________, SS:
I HEREBY CERTIFY that on this _________ day of
__________________, 1994, before me, the undersigned, a Notary Public
of said State, personally appeared ___________________________, who
acknowledged himself/herself to be the _____________________ of AAI
Corporation, and that he/she, as such, being authorized so to do,
executed the foregoing instrument for the purposes therein contained.
WITNESS my hand and Notarial Seal.
Notary Public
My Commission expires:
______________________
EXHIBIT G
to Credit Agreement
-------------------
BORROWING CERTIFICATE
This Certificate is made pursuant to Subsection 5.1(i) of
the Credit Agreement of even date herewith (the "Credit Agreement")
among AAI Corporation (the "Borrower"), the financial institutions
parties thereto as Lenders, the financial institution party thereto as
Issuing Bank, and First Fidelity Bank, National Association, as Agent.
Capitalized terms used herein without definition shall have the
meanings assigned to such terms in the Credit Agreement. The
undersigned Vice President of the Borrower hereby certifies that, to
his knowledge and belief:
1. The representations and warranties of the Borrower set
forth in the Credit Agreement and the other Credit Documents, or
which are contained in any certificate, document or financial or
other statement furnished pursuant to or in connection with the
Credit Agreement, are true and complete in all material respects
on and as of the date hereof;
2. There are no bankruptcy, insolvency, reorganization,
liquidation or dissolution proceedings pending or, to my
knowledge, threatened against the Borrower or any of the
Guarantors, nor has any other event occurred affecting or
threatening the existence of the Borrower or any of the
Guarantors; and
3. Immediately prior to and immediately after the making
of the Revolving Credit Loans requested to be made on the date
hereof, no Default or Event of Default will have occurred.
4. Attached hereto are copies of all documents and
instruments, including all waivers, consents, licenses,
approvals, authorizations and filings required or advisable under
any Requirement of Law or by Contractual Obligations of the
Borrower or any Guarantor or otherwise required in connection
with the execution, delivery, performance, validity and
enforceability of the Credit Agreement, the Notes, the other
Credit Documents and the Intercreditor Agreement and such
consents, waivers, licenses, approvals, authorizations and
filings are in full force and effect on the date hereof.
IN WITNESS WHEREOF, the undersigned has hereunto set his
name as of the _____ day of _________, 1994.
Name: Richard R. Erkeneff
Title:
President and Chief Executive Officer
EXHIBIT H
to Credit Agreement
-------------------
(FORM OF COMMITMENT TRANSFER SUPPLEMENT)
COMMITMENT TRANSFER SUPPLEMENT
THIS COMMITMENT TRANSFER SUPPLEMENT is made as of the date
set forth in Item 1 of Schedule I hereto among the Transferor Lender
set forth in Item 2 of Schedule I hereto (the "Transferor Lender"),
each Purchasing Lender set forth in Item 3 of Schedule I hereto (each,
a "Purchasing Lender"), and FIRST FIDELITY BANK, NATIONAL ASSOCIATION,
as Agent under the Credit Agreement described below (in such capacity,
the "Agent").
WHEREAS, this Commitment Transfer Supplement is being
executed and delivered in accordance with Subsection 10.12(c) of the
Credit Agreement dated as of October 13, 1994, among AAI CORPORATION,
a Maryland corporation (the "Borrower"), the Transferor Lender, the
other Lenders party thereto, the Issuing Bank party thereto and the
Agent (as amended, modified, extended, renewed, supplemented or
replaced from time to time, the "Credit Agreement"); and
----------------
WHEREAS, capitalized terms used herein without definition
shall have the meanings assigned to such terms in the Credit
Agreement; and
WHEREAS, each Purchasing Lender (if it is not already a
Lender party to the Credit Agreement) wishes to become a Lender party
to the Credit Agreement; and
WHEREAS, the Transferor Lender is selling and assigning to
each Purchasing Lender rights, obligations and commitments under the
Credit Agreement.
NOW, THEREFORE, the parties hereto hereby agree as follows:
1. Promptly after receipt by the Agent of five
counterparts of this Commitment Transfer Supplement, to each of which
is attached a fully completed Schedule I and Schedule II, and each of
which has been executed by the Transferor Lender and each
Purchasing Lender (and the Borrower, if required by the Credit
Agreement to execute this Commitment Transfer Supplement), the Agent
will execute each such counterpart and transmit to the Borrower, the
Transferor Lender and each Purchasing Lender a Transfer Effective
Notice, substantially in the form of Schedule III hereto (a "Transfer
Effective Notice"). Such Transfer Effective Notice shall set forth,
inter alia, the date on which the transfer effected by this Commitment
----- ----
Transfer Supplement shall become effective (the "Transfer Effective
Date"), which date shall be the fifth Business Day following the date
of such Transfer Effective Notice. From and after the Transfer
Effective Date, each Purchasing Lender shall be a Lender party to the
Credit Agreement for all purposes thereof.
2. At or before 12:00 Noon, local time of the Transferor
Lender, on the Transfer Effective Date, each Purchasing Lender shall
pay to the Transferor Lender, in immediately available funds, an
amount equal to the purchase price, as agreed between the Transferor
Lender and such Purchasing Lender (the "Purchase Price"), of the
portion being purchased by such Purchasing Lender (such Purchasing
Lender's "Purchased Percentage") of the outstanding Revolving Credit
Loans, participations in Letters of Credit and other amounts owing to
the Transferor Lender under the Credit Agreement and the other Credit
Documents. Effective upon receipt by the Transferor Lender of the
Purchase Price from a Purchasing Lender, the Transferor Lender hereby
irrevocably sells, assigns and transfers to such Purchasing Lender,
without recourse, representation or warranty, and each Purchasing
Lender hereby irrevocably purchases, takes and assumes from the
Transferor Lender, such Purchasing Lender's Purchased Percentage of
the Revolving Credit Commitment of the Transferor Lender and the
presently outstanding Revolving Credit Loans, participations in
Letters of Credit and other amounts owing to the Transferor Lender
under the Credit Agreement and the other Credit Documents.
3. The Transferor Lender has made arrangements with each
Purchasing Lender with respect to (i) the portion, if any, to be paid,
and the date or dates for payment, by the Transferor Lender to such
Purchasing Lender of any fees heretofore received by the Transferor
Lender pursuant to the Credit Agreement prior to the Transfer
Effective Date and (ii) the portion, if any, to be paid, and the date
or dates for payment, by such Purchasing Lender to the Transferor
Lender of fees or interest received by such Purchasing Lender pursuant
to the Credit Agreement from and after the Transfer Effective Date.
4. (a) All principal payments that would otherwise be
payable from and after the Transfer Effective Date to or for the
account of the Transferor Lender pursuant to the Credit Agreement and
the other Credit Documents shall, instead, be payable to or for the
account of the Transferor Lender and the Purchasing Lenders, as the
case may be, in
accordance with their respective interests as reflected in this
Commitment Transfer Supplement.
(b) All interest, fees and other amounts that would
otherwise accrue for the account of the Transferor Lender from and
after the Transfer Effective Date pursuant to the Credit Agreement and
the other Credit Documents shall, instead, accrue for the account of,
and be payable to, the Transferor Lender and the Purchasing Lenders,
as the case may be, in accordance with their respective interests as
reflected in this Commitment Transfer Supplement. In the event that
any amount of interest, fees or other amounts accruing prior to the
Transfer Effective Date was included in the Purchase Price paid by any
Purchasing Lender, the Transferor Lender and each Purchasing Lender
will make appropriate arrangements for payment by the Transferor
Lender to such Purchasing Lender of such amount upon receipt thereof
from the Borrower.
5. On or prior to the Transfer Effective Date, the
Transferor Lender will deliver to the Agent its Revolving Credit Note.
On or prior to the Transfer Effective Date, the Borrower will execute
and deliver to the Agent a Revolving Credit Note for each Purchasing
Lender and the Transferor Lender, in each case in principal amounts
reflecting, in accordance with the Credit Agreement, their Revolving
Credit Commitments (as adjusted pursuant to this Commitment Transfer
Supplement). Each such new Revolving Credit Note shall be dated the
Closing Date. Promptly after the Transfer Effective Date, the Agent
will send to each of the Transferor Lender and the Purchasing Lenders
its new Revolving Credit Note and will send to the Borrower the
superseded Revolving Credit Note of the Transferor Lender, marked
"Cancelled."
6. Concurrently with the execution and delivery hereof,
the Transferor Lender will provide, at its sole expense, to each
Purchasing Lender (if it is not already a Lender party to the Credit
Agreement) conformed copies of all documents delivered to such
Transferor Lender on the Closing Date in satisfaction of the
conditions precedent set forth in the Credit Agreement.
7. Each of the parties to this Commitment Transfer
Supplement agrees that, at any time and from time to time upon the
written request of any other party, it will execute and deliver such
further documents and do such further acts and things as such other
party may reasonably request in order to effect the purposes of this
Commitment Transfer Supplement.
8. By executing and delivering this Commitment Transfer
Supplement, the Transferor Lender and each Purchasing Lender confirm
to and agree with each other, the Agent and the Lenders as follows:
(i) other than the representation and warranty that it is the
legal and beneficial owner of the interest being assigned hereby free
and clear of any adverse claim, the Transferor Lender makes no
representation or warranty and assumes no responsibility with respect
to any statements, warranties or representations made in or in
connection with the Credit Agreement or the other Credit Documents or
the execution, legality, validity, enforceability, genuineness,
sufficiency or value of the Credit Agreement or any other Loan
Document; (ii) the Transferor Lender makes no representation or
warranty and assumes no responsibility with respect to the financial
condition of the Borrower or any Other Obligor or the performance or
observance by the Borrower or any Other Obligor of any of its
obligations under the Credit Agreement or any other Loan Document;
(iii) each Purchasing Lender confirms that it has received a copy of
the Credit Agreement, together with copies of the financial statements
referred to in Subsection 4.1 of the Credit Agreement, the financial
statements delivered pursuant to Subsection 6.1 of the Credit
Agreement, if any, and such other documents and information as it has
deemed appropriate to make its credit analysis and decision to enter
into this Commitment Transfer Supplement; (iv) each Purchasing Lender
will, independently and without reliance upon the Agent, the
Transferor Lender, any other Lender or the Issuing Bank and based on
such documents and information as it shall deem appropriate at the
time, continue to make its own credit decisions in taking or not
taking action under the Credit Agreement or other Credit Documents;
(v) each Purchasing Lender appoints and authorizes the Agent to take
such actions as Agent on its behalf and to exercise such powers under
the Credit Agreement and the other Credit Documents as are delegated
to the Agent by the terms thereof, together with such powers as are
reasonably incidental thereto, all in accordance with Section 9 of the
Credit Agreement; and (vi) each Purchasing Lender agrees that it will
perform in accordance with their terms all of the obligations which by
the terms of the Credit Agreement or other Credit Documents are
required to be performed by it as a Lender.
9. Schedule II hereto sets forth the revised Revolving
Credit Commitments and Commitment Percentages of the Transferor Lender
and each Purchasing Lender, as well as administrative information with
respect to each Purchasing Lender.
10. Each Purchasing Lender hereby acknowledges and consents
to, and agrees to be bound by, the Intercreditor Agreement. This
paragraph 10 is for the benefit of the Private Placement Debt Holders
and the Transferor Lender.
11. THIS COMMITMENT TRANSFER SUPPLEMENT SHALL BE GOVERNED
BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE INTERNAL
LAWS OF THE STATE OF MARYLAND, EXCLUSIVE OF PRINCIPLES OF CONFLICTS OF
LAWS.
IN WITNESS WHEREOF, the parties hereto have caused this
Commitment Transfer Supplement to be executed and delivered by their
respective duly authorized officers on Schedule I hereto as of the
date set forth in Item 1 of Schedule I hereto.
CONSENTED TO AND ACKNOWLEDGED:
AAI CORPORATION
By:________________________
Name:
Title:
[Consent required only when
Purchasing Lender is not already
a Lender or Affiliate thereof]
SCHEDULE I
TO COMMITMENT
TRANSFER
SUPPLEMENT
----------
COMPLETION OF INFORMATION AND
SIGNATURES FOR COMMITMENT
TRANSFER SUPPLEMENT
---------------------------------
Re: Credit Agreement dated October 13, 1994
with AAI Corporation
Item 1 Date of Commitment [Insert date of
Transfer Supplement: Commitment Transfer
Supplement]
Item 2 Transferor Lender: [Insert name of
Transferor Lender]
Item 3 Purchasing Lender[s]: [Insert name[s] of
Purchasing Lender[s]]
Item 4 Signatures of Parties
to Commitment Transfer
Supplement:
, as
-------------------------------
Transferor Lender
By:
--------------------------------
Name:
Title:
[SIGNATURES CONTINUED]
, as a
-----------------------------
Purchasing Lender
By:
--------------------------------
Name:
Title:
, as Agent
-------------------------
By:
--------------------------------
Name:
Title:
SCHEDULE II
TO COMMITMENT
TRANSFER
SUPPLEMENT
----------
LIST OF LENDING OFFICES, ADDRESSES
FOR NOTICES AND COMMITMENT AMOUNTS
----------------------------------
[Name of Transferor
Lender] Revised Revolving Credit $
------------------------ ---------
Commitment Amount:
Revised Commitment Percentage:
------------------------------ ---------
[Name of Purchasing New Revolving Credit $
Lender] -------------------- ---------
Commitment Amount:
New Commitment Percentage:
-------------------------- ---------
Address for Notices to Purchasing Lender:
----------------------------------------
-----------------------------------------------------------
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Eurodollar Lending Office of Purchasing Lender:
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Domestic Lending Office of Purchasing Lender:
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SCHEDULE III
TO COMMITMENT
TRANSFER
SUPPLEMENT
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[Form of Transfer Effective Notice]
To: AAI CORPORATION, [Transferor Lender
and each Purchasing Lender]
The undersigned, as Agent under the Credit Agreement dated
as of October 13, 1994, among AAI CORPORATION (the "Borrower"), the
Lenders parties thereto, the Issuing Bank party thereto and the
undersigned, as such Agent, acknowledges receipt of five executed
counterparts of a completed Commitment Transfer Supplement, as
described in Schedule I hereto. [Note: attach copy of Schedule I from
Commitment Transfer Supplement.] Terms defined in such Commitment
Transfer Supplement are used herein as therein defined.
1. Pursuant to such Commitment Transfer Supplement, you
are advised that the Transfer Effective Date will be
[Insert fifth Business Day following date of
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Transfer Effective Notice].
2. Pursuant to such Commitment Transfer Supplement, the
Transferor Lender is required to deliver to the Agent on or before the
Transfer Effective Date its Revolving Credit Note.
3. Pursuant to such Commitment Transfer Supplement, the
Borrower is required to deliver to the Agent on or before the Transfer
Effective Date the following Revolving Credit Notes, each dated
[ , 1994]:
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[Describe each new Revolving Credit Note for Transferor
Lender and each Purchasing Lender as to principal
amount and payee]
4. Pursuant to such Commitment Transfer Supplement, each
Purchasing Lender is required to pay its Purchase Price to the
Transferor Lender at or before 12:00 Noon on the Transfer Effective
Date in immediately available funds.
Very truly yours,
FIRST FIDELITY BANK, NATIONAL
ASSOCIATION, as Agent
By:
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Name:
Title:
By:
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Name:
Title: