AMENDED AND RESTATED FINANCING AND SECURITY AGREEMENT Dated August 6, 2007 By and Between GENERAL PHYSICS CORPORATION as Borrower And WACHOVIA BANK, NATIONAL ASSOCIATION, as Lender
Exhibit
10.2
AMENDED
AND RESTATED FINANCING AND SECURITY AGREEMENT
Dated
August
6, 2007
By
and Between
GENERAL
PHYSICS CORPORATION
as
Borrower
And
WACHOVIA
BANK, NATIONAL ASSOCIATION,
as
Lender
TABLE
OF CONTENTS
| ARTICLE I DEFINITIONS |
2
|
|
|
Section
1.1
|
Certain
Defined Terms.
|
2
|
|
Section
1.2
|
Accounting
Terms and Other Definitional Provisions.
|
19
|
| ARTICLE II THE CREDIT FACILITIES |
20
|
|
|
Section
2.1
|
The
Revolving Credit Facility.
|
20
|
|
2.1.1
|
Revolving
Credit Facility.
|
20
|
|
2.1.2
|
Procedure
for Making Advances Under the Revolving Loan; Lender Protection
Loans.
|
20
|
|
2.1.3
|
Borrowing
Base.
|
21
|
|
2.1.4
|
Borrowing
Base Report.
|
21
|
|
2.1.5
|
Revolving
Credit Note.
|
22
|
|
2.1.6
|
Mandatory
Prepayments of Revolving Loan.
|
22
|
|
2.1.7
|
Optional
Prepayments of Revolving Loan.
|
22
|
|
2.1.8
|
The
Collateral Account.
|
22
|
|
2.1.9
|
Revolving
Loan Account.
|
23
|
|
2.1.10
|
Revolving
Credit Unused Line Fee.
|
24
|
|
Section
2.2
|
The
Letter of Credit Facility.
|
24
|
|
2.2.1
|
Letters
of Credit.
|
24
|
|
2.2.2
|
Letter
of Credit Fees.
|
24
|
|
2.2.3
|
Terms
of Letters of Credit.
|
24
|
|
2.2.4
|
Procedures
for Letters of Credit.
|
25
|
|
2.2.5
|
Payments
of Letters of Credit.
|
26
|
|
2.2.6
|
Change
in Law; Increased Cost.
|
27
|
|
2.2.7
|
General
Letter of Credit Provisions.
|
27
|
|
Section
2.3
|
Applicable
Interest Rates.
|
28
|
|
Section
2.4
|
General
Financing Provisions.
|
29
|
|
2.4.1
|
Borrowers’
Representatives.
|
29
|
|
2.4.2
|
Use
of Proceeds of the Revolving Loan.
|
31
|
|
2.4.3
|
Origination
Fee.
|
31
|
|
2.4.4
|
Monitoring
Fee.
|
31
|
|
2.4.5
|
Computation
of Interest and Fees.
|
31
|
|
2.4.6
|
Maximum
Interest Rate.
|
31
|
|
2.4.7
|
Payments.
|
32
|
|
2.4.8
|
Liens;
Setoff.
|
32
|
|
2.4.9
|
Requirements
of Law.
|
32
|
|
2.4.10
|
Guaranty.
|
33
|
|
2.4.11
|
ACH
Transactions and Swap Contracts.
|
36
|
|
2.4.12
|
Termination
of Revolving Credit Facility.
|
36
|
| ARTICLE III THE COLLATERAL |
36
|
|
|
Section
3.1
|
Debt
and Obligations Secured.
|
36
|
|
Section
3.2
|
Grant
of Liens.
|
36
|
|
Section
3.3
|
Collateral
Disclosure List.
|
37
|
|
Section
3.4
|
Personal
Property.
|
37
|
|
Section
3.5
|
Record
Searches.
|
38
|
|
Section
3.6
|
Costs.
|
38
|
|
Section
3.7
|
Release.
|
38
|
|
Section
3.8
|
Inconsistent
Provisions.
|
39
|
| ARTICLE IV REPRESENTATIONS AND WARRANTIES |
39
|
|
|
Section
4.1
|
Representations
and Warranties.
|
39
|
|
4.1.1
|
Subsidiaries.
|
39
|
|
4.1.2
|
Existence.
|
39
|
|
4.1.3
|
Power
and Authority.
|
39
|
|
4.1.4
|
Binding
Agreements.
|
39
|
|
4.1.5
|
No
Conflicts.
|
40
|
|
4.1.6
|
No
Defaults, Violations.
|
40
|
|
4.1.7
|
Compliance
with Laws.
|
40
|
|
4.1.8
|
Margin
Stock.
|
40
|
|
4.1.9
|
Investment
Company Act; Margin Stock.
|
41
|
|
4.1.10
|
Litigation.
|
41
|
|
4.1.11
|
Financial
Condition.
|
41
|
|
4.1.12
|
Full
Disclosure.
|
41
|
|
4.1.13
|
Indebtedness
for Borrowed Money.
|
42
|
|
4.1.14
|
Subordinated
Debt.
|
42
|
|
4.1.15
|
Taxes.
|
42
|
|
4.1.16
|
ERISA.
|
42
|
|
4.1.17
|
Title
to Properties.
|
43
|
|
4.1.18
|
Patents,
Trademarks, Etc.
|
43
|
|
4.1.19
|
Employee
Relations.
|
43
|
|
4.1.20
|
Presence
of Hazardous Materials or Hazardous Materials
Contamination.
|
43
|
|
4.1.21
|
Perfection
and Priority of Collateral.
|
44
|
|
4.1.22
|
No
Suspension or Debarment.
|
44
|
|
4.1.23
|
Collateral
Disclosure List.
|
44
|
|
4.1.24
|
Business
Names and Addresses.
|
44
|
|
4.1.25
|
Equipment.
|
44
|
|
4.1.26
|
Accounts.
|
44
|
|
4.1.27
|
Compliance
with Eligibility Standards.
|
45
|
|
Section
4.2
|
Survival;
Updates of Representations and Warranties.
|
45
|
| ARTICLE V CONDITIONS PRECEDENT |
45
|
|
|
Section
5.1
|
Conditions
to the Initial Advance and Initial Letter of Credit.
|
45
|
|
5.1.1
|
Organizational
Documents.
|
45
|
|
5.1.2
|
Opinion
of Borrowers’ Counsel.
|
46
|
|
5.1.3
|
Organizational
Documents - Guarantor.
|
46
|
|
5.1.4
|
Consents,
Licenses, Approvals, Etc.
|
47
|
|
5.1.5
|
Note.
|
47
|
|
5.1.6
|
Financing
Documents and Collateral.
|
47
|
|
5.1.7
|
Other
Financing Documents.
|
47
|
|
5.1.8
|
Other
Documents, Etc.
|
48
|
|
5.1.9
|
Payment
of Fees.
|
48
|
|
5.1.10
|
Collateral
Disclosure List.
|
48
|
|
5.1.11
|
Recordings
and Filings.
|
48
|
|
5.1.12
|
Insurance
Certificate.
|
48
|
|
5.1.13
|
Landlord’s
Waivers.
|
48
|
|
5.1.14
|
Field
Examination.
|
48
|
|
5.1.15
|
Subordination
Agreement.
|
48
|
|
5.1.16
|
Subordinated
Indebtedness.
|
49
|
|
5.1.17
|
Blocked
Account Agreements.
|
49
|
|
5.1.18
|
Borrowing
Base Report.
|
49
|
|
Section
5.2
|
Conditions
to all Extensions of Credit.
|
49
|
|
5.2.1
|
Compliance.
|
49
|
|
5.2.2
|
Borrowing
Base.
|
49
|
|
5.2.3
|
Default.
|
49
|
2
|
5.2.4
|
Representations
and Warranties.
|
49
|
|
5.2.5
|
Adverse
Change.
|
50
|
|
5.2.6
|
Legal
Matters.
|
50
|
| ARTICLE VI COVENANTS |
50
|
|
|
Section
6.1
|
Affirmative
Covenants.
|
50
|
|
6.1.1
|
Financial
Statements.
|
50
|
|
6.1.2
|
Recordkeeping,
Rights of Inspection, Field Examination, Etc.
|
52
|
|
6.1.3
|
Existence.
|
53
|
|
6.1.4
|
Compliance
with Laws.
|
53
|
|
6.1.5
|
Preservation
of Properties.
|
53
|
|
6.1.6
|
Line
of Business.
|
53
|
|
6.1.7
|
Insurance.
|
53
|
|
6.1.8
|
Taxes.
|
54
|
|
6.1.9
|
ERISA.
|
54
|
|
6.1.10
|
Notification
of Events of Default and Adverse Developments.
|
54
|
|
6.1.11
|
Hazardous
Materials; Contamination.
|
55
|
|
6.1.12
|
Financial
Covenants.
|
56
|
|
6.1.13
|
Collection
of Receivables.
|
56
|
|
6.1.14
|
Assignments
of Receivables.
|
57
|
|
6.1.15
|
Government
Accounts.
|
57
|
|
6.1.16
|
Notice
of Returned Goods, etc.
|
57
|
|
6.1.17
|
Equipment.
|
57
|
|
6.1.18
|
Defense
of Title and Further Assurances.
|
58
|
|
6.1.19
|
Business
Names; Locations.
|
58
|
|
6.1.20
|
Protection
of Collateral.
|
58
|
|
6.1.21
|
Depository
Relationship.
|
59
|
|
Section
6.2
|
Negative
Covenants.
|
59
|
|
6.2.1
|
Capital
Structure, Merger or Sale of Assets.
|
59
|
|
6.2.2
|
Acquisitions.
|
59
|
|
6.2.3
|
Subsidiaries.
|
59
|
|
6.2.4
|
Issuance
of Stock.
|
59
|
|
6.2.5
|
Purchase
or Redemption of Securities, Dividend Restrictions.
|
59
|
|
6.2.6
|
Indebtedness.
|
60
|
|
6.2.7
|
Investments,
Loans and Other Transactions.
|
60
|
|
6.2.8
|
Stock
of Subsidiaries.
|
61
|
|
6.2.9
|
Subordinated
Indebtedness.
|
61
|
|
6.2.10
|
Liens;
Confessed Judgment.
|
62
|
|
6.2.11
|
Other
Businesses.
|
62
|
|
6.2.12
|
ERISA
Compliance.
|
62
|
|
6.2.13
|
Prohibition
on Hazardous Materials.
|
62
|
|
6.2.14
|
Method
of Accounting; Fiscal Year.
|
62
|
|
6.2.15
|
Sale
and Leaseback.
|
63
|
|
6.2.16
|
Disposition
of Collateral.
|
63
|
| ARTICLE VII DEFAULT AND RIGHTS AND REMEDIES |
63
|
|
|
Section
7.1
|
Events
of Default.
|
63
|
|
7.1.1
|
Failure
to Pay.
|
63
|
|
7.1.2
|
Breach
of Representations and Warranties.
|
63
|
|
7.1.3
|
Failure
to Comply with Specific Covenants.
|
64
|
|
7.1.4
|
Failure
to Comply with Covenants.
|
64
|
|
7.1.5
|
Default
Under Other Financing Documents or Obligations.
|
64
|
|
7.1.6
|
Receiver;
Bankruptcy.
|
64
|
|
7.1.7
|
Involuntary
Bankruptcy, etc.
|
64
|
|
7.1.8
|
Judgment.
|
65
|
3
|
7.1.9
|
Execution;
Attachment.
|
65
|
|
7.1.10
|
Default
Under Other Borrowings.
|
65
|
|
7.1.11
|
Challenge
to Agreements.
|
65
|
|
7.1.12
|
Material
Adverse Change.
|
65
|
|
7.1.13
|
Contract
Default, Debarment or Suspension.
|
65
|
|
7.1.14
|
Liquidation,
Termination, Dissolution, etc.
|
66
|
|
Section
7.2
|
Remedies.
|
66
|
|
7.2.1
|
Acceleration.
|
66
|
|
7.2.2
|
Further
Advances.
|
66
|
|
7.2.3
|
Uniform
Commercial Code.
|
66
|
|
7.2.4
|
Specific
Rights With Regard to Collateral.
|
67
|
|
7.2.5
|
Application
of Proceeds.
|
68
|
|
7.2.6
|
Performance
by Lender.
|
68
|
|
7.2.7
|
Other
Remedies.
|
69
|
| ARTICLE VIII MISCELLANEOUS |
69
|
|
|
Section
8.1
|
Notices.
|
69
|
|
Section
8.2
|
Amendments;
Waivers.
|
70
|
|
Section
8.3
|
Cumulative
Remedies.
|
71
|
|
Section
8.4
|
Severability.
|
72
|
|
Section
8.5
|
Assignments
by Lender.
|
72
|
|
Section
8.6
|
Participations
by Lender.
|
73
|
|
Section
8.7
|
Disclosure
of Information by Lender.
|
73
|
|
Section
8.8
|
Successors
and Assigns.
|
73
|
|
Section
8.9
|
Continuing
Agreements.
|
73
|
|
Section
8.10
|
Enforcement
Costs.
|
73
|
|
Section
8.11
|
Applicable
Law; Jurisdiction.
|
74
|
|
8.11.1
|
Applicable
Law.
|
74
|
|
8.11.2
|
Submission
to Jurisdiction.
|
74
|
|
8.11.3
|
Service
of Process.
|
74
|
|
Section
8.12
|
Duplicate
Originals and Counterparts.
|
74
|
|
Section
8.13
|
Headings.
|
75
|
|
Section
8.14
|
No
Agency.
|
75
|
|
Section
8.15
|
Date
of Payment.
|
75
|
|
Section
8.16
|
Entire
Agreement.
|
75
|
|
Section
8.17
|
Waiver
of Trial by Jury.
|
75
|
|
Section
8.18
|
LIMITATION
ON LIABILITY; WAIVER OF PUNITIVE DAMAGES.
|
76
|
|
Section
8.19
|
Liability
of Lender.
|
76
|
|
Section
8.20
|
Indemnification.
|
76
|
|
Section
8.21
|
Confidentiality.
|
77
|
|
Section
8.22
|
Patriot
Act Notice.
|
77
|
|
Compliance
with Laws.
|
77
|
|
|
Section
8.24
|
Electronic
Transmission of Data.
|
78
|
4
AMENDED
AND RESTATED FINANCING
AND SECURITY AGREEMENT
THIS
AMENDED AND RESTATED FINANCING AND SECURITY AGREEMENT (this “Agreement”) is made
as of August 6, 2007, by and between GENERAL
PHYSICS CORPORATION, a Delaware corporation (“General Physics” or “Borrower”)
and
WACHOVIA
BANK, NATIONAL ASSOCIATION, a national banking association
(“Lender”).
RECITALS
A. General
Physics, MXL Industries, Inc., a Delaware corporation (“MXL”) and Skillright,
Inc., a Delaware corporation (“Skillright”) and Lender are parties to a
Financing and Security Agreement dated August 13, 2003 (the “Original Financing
Agreement”) and pursuant to the terms of a First Amendment to Financing and
Security Agreement dated as of March 30, 2004 (the “First Amendment”), the
Original Financing Agreement was modified to eliminate all references to MXL
and
any and all obligations of MXL under the Original Financing
Agreement.
B. The
Original Financing Agreement has been further modified by a Second Amendment
to
Financing and Security Agreement dated as of July
2,
2004, a Third Amendment to Financing and Security Agreement dated as of July
30,
2004 and a Fourth Amendment to Financing and Security Agreement dated as of
January 19, 2006 (together with the Original Financing Agreement and the First
Amendment, the “Original Amended Financing Agreement”).
C. General
Physics has applied to Lender for (i) an extension of the maturity date of
the
credit facilities under the Original Amended Financing Agreement consisting
of
(a) a revolving credit facility in the maximum principal amount of $25,000,000
and (b) a letter of credit facility as part of that revolving credit facility,
to be used by General Physics for the Permitted Uses (as hereinafter defined),
(ii) the elimination of Skillright as a “Borrower” under the terms of the
Original Amended Financing Agreement and (iii) a change in the pricing
applicable to the revolving credit facility.
D. Lender
has agreed to amend the Original Amended Financing Agreement and, in connection
therewith, agreed with Borrower to restate the Original Amended Financing
Agreement in its entirety upon the terms and subject to the conditions set
forth
in this Agreement.
AGREEMENTS
NOW,
THEREFORE, in consideration of the premises and for other good and valuable
consideration, the receipt of which is hereby acknowledged, the parties hereby
agree as follows:
ARTICLE
I
Section
1.1 Certain
Defined Terms.
As
used
in this Agreement, the terms defined in the Preamble and Recitals hereto shall
have the respective meanings specified therein, and the following terms shall
have the following meanings:
“Account”
individually and “Accounts” collectively mean all presently existing or
hereafter acquired or created accounts, accounts receivable, health-care
insurance receivables, contract rights, notes, drafts, instruments, acceptances,
chattel paper, leases and writings evidencing a monetary obligation or a
security interest in, or a lease of, goods, all rights to payment of a monetary
obligation or other consideration under present or future contracts (including,
without limitation, all rights (whether or not earned by performance) to receive
payments under presently existing or hereafter acquired or created letters
of
credit), or by virtue of property that has been sold, leased, licensed, assigned
or otherwise disposed of, services rendered or to be rendered, loans and
advances made or other considerations given, by or set forth in or arising
out
of any present or future chattel paper, note, draft, lease, acceptance, writing,
bond, insurance policy, instrument, document or general intangible, and all
extensions and renewals of any thereof, all rights under or arising out of
present or future contracts, agreements or general interest in goods which
gave
rise to any or all of the foregoing, including all commercial tort claims,
other
claims or causes of action now existing or hereafter arising in connection
with
or under any agreement or document or by operation of law or otherwise, all
collateral security of any kind (including, without limitation, real property
mortgages and deeds of trust) Supporting Obligations, letter-of-credit rights
and letters of credit given by any Person with respect to any of the foregoing,
all books and records in whatever media (paper, electronic or otherwise)
recorded or stored, with respect to any or all of the foregoing and all
equipment and general intangibles necessary or beneficial to retain, access
and/or process the information contained in those books and records, and all
Proceeds of the foregoing.
“Account
Debtor” means any Person who is obligated on a Receivable and “Account Debtors”
mean all Persons who are obligated on the Receivables.
“ACH
Transactions” means any cash management or related services including the
automatic clearing house transfer of funds by Lender for the account of any
Borrower pursuant to agreement or overdrafts.
“Additional
Borrower” means each Person that has executed and delivered an Additional
Borrower Joinder Supplement that has been accepted and approved by
Lender.
“Additional
Borrower Joinder Supplement” means an Additional Borrower Joinder Supplement in
substantially the form attached hereto as EXHIBIT
A,
with
the blanks appropriately completed and executed and delivered by the Additional
Borrower and accepted by General Physics on behalf of Borrowers.
“Adjustment
Date” has the meaning described in Section
8.5
(Assignments by Lender).
2
“Affiliate”
means, with respect to any designated Person, any other Person, (a) directly
or
indirectly controlling, directly or indirectly controlled by, or under direct
or
indirect common control with the Person designated, (b) directly or indirectly
owning or holding twenty percent (20%) or more of any equity interest in such
designated Person, or (c) twenty percent (20%) or more of whose stock or other
equity interest is directly or indirectly owned or held by such designated
Person. For purposes of this definition, the term “control” (including with
correlative meanings, the terms “controlling”, “controlled by” and “under common
control with”) means the possession, directly or indirectly, of the power to
direct or cause the direction of the management and policies of a Person,
whether through ownership of voting securities or other equity interests or
by
contract or otherwise.
“Agreement”
means this Amended and Restated Financing and Security Agreement, as amended,
restated, supplemented or otherwise modified in writing in accordance with
the
provisions of Section
8.2
(Amendments; Waivers).
“Applicable
Rate” means the sum of (a) the Applicable Margin plus
(b) the
LIBOR Market Index Rate.
“Assets”
means at any date all assets that, in accordance with GAAP consistently applied,
should be classified as assets on a consolidated balance sheet of Borrowers
and
their respective Subsidiaries.
“Assignee”
means any Person to which Lender assigns all or any portion of its interests
under this Agreement, any Commitment, and the Revolving Loan, in accordance
with
the provisions of Section
8.5
(Assignments by Lender), together with any and all successors and assigns of
such Person; “Assignees” means the collective reference to all
Assignees.
“Bankruptcy
Code” means Title 11 of the United States Code, as amended from time to time,
and any successor Laws.
“Blocked
Account” means collectively the deposit accounts subject to the Blocked Account
Agreements.
“Blocked
Account Agreements” means collectively the Blocked Account Agreement dated as of
the Closing Date by and among General Physics, Lender and Fleet National Bank,
the Blocked Account Agreement dated as of the Closing Date by and among General
Physics and the Blocked Account Agreement dated as of the Closing Date by and
among Skillright, Lender and Bank of America, N. A., each as amended, modified,
substituted, extended, and renewed from time to time.
“Borrower”
means each Person defined as a “Borrower” in the preamble of this Agreement and
each Additional Borrower; “Borrowers” means the collective reference to all
Persons defined as “Borrower” in the preamble to this Agreement and all
Additional Borrowers.
“Borrowing
Base” has the meaning described in Section 2.1.3
(Borrowing Base).
3
“Borrowing
Base Deficiency” has the meaning described in Section 2.1.3
(Borrowing Base).
“Borrowing
Base Report” has the meaning described in Section 2.1.4
(Borrowing Base Report).
“Business
Day” means any day other than a Saturday, Sunday or other day on which
commercial banks in the State are authorized or required to close.
“Capital
Adequacy Regulation” means any guideline, request or directive of any central
bank or other Governmental Authority, or any other law, rule or regulation,
whether or not having the force of law, in each case, regarding capital adequacy
of any bank or of any corporation controlling a bank.
“Capital
Expenditure” means an expenditure (whether payable in cash or other property or
accrued as a liability) for Fixed or Capital Assets, including, without
limitation, the entering into of a Capital Lease.
“Capital
Lease” means with respect to any Person any lease of real or personal property,
for which the related Lease Obligations have been or should be, in accordance
with GAAP consistently applied, capitalized on the balance sheet of that
Person.
“Cash
Equivalents” means (a) securities with maturities of one year or less from the
date of acquisition issued or fully guaranteed or insured by the United States
Government or any agency thereof, (b) certificates of deposit with maturities
of
one (1) year or less from the date of acquisition of, or money market accounts
maintained with, Lender, any Affiliate of Lender, or any other domestic
commercial bank having capital and surplus in excess of One Hundred Million
Dollars ($100,000,000.00) or such other domestic financial institutions or
domestic brokerage houses to the extent disclosed to, and approved by, Lender
and (c) commercial paper of a domestic issuer rated at least either A-1 by
Standard & Poor’s Corporation (or its successor) or P-1 by Xxxxx’x Investors
Service, Inc. (or its successor) with maturities of six (6) months or less
from
the date of acquisition.
“Chattel
Paper” means a record or records (including, without limitation, electronic
chattel paper) that evidence both a monetary obligation and a security interest
in specific goods, a security interest in specific goods and software used
in
the goods, or a lease of specific goods; all Supporting Obligations with respect
thereto; any returned, rejected or repossessed goods and software covered by
any
such record or records and all proceeds (in any form including, without
limitation, accounts, contract rights, documents, chattel paper, instruments
and
general intangibles) of such returned, rejected or repossessed goods; and all
Proceeds of the foregoing.
“Closing
Date” means August 13, 2003.
“Collateral”
means
all property of each and every Borrower subject from time to time to the Liens
of this Agreement, any of the Security Documents and/or any of the other
Financing Documents, together with any and all Proceeds thereof.
4
“Collateral
Account” has the meaning described in Section 2.1.8
(The
Collateral Account).
“Collateral
Disclosure List” has the meaning described in Section
3.3
(Collateral Disclosure List).
“Commitment”
means the Revolving Credit Commitment.
“Compliance
Certificate” means a periodic Compliance Certificate described in Section
6.1.1
(Financial Statements).
“Commonly
Controlled Entity” means an entity, whether or not incorporated, which together
with any Borrower would be deemed to be a “single employer” within the meaning
of Internal Revenue Code § 414(b) or (c), and for the purpose of ERISA
§ 302 and/or Internal Revenue Code §§ 412, 4971, 4977, 4980D, 4980E
and/or each “applicable section” under Internal Revenue Code § 414(t)(2),
within the meaning of the Internal Revenue Code § 414(b), (c) (m) or
(o).
“Copyrights”
means and includes, in each case whether now existing or hereafter arising,
all
of each Borrower’s rights, title and interest in and to (a) all copyrights,
rights and interests in copyrights, works protectable by copyright, copyright
registrations, copyright applications, and all renewals of any of the foregoing,
(b) all income, royalties, damages and payments now or hereafter due and/or
payable under any of the foregoing, including, without limitation, damages
or
payments for past, current or future infringements of any of the foregoing,
(c)
the right to xxx for past, present and future infringements of any of the
foregoing, and (d) all rights corresponding to any of the foregoing throughout
the world.
“Credit
Facility” means the Revolving Credit Facility or the Letter of Credit Facility,
as the case may be, and “Credit Facilities” means collectively the Revolving
Credit Facility and the Letter of Credit Facility and any and all other credit
facilities now or hereafter extended under or secured by this
Agreement.
“Current
Letter of Credit Obligations” has the meaning described in Section 2.2.5
(Payments of Letters of Credit).
“Default”
means an event which, with the giving of notice or lapse of time, or both,
would
reasonably be expected to constitute an Event of Default under the provisions
of
this Agreement.
“Documents”
means all documents of title or receipts, whether now existing or hereafter
acquired or created, and all Proceeds of the foregoing.
“Eligible
Receivable” and “Eligible Receivables” mean, at any time of determination
thereof, the unpaid portion of each account (net of any returns, discounts,
claims, credits, charges, accrued rebates or other allowances, offsets,
deductions, counterclaims, disputes or other defenses and reduced by the
aggregate amount of all reserves, limits and deductions provided for in this
definition and elsewhere in this Agreement) receivable in United States Dollars,
provided each account conforms and continues to conform to the following
criteria to the satisfaction of Lender:
5
(a) the
account arose in the ordinary course of business from a bona fide outright
sale
of goods or from services performed;
(b) the
account is a valid, legally enforceable obligation of the Account Debtor and
requires no further act on the part of any Person under any circumstances to
make the account payable by the Account Debtor;
(c) the
account is based upon an enforceable order or contract, written or oral, for
Inventory shipped or services performed, and the same were shipped or performed
in accordance with such order or contract;
(d) if
the
account arises from the sale of Inventory, the Inventory the sale of which
gave
rise to the account has been shipped or delivered to the Account Debtor on
an
absolute sale basis and not on a xxxx and hold sale basis, a consignment sale
basis, a guaranteed sale basis, a sale or return basis, or on the basis of
any
other similar understanding;
(e) if
the
account arises from the performance of services, such services have been fully
rendered and do not relate to any warranty claim or obligation;
(f) the
account is evidenced by an invoice or other documentation in form acceptable
to
Lender, dated no later than is customary in the ordinary course of business
and
containing only terms normally offered by the applicable Borrower;
(g) the
amount shown on the books of a Borrower, and on any invoice, certificate,
schedule or statement delivered to Lender is owing to such Borrower, and no
partial payment has been received unless reflected on the books of such
Borrower, and deducted from the amount due;
(h) the
account is not outstanding more than ninety (90) days from the date of the
invoice therefor or past due more than sixty (60) days after its due date,
which
shall not be later than sixty (60) days after the invoice date;
(i) the
account is not owing by any Account Debtor for which Lender has deemed fifty
percent (50%) or more of such Account Debtor’s other accounts (or any portion
thereof) due to a Borrower, individually, or all Borrowers collectively, to
be
non-Eligible Receivables;
(j) the
account is not owing by an Account Debtor or a group of affiliated Account
Debtors to any Borrower whose then existing accounts owing to that Borrower,
individually, exceed in aggregate face amount fifteen percent (15%) of such
Borrower’s total Eligible Receivables; provided, however, for the purposes of
this subsection (j),
each
contract with any agency or division of the United States Government, shall
be
treated as though entered into with a separate Account Debtor and if a Borrower
has an account or accounts which, when aggregated with other accounts owing
by
an Account Debtor or group of affiliated Account Debtors, exceed(s) fifteen
percent (15%) of such Borrower’s total Eligible Receivables, only that portion
of the account in excess of fifteen percent (15%) shall be deemed
ineligible;
6
(k) the
Account Debtor has not returned, rejected or refused to retain, or otherwise
notified a Borrower of any dispute concerning, or claimed nonconformity of,
any
of the Inventory or services from the sale or furnishing of which the account
arose; provided, however, the Receivable shall be deemed ineligible only to
the
extent of the disputed amount;
(l) the
account is not subject to any present or contingent (and no facts exist which
are the basis for any future) offset, claim, deduction or counterclaim, dispute
or defense in law or equity on the part of such Account Debtor, or any claim
for
credits, allowances, or adjustments by the Account Debtor because of returned,
inferior or damaged Inventory or unsatisfactory services, or for any other
reason including, without limitation, those arising on account of a breach
of
any express or implied representation or warranty; provided, however, the
Receivable shall be deemed ineligible only to the extent of the disputed
amount;
(m) the
Account Debtor is not a Subsidiary or Affiliate of any Borrower, or an employee,
officer, director or shareholder of any Borrower, or Affiliate of any
Borrower;
(n) the
Account Debtor is not incorporated or primarily conducting business in any
jurisdiction outside of the United States of America or Canada (excluding Quebec
Province), unless the Account Debtor’s obligations with respect to such account
are secured by a letter of credit, guaranty or banker’s acceptance having terms
and from such issuers and confirmation banks as are acceptable to Lender in
its
sole and absolute discretion (which letter of credit, guaranty or banker’s
acceptance is subject to the perfected Lien of Lender);
(o) as
to
which none of the following events has occurred with respect to the Account
Debtor on such Account: death or judicial declaration of incompetency of an
Account Debtor who is an individual; the filing by or against the Account Debtor
of a request or petition for liquidation, reorganization, arrangement,
adjustment of debts, adjudication as a bankrupt, winding-up, or other relief
under the bankruptcy, insolvency, or similar laws of the United States, any
state or territory thereof, or any foreign jurisdiction, now or hereafter in
effect; the making of any general assignment by the Account Debtor for the
benefit of creditors; the appointment of a receiver or trustee for the Account
Debtor or for any of the assets of the Account Debtor, including, without
limitation, the appointment of or taking possession by a “custodian,” as defined
in the Federal Bankruptcy Code; the institution by or against the Account Debtor
of any other type of insolvency proceeding (under the bankruptcy laws of the
United States or otherwise) or of any formal or informal proceeding for the
dissolution or liquidation of, settlement of claims against, or winding up
of
affairs of, the Account Debtor; the sale, assignment, or transfer of all or
any
material part of the assets of the Account Debtor; the nonpayment generally
by
the Account Debtor of its debts as they become due; or the cessation of the
business of the Account Debtor as a going concern;
7
(p) no
Borrower, is indebted in any manner to the Account Debtor (as creditor, lessor,
supplier or otherwise), with the exception of customary credits, adjustments
and/or discounts given to an Account Debtor by a Borrower, in the ordinary
course of its business; provided, however, if in the ordinary course of business
any Borrower incurs obligations to an Account Debtor for goods or services,
the
account shall be deemed ineligible only to the extent of the amount of such
payable due to the Account Debtor by such Borrower;
(q) the
account does not arise from services under or related to any warranty obligation
or out of service charges, finance charges or other fees for the time value
of
money;
(r) the
account is not evidenced by chattel paper or an instrument of any kind and,
except as may occur under subsection (n)
above,
is not secured by any letter of credit;
(s) the
title
of the respective Borrower, to the account is absolute and is not subject to
any
prior assignment, claim, Lien, or security interest, except Permitted
Liens;
(t) no
bond
or other undertaking by a guarantor or surety has been or is required to be
obtained, supporting the performance of any Borrower, or any other obligor
in
respect of any of such Borrower’s agreements with the Account Debtor
or
supporting the account and any of the Account Debtor’s obligations in respect of
the account;
(u) each
Borrower, has the full and unqualified right and power to assign and grant
a
security interest in, and Lien on, the account to Lender as security and
collateral for the payment of the Obligations;
(v) the
account does not arise out of a contract with, or order from, an Account Debtor
that, by its terms, forbids or makes void or unenforceable the assignment or
grant of a security interest by Borrower, to Lender of the account arising
from
such contract or order;
(w) the
account is subject to a Lien in favor of Lender, which Lien is perfected as
to
the account by the filing of financing statements and which Lien upon such
filing constitutes a first priority security interest and Lien, subject to
Permitted Liens;
8
(x) the
Inventory giving rise to the account was not, at the time of the sale thereof,
subject to any Lien other than Permitted Liens;
(y) no
part
of the account represents an advance or “up-front” billing for which work has
not been performed or a retainage; and
(z) Lender
in
the good faith exercise of its sole and absolute discretion has not deemed
the
account ineligible because of uncertainty as to the creditworthiness of the
Account Debtor or because Lender otherwise considers the collateral value of
such account to Lender to be impaired or its ability to realize such value
to be
insecure.
In
the
event of any dispute, under the foregoing criteria, as to whether an account
is,
or has ceased to be, an Eligible Receivable, the decision of Lender in the
good
faith exercise of its sole and absolute discretion shall control.
“Enforcement
Costs” means all reasonable expenses, charges, costs and fees whatsoever of any
nature whatsoever paid or incurred by or on behalf of Lender in connection
with
(a) any or all of the Obligations, this Agreement and/or any of the other
Financing Documents, (b) the creation, perfection, collection, maintenance,
preservation, defense, protection, realization upon, disposition, sale or
enforcement of all or any part of the Collateral, this Agreement or any of
the
other Financing Documents, including, without limitation, those costs and
expenses more specifically enumerated in Section
3.6
(Costs)
and/or Section
8.10
(Enforcement Costs), and further including, without limitation, amounts paid
to
lessors, processors, bailees, warehousemen, sureties, judgment creditors and
others in possession of or with a Lien against or claimed against the
Collateral, and (c) the monitoring, administration, processing and/or servicing
of any or all of the Obligations, the Financing Documents, and/or the
Collateral.
“Equipment”
means all equipment, machinery, computers, chattels, tools, parts, machine
tools, furniture, furnishings, fixtures and supplies of every nature, presently
existing or hereafter acquired or created and wherever located, whether or
not
the same shall be deemed to be affixed to real property, and all of such types
of property leased by any Borrower and all of Borrowers’ rights and interests
with respect thereto under such leases (including, without limitation, options
to purchase), together with all accessions, additions, fittings, accessories,
special tools, and improvements thereto and substitutions therefor and all
parts
and equipment which may be attached to or which are necessary or beneficial
for
the operation, use and/or disposition of such personal property, all licenses,
warranties, franchises and General Intangibles related thereto or necessary
or
beneficial for the operation, use and/or disposition of the same, together
with
all Accounts, Chattel Paper, Instruments and other consideration received by
any
Borrower on account of the sale, lease or other disposition of all or any part
of the foregoing, and together with all rights under or arising out of present
or future Documents and contracts relating to the foregoing and all Proceeds
of
the foregoing.
9
“ERISA”
means the Employee Retirement Income Security Act of 1974, as amended from
time
to time.
“Event
of
Default” has the meaning described in ARTICLE
VII
(Default
and Rights and Remedies).
“Facilities”
means the collective reference to the loan, letter of credit, interest rate
protection, foreign exchange risk, cash management, and other credit facilities
now or hereafter provided to any one or more of Borrowers by
Lender.
“Fees”
means, without duplication, the collective reference to each fee payable to
Lender under the terms of this Agreement or under the terms of any of the other
Financing Documents.
“Financing
Documents” means at any time collectively this Agreement, the Notes, the
Security Documents, the Letter of Credit Documents, and any other instrument,
agreement or document previously, simultaneously or hereafter executed and
delivered by any Borrower, any Guarantor and/or any other Person, singly or
jointly with another Person or Persons, evidencing, securing, guarantying or
in
connection with this Agreement, any Note, any of the Security Documents, any
of
the Facilities, and/or any of the Obligations.
“Fixed
or
Capital Assets” of a Person at any date means all assets which would, in
accordance with GAAP consistently applied, be classified on the balance sheet
of
such Person as property, plant or equipment at such date.
“GAAP”
means generally accepted accounting principles in the United States of America
in effect from time to time.
“General
Intangibles” means all general intangibles of every nature, whether presently
existing or hereafter acquired or created, and without implying any limitation
of the foregoing, further means all books and records, commercial tort claims,
other claims (including without limitation all claims for income tax and other
refunds), payment intangibles, Supporting Obligations, choses in action, claims,
causes of action in tort or equity, contract rights, judgments, customer lists,
software, Patents, Trademarks, licensing agreements, rights in intellectual
property, goodwill (including goodwill of any Borrower’s business symbolized by
and associated with any and all Trademarks, trademark licenses, Copyrights
and/or service marks), royalty payments, licenses, letter-of-credit rights,
letters of credit, contractual rights, the right to receive refunds of unearned
insurance premiums, rights as lessee under any lease of real or personal
property, literary rights, Copyrights, service names, service marks, logos,
trade secrets, amounts received as an award in or settlement of a suit in
damages, deposit accounts, interests in joint ventures, general or limited
partnerships, or limited liability companies or partnerships, rights in
applications for any of the foregoing, books and records in whatever media
(paper, electronic or otherwise) recorded or stored, with respect to any or
all
of the foregoing, all Supporting Obligations with respect to any of the
foregoing, and all Equipment and General Intangibles necessary or beneficial
to
retain, access and/or process the information contained in those books and
records, and all Proceeds of the foregoing.
10
“Governmental
Authority” means any nation or government, any state or other political
subdivision thereof and any entity exercising executive, legislative, judicial,
regulatory or administrative functions of government and any department, agency
or instrumentality thereof.
“Government
Contracts” means any contract with the United States or any department, agency
or instrumentality of the United States.
“GPX”
means GP
Strategies Corporation, a corporation organized and existing under the laws
of
the State of Delaware.
“Guarantor”
means GPX
and its
successors and assigns.
“Guaranty”
means that certain guaranty of payment for the benefit of Lender dated as of
the
Closing Date from GPX, as
the
same may from time to time be extended, amended, restated or otherwise
modified.
“Hazardous
Materials” means (a) any “hazardous waste” as defined by the Resource
Conservation and Recovery Act of 1976, as amended from time to time, and
regulations promulgated thereunder; (b) any “hazardous substance” as defined by
the Comprehensive Environmental Response, Compensation and Liability Act of
1980, as amended from time to time, and regulations promulgated thereunder;
and
(c) any substance the presence of which on any property now or hereafter owned,
acquired or operated by any Borrower is prohibited by any Law similar to those
set forth in this definition.
“Hazardous
Materials Contamination” means the contamination (whether presently existing or
occurring after the date of this Agreement) by Hazardous Materials of any
property owned, operated or controlled by any Borrower or for which any Borrower
has responsibility, including, without limitation, improvements, facilities,
soil, ground water, air or other elements on, or of, any property now or
hereafter owned, acquired or operated by any Borrower, and any other
contamination by Hazardous Materials for which any Borrower is
responsible.
“Indebtedness”
of a Person means at any date the total liabilities of such Person at such
time
determined in accordance with GAAP consistently applied.
“Indebtedness
for Borrowed Money” of a Person means at any time the sum at such time of (a)
Indebtedness of such Person for borrowed money or for the deferred purchase
price of property or services, (b) any obligations of such Person in respect
of
letters of credit, banker’s or other acceptances or similar obligations issued
or created for the account of such Person, (c) Lease Obligations of such Person
with respect to Capital Leases, (d) all liabilities secured by any Lien on
any
property owned by such Person, to the extent attached to such Person’s interest
in such property, even though such Person has not assumed or become personally
liable for the payment thereof, (e) obligations of third parties which are
being
guarantied or indemnified against by such Person or which are secured by the
property of such Person; (f) any obligation of such Person under an employee
stock ownership plan or other similar employee benefit plan; (g) any obligation
of such Person or a Commonly Controlled Entity to a Multiemployer Plan; and
(h)
any obligations, liabilities or indebtedness, contingent or otherwise, under
or
in connection with, any Swap Contract; but excluding trade and other accounts
payable in the ordinary course of business in accordance with customary trade
terms and which are not overdue (as determined in accordance with customary
trade practices) or which are being disputed in good faith by such Person and
for which adequate reserves are being provided on the books of such Person
in
accordance with GAAP.
11
“Indemnified
Parties” has the meaning set forth in Section
8.20
(Indemnification).
“Instrument”
means a negotiable instrument or any other writing which evidences a right
to
payment of a monetary obligation and is not itself a security agreement or
lease
and is of a type that in the ordinary course of business is transferred by
delivery with any necessary endorsement or assignment, and all Supporting
Obligations with respect to any of the foregoing and all Proceeds with respect
to any of the foregoing.
“Interest
Coverage Ratio” shall be defined as (a) earnings before deduction of interest
and taxes paid divided by (b) the sum of interest and tax payments.
“Internal
Revenue Code” means the Internal Revenue Code of 1986, as amended from time to
time, and the Income Tax Regulations issued and proposed to be issued
thereunder.
“Inventory”
means all goods whether now owned or hereafter acquired and other personal
property furnished under any contract of service or intended for sale or lease,
including, without limitation, all raw materials, work-in-process, finished
goods and materials and supplies of any kind, nature or description which are
used or consumed in any Borrower’s business or are or might be used in
connection with the manufacture, packing, shipping, advertising, selling or
finishing of such goods and other personal property and all licenses,
warranties, franchises, General Intangibles, personal property and all documents
of title or documents relating to the same, together with all Accounts, Chattel
Paper, Instruments and other consideration received on account of the sale,
lease or other disposition of all or any part of the foregoing, and together
with all rights under or arising out of present or future Documents and
contracts relating to the foregoing and all Proceeds of the
foregoing.
“Investment
Property” means a security, whether certificated or uncertificated, security
entitlement, securities account, commodity contract or commodity account and
all
Proceeds of, and Supporting Obligations with respect to, the
foregoing.
“ISP”
means, with respect to any Letter of Credit, the “International Standby
Practices 1998” published by the Institute of International Banking Law &
Practice (or such later version thereof as may be in effect at the time of
issuance).
“Item
of
Payment” means each check, draft, cash, money, instrument, item, and other
remittance in payment or on account of payment of the Receivables or otherwise
with respect to any Collateral, including, without limitation, cash proceeds
of
any returned, rejected or repossessed goods, the sale or lease of which gave
rise to a Receivable, and other proceeds of Collateral; and “Items of Payment”
means the collective reference to all of the foregoing.
“Laws”
means all ordinances, statutes, rules, regulations, orders, injunctions, writs,
or decrees of any Governmental Authority.
12
“Lease
Obligations” of a Person means for any period the rental commitments of such
Person for such period under leases for real and/or personal property (net
of
rent from subleases thereof, but including taxes, insurance, maintenance and
similar expenses which such Person, as the lessee, is obligated to pay under
the
terms of said leases, except to the extent that such taxes, insurance,
maintenance and similar expenses are payable by sublessees), including rental
commitments under Capital Leases.
“Letter
of Credit” and “Letters of Credit” shall have the meanings described in Section
2.2.1
(Letters
of Credit).
“Letter
of Credit Agreement” means the collective reference to each letter of credit
application and agreement substantially in the form of Lender’s then standard
form of application for letter of credit or such other form as may be approved
by Lender, executed and delivered by any Borrower or Borrowers in connection
with the issuance of a Letter of Credit, as the same may from time to time
be
amended, restated, supplemented or modified and “Letter of Credit Agreements”
means all of the foregoing in effect at any time and from time to
time.
“Letter
of Credit Cash Collateral Account” has the meaning described in Section
2.2.3
(Terms
of Letters of Credit).
“Letter
of Credit Documents” means any and all drafts under or purporting to be under a
Letter of Credit, any Letter of Credit Agreement, and any other instrument,
document or agreement executed and/or delivered by any Borrower or Borrowers
or
any other Person under, pursuant to or in connection with a Letter of Credit
or
any Letter of Credit Agreement.
“Letter
of Credit Facility” means the facility established pursuant to Section
2.2
(Letter
of Credit Facility).
“Letter
of Credit Fee” and “Letter of Credit Fees” have the meanings described in
Section 2.2.2
(Letter
of Credit Fees).
“Letter
of Credit Obligations” means all Obligations of Borrowers with respect to the
Letters of Credit and the Letter of Credit Agreements.
“Letter-of-credit
right” means a right to payment or performance under a letter of credit, whether
or not the beneficiary has demanded or is at the time entitled to demand payment
or performance.
“Liabilities”
means at any date all liabilities that in accordance with GAAP consistently
applied should be classified as liabilities on a consolidated balance sheet
of
Borrowers and their respective Subsidiaries.
“LIBOR
Market Index Rate”, for any day the rate (rounded to the next higher 1/100 of
1%) for 1 month U.S. dollar deposits as reported on Telerate page 3750 as of
11:00 a.m., London time, on such day, provided, if such day is not a London
business day, then the immediately preceding London business day (or if not
so
reported, then as determined by Lender from another recognized source or
interbank quotation).
13
“Lien”
means any mortgage, pledge, hypothecation, assignment, deposit arrangement,
encumbrance, lien (statutory or other), charge, or preference, priority or
other
security interest or preferential arrangement of any kind or nature whatsoever
(including any conditional sale or other title retention agreement, and any
financing lease having substantially the same economic effect as any of the
foregoing).
“Loan
Notice” has the meaning described in Section 2.1.2
(Procedure for Making Advances).
“Lockbox”
has the meaning described in Section 2.1.8
(The
Collateral Account).
“Maximum
Rate” has the meaning described in Section 2.4.6
(Maximum
Interest Rate).
“Modified
Interest Coverage Ratio” shall be defined as (a) earnings before deduction of
interest and taxes paid divided by (b) interest.
“Monitoring
Fee” and “Monitoring Fees” have the meanings described in Section 2.4.4
(Monitoring Fee).
“Multiemployer
Plan” means a Plan that is a multiemployer plan as defined in Section 4001(a)(3)
of ERISA.
“Net
Worth” means the consolidated shareholders’ equity, defined in accordance with
GAAP, of Borrowers and their respective Subsidiaries.
“Notice”
means a communication delivered in accordance with the terms of Section
8.1
(Notices).
“Note”
means the Revolving Credit Note, and “Notes” means collectively the Revolving
Credit Note and any other promissory note which may from time to time evidence
all or any portion of the Obligations.
“NPDC”
means National Patent Development Corporation, a Delaware corporation, and
its
successors and assigns.
“Obligations”
means, without duplication, all present and future indebtedness, duties,
obligations, and liabilities, whether now existing or contemplated or hereafter
arising, of any one or more of Borrowers to Lender under, arising pursuant
to,
in connection with and/or on account of the provisions of this Agreement, each
Note, each Security Document, and/or any of the other Financing Documents,
the
Revolving Loan, any Swap Contract and/or any of the Facilities including,
without limitation, the principal of, and interest on, each Note, late charges,
the Fees, Enforcement Costs, and prepayment fees (if any), letter of credit
reimbursement obligations, letter of credit fees or fees charged with respect
to
any guaranty of any letter of credit, regardless of whether such indebtedness,
duties, obligations, and liabilities be direct, indirect, primary, secondary,
joint, several, joint and several, fixed or contingent; and also means any
and
all renewals, extensions, substitutions, amendments, restatements and
rearrangements of any such indebtedness, duties, obligations, and
liabilities.
14
“OFAC”
means the U.S. Department of the Treasury’s Office of Foreign Assets
Control.
“Origination
Fee” has the meaning described in Section 2.4.3
(Origination Fee).
“Outstanding
Letter of Credit Obligations” has the meaning described in Section 2.2.3
(Terms
of Letters of Credit).
“Patents”
means and includes, in each case whether now existing or hereafter arising,
all
of each Borrower’s rights, title and interest in and to (a) any and all patents
and patent applications, (b) any and all inventions and improvements described
and claimed in such patents and patent applications, (c) reissues, divisions,
continuations, renewals, extensions and continuations-in-part of any patents
and
patent applications, (d) income, royalties, damages, claims and payments now
or
hereafter due and/or payable under and with respect to any patents or patent
applications, including, without limitation, damages and payments for past
and
future infringements, (e) rights to xxx for past, present and future
infringements of patents, and (f) all rights corresponding to any of the
foregoing throughout the world.
“PBGC”
means the Pension Benefit Guaranty Corporation.
“Permitted
Acquisitions” means acquisitions which may be made by a Borrower, provided there
is no Default or Event of Default both prior to the acquisition and on a
pro-forma basis, for which the aggregate cash purchase price paid at closing
plus the projected earnout payments to be paid by Borrower do not exceed Twenty
Million Dollars ($20,000,000).
“Permitted
Liens” means: (a) Liens for Taxes which are not delinquent or which Lender has
determined in the exercise of its sole and absolute discretion (i) are being
diligently contested in good faith and by appropriate proceedings, and such
contest operates to suspend collection of the contested Taxes and enforcement
of
a Lien, (ii) the applicable Borrower, has the financial ability to pay, with
all
penalties and interest, at all times without materially and adversely affecting
such Borrower, and (iii) are not, and will not be with appropriate filing,
the
giving of notice or the passage of time alone, entitled to priority over any
Lien of Lender; (b) deposits
to secure the performance of bids, trade contracts and leases (other than
Indebtedness), statutory obligations, surety bonds (other than bonds related
to
judgments or litigation), performance bonds and other obligations of a like
nature incurred in the ordinary course of business;
(c)
Liens securing the Obligations; (d) judgment Liens to the extent the entry
of
such judgment does not constitute an Event of Default under the terms of this
Agreement or result in the sale or levy of, or execution on, any of the
Collateral; (e) Liens existing as of the date hereof, including Liens securing
the Subordinated Debt; (f) Liens securing Capital Leases that are otherwise
permitted hereunder; (g) carriers’,
warehousemen’s, mechanics’, materialmen’s, repairmen’s or other like Liens
arising in the ordinary course of business which are not overdue for a period
of
more than thirty (30) days or which are being contested in good faith and by
appropriate proceedings diligently conducted, if adequate reserves with respect
thereto are maintained on the books of the applicable Borrower; (h) easements,
rights-of-way, restrictions and other similar encumbrances affecting real
property 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
applicable Borrower; and
(i)
such other Liens, if any, as are set forth on Schedule
4.1.21 attached
hereto and made a part hereof.
15
“Permitted
Uses” means (a) an amount not to exceed $10,000,000 to be used to repurchase
issued and outstanding stock of GPX and (b) general working capital purposes
arising in the ordinary course of Borrowers’ business and to support the
issuance of Letters of Credit.
“Person”
means and includes an individual, a corporation, a partnership, a joint venture,
a limited liability company or partnership, a trust, an unincorporated
association, a Governmental Authority, or any other organization or
entity.
“Plan”
means any “pension plan” as defined in ERISA Section 3(2) maintained by any
Borrower or a Commonly Controlled Entity in which any Borrower or a Commonly
Controlled Entity is an “employer” as defined in Section 3(5)
of ERISA
and which is intended to qualify for favorable tax treatment pursuant to
Internal Revenue Code Section 401(a).
“Post-Default
Rate” means the Applicable Rate in effect from time to time, plus three percent
(3%) per annum.
“Post-Expiration
Date Letter of Credit” and “Post-Expiration Date Letters of Credit” have the
meanings described in Section 2.2.3
(Terms
of Letters of Credit).
“Prepayment”
means a Revolving Loan Mandatory Prepayment or a Revolving Loan Optional
Prepayment, as the case may be, and “Prepayments” mean collectively all
Revolving Loan Mandatory Prepayments and all Revolving Loan Optional
Prepayments.
“Pricing
Ratio” means the Total Liabilities to Net Worth Ratio and the Interest Coverage
Ratio, collectively.
“Proceeds”
has the meaning described in the Uniform Commercial Code as in effect from
time
to time.
“Purchaser”
has the meaning described in the Note and Warrant Purchase Agreement dated
August 8, 2003 by and among GPX, NPDC, the purchasers party thereto and Gabelli
Funds, LLC, as agent.
“Receivable”
means a now owned or hereafter owned, acquired or created Account, Chattel
Paper, General Intangible or Instrument and all Proceeds thereof; and
“Receivables” means all now or hereafter owned, acquired or created Accounts,
Chattel Paper, General Intangibles and Instruments, and all Proceeds
thereof.
“Registered
Organization” means an organization organized solely under the law of a single
state or the United States and as to which the state or the United States must
maintain a public record showing the organization to have been
organized.
“Reportable
Event” means any of the events set forth in Section 4043(c) of ERISA or the
regulations thereunder.
“Responsible
Officer” means, with respect to a Person, the chief executive officer or the
president of such Person or, with respect to financial matters, the chief
financial officer of such Person.
16
“Revolving
Credit Commitment” means the agreement of Lender relating to the making of the
Revolving Loan and advances thereunder subject to and in accordance with the
provisions of this Agreement.
“Revolving
Credit Commitment Period” means the period of time from the Closing Date to the
Business Day preceding the Revolving Credit Termination Date.
“Revolving
Credit Committed Amount” has the meaning described in Section 2.1.1
(Revolving Credit Facility).
“Revolving
Credit Expiration Date” means August 31, 2009, unless otherwise extended for
successive periods of one (1) year beyond the then existing maturity date
commencing as of the first anniversary date of this Agreement, by Lender in
the
exercise of its sole and absolute discretion.
“Revolving
Credit Facility” means the facility established by Lender pursuant to
Section
2.1
(Revolving Credit Facility).
“Revolving
Credit Note” has the meaning described in Section 2.1.5
(Revolving Credit Note).
“Revolving
Credit Termination Date” means the earlier of (a) the Revolving Credit
Expiration Date, or (b) the date on which the Revolving Credit Commitment is
terminated pursuant to Section
7.2
(Remedies) or otherwise.
“Revolving
Credit Unused Line Fee” and “Revolving Credit Unused Line Fees” have the
meanings described in Section 2.1.10
(Revolving Credit Unused Line Fee).
“Revolving
Loan” has the meaning described in Section 2.1.1
(Revolving Credit Facility).
“Revolving
Loan Account” has the meaning described in Section 2.1.9
(Revolving Loan Account).
“Revolving
Loan Mandatory Prepayment” and “Revolving Loan Mandatory Prepayments” have the
meanings described in Section 2.1.6
(Mandatory Prepayments of Revolving Loan).
“Revolving
Loan Optional Prepayment” and “Revolving Loan Optional Prepayments” have the
meanings described in Section 2.1.7
(Optional Prepayment of Revolving Loan).
“Sanctioned
Country” means a country subject to a sanctions program identified on the list
maintained by OFAC and available at xxxx://xxx.xxxxx.xxx/xxxxxxx/xxxxxxxxxxx/xxxx/xxxxxxxxx/,,
or as otherwise published from time to time.
“Sanctioned
Person” means (i) a person named on the list of Specially Designated Nationals
or Blocked Persons maintained by OFAC available at
xxxx://xxx.xxxxx.xxx/xxxxxxx/xxxxxxxxxxx/xxxx/xxx
or as
otherwise published from time to time, or (ii) (A) an agency of the government
of a Sanctioned Country, (B) an organization controlled by a Sanctioned Country,
or (C) a person resident in a Sanctioned Country to the extent subject to
a
sanctions program administered by OFAC.
17
“Security
Documents” means collectively any assignment, pledge agreement, security
agreement, mortgage, deed of trust, deed to secure debt, financing statement
and
any similar instrument, document or agreement under or pursuant to which a
Lien
is now or hereafter granted to, or for the benefit of, Lender on any real or
personal property of any Person to secure all or any portion of the Obligations,
all as the same may from time to time be amended, restated, supplemented or
otherwise modified.
“State”
means the State of Maryland.
“Subordinated
Debt” means the 6% conditional secured subordinated notes due 2008 in the
aggregate principal amount of $7,500,000 purchased by Purchaser.
“Subordinated
Debt Loan Documents” means any and all promissory notes, agreements, documents
or instruments now or at any time evidencing, securing, guarantying or otherwise
executed and delivered in connection with the Subordinated Debt, as the same
may
from time to time be amended, restated, supplemented or modified.
“Subordinated
Indebtedness” means all Indebtedness, including, without limitation, the
Subordinated Debt, incurred at any time by any Borrower or Borrowers, which
is
in amounts, subject to repayment terms, and subordinated to the Obligations,
as
set forth in one or more written agreements, all in form and substance
satisfactory to Lender in its sole and absolute discretion.
“Subordination
Agreement” means that certain Subordination Agreement dated August 13, 2003 by
and between Purchaser, Borrower and Lender, as the same may be from time to
time
amended, restated, supplemented or modified.
“Subsidiary”
means any corporation the majority of the voting shares of which at the time
are
owned directly by any Borrower and/or by one or more Subsidiaries of any
Borrower.
“Supporting
Obligation” means a letter-of-credit right, secondary obligation or obligation
of a secondary obligor or that supports the payment or performance of an
account, chattel paper, document, general intangible, instrument or investment
property.
“Swap
Contract” means any document, instrument or agreement between Borrower and
Lender or any Affiliate of Lender, now existing or entered into in the future,
relating to an interest rate swap transaction, forward rate transaction,
interest rate cap, floor or collar transaction, any similar transaction, any
option to enter into any of the foregoing, and any combination of the foregoing,
which agreement may be oral or in writing, including, without limitation, any
master agreement relating to or governing any or all of the foregoing and any
related schedule or confirmation, each as amended from time to
time.
“Tangible
Net Worth” means as to the Borrowers and their respective Subsidiaries on a
consolidated basis at any date of determination thereof, the sum at such time
of: the Net Worth less the total of (a) all Assets which would be classified
as
intangible assets under GAAP consistently applied, (b) any revaluation or other
write-up in book value of assets subsequent to the date of the most recent
financial statements delivered to Lender, and (c) the amount of all loans and
advances (exclusive of advances permitted under Section 6.2.7(a))
to, or
investments in, any Person, excluding Cash Equivalents and deposit accounts
maintained by Borrower with any financial institution.
18
“Taxes”
means all taxes and assessments whether general or special, ordinary or
extraordinary, or foreseen or unforeseen, of every character (including all
penalties or interest thereon), which at any time may be assessed, levied,
confirmed or imposed by any Governmental Authority on any Borrower or any of
its
or their properties or assets or any part thereof or in respect of any of its
franchises, businesses, income or profits.
“Trademarks”
means and includes in each case whether now existing or hereafter arising,
all
of Borrower’s rights, title and interest in and to (a) any and all trademarks
(including service marks), trade names and trade styles, and applications for
registration thereof and the goodwill of the business symbolized by any of
the
foregoing, (b) any and all licenses of trademarks, service marks, trade names
and/or trade styles, whether as licensor or licensee, (c) any renewals of any
and all trademarks, service marks, trade names, trade styles and/or licenses
of
any of the foregoing, (d) income, royalties, damages and payments now or
hereafter due and/or payable with respect thereto, including, without
limitation, damages, claims, and payments for past, present and future
infringements thereof, (e) rights to xxx for past, present and future
infringements of any of the foregoing, including the right to settle suits
involving claims and demands for royalties owing, and (f) all rights
corresponding to any of the foregoing throughout the world.
“Unbilled
Receivables” means Receivables which otherwise qualify as Eligible Receivables
but which shall be billed within fifteen (15) days after the last day of the
prior month and are included in General Physics’ General Ledger Account number
1160-0001 titled “Sales earned not billed”.
“Uniform
Commercial Code” means, unless otherwise provided in this Agreement, the Uniform
Commercial Code as adopted by and in effect from time to time in the State
or in
any other jurisdiction, as applicable.
“Wholly
Owned Subsidiary” means any corporation, all the shares of stock of all classes
of which (other than directors’ qualifying shares) at the time are owned
directly or indirectly by a Borrower and/or by one or more Wholly Owned
Subsidiaries of Borrower.
|
Section
1.2
|
Accounting
Terms and Other Definitional Provisions.
|
Unless
otherwise defined herein, as used in this Agreement and in any certificate,
report or other document made or delivered pursuant hereto, accounting terms
not
otherwise defined herein, and accounting terms only partly defined herein,
to
the extent not defined, shall have the respective meanings given to them
under
GAAP, as consistently applied to the applicable Person. All terms used herein
which are defined by the Uniform Commercial Code shall have the same meanings
as
assigned to them by the Uniform Commercial Code unless and to the extent
varied
by this Agreement. The words “hereof”, “herein” and “hereunder” and words of
similar import when used in this Agreement shall refer to this Agreement
as a
whole and not to any particular provision of this Agreement, and article,
section, subsection, schedule and exhibit references are references to articles,
sections or subsections of, or schedules or exhibits to, as the case may
be,
this Agreement unless otherwise specified. As used herein, the singular number
shall include the plural, the plural the singular and the use of the masculine,
feminine or neuter gender shall include all genders, as the context may require.
Reference to any one or more of the Financing Documents shall mean the same
as
the foregoing may from time to time be amended, restated, substituted, extended,
renewed, supplemented or otherwise modified.
19
ARTICLE
II
THE
CREDIT FACILITIES
|
Section
2.1
|
The
Revolving Credit Facility.
|
|
2.1.1
|
Revolving
Credit Facility.
|
Subject
to and upon the provisions of this Agreement, Lender establishes a revolving
credit facility in favor of Borrowers. The aggregate of all advances under
the
Revolving Credit Facility is sometimes referred to in this Agreement as the
“Revolving Loan”.
The
principal amount of Twenty Five Million Dollars ($25,000,000) is the “Revolving
Credit Committed Amount”.
During
the Revolving Credit Commitment Period, Lender agrees to make advances under
the
Revolving Credit Facility in accordance with the provisions of this Agreement;
provided that after giving effect to any request duly made pursuant to this
Agreement, the aggregate outstanding principal balance of the Revolving Loan
and
all Letter of Credit Obligations would not exceed the lesser of (a) the
Revolving Credit Committed Amount or (b) the then most current Borrowing
Base.
Unless
sooner paid, the unpaid Revolving Loan, together with interest accrued and
unpaid thereon, and all other Obligations shall be due and payable in full
on
the Revolving Credit Expiration Date.
|
2.1.2
|
Procedure
for Making Advances Under the Revolving Loan; Lender Protection
Loans.
|
Borrowers
may borrow under the Revolving Credit Facility on any Business Day. Advances
under the Revolving Loan shall be deposited to a demand deposit account of
General Physics with Lender (or an Affiliate of Lender) or shall be otherwise
applied as directed by General Physics, which direction Lender may require
to be
in writing. No later than 12:00 p.m. (Eastern Time) on the date of the requested
borrowing, General Physics shall give Lender oral or written notice (a “Loan
Notice”) of the amount and (if requested by Lender) the purpose of the requested
borrowing. Any oral Loan Notice shall be confirmed in writing by General
Physics
within three (3) Business Days after the making of the requested advance
under
the Revolving Loan. Each Loan Notice shall be irrevocable.
In
addition, each Borrower hereby irrevocably authorizes Lender at any time
and
from time to time, without further request from or notice to such Borrower,
to
make advances under the Revolving Loan, and to establish, without duplication,
reserves against the Borrowing Base, which Lender, in its sole and absolute
discretion, deems necessary or appropriate to protect the interests of Lender,
including, without limitation, advances and reserves under the Revolving
Loan
made to cover debit balances in the Revolving Loan Account, principal of,
and/or
interest on, the Revolving Loan, the Obligations (including, without limitation,
any Letter of Credit Obligations), and/or Enforcement Costs, prior to, on,
or
after the termination of other advances under this Agreement, regardless
of
whether the outstanding principal amount of the Revolving Loan that Lender
may
advance or reserve hereunder exceeds the Revolving Credit Committed Amount
or
the Borrowing Base. Lender shall communicate to General Physics from time
to
time any action taken under this paragraph either orally or in
writing.
20
|
2.1.3
|
Borrowing
Base.
|
As
used
in this Agreement, the term “Borrowing Base” means at any time, an amount equal
to the aggregate of (a) eighty percent (80%) of the amount of Eligible
Receivables of Borrowers and (b) eighty
percent (80%) of Borrowers’ Unbilled Receivables.
The
Borrowing Base shall be computed based on the Borrowing Base Report most
recently delivered to and accepted by Lender in its sole and absolute
discretion. In the event Borrowers fail to furnish a Borrowing Base Report
required by Section 2.1.4
(Borrowing Base Report), or in the event Lender believes that a Borrowing
Base
Report is no longer accurate, Lender may, in its sole and absolute discretion
exercised from time to time and without limiting its other rights and remedies
under this Agreement, suspend the making of or limit advances under the
Revolving Loan.
If
at any
time the total of the aggregate principal amount of the Revolving Loan and
Outstanding Letter of Credit Obligations exceeds the Borrowing Base, a borrowing
base deficiency (“Borrowing Base Deficiency”) shall exist. Each time a Borrowing
Base Deficiency exists, Borrowers, at the sole and absolute discretion of
Lender
exercised from time to time, shall pay the Borrowing Base Deficiency ON DEMAND
to Lender.
Without
implying any limitation on Lender’s discretion with respect to the Borrowing
Base, the criteria for Eligible Receivables contained in the respective
definitions of Eligible Receivables are in part based upon the business
operations of Borrowers existing on or about the Closing Date and upon
information and records furnished to Lender by Borrowers. If at any time
or from
time to time hereafter, the business operations of Borrowers change or such
information and records furnished to Lender is incorrect or misleading, Lender
in its discretion, may at any time and from time to time during the duration
of
this Agreement change such criteria or add new criteria. Lender shall
communicate such changed or additional criteria to Borrowers from time to
time
either orally or in writing.
|
2.1.4
|
Borrowing
Base Report.
|
Borrowers
will furnish to Lender no less frequently than monthly and at such other
times
as may be requested by Lender a report of the Borrowing Base (each a “Borrowing
Base Report”; collectively, the “Borrowing Base Reports”) in the form required
from time to time by Lender, appropriately completed and duly signed. The
Borrowing Base Report shall contain the amount and payments on the Receivables,
both billed and unbilled, and the calculations of the Borrowing Base, all
in
such detail, and accompanied by such supporting and other information, as
Lender
may from time to time request. Upon Lender’s request Borrowers will provide
Lender with (a) confirmatory assignment schedules; (b) copies of Account
Debtor
invoices; (c) evidence of shipment or delivery; and (d) such further schedules,
documents and/or information regarding the Receivables, both billed and
unbilled, as Lender may reasonably require. The items to be provided under
this
subsection shall be in form satisfactory to Lender, and certified as true
and
correct by a Responsible Officer (or by any other officers or employees of
Borrower whom a Responsible Officer from time to time authorizes in writing
to
do so), and delivered to Lender from time to time solely for Lender’s
convenience in maintaining records of the Collateral. Any Borrower’s failure to
deliver any of such items to Lender shall not affect, terminate, modify,
or
otherwise limit the Liens of Lender on the Collateral.
21
|
2.1.5
|
Revolving
Credit Note.
|
The
obligation of Borrowers to pay the Revolving Loan, with interest, shall be
evidenced by a promissory note (as from time to time extended, amended,
restated, supplemented or otherwise modified, the “Revolving Credit Note”)
substantially in the form of EXHIBIT
B
attached
hereto and made a part hereof, with appropriate insertions. The Revolving
Credit
Note shall be payable to the order of Lender at the times provided in the
Revolving Credit Note, and shall be in the principal amount of the Revolving
Credit Committed Amount. Borrowers acknowledge and agree that, if the
outstanding principal balance of the Revolving Loan outstanding from time
to
time exceeds the face amount of the Revolving Credit Note, the excess shall
bear
interest at the Post-Default Rate for the Revolving Loan and shall be payable,
with accrued interest, ON DEMAND. The Revolving Credit Note shall not operate
as
a novation of any of the Obligations or nullify, discharge, or release any
such
Obligations or the continuing contractual relationship of the parties hereto
in
accordance with the provisions of this Agreement.
|
2.1.6
|
Mandatory
Prepayments of Revolving Loan.
|
Borrowers
shall make the mandatory prepayments (each a “Revolving Loan Mandatory
Prepayment” and collectively, the “Revolving Loan Mandatory Prepayments”) of the
Revolving Loan at any time and from time to time in such amounts as is required
pursuant to Section 2.1.3
(Borrowing Base) in order to cover any Borrowing Base Deficiency.
|
2.1.7
|
Optional
Prepayments of Revolving Loan.
|
Borrowers
shall have the option, at any time and from time to time, to prepay (each
a
“Revolving Loan Optional Prepayment” and collectively the “Revolving Loan
Optional Prepayments”) the Revolving Loan, in whole or in part without premium
or penalty.
|
2.1.8
|
The
Collateral Account.
|
Each
Borrower will deposit, or cause to be deposited, all Items of Payment to
a bank
account or bank accounts designated by Lender and from which Lender alone
has
power of access and withdrawal (collectively, the “Collateral Account”). In the
case of any deposit that is made by a Borrower manually (i.e., the payment
is
received by a Borrower rather than being delivered to the Lockbox or wired
to
the Collateral Account), such deposit shall be made not later than the next
Business Day after the date of receipt of the Items of Payment. The Items
of
Payment shall be deposited in precisely the form received, except for the
endorsements of the applicable Borrower where necessary to permit the collection
of any such Items of Payment, each Borrower hereby agreeing to make such
endorsement. In the event any Borrower shall fail to do so, Lender is hereby
authorized by each Borrower to make the endorsement in the name of the
applicable Borrower. Prior to such a deposit, Borrowers will not commingle
any
Items of Payment with any of the other funds or property of any Borrower,
but
will hold them separate and apart in trust and for the account of
Lender.
22
Each
Borrower shall direct its Account Debtors that all Items of Payment are to
be
either (a) wired to the Collateral Account or (b) mailed to one or more
post-office boxes designated by Lender, or to such other additional or
replacement post-office boxes pursuant to the request of Lender from time
to
time (collectively, the “Lockbox”). Lender shall have unrestricted and exclusive
access to the Lockbox.
Each
Borrower hereby authorizes Lender to inspect all Items of Payment, endorse
all
Items of Payment in the name of such Borrower, and deposit such Items of
Payment
in the Collateral Account. Lender reserves the right, exercised in its sole
and
absolute discretion from time to time, to provide to the Collateral Account
credit prior to final collection of an Item of Payment and to disallow credit
for any Item of Payment which is unsatisfactory to Lender. In the event Items
of
Payment are returned to Lender for any reason whatsoever, Lender may, in
the
exercise of its discretion from time to time, forward such Items of Payment
a
second time. Any returned Items of Payment shall be charged back to the
Collateral Account, the Revolving Loan Account, or other account, as
appropriate.
Lender
will apply the whole or any part of the collected funds credited to the
Collateral Account (including funds received from the Blocked Account) against
the Revolving Loan (or with respect to Items of Payment that are not proceeds
of
Accounts or after the occurrence and during the continuance of an Event of
Default, against any of the Obligations) or credit such collected funds to
a
depository account of Borrower with Lender (or an Affiliate of Lender), the
order and method of such application to be in the sole discretion of
Lender.
|
2.1.9
|
Revolving
Loan Account.
|
Lender
will establish and maintain a loan account on its books (the “Revolving Loan
Account”) to which Lender will (a) debit
(i) the
principal amount of each advance of the Revolving Loan made by Lender hereunder
as of the date made, (ii) the amount of any interest accrued on the Revolving
Loan as and when due, and (iii) any other amounts due and payable by Borrowers
to Lender from time to time under the provisions of this Agreement in connection
with the Revolving Loan, including, without limitation, Enforcement Costs,
Fees,
late charges, and service, collection and audit fees, as and when due and
payable, and (b) credit
all
payments made by Borrowers to Lender on account of the Revolving Loan as
of the
date made including, without limitation, funds credited to the Revolving
Loan
Account from the Collateral Account. Lender may debit the Revolving Loan
Account
for the amount of any Item of Payment that is returned to Lender unpaid.
All
credit entries to the Revolving Loan Account are conditional and shall be
readjusted as of the date made if final and indefeasible payment is not received
by Lender in cash or solvent credits. Any and all periodic or other statements
or reconciliations, and the information contained in those statements or
reconciliations, of the Revolving Loan Account shall be final, binding and
conclusive upon Borrowers in all respects, absent manifest error, unless
Lender
receives specific written objection thereto from Borrowers within thirty
(30)
Business Days after such statement or reconciliation shall have been sent
by
Lender.
23
|
2.1.10
|
Revolving
Credit Unused Line Fee.
|
Borrowers
shall pay to Lender a revolving credit facility fee (collectively, the
“Revolving Credit Unused Line Fees” and individually, a “Revolving Credit Unused
Line Fee”) in an amount equal to three-eighths percent (3/8%) per annum of the
average daily unused and undisbursed portion of the Revolving Credit Committed
Amount in effect from time to time accruing during each quarter. The accrued
and
unpaid portion of the Revolving Credit Unused Line Fee shall be paid in arrears
by Borrowers to Lender on the first day of each September, December, March
and
June, commencing on the first such date following the date hereof, and on
the
Revolving Credit Termination Date.
|
Section
2.2
|
The
Letter of Credit Facility.
|
|
2.2.1
|
Letters
of Credit.
|
Subject
to and upon the provisions of this Agreement, and as a part of the Revolving
Credit Commitment, any of Borrowers, upon the prior approval of Lender, may
obtain standby letters of credit (as the same may from time to time be amended,
supplemented or otherwise modified, each a “Letter of Credit” and collectively
the “Letters of Credit”) from Lender from time to time from the Closing Date
until the Business Day preceding the Revolving Credit Termination Date.
No
Borrower
will be
entitled to obtain a Letter of Credit hereunder unless (a) after giving effect
to the request, the outstanding principal balance of the Revolving Loan and
of
the Letter of Credit Obligations would not exceed the lesser of (i) the
Revolving Credit Committed Amount or (ii) the most current Borrowing Base
and
(b) the sum of the aggregate face amount of the then outstanding Letters
of
Credit (including the face amount of the requested Letter of Credit) does
not
exceed One Million Dollars ($1,000,000)
2.2.2 Letter
of
Credit Fees.
Prior
to
or simultaneously with the opening of each Letter of Credit, Borrowers shall
pay
to Lender, a letter of credit fee (each a “Letter of Credit Fee” and
collectively the “Letter of Credit Fees”) in an amount equal to the customary
fee charged commercial customers for a Letter of Credit from time to time.
The
Letter of Credit Fees shall be paid upon the opening of each Letter of Credit
and upon each anniversary thereof, if any. In addition, Borrowers shall pay
to
Lender all other reasonable and customary amendment, negotiation, processing,
transfer or other fees to the extent and as and when required by the provisions
of any Letter of Credit Agreement. All Letter of Credit Fees and all such
other
additional fees are included in and are a part of the “Fees” payable by
Borrowers under the provisions of this Agreement and are a part of the
Obligations.
|
2.2.3
|
Terms
of Letters of Credit.
|
Each
Letter of Credit shall (a) be opened pursuant to a Letter of Credit Agreement,
and (b) expire on a date not later than the Business Day preceding the Revolving
Credit Expiration Date; provided, however, if any Letter of Credit does have
an
expiration date later than the Business Day preceding the Revolving Credit
Termination Date (each a “Post-Expiration Date Letter of Credit” and
collectively, the “Post-Expiration Date Letters of Credit”), effective as of the
Business Day preceding the Revolving Credit Termination Date and without
prior
notice to or the consent of Borrowers, Lender shall make advances under the
Revolving Loan for the account of Borrowers in the aggregate face amount
of all
such Letters of Credit. Lender shall deposit the proceeds of such advances
into
one or more non-interest bearing accounts with and in the name of Lender
and
over which Lender alone shall have exclusive power of access and withdrawal
(collectively, the “Letter of Credit Cash Collateral Account”). The Letter of
Credit Cash Collateral Account is to be held by Lender as additional collateral
and security for any Letter of Credit Obligations relating to the
Post-Expiration Date Letters of Credit. Each Borrower hereby assigns, pledges,
grants and sets over to Lender a first priority security interest in, and
Lien
on, all of the funds on deposit in the Letter of Credit Cash Collateral Account,
together with any and all proceeds and products thereof as additional collateral
and security for the Letter of Credit Obligations relating to the
Post-Expiration Date Letters of Credit. Each Borrower acknowledges and agrees
that Lender shall be entitled to fund any draw or draft on any Post-Expiration
Date Letter of Credit from the monies on deposit in the Letter of Credit
Cash
Collateral Account with notice to but without the consent of any Borrower.
Each
Borrower further acknowledges and agrees that Lender’s election to fund any draw
or draft on any Post-Expiration Date Letter of Credit from the Letter of
Credit
Cash Collateral shall in no way limit, impair, lessen, reduce, release or
otherwise adversely affect Borrowers’ obligation to pay any Letter of Credit
Obligations under or relating to the Post-Expiration Date Letters of Credit.
At
such time as all Post-Expiration Date Letters of Credit have expired, all
Obligations have been paid in full, and the Commitment has been terminated,
any
remaining funds on deposit in the Letter of Credit Cash Collateral Account
shall
be paid to Borrowers.
24
The
aggregate face amount of all Letters of Credit at any one time outstanding
and
issued by Lender pursuant to the provisions of this Agreement, including,
without limitation, any and all Post-Expiration Date Letters of Credit, plus
the
amount of any unpaid Letter of Credit Fees accrued thereon, and less the
aggregate amount of all drafts issued under or purporting to have been issued
under such Letters of Credit that have been paid by Lender and for which
Lender
has been reimbursed by Borrower in full in accordance with Section 2.2.5
(Payments of Letters of Credit) and the Letter of Credit Agreements, and
for
which Lender has no further obligation or commitment to restore all or any
portion of the amounts drawn and reimbursed, is herein called the “Outstanding
Letter of Credit Obligations”.
|
2.2.4
|
Procedures
for Letters of Credit.
|
A
Borrower shall give Lender written notice at least five (5) Business Days
prior
to the date on which such Borrower desires Lender to issue a Letter of Credit.
Such notice shall be accompanied by a duly executed Letter of Credit Agreement
specifying, among other things: (a) the name and address of the intended
beneficiary of the Letter of Credit, (b) the requested face amount of the
Letter
of Credit, (c) whether the Letter of Credit is to be revocable or irrevocable,
(d) the Business Day on which the Letter of Credit is to be opened and the
date
on which the Letter of Credit is to expire, (e) the terms of payment of any
draft or drafts which may be drawn under the Letter of Credit, and (f) any
other
terms or provisions such Borrower desires to be contained in the Letter of
Credit. Such notice shall also be accompanied by such other information,
certificates, confirmations, and other items as Lender may require to assure
that the Letter of Credit is issued in accordance with the provisions of
this
Agreement and a Letter of Credit Agreement. In the event of any conflict
between
the provisions of this Agreement and the provisions of a Letter of Credit
Agreement, the provisions of this Agreement shall prevail and control unless
otherwise expressly provided in the Letter of Credit Agreement. Upon (x)
receipt
of such notice, (y) payment of all Letter of Credit Fees and all other Fees
payable in connection with the issuance of such Letter of Credit, and (z)
receipt of a duly executed Letter of Credit Agreement, Lender shall process
such
notice and Letter of Credit Agreement in accordance with its customary
procedures and open such Letter of Credit on the Business Day specified in
such
notice.
25
|
2.2.5
|
Payments
of Letters of Credit.
|
Borrowers
hereby promise to pay to Lender, ON DEMAND and in United States Dollars,
the
following which are herein collectively referred to as the “Current Letter of
Credit Obligations”:
(a) the
amount which Lender has paid or will be required to pay under each draft
or draw
on a Letter of Credit, whether such demand be in advance of Lender’s payment or
for reimbursement for such payment;
(b) any
and
all reasonable charges and expenses which Lender may pay or incur relative
to
the Letter of Credit and/or such draws or drafts; and
(c) interest
on the amounts described in (a) and (b) not paid by Borrowers as and when
due
and payable under the provisions of (a) and (b) above from the day the same
are
due and payable until paid in full at the Post-Default Rate.
In
addition, Borrowers hereby promise to pay any and all other Letter of Credit
Obligations as and when due and payable in accordance with the provisions
of
this Agreement and the Letter of Credit Agreements. The obligation of Borrowers
to pay Current Letter of Credit Obligations and all other Letter of Credit
Obligations shall be absolute and unconditional under any and all circumstances
and irrespective of any setoff, counterclaim or defense to payment which
any
Borrower or any other account party may have or have had against the beneficiary
of such Letter of Credit, Lender, or any other Person, including, without
limitation, any defense based on the failure of any draft or draw to conform
to
the terms of such Letter of Credit, any draft or other document proving to
be
forged, fraudulent or invalid, or the legality, validity, regularity or
enforceability of such Letter of Credit, any draft or other documents presented
with any draft, any Letter of Credit Agreement, this Agreement, or any of
the
other Financing Documents, all whether or not Lender had actual or constructive
knowledge of the same, and irrespective of any Collateral, security or guarantee
therefor or right of offset with respect thereto and irrespective of any
other
circumstances whatsoever which constitutes, or might be construed to constitute,
an equitable or legal discharge of Borrowers for any Letter of Credit
Obligations, in bankruptcy or otherwise; provided,
however,
that
Borrowers shall not be obligated to reimburse Lender for any wrongful payment
under such Letter of Credit made as a result of Lender’s gross negligence or
willful misconduct. The obligation of Borrowers to pay the Letter of Credit
Obligations shall not be conditioned or contingent upon the pursuit by Lender
or
any other Person at any time of any right or remedy against any Person which
may
be or become liable in respect of all or any part of such obligation or against
any Collateral, security or guarantee therefor or right of offset with respect
thereto.
26
The
Letter of Credit Obligations shall continue to be effective, or be reinstated,
as the case may be, if at any time payment of all or any portion of the Letter
of Credit Obligations is rescinded or must otherwise be restored or returned
by
Lender upon the insolvency, bankruptcy, dissolution, liquidation or
reorganization of any Person, or upon or as a result of the appointment of
a
receiver, intervenor, or conservator of, or trustee or similar officer for,
any
Person, or any substantial part of such Person’s property, all as though such
payments had not been made.
|
2.2.6
|
Change
in Law; Increased Cost.
|
If
any
change in any law or regulation or in the interpretation thereof by any court
or
other Governmental Authority charged with the administration thereof occurring
after the date of this Agreement shall either (a) impose, modify or deem
applicable any reserve, special deposit or similar requirement against Letters
of Credit issued by Lender, or (b) impose on Lender any other condition
regarding this Agreement or any Letter of Credit, and the result of any event
referred to in clauses (a) or (b) above shall be to increase the cost to
Lender
of issuing, maintaining or extending the Letter of Credit or the cost to
Lender
of funding any obligation under or in connection with the Letter of Credit
(other than a cost relating to net income, franchise or similar taxes), then,
upon demand by Lender, Borrowers shall immediately pay to Lender from time
to
time as specified by Lender, additional amounts which shall be sufficient
to
compensate Lender for such increased cost, together with interest on each
such
amount from the date demanded until payment in full thereof at a rate per
annum
equal to the then highest current rate of interest on the Revolving Loan.
A
certificate as to such increased cost incurred by Lender, submitted by Lender
to
Borrowers, shall be conclusive, absent manifest error.
|
2.2.7
|
General
Letter of Credit Provisions.
|
Borrowers
consent to Lender’s payment of any draft complying with the terms of any Letter
of Credit irrespective of any instructions of any Borrower to the contrary.
As
between Borrowers and Lender, Borrowers assume all risks of the acts and
omissions of the beneficiary and other users of any Letter of Credit. Lender
and
its respective branches, Affiliates and/or correspondents shall not be
responsible for and each Borrower hereby indemnifies and holds Lender and
its
respective branches, Affiliates and/or correspondents harmless from and against
all liability, loss and expense (including reasonable attorney’s fees and costs)
incurred by Lender and/or its branches, Affiliates and/or correspondents
relative to and/or as a consequence of (a) any failure by Borrowers to perform
the agreements hereunder and under any Letter of Credit Agreement, (b) any
Letter of Credit Agreement, this Agreement, any Letter of Credit and any
draft,
draw and/or acceptance under or purported to be under any Letter of Credit,
(c)
any action taken or omitted by Lender and/or any of its respective branches,
Affiliates and/or correspondents at the request of Borrowers, (d) any failure
or
inability to perform in accordance with the terms of any Letter of Credit
by
reason of any control or restriction rightfully or wrongfully exercised by
any
de
facto
or
de
jure
Governmental Authority, group or individual asserting or exercising governmental
or paramount powers, and/or (e) any consequences arising from causes beyond
the
control of Lender and/or any of its respective branches, Affiliates and/or
correspondents.
27
Except
for gross negligence or willful misconduct, Lender and its respective branches,
Affiliates and/or correspondents, shall not be liable or responsible in any
respect for any (a) error, omission, interruption or delay in transmission,
dispatch or delivery of any one or more messages or advices in connection
with
any Letter of Credit, whether transmitted by cable, telegraph, mail or otherwise
and despite any cipher or code which may be employed, and/or (b) action,
inaction or omission which may be taken or suffered by it or them in good
faith
or through inadvertence in identifying or failing to identify any beneficiary
or
otherwise in connection with any Letter of Credit.
Subject
to the terms of the Letter of Credit, a Letter of Credit may be amended,
modified or revoked only upon the receipt by Lender from Borrowers and the
beneficiary (including any transferee and/or assignee of the original
beneficiary), of a written consent and request therefor.
If
any
Laws, order of court and/or ruling or regulation of any Governmental Authority
of the United States (or any state thereof) and/or any country other than
the
United States permits a beneficiary under a Letter of Credit to require Lender
and/or any of its respective branches, Affiliates and/or correspondents to
pay
drafts under or purporting to be under a Letter of Credit after the expiration
date of the Letter of Credit, Borrowers shall reimburse Lender, as appropriate,
for any such payment pursuant to provisions of Section 2.2.6
(Change
in Law; Increased Cost).
Except
as
may otherwise be specifically provided in a Letter of Credit or Letter of
Credit
Agreement, (a) the rules of the ISP shall apply to each standby Letter of
Credit, and (b) the rules of the Uniform Customs and Practice for Documentary
Credits, as most recently published by the International Chamber of Commerce
(the “ICC”)
at the
time of issuance shall apply to each commercial Letter of Credit.
Section
2.3 Applicable
Interest Rates.
(a) Each
advance of the Revolving Loan shall bear interest until maturity (whether
by
acceleration, declaration, extension or otherwise) at the Applicable Rate
as
determined in accordance with the provisions of this Section.
(b) Notwithstanding
the foregoing, following the occurrence and during the continuance of an
Event
of Default, at the option of Lender, all advances of the Revolving Loan and
all
other Obligations shall bear interest at the Post-Default Rate.
(c) The
Applicable Margin shall be 275 basis points per annum unless and until a
change
is required by the operation of Section
2.3(d).
(d) Changes
in the Applicable Margin shall be made not more frequently than quarterly
based
on the Pricing Ratio, determined by Lender subsequent to its review of the
quarterly reports required by Section 6.1.1(c)
(Quarterly Statements and Certificates), except that the first such
determination shall be made based on Borrowers’ annual financial statements
required by Section 6.1.1(a)
(Annual
Statements and Certificates) for Borrowers’ fiscal year ended December 31, 2003
and shall be effective as of the first day of the first month after Lender
receives and reviews such statements. The Applicable Margin (expressed as
basis
points) shall vary depending upon the Pricing Ratio, as follows:
28
|
Pricing
Ratio
(both
covenants achieved for two (2) consecutive quarters)
|
Applicable
Margin
|
|||
|
Total
Liabilities to Tangible Net Worth
|
Interest
Coverage Ratio
|
|||
|
Equal
to or less than 2.50 to 1.00
|
Greater
than 3.0 to 1.00
|
275
basis points
|
||
|
Equal
to or less than 2.50 to 1.00
|
Greater
than 5.0 to 1.00
|
250
basis points
|
||
|
Equal
to or less than 2.50 to 1.00
|
Greater
than 6.0 to 1.00
|
175
basis points
|
||
|
Equal
to or less than 2.00 to 1.00
|
Greater
than 8.0 to 1.00
|
150
basis points
|
||
|
Equal
to or less than 2.00 to 1.00
|
Greater
than 10.0 to 1.00
|
125
basis points
|
||
|
Section
2.4
|
General
Financing Provisions.
|
2.4.1 Borrowers’
Representatives.
Borrowers
hereby represent and warrant to Lender that each of them will derive benefits,
directly and indirectly, from each Letter of Credit and from each Loan, both
in
their separate capacity and as a member of the integrated group to which
each of
Borrowers belong and because the successful operation of the integrated group
is
dependent upon the continued successful performance of the functions of the
integrated group as a whole, because (a) the terms of the consolidated financing
provided under this Agreement are more favorable than would otherwise be
obtainable by Borrowers individually, and (b) Borrowers’ additional
administrative and other costs and reduced flexibility associated with
individual financing arrangements which would otherwise be required if
obtainable would substantially reduce the value to Borrowers of the financing.
Borrowers in the discretion of their respective managements are to agree
among
themselves as to the allocation of the benefits of Letters of Credit and
the
proceeds of the Loan, provided, however, that Borrowers shall be deemed to
have
represented and warranted to Lender at the time of allocation that each benefit
and use of proceeds is a Permitted Use.
For
administrative convenience, each Borrower hereby irrevocably appoints General
Physics as Borrower’s attorney-in-fact, with power of substitution (with the
prior written consent of Lender in the exercise of its sole and absolute
discretion), in the name of General Physics or in the name of Borrower or
otherwise to take any and all actions with respect to the this Agreement,
the
other Financing Documents, the Obligations and/or the Collateral (including,
without limitation, the Proceeds thereof) as General Physics may so elect
from
time to time, including, without limitation, actions to (i) request advances
under the Loan, apply for and direct the benefits of Letters of Credits,
and
direct Lender to disburse or credit the proceeds of any Loan directly to
an
account of General Physics, any one or more of Borrowers or otherwise, which
direction shall evidence the making of such Loan and shall constitute the
acknowledgment by each of Borrowers of the receipt of the proceeds of such
Loan
or the benefit of such Letter of Credit, (ii) enter into, execute, deliver,
amend, modify, restate, substitute, extend and/or renew this Agreement, any
Additional Borrower Joinder Supplement, any other Financing Documents, security
agreements, mortgages, deposit account agreements, instruments, certificates,
waivers, letter of credit applications, releases, documents and agreements
from
time to time, and (iii) endorse any check or other item of payment in the
name
of Borrower or in the name of General Physics. The foregoing appointment
is
coupled with an interest, cannot be revoked without the prior written consent
of
Lender, and may be exercised from time to time through General Physics’ duly
authorized officer, officers or other Person or Persons designated by General
Physics to act from time to time on behalf of General Physics.
29
Each
of
Borrowers hereby irrevocably authorizes Lender to make Loans to any one or
more
of Borrowers, and hereby irrevocably authorizes Lender to issue or cause
to be
issued Letters of Credit for the account of any or all of Borrowers, pursuant
to
the provisions of this Agreement upon the written, oral or telephone request
of
any one or more of the Persons who is from time to time a Responsible Officer
of
a Borrower under the provisions of the most recent certificate of corporate
resolutions and/or incumbency of Borrowers on file with Lender and also upon
the
written, oral or telephone request of any one of the Persons who is from
time to
time a Responsible Officer of General Physics under the provisions of the
most
recent certificate of corporate resolutions and/or incumbency for General
Physics on file with Lender.
Lender
assumes no responsibility or liability for any errors, mistakes, and/or
discrepancies in the oral, telephonic, written or other transmissions of
any
instructions, orders, requests and confirmations between Lender and Borrowers
in
connection with the Credit Facilities, any Loan, any Letter of Credit or
any
other transaction in connection with the provisions of this Agreement. Without
implying any limitation on the joint and several nature of the Obligations,
Lender agrees that, notwithstanding any other provision of this Agreement,
Borrowers may create reasonable inter-company indebtedness between or among
Borrowers with respect to the allocation of the benefits and proceeds of
the
advances and Credit Facilities under this Agreement. Borrowers agree among
themselves, and Lender consents to that agreement, that each Borrower shall
have
rights of contribution from all of the other Borrowers to the extent such
Borrower incurs Obligations in excess of the proceeds of the Loans received
by,
or allocated to purposes for the direct benefit of, such Borrower. All such
indebtedness and rights shall be, and are hereby agreed by Borrowers to be,
subordinate in priority and payment to the indefeasible repayment in full
in
cash of the Obligations, and, unless Lender agrees in writing otherwise,
shall
not be exercised or repaid in whole or in part until all of the Obligations
have
been indefeasibly paid in full in cash. Borrowers agree that all of such
inter-company indebtedness and rights of contribution are part of the Collateral
and secure the Obligations. Each Borrower hereby waives all rights of
counterclaim, recoupment and offset between or among themselves arising on
account of that indebtedness and otherwise. Each Borrower shall not evidence
the
inter-company indebtedness or rights of contribution by note or other
instrument, and shall not secure such indebtedness or rights of contribution
with any Lien or security. Notwithstanding anything contained in this Agreement
to the contrary, the amount covered by each Borrower under the Obligations
(including, without limitation, Section 2.4.10
(Guaranty)) shall be limited to an aggregate amount (after giving effect
to any
collections from, rights to receive contribution from or payments made by
or on
behalf of any other Borrower in respect of the Obligations) which, together
with
other amounts owing by such Borrower to Lender under the Obligations, is
equal
to the largest amount that would not be subject to avoidance under the
Bankruptcy Code or any applicable provisions of any applicable, comparable
state
or other Laws.
30
|
2.4.2
|
Use
of Proceeds of the Revolving Loan.
|
The
proceeds of each advance under the Revolving Loan shall be used by Borrowers
for
Permitted Uses, and for no other purposes except as may otherwise be agreed
by
Lender in writing.
|
2.4.3
|
Origination
Fee.
|
Borrowers
have paid to Lender on or before the Closing Date a loan origination fee
(the
“Origination Fee”) in the amount of Two Hundred Fifty Thousand Dollars
($250,000), which fee has been fully earned and is non-refundable. Prior
to the
Closing Date Borrowers have paid a portion of the Origination Fee in the
amount
of Seventy Five Thousand Dollars ($75,000); the balance due as of the Closing
Date is One Hundred Seventy Five Thousand Dollars ($175,000). There is no
origination fee connected with this amended and restated agreement.
2.4.4 Monitoring
Fee.
Borrowers
shall pay to Lender a monthly monitoring fee in the amount of $700
(collectively, the “Monitoring Fees” and individually, a “Monitoring Fee”)
commencing on the first such date following the date hereof and continuing
until
the Revolving Credit Termination Date. Borrowers
authorize Lender to debit demand deposit account number 2079900107595 or
any
other account with Lender (routing number 055-003201) designated in writing
by
General Physics, beginning as of the date hereof for any Monitoring Fee.
Borrowers further certify that General Physics hold legitimate ownership
of this
account and preauthorizes this periodic debit as part of its right under
said
ownership.
|
2.4.5
|
Computation
of Interest and Fees.
|
All
applicable Fees and interest shall be calculated on the basis of a year of
360
days for the actual number of days elapsed.
|
2.4.6
|
Maximum
Interest Rate.
|
In
no
event shall any interest rate provided for hereunder exceed the maximum rate
permissible for corporate borrowers under applicable law for loans of the
type
provided for hereunder (the “Maximum Rate”). If, in any month, any interest
rate, absent such limitation, would have exceeded the Maximum Rate, then
the
interest rate for that month shall be the Maximum Rate, and, if in future
months, that interest rate would otherwise be less than the Maximum Rate,
then
that interest rate shall remain at the Maximum Rate until such time as the
amount of interest paid hereunder equals the amount of interest which would
have
been paid if the same had not been limited by the Maximum Rate. In the event
that, upon payment in full of the Obligations, the total amount of interest
paid
or accrued under the terms of this Agreement is less than the total amount
of
interest which would, but for this Section, have been paid or accrued if
the
interest rates otherwise set forth in this Agreement had at all times been
in
effect, then Borrowers shall, to the extent permitted by applicable law,
pay
Lender, an amount equal to the excess of (a) the lesser of (i) the amount
of
interest which would have been charged if the Maximum Rate had, at all times,
been in effect or (ii) the amount of interest which would have accrued had
the
interest rates otherwise set forth in this Agreement, at all times, been
in
effect over (b) the amount of interest actually paid or accrued under this
Agreement. In the event that a court determines that Lender has received
interest and other charges hereunder in excess of the Maximum Rate, such
excess
shall be deemed received on account of, and shall automatically be applied
to
reduce, the Obligations other than interest, in the inverse order of maturity,
and if there are no Obligations outstanding, Lender shall refund to Borrowers
such excess.
31
|
2.4.7
|
Payments.
|
All
payments of the Obligations, including, without limitation, principal, interest,
Prepayments, and Fees, shall be paid by Borrowers without setoff, recoupment
or
counterclaim to Lender in immediately available funds not later than 2:00
p.m.
(Eastern Time) on the due date of such payment. All payments received by
Lender
after such time shall be deemed to have been received by Lender for purposes
of
computing interest and Fees and otherwise as of the next Business Day. Payments
shall not be considered received by Lender until such payments are paid to
Lender in immediately available funds to Lender’s principal office in Baltimore,
Maryland or at such other location as Lender may at any time and from time
to
time notify Borrowers. Alternatively, at its sole discretion, Lender may
charge
any deposit account of Borrowers at Lender or any Affiliate of Lender with
all
or any part of any amount due to Lender under this Agreement or any of the
other
Financing Documents to the extent that Borrowers shall have not otherwise
tendered payment to Lender.
|
2.4.8
|
Liens;
Setoff.
|
Each
Borrower hereby grants to Lender as additional collateral and security for
all
of the Obligations, a continuing Lien on any and all monies, Investment
Property, and other property of Borrower and any and all proceeds thereof,
now
or hereafter held or received by or in transit to, Lender, and/or any Affiliate
of Lender, from or for the account of, Borrower, and also upon any and all
deposit accounts (general or special) and credits of Borrower, if any, with
Lender or any Affiliate of Lender, at any time existing, excluding any deposit
accounts held by Borrower in its capacity as trustee for Persons who are
not
Affiliates of Borrower. Without implying any limitation on any other rights
Lender may have under the Financing Documents or applicable Laws, during
the
continuance of an Event of Default, Lender is hereby authorized by each Borrower
at any time and from time to time, without notice to, or consent of, Borrower,
to set off, appropriate, seize, freeze and apply any or all items hereinabove
referred to against all Obligations then outstanding (whether or not then
due),
all in such order and manner as shall be determined by Lender in its sole
and
absolute discretion.
|
2.4.9
|
Requirements
of Law.
|
In
the
event that Lender shall have determined in good faith that (a) the adoption
of
any Capital Adequacy Regulation, or (b) any change in any Capital Adequacy
Regulation or in the interpretation or application thereof or (c) compliance
by
Lender or any corporation controlling Lender with any request or directive
regarding capital adequacy (whether or not having the force of law) from
any
central bank or Governmental Authority, does or shall have the effect of
reducing the rate of return on the capital of Lender or any corporation
controlling Lender, as a consequence of the obligations of Lender hereunder
to a
level below that which Lender or any corporation controlling Lender would
have
achieved but for such adoption, change or compliance (taking into consideration
the policies of Lender and the corporation controlling Lender, with respect
to
capital adequacy) by an amount deemed by Lender, in its discretion, to be
material, then from time to time, after submission by Lender to Borrowers
of a
written request therefor and a statement of the basis for Lender’s
determination, Borrowers shall pay to Lender ON DEMAND such additional amount
or
amounts in order to compensate Lender or its controlling corporation for
any
such reduction.
32
|
2.4.10
|
Guaranty.
|
(a) Each
Borrower hereby unconditionally and irrevocably, guarantees to
Lender:
(i) the
due
and punctual payment in full (and not merely the collectibility) by the other
Borrowers of the Obligations, including unpaid and accrued interest thereon,
in
each case when due and payable, all according to the terms of this Agreement,
the Notes and the other Financing Documents;
(ii) the
due
and punctual payment in full (and not merely the collectibility) by the other
Borrowers of all other sums and charges which may at any time be due and
payable
in accordance with this Agreement, the Notes or any of the other Financing
Documents;
(iii) the
due
and punctual performance by the other Borrowers of all of the other terms,
covenants and conditions contained in the Financing Documents; and
(iv) all
the
other Obligations of the other Borrowers.
(b) The
obligations and liabilities of each Borrower as a guarantor under this Section
2.4.10
shall be
absolute and unconditional and joint and several, irrespective of the
genuineness, validity, priority, regularity or enforceability of this Agreement,
any of the Notes or any of the Financing Documents or any other circumstance
which might otherwise constitute a legal or equitable discharge of a surety
or
guarantor. Each Borrower in its capacity as a guarantor expressly agrees
that
Lender may, in its sole and absolute discretion, without notice to or further
assent of such Borrower and without in any way releasing, affecting or in
any
way impairing the joint and several obligations and liabilities of such Borrower
as a guarantor hereunder:
(i) waive
compliance with, or any defaults under, or grant any other indulgences under
or
with respect to any of the Financing Documents;
(ii) modify,
amend, change or terminate any provisions of any of the Financing
Documents;
33
(iii) grant
extensions or renewals of or with respect to the Credit Facilities, the Notes
or
any of the other Financing Documents;
(iv) effect
any release, subordination, compromise or settlement in connection with this
Agreement, any of the Notes or any of the other Financing
Documents;
(v) agree
to
the substitution, exchange, release or other disposition of the Collateral
or
any part thereof, or any other collateral for the Loan or to the subordination
of any lien or security interest therein;
(vi) make
advances for the purpose of performing any term, provision or covenant contained
in this Agreement, any of the Notes or any of the other Financing Documents
with
respect to which Borrowers shall then be in default;
(vii) make
future advances pursuant to this Agreement or any of the other Financing
Documents;
(viii) assign,
pledge, hypothecate or otherwise transfer the Commitments, the Obligations,
the
Notes, any of the other Financing Documents or any interest therein, all
as and
to the extent permitted by the provisions of this Agreement;
(ix) deal
in
all respects with the other Borrowers as if this Section 2.4.10
were not
in effect;
(x) effect
any release, compromise or settlement with any of the other Borrowers, whether
in their capacity as a Borrower or as a guarantor under this Section
2.4.10,
or any
other guarantor; and
(xi) provide
debtor-in-possession financing or allow use of cash collateral in proceedings
under the Bankruptcy Code, it being expressly agreed by all Borrowers that
any
such financing and/or use would be part of the Obligations.
(c) The
obligations and liabilities of each Borrower, as guarantor under this Section
2.4.10,
shall
be primary, direct and immediate, shall not be subject to any counterclaim,
recoupment, set off, reduction or defense based upon any claim that a Borrower
may have against any one or more of the other Borrowers, Lender, and/or any
other guarantor and shall not be conditional or contingent upon pursuit or
enforcement by Lender of any remedies it may have against Borrowers with
respect
to this Agreement, the Notes or any of the other Financing Documents, whether
pursuant to the terms thereof or by operation of law. Without limiting the
generality of the foregoing, Lender shall not be required to make any demand
upon any of Borrowers, or to sell the Collateral or otherwise pursue, enforce
or
exhaust its remedies against Borrowers or the Collateral either before,
concurrently with or after pursuing or enforcing its rights and remedies
hereunder. Any one or more successive or concurrent actions or proceedings
may
be brought against each Borrower under this Section 2.4.10,
either
in the same action, if any, brought against any one or more of Borrowers
or in
separate actions or proceedings, as often as Lender may deem expedient or
advisable. Without limiting the foregoing, it is specifically understood
that
any modification, limitation or discharge of any of the liabilities or
obligations of any one or more of Borrowers, any other guarantor or any obligor
under any of the Financing Documents, arising out of, or by virtue of, any
bankruptcy, arrangement, reorganization or similar proceeding for relief
of
debtors under federal or state law initiated by or against any one or more
of
Borrowers, in their respective capacities as borrowers and guarantors under
this
Section 2.4.10,
or
under any of the Financing Documents shall not modify, limit, lessen, reduce,
impair, discharge, or otherwise affect the liability of each Borrower under
this
Section 2.4.10
in any
manner whatsoever, and this Section 2.4.10
shall
remain and continue in full force and effect. It is the intent and purpose
of
this Section 2.4.10
that
each Borrower shall and does hereby waive all rights and benefits which might
accrue to any other guarantor by reason of any such proceeding, and Borrowers
agree that they shall be liable for the full amount of the obligations and
liabilities under this Section 2.4.10,
regardless of, and irrespective to, any modification, limitation or discharge
of
the liability of any one or more of Borrowers, any other guarantor or any
obligor under any of the Financing Documents, that may result from any such
proceedings.
34
(d) Each
Borrower, as guarantor under this Section 2.4.10,
hereby
unconditionally, jointly and severally, irrevocably and expressly
waives:
(i) presentment
and demand for payment of the Obligations and protest of
non-payment;
(ii) notice
of
acceptance of this Section 2.4.10
and of
presentment, demand and protest thereof;
(iii) notice
of
any default hereunder or under the Notes or any of the other Financing Documents
and notice of all indulgences;
(iv) notice
of
any increase in the amount of any portion of or all of the indebtedness
guaranteed by this Section 2.4.10;
(v) demand
for observance, performance or enforcement of any of the terms or provisions
of
this Section 2.4.10,
the
Notes or any of the other Financing Documents;
(vi) all
errors and omissions in connection with Lender’s administration of all
indebtedness guaranteed by this Section 2.4.10,
except
errors and omissions resulting from acts of bad faith;
(vii) any
right
or claim of right to cause a marshalling of the assets of any one or more
of the
other Borrowers;
(viii) any
act
or omission of Lender which changes the scope of the risk as guarantor
hereunder; and
35
(ix) all
other
notices and demands otherwise required by law which Borrower may lawfully
waive.
Within
ten (10) days following any request of Lender so to do, each Borrower will
furnish Lender and such other persons as Lender may direct with a written
certificate, duly acknowledged stating in detail whether or not any credits,
offsets or defenses exist with respect to this Section 2.4.10.
|
2.4.11
|
ACH
Transactions and Swap Contracts.
|
Borrowers
may request and Lender or its Affiliates may, in their sole and absolute
discretion, provide ACH Transactions and Swap Contracts. In the event a Borrower
requests Lender or its Affiliates to procure ACH Transactions or Swap Contracts,
then such Borrower agrees to indemnify and hold Lender or its Affiliates
harmless from any and all obligations now or hereafter owing to Lender or
its
Affiliates in connection with such ACH Transactions or Swap Contracts other
than
obligations arising as a result of Lender’s or its Affiliates’ gross negligence
or willful misconduct. Borrowers agree to pay Lender or its Affiliates all
amounts owing to Lender or its Affiliates pursuant to ACH Transactions and
Swap
Contracts. In the event Borrowers shall not have paid to Lender or its
Affiliates such amounts, Lender may cover such amounts by an advance under
the
Revolving Loan, which advance shall be deemed to have been requested by
Borrowers. Borrowers acknowledge and agree that the obtaining of ACH
Transactions and Swap Contracts from Lender or its Affiliates (a) is in the
sole
and absolute discretion of Lender or its Affiliates and (b) is subject to
all
rules and regulations of Lender or its Affiliates.
2.4.12 Termination
of Revolving Credit Facility.
Borrowers
shall have the right to terminate or reduce the Revolving Credit Commitment,
in
whole or in part, upon at least thirty (30) Business Days prior written notice
to Lender, without any premium or penalty; provided, however, that all
Outstanding Letter of Credit Obligations shall be secured as provided in
Section
2.2.3
(Terms
of Letters of Credit).
ARTICLE
III
THE
COLLATERAL
|
Section
3.1
|
Debt
and Obligations Secured.
|
All
property and Liens assigned, pledged or otherwise granted under or in connection
with this Agreement (including, without limitation, those under Section
3.2
(Grant
of Liens)) or any of the Financing Documents shall secure (a) the payment
of all
of the Obligations, including, without limitation, any and all Outstanding
Letter of Credit Obligations, and (b) the performance, compliance with and
observance by Borrowers of the provisions of this Agreement and all of the
other
Financing Documents or otherwise under the Obligations.
|
Section
3.2
|
Grant
of Liens.
|
(a) Each
Borrower hereby assigns, pledges and grants to Lender, and agrees that Lender
shall have a perfected and continuing security interest in, and Lien on,
(a) all
of Borrower’s Accounts, Inventory, Chattel Paper, Documents, Instruments,
Equipment, Investment Property, and General Intangibles (in which Borrower
is
permitted under the terms thereof to grant a security interest) and all of
Borrower’s deposit accounts with any financial institution with which Borrower
maintains deposits, whether now owned or existing or hereafter acquired or
arising, (b) all returned, rejected or repossessed goods, the sale or lease
of
which shall have given or shall give rise to an Account or Chattel Paper,
(c)
all insurance policies relating to the foregoing and the right to receive
refunds of unearned insurance premiums under those policies, (d) all books
and
records in whatever media (paper, electronic or otherwise) recorded or stored,
with respect to the foregoing and all Equipment and General Intangibles
necessary or beneficial to retain, access and/or process the information
contained in those books and records; and (e) all Proceeds and products of
the
foregoing. Each Borrower further agrees that Lender shall have in respect
thereof all of the rights and remedies of a secured party under the Uniform
Commercial Code as well as those provided in this Agreement, under each of
the
other Financing Documents to which it is a party and under applicable
Laws.
36
(b) Each
Borrower covenants and agrees that Borrower shall provide Lender with all
necessary information and will execute and deliver such documents as are
required to comply with the Federal Assignment of Claims Act of 1940 (31
X.X.X.
§0000 and 41 U.S.C. §15), to perfect Lender’s security interest in the Accounts
arising under Government Contracts with a contract value equal to or greater
than Fifty Thousand Dollars ($50,000) and such other Government Contracts
as
Lender may determine in its sole discretion.
|
Section
3.3
|
Collateral
Disclosure List.
|
On
or
prior to the Closing Date, each Borrower shall each deliver to Lender a list
on
the form provided by Lender (the “Collateral Disclosure List”) which shall
contain such information with respect to Borrower’s business and personal
property as Lender may require and shall be certified by a Responsible Officer
of Borrower, as applicable. Promptly after demand by Lender, Borrower shall
furnish to Lender an update of the information contained in the Collateral
Disclosure List at any time and from time to time as may be reasonably requested
by Lender.
|
Section
3.4
|
Personal
Property.
|
Each
Borrower acknowledges and agrees that it is the intention of the parties
to this
Agreement that Lender shall have a first priority, perfected Lien, in form
and
substance satisfactory to Lender and its counsel, on all of the Collateral,
whether now owned or hereafter acquired, subject only to the Permitted Liens,
if
any. In furtherance of the foregoing:
(a) On
the
Closing Date and without implying any limitation on the scope of Section
3.2
(Grant
of Liens), each Borrower shall deliver to Lender the originals of all of
its
letters of credit, Investment Property, Chattel Paper, Documents and Instruments
and, if Lender so requires, shall execute and deliver separate pledge,
assignment and security agreements in form and content acceptable to Lender,
which pledge, assignment and security agreements shall assign, pledge and
xxxxx
x Xxxx to Lender on all letters of credit, Investment Property, Chattel Paper,
Documents, and Instruments. Notwithstanding the foregoing, Lender agrees
that
Borrowers may retain possession of Investment Property with an aggregate
value
of less than One Hundred Thousand Dollars ($100,000) that is received from
Account Debtors in payment of Receivables in lieu of cash.
37
(b) In
the
event that any Borrower shall acquire after the Closing Date any letters
of
credit, Investment Property, Chattel Paper, Documents, or Instruments, Borrower
shall promptly so notify Lender and deliver the originals of all of the
foregoing to Lender promptly and in any event within ten (10) days of each
acquisition.
(c) All
letters of credit, Investment Property, Chattel Paper, Documents and Instruments
shall be delivered to Lender endorsed and/or assigned as required by any
pledge,
assignment and security agreement and/or as Lender may require and, if
applicable, shall be accompanied by blank irrevocable and unconditional stock
or
bond powers and/or notices as Lender may require.
|
Section
3.5
|
Record
Searches.
|
As
of the
Closing Date and thereafter at the time any Financing Document is executed
and
delivered by Borrowers pursuant to this Section, Lender shall have received,
in
form and substance satisfactory to Lender, such Lien or record searches with
respect to Borrowers and/or any other Person, as appropriate, and the property
covered by such Financing Document showing that the Lien of such Financing
Document will be a perfected first priority Lien on the property covered
by such
Financing Document subject only to Permitted Liens or to such other matters
as
Lender may approve.
|
Section
3.6
|
Costs.
|
Borrowers
agree to pay, as part of the Enforcement Costs and to the fullest extent
permitted by applicable Laws, on demand all costs, fees and expenses incurred
by
Lender in connection with the taking, perfection, preservation, protection
and/or release of a Lien on the Collateral, including, without
limitation:
(a) customary
fees and expenses incurred in preparing Financing Documents from time to
time
(including, without limitation, reasonable attorneys’ fees incurred in
connection with preparing the Financing Documents, including, any amendments
and
supplements thereto);
(b) all
filing and/or recording taxes or fees;
(c) all
costs
of Lien and record searches;
(d) reasonable
attorneys’ fees in connection with all legal opinions required; and
(e) all
related costs, fees and expenses.
|
Section
3.7
|
Release.
|
Upon
the
indefeasible repayment in full in cash of the Obligations and performance
of all
Obligations under this Agreement and all other Financing Documents, and the
termination and/or expiration of the Commitment, all Letters of Credit and
all
Outstanding Letter of Credit Obligations, or, in the case of Outstanding
Letter
of Credit Obligations, the cash collateralization thereof pursuant to Section
2.2.3
(Terms
of Letters of Credit), upon Borrowers’ request and at Borrowers’ sole cost and
expense, Lender shall release and/or terminate any Financing
Document.
38
|
Section
3.8
|
Inconsistent
Provisions.
|
In
the
event that the provisions of any Financing Document directly conflict with
any
provision of this Agreement, the provisions of this Agreement
govern.
ARTICLE
IV
REPRESENTATIONS
AND WARRANTIES
|
Section
4.1
|
Representations
and Warranties.
|
Borrowers,
for themselves and for each other, represent and warrant to Lender, as
follows:
|
4.1.1
|
Subsidiaries.
|
Borrowers
have the Subsidiaries listed on the Collateral Disclosure List and no others.
Each of the Subsidiaries is a Wholly Owned Subsidiary except as shown on
the
Collateral Disclosure List, which correctly indicates the nature and amount
of
each Borrower’s ownership interests therein.
|
4.1.2
|
Existence.
|
Each
Borrower (a) is a Registered Organization under the laws of the jurisdiction
stated in the Preamble of this Agreement, (b) is in good standing under the
laws
of the jurisdiction in which it is organized, (c) has the power to own its
property and to carry on its business as now being conducted, and (d) is
duly
qualified to do business and is in good standing in each jurisdiction in
which
the character of the properties owned by it therein or in which the transaction
of its business makes such qualification necessary. Each Borrower is organized
under the laws of only one (1) jurisdiction.
|
4.1.3
|
Power
and Authority.
|
Each
Borrower has full power and authority to execute and deliver this Agreement
and
the other Financing Documents to which it is a party, to make the borrowings
and
request Letters of Credit under this Agreement and to incur and perform the
Obligations whether under this Agreement, the other Financing Documents or
otherwise, all of which have been duly authorized by all proper and necessary
action. No consent or approval of owners or any creditors of any Borrower,
and
no consent, approval, filing or registration with or notice to any Governmental
Authority on the part of any Borrower, is required as a condition to the
execution, delivery, validity or enforceability of this Agreement, or any
of the
other Financing Documents, or the performance by any Borrower of the
Obligations.
|
4.1.4
|
Binding
Agreements.
|
This
Agreement and the other Financing Documents executed and delivered by Borrowers
have been properly executed and delivered and constitute the valid and legally
binding obligations of Borrowers and are fully enforceable against Borrowers
in
accordance with their respective terms, subject to bankruptcy, insolvency,
reorganization, moratorium and other laws of general application affecting
the
rights and remedies of creditors and secured parties, and general principles
of
equity regardless of whether applied in a proceeding in equity or at
law.
39
|
4.1.5
|
No
Conflicts.
|
Neither
the execution, delivery and performance of the terms of this Agreement or
of any
of the other Financing Documents executed and delivered by Borrowers nor
the
consummation of the transactions contemplated by this Agreement will conflict
with, violate or be prevented by (a) any Borrower’s organizational or governing
documents, (b) any existing mortgage, indenture, contract or agreement binding
on any Borrower or affecting its property, except for any conflict which
could
not have a materially adverse effect on any Borrower, or (c) any applicable
Laws.
|
4.1.6
|
No
Defaults, Violations.
|
(a) No
Default or Event of Default has occurred and is continuing.
(b) No
Borrower nor any of their Subsidiaries is in default under or with respect
to
any obligation under any existing mortgage, indenture, contract or agreement
binding on it or affecting its property in any respect which could be materially
adverse to the business, operations, property or financial condition of any
Borrower, or which could materially adversely affect the ability of any Borrower
to perform its obligations under this Agreement or the other Financing Documents
to which such Borrower is a party.
|
4.1.7
|
Compliance
with Laws.
|
No
Borrower nor any of their Subsidiaries is in violation of any applicable
Laws
(including, without limitation, any Laws relating to employment practices,
to
environmental, occupational and health standards and controls) or order,
writ,
injunction, decree or demand of any court, arbitrator, or any Governmental
Authority affecting it or any of its properties, the violation of which could
materially adversely affect the business, operations or properties of any
Borrowers and their Subsidiaries taken as a whole.
|
4.1.8
|
Margin
Stock.
|
None
of
the proceeds of the Revolving Loan will be used, directly or indirectly,
by
Borrowers or any Subsidiary for the purpose of purchasing or carrying, or
for
the purpose of reducing or retiring any indebtedness which was originally
incurred to purchase or carry, any “margin stock” within the meaning of
Regulation U (12 CFR Part 221), of the Board of Governors of the Federal
Reserve
System or for any other purpose which might make the transactions contemplated
in this Agreement a “purpose credit” within the meaning of Regulation U, or
cause this Agreement to violate any other regulation of the Board of Governors
of the Federal Reserve System or the Securities Exchange Act of 1934 or the
Small Business Investment Act of 1958, as amended, or any rules or regulations
promulgated under any of such statutes.
40
|
4.1.9
|
Investment
Company Act; Margin Stock.
|
No
Borrower nor any of their Subsidiaries is an investment company within the
meaning of the Investment Company Act of 1940, as amended, nor is it, directly
or indirectly, controlled by or acting on behalf of any Person which is an
investment company within the meaning of said Act. No Borrower nor any of
their
Subsidiaries is engaged principally, or as one of its important activities,
in
the business of extending credit for the purpose of purchasing or carrying
“margin stock” within the meaning of Regulation U (12 CFR Part 221), of the
Board of Governors of the Federal Reserve System.
|
4.1.10
|
Litigation.
|
Except
as
otherwise disclosed on Schedule
4.1.10
attached
hereto and made a part hereof, there are no proceedings, actions or, to the
knowledge of Borrowers, investigations pending or, so far as any Borrower
knows,
threatened before or by any court, arbitrator or any Governmental Authority
which, in any one case or in the aggregate, if determined adversely to the
interests of Borrowers or any Subsidiary, would have a material adverse effect
on the business, properties, condition (financial or otherwise) or operations
of
any Borrower.
|
4.1.11
|
Financial
Condition.
|
The
consolidated financial statements of Borrowers dated December 31, 2006 are
complete and correct and fairly present the financial position of Borrowers
and
their Subsidiaries and the results of their operations and transactions in
their
surplus accounts as of the date and for the period referred to and have been
prepared in accordance with GAAP applied on a consistent basis throughout
the
period involved. There are no material liabilities, direct or indirect, fixed
or
contingent, of Borrowers or their Subsidiaries as of the date of such financial
statements that are not reflected therein or in the notes thereto. There
has
been no adverse change in the financial condition or operations of Borrowers
or
their Subsidiaries since the date of such financial statements and to Borrowers’
knowledge no such adverse change is pending or threatened. Prior to the date
hereof, no Borrower nor any Subsidiary has guaranteed the obligations of,
or
made any investment in or advances to, any Person, except as disclosed in
such
financial statements or the schedules hereto.
|
4.1.12
|
Full
Disclosure.
|
The
financial statements referred to in Section 4.1.11
(Financial Condition), the Financing Documents (including, without limitation,
this Agreement), and the statements, reports or certificates furnished by
Borrowers in connection with the Financing Documents (a) do not contain any
untrue statement of a material fact and (b) when taken in their entirety,
do not
omit any material fact necessary to make the statements contained therein
not
misleading. There is no fact known to Borrowers which Borrowers have not
disclosed to Lender in writing prior to the date of this Agreement with respect
to the transactions contemplated by the Financing Documents that materially
and
adversely affects or in the future could, in the reasonable opinion of
Borrowers, materially adversely affect the condition, financial or otherwise,
results of operations, business, or assets of Borrowers and their Subsidiaries
taken as a whole.
41
|
4.1.13
|
Indebtedness
for Borrowed Money.
|
Except
for the Obligations and except as set forth in Schedule
4.1.13 attached
hereto and made a part hereof, Borrowers have no Indebtedness for Borrowed
Money. Lender has received photocopies of all promissory notes evidencing
any
Indebtedness for Borrowed Money set forth in Schedule
4.1.13,
together with any and all subordination agreements, other agreements, documents,
or instruments securing, evidencing, guarantying or otherwise executed and
delivered in connection therewith.
|
4.1.14
|
Subordinated
Debt.
|
None
of
the Subordinated Debt Loan Documents has been amended, supplemented, restated
or
otherwise modified except as otherwise disclosed to Lender in writing on
or
before the effective date of any such amendment, supplement, restatement
or
other modification. In addition, there does not exist any default or any
event
which upon notice or lapse of time or both would constitute a default under
the
terms of any of the Subordinated Debt Loan Documents.
|
4.1.15
|
Taxes.
|
Each
Borrower and its Subsidiaries has filed all returns, reports and forms for
Taxes
that, to the knowledge of Borrower, are required to be filed, and has paid
all
Taxes as shown on such returns or on any assessment received by it, to the
extent that such Taxes have become due, unless and to the extent only that
such
Taxes, assessments and governmental charges are currently contested in good
faith and by appropriate proceedings by such Borrower, such Taxes are not
the
subject of any Liens other than Permitted Liens, and adequate reserves therefor
have been established as required under GAAP. All tax liabilities of Borrowers
were as of the date of audited financial statements referred to in Section
4.1.11
(Financial Condition), and are now, adequately provided for on the books
of
Borrowers or their Subsidiaries, as appropriate. No tax liability has been
asserted by the Internal Revenue Service or any state or local authority
against
Borrowers for Taxes in excess of those already paid.
|
4.1.16
|
ERISA.
|
With
respect to any Plan, and except to the extent that the failure of any of
the
following statements to be accurate would not result in a material liability
to
Borrowers: (a) no “accumulated funding deficiency” as defined in Code §412 or
ERISA §302 has occurred, whether or not that accumulated funding deficiency has
been waived; (b) no Reportable Event has occurred other than events for which
reporting has been waived under applicable PBGC regulations; (c) no termination
of any plan subject to Title IV of ERISA has occurred; (d) no Borrower nor
any
Commonly Controlled Entity has incurred a “complete withdrawal” within the
meaning of ERISA §4203 from any Multiemployer Plan; (e) no Borrower nor any
Commonly Controlled Entity has incurred a “partial withdrawal” within the
meaning of ERISA §4205 with respect to any Multiemployer Plan; (f) no
Multiemployer Plan to which a Borrower or any Commonly Controlled Entity
has an
obligation to contribute is in “reorganization” within the meaning of ERISA
§4241 nor has notice been received by Borrower or any Commonly Controlled
Entity
that such a Multiemployer Plan will be placed in “reorganization”.
42
|
4.1.17
|
Title
to Properties.
|
Borrowers
have good and marketable title to the Collateral and the properties and assets
reflected in the balance sheets described in Section 4.1.11
(Financial Condition) to the extent such property and assets have not been
disposed of in the ordinary course of business since the date of such balance
sheets and excluding any real property.
|
4.1.18
|
Patents,
Trademarks, Etc.
|
Each
Borrower and their Subsidiaries owns, possesses, or has the right to use
all
necessary Patents, licenses, Trademarks, Copyrights, permits and franchises
to
own its properties and to conduct its business as now conducted, without
known
conflict with the rights of any other Person. Any and all obligations to
pay
royalties or other charges with respect to such properties and assets are
properly reflected on the financial statements described in Section 4.1.11
(Financial Condition).
|
4.1.19
|
Employee
Relations.
|
Except
as
disclosed on Schedule
4.1.19
attached
hereto and made a part hereof, (a) no Borrower nor any Subsidiary thereof
nor
any of such Borrower’s or Subsidiary’s employees is subject to any collective
bargaining agreement, (b) no petition for certification or union election
is
pending with respect to the employees of any Borrower or any Subsidiary and
no
union or collective bargaining unit has sought such certification or recognition
with respect to the employees of any Borrower, (c) there are no strikes,
slowdowns, work stoppages or controversies pending or, to the best knowledge
of
Borrowers after due inquiry, threatened between any Borrower and its employees,
and (d) no Borrower nor any Subsidiaries is subject to an employment contract,
severance agreement, commission contract, consulting agreement or bonus
agreement. Hours worked and payments made to the employees of Borrowers have
not
been in violation of the Fair Labor Standards Act or any other applicable
law
dealing with such matters. All payments due from Borrowers or for which any
claim may be made against Borrowers, on account of wages and employee and
retiree health and welfare insurance and other benefits have been paid or
accrued as a liability on its books. The consummation of the transactions
contemplated by the Financing Agreement or any of the other Financing Documents,
will not give rise to a right of termination or right of re-negotiation on
the
part of any union under any collective bargaining agreement to which any
Borrower is a party or by which it is bound.
|
4.1.20
|
Presence
of Hazardous Materials or Hazardous Materials
Contamination.
|
To
the
best of Borrowers’ knowledge, (a) no Hazardous Materials are located on any real
property owned, controlled or operated by any Borrower or for which any Borrower
is, or is claimed to be, responsible, except for reasonable quantities of
necessary supplies for use by any Borrower in the ordinary course of its
current
line of business and stored, used and disposed in accordance with applicable
Laws, except for any non-compliance which individually or in the aggregate
could
not have a material adverse affect on any Borrower or any of its Subsidiaries
taken as a whole; and (b) no property owned, controlled or operated by any
Borrower or for which any Borrower has, or is claimed to have, responsibility
has ever been used as a manufacturing, storage, or dump site for Hazardous
Materials except in compliance with applicable Laws, except for any
non-compliance which individually or in the aggregate could not have a material
adverse affect on any Borrower or any of its Subsidiaries taken as a whole
nor
is affected by Hazardous Materials Contamination at any other property except
for any such Hazardous Materials that individually or in the aggregate could
not
have a material adverse affect on any Borrower or any of its Subsidiaries
taken
as a whole.
43
|
4.1.21
|
Perfection
and Priority of Collateral.
|
Lender
has, or upon execution and recording of this Agreement and the Security
Documents will have, and will continue to have as security for the Obligations,
a valid and perfected Lien on and security interest in all Collateral, free
of
all other Liens, claims and rights of third parties whatsoever except Permitted
Liens, including, without limitation, those described on Schedule
4.1.21 attached
hereto and made a part hereof.
|
4.1.22
|
No
Suspension or Debarment.
|
No
Borrower nor, to the knowledge of any Borrower, any Affiliate nor any of
their
respective directors, officers or employees has received any notice of, or
information concerning, any proposed, contemplated or initiated suspension
or
debarment, be it temporary or permanent, due to an administrative or a statutory
basis, of any Borrower or any Affiliate by any Governmental Authority. Borrowers
further warrant and represent that no Borrower nor, to the knowledge of
Borrowers, any Affiliate has defaulted under any Government Contract which
default would be a basis of terminating such Government Contract.
|
4.1.23
|
Collateral
Disclosure List.
|
The
information contained in the Collateral Disclosure List delivered by each
Borrower is complete and correct in all material respects. Such Collateral
Disclosure List completely and accurately identifies (a) the type of entity,
the
state of organization and the chief executive office of each Borrower, (b)
each
other place of business of each Borrower, (c) the location of all books and
records pertaining to the Collateral, and (d) each location, other than the
foregoing, where any of the Collateral is located.
|
4.1.24
|
Business
Names and Addresses.
|
In
the
five (5) years preceding the date hereof, no Borrower has changed its name,
identity or corporate structure, conducted business under any name other
than
its current name, nor has it conducted its business in any jurisdiction other
than those disclosed on the Collateral Disclosure List.
|
4.1.25
|
Equipment.
|
All
Equipment is personalty and is not and will not be affixed to real estate
in
such manner as to become a fixture or part of such real estate. No equipment
is
held by any Borrower on a sale on approval basis.
|
4.1.26
|
Accounts.
|
With
respect to all Accounts of Borrowers and to the best of Borrowers’ knowledge (a)
they are genuine, and in all respects what they purport to be, and are not
evidenced by a judgment, an Instrument, or Chattel Paper (unless such judgment
has been assigned and such Instrument or Chattel Paper has been endorsed
and
delivered to Lender); (b) they represent bona fide transactions completed
in
accordance with the terms and provisions contained in the invoices, purchase
orders and other contracts relating thereto, and the underlying transaction
therefor is in all material respects in accordance with all applicable Laws;
(c)
the amounts shown on Borrowers’ books and records, with respect thereto are
actually and absolutely owing to a Borrower and are not contingent or subject
to
reduction for any reason other than regular discounts, credits or adjustments
allowed by a Borrower in the ordinary course of its business; (d) no payments
have been or shall be made thereon except payments turned over to Lender
by
Borrowers; (e) all Account Debtors thereon have the capacity to contract;
and
(f) the goods sold, leased or transferred or the services furnished giving
rise
thereto are not subject to any Liens except Permitted Liens.
44
|
4.1.27
|
Compliance
with Eligibility Standards.
|
Each
Account of Borrowers included in the calculation of the Borrowing Base does
and
will at all times that it is included in the Borrowing Base meet and comply
with
all of the standards for Eligible Receivables. With respect to those Accounts
of
Borrowers which Lender has deemed Eligible Receivables (a) to the knowledge
of
Borrowers, there are no facts, events or occurrences which could materially
impair the validity, collectibility or enforceability thereof or tend to
reduce
the amount payable thereunder; and (b) there are no proceedings or actions
known
to Borrowers that are threatened or pending against any Account Debtor which
might result in any material adverse change in the Borrowing Base.
|
Section
4.2
|
Survival;
Updates of Representations and
Warranties.
|
All
representations and warranties contained in or made under or in connection
with
this Agreement and the other Financing Documents shall survive the Closing
Date,
the making of any advance under the Revolving Loan and extension of credit
made
hereunder, and the incurring of any other Obligations and shall be deemed
to
have been made at the time of each request for, and again at the time of
the
making of, each advance under the Revolving Loan or the issuance of each
Letter
of Credit, except that the representations and warranties which relate to
the
financial statements which are referred to in Section 4.1.11
(Financial Condition), shall also be deemed to cover financial statements
furnished from time to time to Lender pursuant to Section 6.1.1
(Financial Statements).
ARTICLE
V
CONDITIONS
PRECEDENT
|
Section
5.1
|
Conditions
to the Initial Advance and Initial Letter of
Credit.
|
The
making of the initial advance under the Revolving Loan and the issuance of
the
initial Letter of Credit is subject to the fulfillment on or before the Closing
Date of the following conditions precedent in a manner satisfactory in form
and
substance to Lender and its counsel:
|
5.1.1
|
Organizational
Documents.
|
Lender
shall have received for each Borrower:
45
(a) a
certificate of good standing certified by the Secretary of State, or other
appropriate Governmental Authority, of the state of formation of each
Borrower;
(b) a
certified copy from the appropriate Governmental Authority under which each
Borrower is organized, of such Borrower’s organizational documents and all
recorded amendments thereto;
(c) a
certificate of qualification to do business certified by the Secretary of
State
or other Governmental Authority of each jurisdiction required by Section
4.1.2(d)
(Existence); and
(d) a
certificate dated as of the Closing Date by the Secretary or an Assistant
Secretary of each Borrower covering:
(i) true
and
complete copies of such Borrower’s organizational and governing documents and
all amendments thereto;
(ii) true
and
complete copies of the resolutions of its Board of Directors authorizing
(A) the
execution, delivery and performance of the Financing Documents to which it
is a
party, (B) the borrowings hereunder, and (C) the granting of the Liens
contemplated by this Agreement and the Financing Documents to which such
Borrower is a party;
(iii) the
incumbency, authority and signatures of the officers of such Borrower authorized
to sign this Agreement and the other Financing Documents to which Borrower
is a
party; and
(iv) the
identity of such Borrower’s current directors.
5.1.2 Opinion
of Borrowers’ Counsel.
Lender
shall have received the favorable opinion of counsel for Borrowers addressed
to
Lender.
|
5.1.3
|
Organizational
Documents - Guarantor.
|
Lender
shall have received for Guarantor:
(a) a
certificate of good standing certified by the Secretary of State, or other
appropriate Governmental Authority, of the state of formation of the
Guarantor;
(b) a
certificate of qualification to do business certified by the Secretary of
State
or other Governmental Authority of each jurisdiction required by Section
4.1.2(d)
(Existence);
46
(c) a
certificate dated as of the Closing Date by the Secretary or an Assistant
Secretary of the Guarantor covering:
(i) true
and
complete copies of the Guarantor’s organizational and governing documents and
all amendments thereto;
(ii) true
and
complete copies of the resolutions of the Board of Directors of the Guarantor
authorizing the execution, delivery and performance of the Financing Documents
to which the Guarantor is a party and the granting of the Liens (if applicable)
contemplated by any of the Financing Documents to which the Guarantor is
a
party;
(iii) the
incumbency, authority and signatures of the officers of the Guarantor authorized
to sign the Guaranty and all other Financing Documents to which the Guarantor
is
a party;
(iv) the
identity of the Guarantor’s current directors; and
(d) the
favorable opinion of counsel for the Guarantor addressed to Lender.
|
5.1.4
|
Consents,
Licenses, Approvals, Etc.
|
Lender
shall have received copies of all consents, licenses and approvals, required
in
connection with the execution, delivery, performance, validity and
enforceability of the Financing Documents, and such consents, licenses and
approvals shall be in full force and effect.
|
5.1.5
|
Note.
|
Lender
shall have received the Revolving Credit Note, conforming to the requirements
hereof and executed by a Responsible Officer of each Borrower and attested
by a
duly authorized representative of each Borrower.
|
5.1.6
|
Financing
Documents and Collateral.
|
Each
Borrower shall have executed and delivered the Financing Documents to be
executed by it, and shall have delivered original Chattel Paper, Instruments,
Investment Property, and related Collateral and all opinions and other documents
contemplated by ARTICLE
III
(The
Collateral).
|
5.1.7
|
Other
Financing Documents.
|
In
addition to the Financing Documents to be delivered by Borrowers, Lender
shall
have received the Guaranty and all other Financing Documents duly executed
and
delivered by Persons other than Borrowers.
47
|
5.1.8
|
Other
Documents, Etc.
|
Lender
shall have received such other certificates, opinions, documents and instruments
confirmatory of or otherwise relating to the transactions contemplated hereby
as
may have been reasonably requested by Lender.
|
5.1.9
|
Payment
of Fees.
|
Lender
shall have received payment of any Fees due on or before the Closing
Date.
|
5.1.10
|
Collateral
Disclosure List.
|
Each
Borrower shall have delivered a Collateral Disclosure List required under
the
provisions of Section
3.3
(Collateral Disclosure List) duly executed by a Responsible Officer of such
Borrower.
|
5.1.11
|
Recordings
and Filings.
|
Each
Borrower shall have: (a) authorized, executed and/or delivered all Financing
Documents required to be filed, registered or recorded in order to create,
in
favor of Lender, a perfected Lien in the Collateral (subject only to the
Permitted Liens) in form and in sufficient number for filing, registration,
and
recording in each office in each jurisdiction in which such filings,
registrations and recordations are required, and (b) delivered such evidence
as
Lender deems satisfactory that all necessary filing fees and all recording
and
other similar fees, and all Taxes and other expenses related to such filings,
registrations and recordings will be or have been paid in full.
|
5.1.12
|
Insurance
Certificate.
|
Lender
shall have received insurance certificates in accordance with the provisions
of
Section 6.1.7
(Insurance).
|
5.1.13
|
Landlord’s
Waivers.
|
Lender
shall have received a waiver from the landlord of the Elkridge, Maryland
location leased by General Physics in form reasonably acceptable to Lender
and
its counsel in their sole and absolute discretion.
|
5.1.14
|
Field
Examination.
|
Lender
shall have completed a field examination of Borrowers’ business, operations and
income, the results of which field examination shall be in all respects
acceptable to Lender in its sole and absolute discretion and shall include
reference discussions with key customers and vendors.
|
5.1.15
|
Subordination
Agreement.
|
Lender
shall have received the fully executed Subordination Agreement in form and
content acceptable to Lender. Lender shall have received and approved copies
of
the fully executed Subordinated Debt Loan Documents, all of which must be
in
form and content acceptable to Lender.
48
|
5.1.16
|
Subordinated
Indebtedness.
|
Lender
shall have received a certificate signed by a Responsible Officer of General
Physics, certifying to Lender that General Physics (a) has received the proceeds
of the Subordinated Debt and has applied the same to such purposes as has
been
previously disclosed to, and approved by, Lender and (b) has delivered to
Lender
a true and correct photocopy of all Subordinated Debt Loan
Documents.
5.1.17 Blocked
Account Agreements.
Lender
shall have received the fully executed Blocked Account Agreements in form
and
content acceptable to Lender.
5.1.18 Borrowing
Base Report.
Lender
shall have received a current Borrowing Base Report.
|
Section
5.2
|
Conditions
to all Extensions of Credit.
|
The
making of all advances under the Revolving Loan and the issuance of all Letters
of Credit is subject to the fulfillment of the following conditions precedent
in
a manner satisfactory in form and substance to Lender and its
counsel:
|
5.2.1
|
Compliance.
|
Each
Borrower shall have complied and shall then be in compliance with all terms,
covenants, conditions and provisions of this Agreement and the other Financing
Documents that are binding upon it.
|
5.2.2
|
Borrowing
Base.
|
Borrowers
shall have furnished all Borrowing Base Reports required by Section 2.1.4
(Borrowing Base Report), there shall exist no Borrowing Base Deficiency,
and as
evidence thereof, Borrowers shall have furnished to Lender such reports,
schedules, certificates, records and other papers as may be requested by
Lender,
and Borrowers shall be in compliance with the provisions of this Agreement
both
immediately before and immediately after the making of the advance
requested.
|
5.2.3
|
Default.
|
There
shall exist no Event of Default or Default hereunder.
|
5.2.4
|
Representations
and Warranties.
|
The
representations and warranties of Borrowers contained among the provisions
of
this Agreement shall be true and with the same effect as though such
representations and warranties had been made at the time of the making of,
and
of the request for, each advance under the Revolving Loan or the issuance
of
each Letter of Credit, except that the representations and warranties which
relate to financial statements which are referred to in Section 4.1.11
(Financial Condition), shall also be deemed to cover financial statements
furnished from time to time to Lender pursuant to Section 6.1.1
(Financial Statements).
49
|
5.2.5
|
Adverse
Change.
|
No
adverse change shall have occurred in the condition (financial or otherwise),
operations or business of any Borrower that would, in the good faith judgment
of
Lender, materially impair the ability of Borrowers to pay or perform any
of the
Obligations.
|
5.2.6
|
Legal
Matters.
|
All
legal
documents incident to each advance under the Revolving Loan and each of the
Letters of Credit shall be reasonably satisfactory to counsel for
Lender.
ARTICLE
VI
COVENANTS
|
Section
6.1
|
Affirmative
Covenants.
|
So
long
as any of the Obligations (or the Commitment) shall be outstanding hereunder,
Borrowers agree, jointly and severally, with Lender as follows:
|
6.1.1
|
Financial
Statements.
|
Borrowers
shall furnish to Lender:
(b) Independent
Auditors Report. Borrowers shall furnish to Lender as soon as available,
but in
no event more than one hundred twenty (120) days after the close of Borrowers’
fiscal years, a letter or opinion of the accountant who examined and certified
the annual financial statement relating to Borrowers and their Subsidiaries
(i)
stating whether anything in such accountant’s examination has revealed the
occurrence of a Default or an Event of Default hereunder, and, if so, stating
the facts with respect thereto and (ii) acknowledging that Lender will rely
on
the statement and that Borrowers know of the intended reliance by
Lender.
50
(d) Monthly
reports. Borrowers shall furnish to Lender within twenty (20) days after
the end
of each fiscal month, a Borrowing Base Report with respect to Borrowers and
a
report containing the following information:
(i) a
detailed aging schedule of all Receivables by Account Debtor as of the end
of
the previous month and the fifteenth (15th)
day of
the current month, in such detail, and accompanied by such supporting
information, as Lender may from time to time reasonably request;
(ii) a
detailed aging of all accounts payable by supplier, in such detail, and
accompanied by such supporting information, as Lender may from time to time
reasonably request;
(iii) a
listing
of all Unbilled Receivables as of the end of the previous month and as of
the
fifteenth (15th)
day of
the current month, showing the billing status of such Unbilled Receivables;
and
(iv) such
other information as Lender may reasonably request.
(e) Annual
Budget and Projections. Borrowers shall furnish to Lender as soon as available,
but in no event later than forty-five (45) days before the end of each fiscal
year a consolidated budget on a quarterly basis for the following fiscal
year.
(f) Additional
Reports and Information. Borrowers shall furnish to Lender promptly, such
additional information, reports or statements as Lender may from time to
time
reasonably request.
51
|
6.1.2
|
Recordkeeping,
Rights of Inspection, Field Examination,
Etc.
|
(a) Borrowers
shall, and shall cause each of their Subsidiaries to, maintain (i) a standard
system of accounting in accordance with GAAP, and (ii) proper books of record
and account in which full, true and correct entries are made of all dealings
and
transactions in relation to its properties, business and
activities.
(b) Prior
to
an Event of Default, Borrowers shall, and shall cause each of their Subsidiaries
to, permit authorized representatives of Lender to visit and inspect the
properties of Borrowers and their Subsidiaries, up to three (3) times per
year
during normal business hours, to review, audit, check and inspect the
Collateral, to review, audit, check and inspect Borrowers’ other books of record
and to make abstracts and photocopies thereof, and to discuss the affairs,
finances and accounts of Borrowers and/or any Subsidiaries, with the officers,
directors, employees and other representatives of Borrowers and/or any
Subsidiaries and their respective accountants. The annualized cost of the
audits
is not anticipated to exceed $15,000 per year.
(c) Subsequent
to the occurrence of an Event of Default and during the continuance thereof,
Borrowers shall, and shall cause each of their Subsidiaries to, permit
authorized representatives of Lender to visit and inspect the properties
of
Borrowers and their Subsidiaries, to review, audit, check and inspect the
Collateral at any time with or without notice, to review, audit, check and
inspect Borrowers’ other books of record at any time with or without notice and
to make abstracts and photocopies thereof, and to discuss the affairs, finances
and accounts of Borrowers and/or any Subsidiaries, with the officers, directors,
employees and other representatives of Borrowers and/or any Subsidiaries
and
their respective accountants, all at such times and as often as Lender may
request.
(d) Each
Borrower hereby irrevocably authorizes and directs all accountants and auditors
employed by Borrower and/or any Subsidiaries at any time prior to the repayment
in full of the Obligations to exhibit and deliver to Lender copies of any
and
all of the financial statements, trial balances, management letters, or other
accounting records of any nature of Borrowers and/or any Subsidiaries in
the
accountant’s or auditor’s possession, and to disclose to Lender any information
they may have concerning the financial status and business operations of
Borrowers and their Subsidiaries. Further, each Borrower hereby authorizes
all
Governmental Authorities to furnish to Lender copies of reports or examinations
relating to Borrowers and/or any Subsidiaries, whether made by a Borrower
or
otherwise.
(e) Any
and
all costs and expenses incurred by, or on behalf of, Lender in connection
with
the conduct of the foregoing, including, without limitation, travel, lodging,
meals, and other expenses for each auditor employed by Lender for inspections
of
the Collateral and Borrowers’ operations, shall be part of the Enforcement Costs
and shall be payable to Lender upon demand. Each Borrower acknowledges and
agrees that such expenses may include, but shall not be limited to, any and
all
out-of-pocket costs and expenses of Lender’s employees and agents in, and when,
traveling to Borrowers’ facilities.
52
|
6.1.3
|
Existence.
|
Except
as
otherwise permitted under Section 6.2.1
(Capital
Structure, etc.), Borrowers shall (a) maintain, and cause each of their
Subsidiaries to maintain, its existence in good standing in the jurisdiction
in
which it is organized and in each other jurisdiction where it is required
to
register or qualify to do business if the failure to do so in such other
jurisdiction might have a material adverse effect on the ability of Borrowers
to
perform the Obligations, on the conduct of Borrowers’ operations, on Borrowers’
financial condition, or on the value of, or the ability of Lender to realize
upon, the Collateral and (b) remain a Registered Organization under the laws
of
the jurisdiction stated in the Preamble of this Agreement.
|
6.1.4
|
Compliance
with Laws.
|
Borrowers
shall comply, and cause each of their Subsidiaries to comply, with all
applicable Laws and observe the valid requirements of Governmental Authorities,
the non-compliance with or the non-observance of which might have a material
adverse effect on the ability of Borrowers to perform the Obligations, on
the
conduct of Borrowers’ operations, on Borrowers’ financial condition, or on the
value of, or the ability of Lender to realize upon, the Collateral.
|
6.1.5
|
Preservation
of Properties.
|
Subject
to the terms of any applicable leases and limited to the extent of the tenant’s
obligations thereunder, Borrowers will, and will cause each of their
Subsidiaries to, at all times (a) maintain, preserve, protect and keep its
properties, including, but not limited to the Collateral, whether owned or
leased, in good operating condition, working order and repair (ordinary wear
and
tear excepted), and from time to time will make all repairs, maintenance,
replacements, additions and improvements thereto necessary to maintain such
properties in good operating condition, working order and repair, and (b)
do or
cause to be done all things necessary to preserve and to keep in full force
and
effect its material franchises, leases of real and personal property, trade
names, Patents, Trademarks, Copyrights and permits which are necessary for
the
orderly continuance of its business.
|
6.1.6
|
Line
of Business.
|
Borrowers
will continue to engage substantially only in the business of providing
training, training administration/outsourcing, e-learning, management
consulting, engineering and technical products and services.
|
6.1.7
|
Insurance.
|
Borrowers
will, and will cause each of their Subsidiaries to, at all times maintain
with
“A” or better rated insurance companies such insurance as is required by
applicable Laws and such other insurance, in such amounts, of such types
and
against such risks, hazards, liabilities, casualties and contingencies as
are
usually insured against in the same geographic areas by business entities
engaged in the same or similar business. Without limiting the generality
of the
foregoing, Borrowers will, and will cause each of their Subsidiaries to,
keep
adequately insured all of its property against loss or damage resulting from
fire or other risks insured against by extended coverage and maintain public
liability insurance against claims for personal injury, death or property
damage
occurring upon, in or about any properties occupied or controlled by it,
or
arising in any manner out of the businesses carried on by it. Borrowers shall
deliver to Lender on the Closing Date (and thereafter on each date there
is a
material change in the insurance coverage) a certificate of a Responsible
Officer of Borrowers containing a detailed list of the insurance then in
effect
and stating the names of the insurance companies, the types, the amounts
and
rates of the insurance, dates of the expiration thereof and the properties
and
risks covered thereby.
53
|
6.1.8
|
Taxes.
|
Except
to
the extent that the validity or amount thereof is being contested in good
faith
and by appropriate proceedings, Borrowers will, and will cause each of their
Subsidiaries to, pay and discharge all Taxes prior to the date when any interest
or penalty would accrue for the nonpayment thereof which, if unpaid, could
have
a material adverse effect on Borrowers’ business or operation.
|
6.1.9
|
ERISA.
|
Borrowers
will, and will cause each of its Commonly Controlled Entities to, comply
with
the funding requirements of ERISA § 302with respect to Plans for its
respective employees. Borrowers will not permit with respect to any Plan
(a) any
prohibited transaction or transactions under ERISA or the Internal Revenue
Code,
which results, or may result, in any material liability of Borrowers and/or
any
Subsidiary and/or Affiliate, or (b) any Reportable Event if, upon termination
of
the Plan or Plans with respect to which one or more such Reportable Events
shall
have occurred, there is or would be any material liability of Borrowers and/or
any Subsidiary and/or Affiliate to the PBGC. Upon Lender’s request, Borrowers
will deliver to Lender a copy of the most recent actuarial report, financial
statements and annual report completed with respect to any Plan.
|
6.1.10
|
Notification
of Events of Default and Adverse
Developments.
|
Borrowers
shall promptly notify Lender upon obtaining knowledge of the occurrence
of:
(a) any
Event
of Default;
(b) any
Default;
(c) any
litigation instituted or threatened against Borrowers or any Subsidiaries
and of
the entry of any judgment or Lien (other than any Permitted Liens) against
any
of the assets or properties of Borrowers or any Subsidiary where the claims
against Borrowers or any Subsidiaries exceed Five Hundred Thousand Dollars
($500,000) and are not covered by insurance;
(d) any
event, development or circumstance whereby the financial statements furnished
hereunder fail in any material respect to present fairly, in accordance with
GAAP, the financial condition and operational results of Borrowers or any
Subsidiaries;
54
(e) any
judicial, administrative or arbitral proceeding pending against Borrowers
or any
of their Subsidiaries and any judicial or administrative proceeding known
by
Borrowers to be threatened against it or any of its Subsidiaries that, if
adversely decided, could materially adversely affect its financial condition
or
operations (present or prospective);
(f) the
receipt by Borrowers or any of their Subsidiaries of any notice, claim or
demand
from any Governmental Authority which alleges that Borrowers or any Subsidiary
is in violation of any of the terms of, or has failed to comply with any
applicable Laws regulating its operation and business, including, but not
limited to, the Occupational Safety and Health Act and the Environmental
Protection Act;
(g) any
default under any Government Contract to which any Borrower is a party, any
event which if not corrected could give rise to a default under any Government
Contract to which any Borrower is a party, or any event under any Government
Contract with a contract value of One Million Dollars ($1,000,000) or greater,
which if not corrected could give rise to a termination for convenience;
and
(h) any
other
development in the business or affairs of Borrowers and any of their
Subsidiaries that may be materially adverse to such Persons taken as a
whole;
in
each
case describing in detail satisfactory to Lender the nature thereof and the
action Borrowers propose to take with respect thereto.
|
6.1.11
|
Hazardous
Materials; Contamination.
|
Borrowers
agree to undertake the following with respect to any matter that could
materially adversely affect Borrowers or any Subsidiaries taken as a
whole:
(a) give
notice to Lender immediately upon any Borrower’s acquiring knowledge of the
presence of any Hazardous Materials or any Hazardous Materials Contamination
on
any property owned, operated or controlled by any Borrower or for which any
Borrower is, or is claimed to be, responsible except to the extent such claims
arise out of or relate to any gross negligence or willful misconduct of Lender
(provided that such notice shall not be required for Hazardous Materials
placed
or stored on such property in accordance with applicable Laws in the ordinary
course (including, without limitation, quantity) of any Borrower’s line of
business expressly described in this Agreement), with a full description
thereof;
(b) promptly
comply with any Laws requiring the removal, treatment or disposal of Hazardous
Materials or Hazardous Materials Contamination and provide Lender with
satisfactory evidence of such compliance;
55
(c) provide
Lender, within thirty (30) days after a demand by Lender, with a bond, letter
of
credit or similar financial assurance evidencing to Lender’s satisfaction that
the necessary funds are available to pay the cost of removing, treating,
and
disposing of such Hazardous Materials or Hazardous Materials Contamination
and
discharging any Lien which may be established as a result thereof on any
property owned, operated or controlled by any Borrower or for which any Borrower
is, or is claimed to be, responsible; and
(d) as
part
of the Obligations, defend, indemnify and hold harmless the Indemnified Parties
from any and all claims which may now or in the future (whether before or
after
the termination of this Agreement) be asserted against the Indemnified Parties
as a result of the presence of any Hazardous Materials or any Hazardous
Materials Contamination on any property owned, operated or controlled by
any
Borrower or for which any Borrower is, or is claimed to be, responsible except
to the extent such claims arise out of or relate to any gross negligence
or
willful misconduct of Lender. Each Borrower acknowledges and agrees that
this
indemnification shall survive the termination of this Agreement and the
Commitment and the payment and performance of all of the other
Obligations.
|
6.1.12
|
Financial
Covenants.
|
(a) Tangible
Net Worth. Borrowers will maintain as of June 30, 2007 and at all times
thereafter, a Tangible Net Worth equal to but not less than
$18,500,000.
(b) Total
Liabilities to Tangible Net Worth. Borrowers shall maintain, at all times,
a
ratio of Total Liabilities to Tangible Net Worth so that it is not more than
2.75 to 1.00 as of June 30, 2007 and not more than 2.50 to 1.00 as of September
30, 2007 and all times thereafter.
(c) Interest
Coverage Ratio. Borrowers shall maintain, at all times, an Interest Coverage
Ratio equal to not less than 3.0 to 1.0:
(d) Capital
Expenditures. Borrowers will not directly or indirectly (by way of the
acquisition of the securities of a Person or otherwise), make any Capital
Expenditures in the aggregate exceeding
$2,250,000 in any fiscal year.
|
6.1.13
|
Collection
of Receivables.
|
Until
such time that Lender shall notify Borrowers of the revocation of such privilege
in accordance with the next sentence, Borrowers shall at their own expense
have
the privilege for the account of, and in trust for, Lender of collecting
its
Receivables and shall completely service all of the Receivables including
(a)
the billing, posting and maintaining of complete records applicable thereto,
(b)
the taking of such action with respect to the Receivables as Lender may request
or in the absence of such request, as Borrowers may deem advisable; and (c)
the
granting, in the ordinary course of business, to any Account Debtor, any
rebate,
refund or adjustment to which the Account Debtor may be lawfully entitled,
and
may accept, in connection therewith, the return of goods, the sale or lease
of
which shall have given rise to a Receivable and may take such other actions
relating to the settling of any Account Debtor’s claim as may be commercially
reasonable. Lender may, at its option, at any time or from time to time after
and during the continuance of an Event of Default hereunder, revoke the
collection privilege given in this Agreement to Borrowers by either giving
notice of its assignment of, and lien on the Collateral to the Account Debtors
or giving notice of such revocation to Borrowers. Lender shall not have any
duty
to, and each Borrower hereby releases Lender from all claims of loss or damage
caused by the delay or failure to collect or enforce any of the Receivables
or
to preserve any rights against any other party with an interest in the
Collateral. Lender shall be entitled at any time and from time to time to
confirm and verify Receivables.
56
|
6.1.14
|
Assignments
of Receivables.
|
Borrowers
will promptly, upon request, execute and deliver to Lender written assignments,
in form and content acceptable to Lender, of specific Receivables or groups
of
Receivables; provided, however, the Lien and/or security interest granted
to
Lender under this Agreement shall not be limited in any way to or by the
inclusion or exclusion of Receivables within such assignments. Receivables
so
assigned shall secure payment of the Obligations and are not sold to Lender
whether or not any assignment thereof, which is separate from this Agreement,
is
in form absolute. Each Borrower agrees that neither any assignment to Lender
nor
any other provision contained in this Agreement or any of the other Financing
Documents shall impose on Lender any obligation or liability of Borrowers
with
respect to that which is assigned and each Borrower hereby agrees to indemnify
Lender and hold Lender harmless from any and all claims, actions, suits,
losses,
damages, costs, expenses, fees, obligations and liabilities which may be
incurred by or imposed upon Lender by virtue of the assignment of and Lien
on
Borrowers’ rights, title and interest in, to, and under the
Collateral.
|
6.1.15
|
Government
Accounts.
|
Borrowers
will immediately notify Lender if any of the Receivables arise out of Government
Contracts for which, pursuant to the provisions of Section
3.2
(Grant
of Liens), any Borrower is obligated to execute documents and take steps
required by Lender in order that all moneys due and to become due under such
contracts shall be assigned to Lender and notice thereof given to the
Governmental Authority under the Federal Assignment of Claims Act.
|
6.1.16
|
Notice
of Returned Goods, etc.
|
Borrowers
will promptly notify Lender of the return, rejection or repossession of any
goods sold or delivered in respect of any Receivables, and of any claims
made in
regard thereto to the extent that the aggregate purchase price of any such
goods
in any given calendar month exceeds in the aggregate One Hundred Thousand
Dollars ($100,000.00) in any given calendar month.
|
6.1.17
|
Equipment.
|
Borrowers
shall (a) maintain all Equipment as personalty, (b) not affix any Equipment
to
any real estate in such manner as to become a fixture or part of such real
estate, and (c) shall hold no Equipment on a sale on approval basis. Each
Borrower hereby declares its intent that, notwithstanding the means of
attachment, no goods of Borrower hereafter attached to any realty shall be
deemed a fixture, which declaration shall be irrevocable, without Lender’s
consent, until all of the Obligations have been paid in full and the Commitment
and all Letters of Credit have been terminated or have expired.
57
|
6.1.18
|
Defense
of Title and Further Assurances.
|
Subject
to the terms of any applicable leases, at its expense, Borrowers will defend
the
title to the Collateral (and any part thereof), and will immediately execute,
acknowledge and deliver any renewal, affidavit, deed, assignment, security
agreement, certificate or other document which Lender may require in order
to
perfect, preserve, maintain, continue, protect and/or extend the Lien granted
to
Lender under this Agreement or under any of the other Financing Documents
and
the first priority of that Lien, subject only to the Permitted Liens. Each
Borrower hereby authorizes the filing of any financing statement or continuation
statement required under the Uniform Commercial Code. Borrowers will from
time
to time do whatever Lender may reasonably require by way of obtaining,
executing, delivering, and/or filing landlords’ waivers, notices of assignment
and other notices and amendments and renewals thereof and Borrowers will
take
any and all steps and observe such formalities as Lender may require, in
order
to create and maintain a valid Lien upon, pledge of, or paramount security
interest in, the Collateral, subject to the Permitted Liens. Borrowers shall
pay
to Lender on demand all taxes, costs and expenses incurred by Lender in
connection with the preparation, execution, recording and filing of any such
document or instrument. To the extent that the proceeds of any of the Accounts
or Receivables of Borrowers are expected to become subject to the control
of, or
in the possession of, a party other than Borrowers or Lender, Borrowers shall
cause all such parties to execute and deliver on the Closing Date security
documents or other documents as requested by Lender and as may be necessary
to
evidence and/or perfect the security interest of Lender in those proceeds.
Each
Borrower hereby irrevocably appoints Lender as Borrower’s attorney-in-fact, with
power of substitution, in the name of Lender or in the name of Borrower or
otherwise, for the use and benefit of Lender, but at the cost and expense
of
Borrower and without notice to Borrower, to execute and deliver any and all
of
the instruments and other documents and take any action which Lender may
require
pursuant the foregoing provisions of this Section 6.1.18.
|
6.1.19
|
Business
Names; Locations.
|
Borrowers
will notify and cause each of their Subsidiaries to notify Lender not less
than
fifteen (15) days prior to (a) any change in the name under which Borrowers
or
the applicable Subsidiary conducts its business, (b) any change of the location
of the chief executive office of Borrowers or the applicable Subsidiary,
(c) the
opening of any new place of business or the closing of any existing place
of
business, and (d) any change in the location of the places where the books
and
records, or any part thereof, are kept.
|
6.1.20
|
Protection
of Collateral.
|
Subject
to the terms of any applicable leases, each Borrower agrees that Lender may
at
any time following the occurrence and during the continuance of an Event
of
Default take such steps as Lender deems reasonably necessary to protect the
interest of Lender in, and to preserve the Collateral, including, the hiring
of
such security guards or the placing of other security protection measures
as
Lender deems appropriate, may employ and maintain at any of Borrower’s premises
a custodian who shall have full authority to do all acts necessary to protect
the interests of Lender in the Collateral and may lease warehouse facilities
to
which Lender may move all or any part of the Collateral to the extent
commercially reasonable. Each Borrower agrees to cooperate fully with Lender’s
efforts to preserve the Collateral and, subject to the terms of any applicable
leases, will take such actions to preserve the Collateral as Lender may
reasonably direct. All of Lender’s expenses of preserving the Collateral,
including any reasonable expenses relating to the compensation and bonding
of a
custodian, shall be part of the Enforcement Costs.
58
6.1.21 Depository
Relationship.
Borrowers
shall maintain their primary depository and cash management relationship
with
Lender at all times during the term of the Revolving Loan.
|
Section
6.2
|
Negative
Covenants.
|
So
long
as any of the Obligations or the Commitment shall be outstanding hereunder,
each
Borrower agrees with Lender as follows:
|
6.2.1
|
Capital
Structure, Merger or Sale of
Assets.
|
Except
for the dissolution of Subsidiaries in Canada and Brazil, no Borrower will
alter
or amend its capital structure, authorize any additional class of equity,
issue
any stock or equity of any class, enter into any merger or consolidation
or
amalgamation, windup or dissolve itself (or suffer any liquidation or
dissolution) or sell, lease or otherwise dispose of any of its assets (except
as
provided in Section 6.2.16
(Disposition of Collateral)). Any consent of Lender to the disposition of
any
assets may be conditioned on a specified use of the proceeds of
disposition.
|
6.2.2
|
Acquisitions.
|
Except
for Permitted Acquisitions, no Borrower will acquire all or substantially
all
the assets of any Person.
|
6.2.3
|
Subsidiaries.
|
No
Borrower will create or acquire any Subsidiaries other than the Subsidiaries
identified on the Collateral Disclosure List, unless such Subsidiaries execute
an Additional Borrower Joinder Supplement or such Borrower pledges all of
the
issued and outstanding stock owned in the Subsidiaries that are domestic
Subsidiaries and sixty six percent (66%) of all of the issued and outstanding
stock owned in the Subsidiaries that are foreign Subsidiaries, as required
by
Lender in its sole discretion.
|
6.2.4
|
Issuance
of Stock.
|
No
Borrower will issue any capital stock or, other than in the ordinary course
of
business in connection with compensation of employees and directors, grant
any
option or right to purchase any of its capital stock.
|
6.2.5
|
Purchase
or Redemption of Securities, Dividend
Restrictions.
|
No
Borrower will purchase, redeem or otherwise acquire any shares of its capital
stock or warrants now or hereafter outstanding, declare or pay any dividends
thereon (other than stock dividends), apply any of its property or assets
to the
purchase, redemption or other retirement of, set apart any sum for the payment
of any dividends on, or for the purchase, redemption, or other retirement
of,
make any distribution by reduction of capital or otherwise in respect of,
any
shares of any class of capital stock of Borrower, or any warrants, permit
any
Subsidiary to purchase or acquire any shares of any class of capital stock
of,
or warrants issued by, Borrower, make any distribution to stockholders or
set
aside any funds for any such purpose, and not prepay, purchase or redeem
any
Indebtedness for Borrowed Money other than the Obligations; provided, however,
if no Default exists or would result from the payment thereof, Borrowers
may
make payments to GPX (a) for taxes due in connection with the operations
of
Borrower, (b) for interest due in connection with the Subordinated Debt and
(c)
for payments permitted under Section 6.2.7(g).
59
|
6.2.6
|
Indebtedness.
|
No
Borrower will, and no Borrower will permit any Subsidiary to, create, incur,
assume or suffer to exist any Indebtedness for Borrowed Money, or permit
any
Subsidiary to do so, except:
(a) the
Obligations;
(b) accounts
payable arising in the ordinary course;
(c) Indebtedness
secured by Permitted Liens;
(d) Subordinated
Indebtedness;
(e) Indebtedness
of Subsidiaries permitted under Section 6.2.7
(Investments, Loans, etc.); and
(f) Indebtedness
of Borrower existing on the date hereof and reflected on Schedule
6.2.6
attached
hereto and made a part hereof.
|
6.2.7
|
Investments,
Loans and Other Transactions.
|
Except
as
otherwise provided in this Agreement, no Borrower will, and no Borrower will
permit any of its Subsidiaries to, (a) make, assume or acquire any investment
in
any real property (unless used in connection with its business and treated
as a
Fixed or Capital Asset of Borrower or the Subsidiary) or any Person, whether
by
stock purchase, capital contribution, acquisition of indebtedness of such
Person
or otherwise (including, without limitation, investments in any joint venture
or
partnership), (b) guaranty or otherwise become contingently liable for the
Indebtedness or obligations of any Person, (c) make any loans or advances,
or
otherwise extend credit to any Person, or (d) enter into or participate in
any
transaction with any Affiliate, Guarantor or Affiliate of Guarantor or, except
in the ordinary course of business, with the officers, directors, employees
and
other representatives of Borrower and/or any Subsidiary, except:
(a) any
advance to an officer or employee of Borrower or any Subsidiary for travel
or
other business expenses in the ordinary course of business, provided that
the
aggregate amount of all such advances by Borrowers and their Subsidiaries
(taken
as a whole) outstanding at any time shall not exceed One Hundred Thousand
Dollars ($100,000);
60
(b) the
endorsement of negotiable instruments for deposit or collection or similar
transactions in the ordinary course of business;
(c) any
investment in Cash Equivalents, which are pledged to Lender as collateral
and
security for the Obligations;
(d) trade
credit extended to customers in the ordinary course of business;
(e) management
fees paid to GPX or NPDC in an amount not to exceed $1,000,000 in any fiscal
year, provided no Event of Default exists or would result from such
payment;
(f) loans
made to Subsidiaries from and after the Closing Date in an amount not to
exceed
$1,500,000 in the aggregate at any time outstanding;
(g) payment
to GPX for costs and expenses related to the spin-off of NPDC to the extent
actually incurred, but in no event to exceed $250,000; and
(h) guarantees,
loans, investments (including investments in joint ventures) or advances
existing on the date hereof and reflected on Schedule
6.2.7
attached
hereto and made a part hereof.
|
6.2.8
|
Stock
of Subsidiaries.
|
Except
for the dissolution of Subsidiaries in Canada and Brazil, no Borrower will
sell
or otherwise dispose of any shares of capital stock of any Subsidiary (except
in
connection with a merger or consolidation of a Wholly Owned Subsidiary into
Borrower or another Wholly Owned Subsidiary or with the dissolution of any
Subsidiary) or permit any Subsidiary to issue any additional shares of its
capital stock except pro rata
to its
stockholders.
|
6.2.9
|
Subordinated
Indebtedness.
|
No
Borrower will, and no Borrower will permit any Subsidiary to make:
(a) any
payment of principal of, or interest on, any of the Subordinated Indebtedness,
including, without limitation, the Subordinated Debt, if a Default or an
Event
of Default then exists hereunder or would result from such payment;
(b) any
payment of the principal or interest due on the Subordinated Indebtedness
as a
result of acceleration thereunder or a mandatory prepayment
thereunder;
61
(c) any
amendment or modification of or supplement to the documents evidencing or
securing the Subordinated Indebtedness; or
(d) payment
of principal or interest on the Subordinated Indebtedness other than when
due
(without giving effect to any acceleration of maturity or mandatory
prepayment).
|
6.2.10
|
Liens;
Confessed Judgment.
|
Each
Borrower agrees that it (a) will not create, incur, assume or suffer to exist
any Lien upon any of its properties or assets, whether now owned or hereafter
acquired, or permit any Subsidiary so to do, except for Liens securing the
Obligations and Permitted Liens, (b) will not agree to, assume or suffer
to
exist any provision in any instrument or other document for confession of
judgment, cognovit or other similar right or remedy, (c) will not allow or
suffer to exist any Permitted Liens to be superior to Liens securing the
Obligations, (d) will not enter into any contracts for the consignment of
goods,
will not execute or suffer the filing of any financing statements or the
posting
of any signs giving notice of consignments, and will not, as a material part
of
its business, engage in the sale of goods belonging to others, and (e) will
not
allow or suffer to exist the failure of any Lien described in the Security
Documents to attach to, and/or remain at all times perfected on, any of the
property described in the Security Documents.
|
6.2.11
|
Other
Businesses.
|
No
Borrower and no Subsidiary of a Borrower will engage directly or indirectly
in
any business other than its current line of business described in Section
6.1.6
(Line of
Business).
|
6.2.12
|
ERISA
Compliance.
|
Except
to
the extent that the occurrence of any of the following could not result in
a
material liability to Borrowers, no Borrower nor any Commonly Controlled
Entity
shall: (a) engage in or permit any “prohibited transaction” (as defined in
ERISA); (b) cause any “accumulated funding deficiency” as defined in ERISA
and/or the Internal Revenue Code; (c) terminate any Plan in a manner which
could
result in the imposition of a lien on the property of Borrower pursuant to
ERISA; (d) terminate or consent to the termination of any Multiemployer Plan;
or
(e) incur a complete or partial withdrawal with respect to any Multiemployer
Plan.
|
6.2.13
|
Prohibition
on Hazardous Materials.
|
Borrowers
shall not place, manufacture or store or permit to be placed, manufactured
or
stored any Hazardous Materials on any property owned, operated or controlled
by
any Borrower or for which any Borrower is responsible other than Hazardous
Materials placed or stored on such property in accordance with applicable
Laws
in the ordinary course of Borrowers’ business except for any non-compliance
which would not result in a material adverse effect on Borrowers.
|
6.2.14
|
Method
of Accounting; Fiscal Year.
|
Borrowers
will not:
62
(a) change
the method of accounting employed in the preparation of any financial statements
furnished to Lender under the provisions of Section 6.1.1
(Financial Statements), unless required to conform to GAAP and on the condition
that Borrowers’ accountants shall furnish such information as Lender may request
to reconcile the changes with Borrowers’ prior financial
statements.
(b) change
their fiscal year from a year ending on December 31.
|
6.2.15
|
Sale
and Leaseback.
|
No
Borrower or any Subsidiaries will directly or indirectly enter into any
arrangement to sell or transfer all or any substantial part of its fixed
assets
and thereupon or within one (1) year thereafter rent or lease the assets
so sold
or transferred.
|
6.2.16
|
Disposition
of Collateral.
|
No
Borrower will sell, discount, allow credits or allowances, transfer, assign,
extend the time for payment on, convey, lease, assign, transfer or otherwise
dispose of the Collateral, except, prior to an Event of Default, dispositions
expressly permitted elsewhere in this Agreement, the sale of Inventory and
licensing of intellectual property in the ordinary course of business, and
the
sale of unnecessary or obsolete Equipment, but only if the proceeds of the
sale
of such Equipment are (a) used to purchase similar Equipment to replace the
unnecessary or obsolete Equipment or (b) immediately turned over to Lender
for
application to the Obligations in accordance
with the provisions of this Agreement.
ARTICLE
VII
DEFAULT
AND RIGHTS AND REMEDIES
|
Section
7.1
|
Events
of Default.
|
The
occurrence of any one or more of the following events shall constitute an
“Event
of Default” under the provisions of this Agreement:
|
7.1.1
|
Failure
to Pay.
|
The
failure of Borrowers to pay any of the Obligations as and when due and payable
in accordance with the provisions of this Agreement, the Notes and/or any
of the
other Financing Documents.
|
7.1.2
|
Breach
of Representations and Warranties.
|
Any
representation or warranty made in this Agreement or in any report, statement,
schedule, certificate, opinion (including any opinion of counsel for Borrowers),
financial statement or other document furnished in connection with this
Agreement, any of the other Financing Documents, or the Obligations, shall
prove
to have been false or misleading when made (or, if applicable, when reaffirmed)
in any material respect.
63
|
7.1.3
|
Failure
to Comply with Specific Covenants.
|
The
failure of Borrowers to perform, observe or comply with any covenant, condition
or agreement contained in Section 6.1.3
(Existence) or Section 6.1.7
(Insurance), which failure
continues uncured for a period of thirty (30) days after Notice from Lender
to
Borrowers.
|
7.1.4
|
Failure
to Comply with Covenants.
|
The
failure of Borrowers to perform, observe or comply with any covenant, condition
or agreement contained in this Agreement not otherwise referred to in this
Section
7.1.
|
7.1.5
|
Default
Under Other Financing Documents or
Obligations.
|
A
default
shall occur under any of the other Financing Documents or under any other
Obligations, and such default is not cured within any applicable grace period
provided therein.
|
7.1.6
|
Receiver;
Bankruptcy.
|
Any
Borrower or any Subsidiary shall (a) apply for or consent to the appointment
of
a receiver, trustee or liquidator of itself or any of its property, (b) admit
in
writing its inability to pay its debts as they mature, (c) make a general
assignment for the benefit of creditors, (d) be adjudicated a bankrupt or
insolvent, (e) file a voluntary petition in bankruptcy or a petition or an
answer seeking or consenting to reorganization or an arrangement with creditors
or to take advantage of any bankruptcy, reorganization, insolvency, readjustment
of debt, dissolution or liquidation law or statute, or an answer admitting
the
material allegations of a petition filed against it in any proceeding under
any
such law, or take corporate action for the purposes of effecting any of the
foregoing, or (f) by any act indicate its consent to, approval of or
acquiescence in any such proceeding or the appointment of any receiver of
or
trustee for any of its property, or suffer any such receivership, trusteeship
or
proceeding to continue undischarged for a period of sixty (60) days, or (g)
by
any act indicate its consent to, approval of or acquiescence in any order,
judgment or decree by any court of competent jurisdiction or any Governmental
Authority enjoining or otherwise prohibiting the operation of a material
portion
of Borrower’s or any Subsidiary’s business or the use or disposition of a
material portion of Borrower’s or any Subsidiary’s assets.
|
7.1.7
|
Involuntary
Bankruptcy, etc.
|
An
order
for relief shall be entered in any involuntary case brought against any Borrower
or any Subsidiary under the Bankruptcy Code, or (b) any such case shall be
commenced against any Borrower or any Subsidiary and shall not be dismissed
within sixty (60) days after the filing of the petition, or (c) an order,
judgment or decree under any other Law is entered by any court of competent
jurisdiction or by any other Governmental Authority on the application of
a
Governmental Authority or of a Person other than Borrowers or any Subsidiary
(i)
adjudicating any Borrower, or any Subsidiary bankrupt or insolvent, or (ii)
appointing a receiver, trustee or liquidator of Borrower or of any Subsidiary,
or of a material portion of Borrower’s or any Subsidiary’s assets, or (iii)
enjoining, prohibiting or otherwise limiting the operation of a material
portion
of any Borrower’s or any Subsidiary’s business or the use or disposition of a
material portion of any Borrower’s or any Subsidiary’s assets, and such order,
judgment or decree continues unstayed and in effect for a period of thirty
(30)
days from the date entered.
64
|
7.1.8
|
Judgment.
|
Unless
adequately insured in the opinion of Lender, the entry of a final judgment
for
the payment of money involving more than $1,000,000 against any Borrower
or any
Subsidiary, and the failure by such Borrower or such Subsidiary to discharge
the
same, or cause it to be discharged, within thirty (30) days from the date
of the
order, decree or process under which or pursuant to which such judgment was
entered, or to secure a stay of execution pending appeal of such
judgment.
|
7.1.9
|
Execution;
Attachment.
|
Any
execution or attachment shall be levied against the Collateral, or any part
thereof, and such execution or attachment shall not be set aside, discharged
or
stayed within thirty (30) days after the same shall have been
levied.
|
7.1.10
|
Default
Under Other Borrowings.
|
Default
shall be made with respect to any Indebtedness for Borrowed Money (other
than
the Revolving Loan) with an outstanding principal amount of greater than
$500,000 if the default is a failure to pay at maturity or if the effect
of such
default is to accelerate the maturity of such Indebtedness for Borrowed Money
or
to permit the holder or obligee thereof or other party thereto to cause such
Indebtedness for Borrowed Money to become due prior to its stated
maturity.
|
7.1.11
|
Challenge
to Agreements.
|
Any
Borrower or Guarantor shall challenge the validity and binding effect of
any
provision of any of the Financing Documents or shall state its intention
to make
such a challenge of any of the Financing Documents or any of the Financing
Documents shall for any reason (except to the extent permitted by its express
terms) cease to be effective or to create a valid and perfected first priority
Lien (except for Permitted Liens) on, or security interest in, any of the
Collateral purported to be covered thereby.
|
7.1.12
|
Material
Adverse Change.
|
Lender
in
its sole discretion determines in good faith that a material adverse change
has
occurred in the financial condition of Borrowers or the value of the Collateral
taken as a whole.
7.1.13 Contract
Default, Debarment or Suspension.
Default
shall be made under any Government Contract with, or any Government Contract
is
terminated for default by, the United States or any individual department,
agency or instrumentality of the United States with which any Borrower has
contracts in the aggregate at that point in time with a value in excess of
$10,000,000, or if any Borrower is debarred or suspended, whether temporarily
or
permanently, by the United States or any department, agency or instrumentality
of the United States.
65
|
7.1.14
|
Liquidation,
Termination, Dissolution, etc.
|
Any
Borrower shall liquidate, dissolve or terminate its existence or shall suspend
or terminate a substantial portion of its business operations or any change
occurs in the control of any Borrower without the prior written consent of
Lender.
|
Section
7.2
|
Remedies.
|
Upon
the
occurrence and during the continuance of any Event of Default, Lender may,
in
the exercise of its sole and absolute discretion from time to time, exercise
any
one or more of the following rights, powers or remedies:
|
7.2.1
|
Acceleration.
|
Lender
may declare any or all of the Obligations to be immediately due and payable,
notwithstanding anything contained in this Agreement or in any of the other
Financing Documents to the contrary, without presentment, demand, protest,
notice of protest or of dishonor, or other notice of any kind, all of which
Borrowers hereby waive.
|
7.2.2
|
Further
Advances.
|
Lender
may from time to time without notice to Borrowers suspend, terminate or limit
any further advances, loans or other extensions of credit under the Commitment,
under this Agreement and/or under any of the other Financing Documents. Further,
upon the occurrence of an Event of Default or Default specified in Section
7.1.6
(Receiver; Bankruptcy) or Section 7.1.7
(Involuntary Bankruptcy, etc.), the Revolving Credit Commitment and any
agreement in any of the Financing Documents to provide additional credit
and/or
to issue Letters of Credit shall immediately and automatically terminate
and the
unpaid principal amount of the Notes (with accrued interest thereon) and
all
other Obligations then outstanding, shall immediately become due and payable
without further action of any kind and without presentment, demand, protest
or
notice of any kind, all of which are hereby expressly waived by
Borrowers.
|
7.2.3
|
Uniform
Commercial Code.
|
Lender
shall have all of the rights and remedies of a secured party under the
applicable Uniform Commercial Code and other applicable Laws. Upon demand
by
Lender, Borrowers shall assemble the Collateral and make it available to
Lender,
at a place designated by Lender. Subject to the terms of any applicable leases,
Lender or its agents may without notice from time to time enter upon any
Borrower’s premises to take possession of the Collateral, to remove it, to
render it unusable, to process it or otherwise prepare it for sale, or to
sell
or otherwise dispose of it.
Any
written notice of the sale, disposition or other intended action by Lender
with
respect to the Collateral which is sent by regular mail, postage prepaid,
to
Borrowers at the address set forth in Section
8.1
(Notices), or such other address of Borrowers which may from time to time
be
shown on Lender’s records, at least ten (10) days prior to such sale,
disposition or other action, shall constitute commercially reasonable notice
to
Borrowers. Lender may alternatively or additionally give such notice in any
other commercially reasonable manner. Nothing in this Agreement shall require
Lender to give any notice not required by applicable Laws.
66
If
any
consent, approval, or authorization of any state, municipal or other
Governmental Authority or of any other Person or of any Person having any
interest therein, should be necessary to effectuate any sale or other
disposition of the Collateral, each Borrower agrees to execute all such
applications and other instruments, and to take all other action, as may
be
required in connection with securing any such consent, approval or
authorization.
Borrowers
recognize that Lender may be unable to effect a public sale of all or a part
of
the Collateral consisting of Investment Property by reason of certain
prohibitions contained in the Securities Act of 1933, as amended, and other
applicable Federal and state Laws. Lender may, therefore, in its discretion,
take such steps as it may deem appropriate to comply with such Laws and may,
for
example, at any sale of the Collateral consisting of securities restrict
the
prospective bidders or purchasers as to their number, nature of business
and
investment intention, including, without limitation, a requirement that the
Persons making such purchases represent and agree to the satisfaction of
Lender
that they are purchasing such securities for their account, for investment,
and
not with a view to the distribution or resale of any thereof. Borrowers covenant
and agree to do or cause to be done promptly all such acts and things as
Lender
may request from time to time and as may be necessary to offer and/or sell
the
securities or any part thereof in a manner which is valid and binding and
in
conformance with all applicable Laws. Upon any such sale or disposition,
Lender
shall have the right to deliver, assign and transfer to the purchaser thereof
the Collateral consisting of securities so sold.
|
7.2.4
|
Specific
Rights With Regard to Collateral.
|
In
addition to all other rights and remedies provided hereunder or as shall
exist
at law or in equity from time to time, Lender may (but shall be under no
obligation to), without notice to any Borrower, and each Borrower hereby
irrevocably appoints Lender as its attorney-in-fact, with power of substitution,
in the name of Lender and/or in the name of Borrower for the use and benefit
of
Lender, but at the cost and expense of Borrowers and without notice to
Borrowers:
(a) request
any Account Debtor obligated on any of the Accounts to make payments thereon
directly to Lender, with Lender taking control of the Proceeds
thereof;
(b) compromise,
extend or renew any of the Collateral or deal with the same as it may deem
advisable;
(c) make
exchanges, substitutions or surrenders of all or any part of the
Collateral;
(d) copy,
transcribe, or remove from any place of business of any Borrower or any
Subsidiary all books, records, ledger sheets, correspondence, invoices and
documents, relating to or evidencing any of the Collateral or without cost
or
expense to Lender, subject to the terms of any applicable leases, make such
use
of any Borrower’s or any Subsidiary’s place(s) of business as may be reasonably
necessary to administer, control and collect the Collateral;
67
(e) repair,
alter or supply goods if necessary to fulfill in whole or in part the purchase
order of any Account Debtor;
(f) demand,
collect, receipt for and give renewals, extensions, discharges and releases
of
any of the Collateral;
(g) institute
and prosecute legal and equitable proceedings to enforce collection of, or
realize upon, any of the Collateral;
(h) settle,
renew, extend, compromise, compound, exchange or adjust claims in respect
of any
of the Collateral or any legal proceedings brought in respect
thereof;
(i) endorse
or sign the name of any Borrower upon any Items of Payment, certificates
of
title, Instruments, Investment Property, stock powers, documents, documents
of
title, financing statements, assignments, notices, or other writing relating
to
or part of the Collateral and on any proof of claim in bankruptcy against
an
Account Debtor;
(j) clear
Inventory through customs in Lender’s or, as applicable, any Borrower’s name and
to sign and deliver to customs officials powers of attorney in any Borrower’s
name for such purpose;
(k) notify
the Post Office authorities to change the address for the delivery of mail
to
any Borrower to such address or Post Office Box as Lender may designate and
receive and open all mail addressed to such Borrower; and
(l) take
any
other action necessary or beneficial to realize upon or dispose of the
Collateral or to carry out the terms of this Agreement.
|
7.2.5
|
Application
of Proceeds.
|
Any
proceeds of sale or other disposition of the Collateral will be applied by
Lender to the payment first of any and all Enforcement Costs, and any balance
of
such proceeds will be applied to the Obligations in such order and manner
as
Lender shall determine. If the sale or other disposition of the Collateral
fails
to fully satisfy the Obligations, Borrowers shall remain liable to Lender
for
any deficiency.
|
7.2.6
|
Performance
by Lender.
|
Lender
without notice to or demand upon Borrowers and without waiving or releasing
any
of the Obligations or any Default or Event of Default, may (but shall be
under
no obligation to) at any time thereafter make such payment or perform such
act
for the account and at the expense of Borrowers, and may enter upon the premises
of Borrowers for that purpose and take all such action thereon as Lender
may
consider necessary or appropriate for such purpose, subject to the terms
of any
applicable leases, and each Borrower hereby irrevocably appoints Lender as
its
attorney-in-fact to do so, with power of substitution, in the name of Lender,
in
the name of Borrowers or otherwise, for the use and benefit of Lender, but
at
the cost and expense of Borrowers and without notice to Borrowers. All sums
so
paid or advanced by Lender together with interest thereon from the date of
payment, advance or incurring until paid in full at the Post-Default Rate
and
all costs and expenses, shall be deemed part of the Enforcement Costs, shall
be
paid by Borrowers to Lender on demand, and shall constitute and become a
part of
the Obligations.
68
|
7.2.7
|
Other
Remedies.
|
Lender
may from time to time proceed to protect or enforce its rights by an action
or
actions at law or in equity or by any other appropriate proceeding, whether
for
the specific performance of any of the covenants contained in this Agreement
or
in any of the other Financing Documents, or for an injunction against the
violation of any of the terms of this Agreement or any of the other Financing
Documents, or in aid of the exercise or execution of any right, remedy or
power
granted in this Agreement, the Financing Documents, and/or applicable Laws.
Lender is authorized to offset and apply to all or any part of the Obligations
all moneys, credits and other property of any nature whatsoever of Borrowers
now
or at any time hereafter in the possession of, in transit to or from, under
the
control or custody of, or on deposit with, Lender or any Affiliate of
Lender.
ARTICLE
VIII
MISCELLANEOUS
|
Section
8.1
|
Notices.
|
All
notices, requests and demands to or upon the parties to this Agreement shall
be
in writing and shall be deemed to have been given or made when delivered
by hand
on a Business Day, or five (5) days after the date when deposited in the
mail,
postage prepaid by registered or certified mail, return receipt requested,
or
when sent by overnight courier, on the Business Day next following the day
on
which the notice is delivered to such overnight courier, addressed as
follows:
Borrowers:
General
Physics Corporation
0000
Xxxxxxxxx Xxxxx
Xxxxx
000
Xxxxxxxx,
Xxxxxxxx 00000
Attention: Xxxxxx
Xxxxxxxx-Xxxxx
with
a
copy
to:
General
Physics Corporation
0000
Xxxxxxxxx Xxxxx
Xxxxx
000
Xxxxxxxx,
Xxxxxxxx 00000
Attention: Xxxxxxx
X. Xxxxxxxx
69
Lender:
Wachovia
Bank, National Association
MD4305
0
Xxxxx
Xxxx Xxxxxx, 0xx
Xxxxx
Xxxxxxxxx,
Xxxxxxxx 00000
Attention: Xxxx
X.
Xxxxxxxx
with
a
copy
to:
Xxxxxxxx
X. Xxxxxxx, Esquire
Xxxxxxxx
Xxxxxxx LLP
0000
Xxxxxxxxxxxxx Xxxxx, Xxxxx 000
XxXxxx,
Xxxxxxxx 00000
By
written notice, each party to this Agreement may change the address to which
notice is given to that party, provided that such changed notice shall include
a
street address to which notices may be delivered by overnight courier in
the
ordinary course on any Business Day.
|
Section
8.2
|
Amendments;
Waivers.
|
This
Agreement and the other Financing Documents may not be amended, modified,
or
changed in any respect except by an agreement in writing signed by Lender
and
Borrowers. No waiver of any provision of this Agreement or of any of the
other
Financing Documents or consent to any departure by Borrowers therefrom, shall
in
any event be effective unless the same shall be in writing signed by Lender.
No
course of dealing between Borrowers and Lender and no act or failure to act
from
time to time on the part of Lender shall constitute a waiver, amendment or
modification of any provision of this Agreement or any of the other Financing
Documents or any right or remedy under this Agreement, under any of the other
Financing Documents or under applicable Laws.
Without
implying any limitation on the foregoing:
(a) Any
waiver or consent shall be effective only in the specific instance, for the
terms and purpose for which given, subject to such conditions as Lender may
specify in any such instrument.
(b) No
waiver
of any Default or Event of Default shall extend to any subsequent or other
Default or Event of Default, or impair any right consequent
thereto.
(c) No
notice
to or demand on Borrowers in any case shall entitle Borrowers to any other
or
further notice or demand in the same, similar or other
circumstance.
(d) No
failure or delay by Lender to insist upon the strict performance of any term,
condition, covenant or agreement of this Agreement or of any of the other
Financing Documents, or to exercise any right, power or remedy consequent
upon a
breach thereof, shall constitute a waiver, amendment or modification of any
such
term, condition, covenant or agreement or of any such breach or preclude
Lender
from exercising any such right, power or remedy at any time or
times.
70
(e) By
accepting payment after the due date of any amount payable under this Agreement
or under any of the other Financing Documents, Lender shall not be deemed
to
waive the right either to require prompt payment when due of all other amounts
payable under this Agreement or under any of the other Financing Documents,
or
to declare a default for failure to effect such prompt payment of any such
other
amount.
|
Section
8.3
|
Cumulative
Remedies.
|
The
rights, powers and remedies provided in this Agreement and in the other
Financing Documents are cumulative, may be exercised concurrently or separately,
may be exercised from time to time and in such order as Lender shall determine,
subject to the provisions of this Agreement, and are in addition to, and
not
exclusive of, rights, powers and remedies provided by existing or future
applicable Laws. In order to entitle Lender to exercise any remedy reserved
to
it in this Agreement, it shall not be necessary to give any notice, other
than
such notice as may be expressly required in this Agreement. Without limiting
the
generality of the foregoing and subject to the terms of this Agreement, Lender
may:
(a) proceed
against any Borrower with or without proceeding against any other Person
(including, without limitation, Guarantor) who may be liable (by endorsement,
guaranty, indemnity or otherwise) for all or any part of the
Obligations;
(b) proceed
against any Borrower with or without proceeding under any of the other Financing
Documents or against any Collateral or other collateral and security for
all or
any part of the Obligations;
(c) without
reducing or impairing the obligation of any Borrower and without notice,
release
or compromise with any guarantor or other Person liable for all or any part
of
the Obligations under the Financing Documents or otherwise;
(d) without
reducing or impairing the obligations of any Borrower and without notice
thereof:
(i) fail
to
perfect the Lien in any or all Collateral or to release any or all the
Collateral or to accept substitute Collateral;
(ii) approve
the making of advances under the Revolving Loan under this
Agreement;
(iii) waive
any
provision of this Agreement or the other Financing Documents;
(iv) exercise
or fail to exercise rights of set-off or other rights; or
71
(e) accept
partial payments or extend
from
time to time the maturity of all or any part of the Obligations.
|
Section
8.4
|
Severability.
|
In
case
one or more provisions, or part thereof, contained in this Agreement or in
the
other Financing Documents shall be invalid, illegal or unenforceable in any
respect under any Law, then without need for any further agreement, notice
or
action:
(a) the
validity, legality and enforceability of the remaining provisions shall remain
effective and binding on the parties thereto and shall not be affected or
impaired thereby;
(b) the
obligation to be fulfilled shall be reduced to the limit of such
validity;
(c) if
such
provision or part thereof pertains to repayment of the Obligations, then,
at the
sole and absolute discretion of Lender, all of the Obligations of Borrowers
to
Lender shall become immediately due and payable; and
(d) if
the
affected provision or part thereof does not pertain to repayment of the
Obligations, but operates or would prospectively operate to invalidate this
Agreement in whole or in material part, then such provision or part thereof
only
shall be void, and the remainder of this Agreement shall remain operative
and in
full force and effect.
|
Section
8.5
|
Assignments
by Lender.
|
Lender
may, without notice to or consent of Borrowers, assign to any Person (each
an
“Assignee” and collectively, the “Assignees”) all or a portion of the
Commitment; provided, however, prior to any sale of the Loan, or any portion
thereof, to an institution organized under the laws of a foreign jurisdiction,
so long as no Event of Default exists and is continuing, Lender will provide
notice to Borrowers and Borrowers will have the right to approve or disapprove
the sale which approval shall not be unreasonably withheld, conditioned,
or
delayed, and provided further, however, that the notice and consent right
provided to Borrowers in the foregoing clause will only apply to the sale
of an
interest in the Loan as part of a portfolio management sale by Lender, and
not
any sale of Lender itself. Lender and its Assignee shall notify Borrowers
in
writing of the date on which the assignment is to be effective (the “Adjustment
Date”). On or before the Adjustment Date, Lender, Borrowers and the Assignee
shall execute and deliver a written assignment agreement in a form acceptable
to
Lender, which shall constitute an amendment to this Agreement to the extent
necessary to reflect such assignment. Upon the request of Lender following
an
assignment made in accordance with this Section
8.5,
Borrowers shall issue new Notes to Lender and its Assignee reflecting such
assignment, in exchange for the existing Notes held by Lender.
In
addition, notwithstanding the foregoing, Lender may at any time pledge all
or
any portion of Lender’s rights under this Agreement, the Commitment or the
Obligations to a Federal Reserve Bank.
72
|
Section
8.6
|
Participations
by Lender.
|
Lender
may at any time sell to one or more financial institutions participating
interests in any of Lender’s Obligations or Commitment; provided, however, that
(a) no such participation shall relieve Lender from its obligations under
this
Agreement or under any of the other Financing Documents to which it is a
party,
(b) Lender shall remain solely responsible for the performance of its
obligations under this Agreement and under all of the other Financing Documents
to which it is a party, and (c) Borrowers shall continue to deal solely and
directly with Lender in connection with Lender’s rights and obligations under
this Agreement and the other Financing Documents. A participant shall have
no
rights vis-à-vis Borrowers under this Agreement.
|
Section
8.7
|
Disclosure
of Information by Lender.
|
Subject
to the provisions of Section
8.21
(Confidentiality), in connection with any sale, transfer, assignment or
participation by Lender in accordance with Section
8.5
(Assignments by Lender) or Section
8.6
(Participations by Lender), Lender shall have the right to disclose to any
actual or potential purchaser, assignee, transferee or participant all financial
records, information, reports, financial statements and documents obtained
in
connection with this Agreement and/or any of the other Financing Documents
or
otherwise.
|
Section
8.8
|
Successors
and Assigns.
|
This
Agreement and all other Financing Documents shall be binding upon and inure
to
the benefit of Borrowers and Lender and their respective successors and assigns,
except that Borrowers shall not have the right to assign its rights hereunder
or
any interest herein without the prior written consent of Lender.
|
Section
8.9
|
Continuing
Agreements.
|
All
covenants, agreements, representations and warranties made by Borrowers in
this
Agreement, in any of the other Financing Documents, and in any certificate
delivered pursuant hereto or thereto shall survive the making by Lender of
the
Revolving Loan, the issuance of Letters of Credit and the execution and delivery
of the Notes, shall be binding upon Borrowers regardless of how long before
or
after the date hereof any of the Obligations were or are incurred, and shall
continue in full force and effect so long as any of the Obligations are
outstanding and unpaid. From time to time upon Lender’s request, and as a
condition of the release of any one or more of the Security Documents, Borrowers
and other Persons obligated with respect to the Obligations shall provide
Lender
with such acknowledgments and agreements as Lender may require to the effect
that there exists no defenses, rights of setoff or recoupment, claims,
counterclaims, actions or causes of action of any kind or nature whatsoever
in
connection with the Obligations against Lender and/or any of its agents and
others, or to the extent there are, the same are waived and
released.
|
Section
8.10
|
Enforcement
Costs.
|
Borrowers
shall pay to Lender on demand all Enforcement Costs, together with interest
thereon from the earlier of the date incurred or advanced until paid in full
at
a per annum rate of interest equal at all times to the Post-Default Rate.
Enforcement Costs shall be payable on demand. Without implying any limitation
on
the foregoing, Borrowers shall pay, as part of the Enforcement Costs, upon
demand any and all stamp and other Taxes and fees payable or determined to
be
payable in connection with the execution and delivery of this Agreement and
the
other Financing Documents and to save Lender harmless from and against any
and
all liabilities with respect to or resulting from any delay in paying or
omission to pay any Taxes or fees referred to in this Section. The provisions
of
this Section shall survive the execution and delivery of this Agreement,
the
repayment of the other Obligations and shall survive the termination of this
Agreement.
73
|
Section
8.11
|
Applicable
Law; Jurisdiction.
|
|
8.11.1
|
Applicable
Law.
|
Borrowers
and Lender acknowledge and agree that this Agreement shall be governed by
the
Laws of the State.
|
8.11.2
|
Submission
to Jurisdiction.
|
Each
Borrower irrevocably submits to the jurisdiction of any state or federal
court
sitting in the State over any suit, action or proceeding arising out of or
relating to this Agreement or any of the other Financing Documents. Each
Borrower irrevocably waives, to the fullest extent permitted by law, any
objection that it may now or hereafter have to the laying of the venue of
any
such suit, action or proceeding brought in any such court and any claim that
any
such suit, action or proceeding brought in any such court has been brought
in an
inconvenient forum. Final judgment in any such suit, action or proceeding
brought in any such court shall be conclusive and binding upon Borrower and
may
be enforced in any court in which Borrower is subject to jurisdiction, by
a suit
upon such judgment, provided that service of process is effected upon Borrower
in one of the manners specified in this Section or as otherwise permitted
by
applicable Laws.
|
8.11.3
|
Service
of Process.
|
Each
Borrower hereby consents to process being served in any suit, action or
proceeding of the nature referred to in this Section by the mailing of a
copy
thereof by registered or certified mail, postage prepaid, return receipt
requested, to Borrower at Borrower’s address designated in or pursuant to
Section
8.1
(Notices). Each Borrower irrevocably agrees that such service (y) shall be
deemed in every respect effective service of process upon Borrower in any
such
suit, action or proceeding, and (z) shall, to the fullest extent permitted
by
law, be taken and held to be valid personal service upon Borrower. Nothing
in
this Section shall affect the right of Lender to serve process in any manner
otherwise permitted by law or limit the right of Lender otherwise to bring
proceedings against Borrower in the courts of any jurisdiction or
jurisdictions.
|
Section
8.12
|
Duplicate
Originals and Counterparts.
|
This
Agreement may be executed in any number of duplicate originals or counterparts,
each of such duplicate originals or counterparts shall be deemed to be an
original and all taken together shall constitute but one and the same
instrument.
74
|
Section
8.13
|
Headings.
|
The
headings in this Agreement are included herein for convenience only, shall
not
constitute a part of this Agreement for any other purpose, and shall not
be
deemed to affect the meaning or construction of any of the provisions
hereof.
|
Section
8.14
|
No
Agency.
|
Nothing
herein contained shall be construed to constitute any Borrower as Lender’s agent
for any purpose whatsoever or to permit any Borrower to pledge any of the
credit
of Lender. Lender shall not be responsible or liable for any shortage,
discrepancy, damage, loss or destruction of any part of the Collateral wherever
the same may be located and regardless of the cause thereof, unless as a
result
of Lender’s gross negligence or willful misconduct. Lender shall not, by
anything herein or in any of the Financing Documents or otherwise, assume
any of
Borrowers’ obligations under any contract or agreement assigned to Lender, and
Lender shall not be responsible in any way for the performance by Borrowers
of
any of the terms and conditions thereof.
|
Section
8.15
|
Date
of Payment.
|
Should
the principal of or interest on the Notes become due and payable on other
than a
Business Day, the maturity thereof shall be extended to the next succeeding
Business Day and in the case of principal, interest shall be payable thereon
at
the rate per annum specified in the Notes during such extension.
|
Section
8.16
|
Entire
Agreement.
|
This
Agreement is intended by Lender and Borrowers to be a complete, exclusive
and
final expression of the agreements contained herein. Neither Lender nor
Borrowers shall hereafter have any rights under any prior agreements pertaining
to the matters addressed by this Agreement but shall look solely to this
Agreement for definition and determination of all of their respective rights,
liabilities and responsibilities under this Agreement.
|
Section
8.17
|
Waiver
of Trial by Jury.
|
BORROWERS
AND LENDER HEREBY JOINTLY AND SEVERALLY WAIVE TRIAL BY JURY IN ANY ACTION
OR
PROCEEDING TO WHICH BORROWERS AND LENDER MAY BE PARTIES, ARISING OUT OF OR
IN
ANY WAY PERTAINING TO (A) THIS AGREEMENT, (B) ANY OF THE FINANCING DOCUMENTS,
OR
(C) THE COLLATERAL. THIS WAIVER CONSTITUTES A WAIVER OF TRIAL BY JURY OF
ALL
CLAIMS AGAINST ALL PARTIES TO SUCH ACTIONS OR PROCEEDINGS, INCLUDING CLAIMS
AGAINST PARTIES WHO ARE NOT PARTIES TO THIS AGREEMENT.
This
waiver is knowingly, willingly and voluntarily made by Borrowers and Lender,
and
Borrowers and Lender hereby represent that no representations of fact or
opinion
have been made by any individual to induce this waiver of trial by jury or
to in
any way modify or nullify its effect. Borrowers and Lender further represent
that they have been represented in the signing of this Agreement and in the
making of this waiver by independent legal counsel, selected of their own
free
will, and that they have had the opportunity to discuss this waiver with
counsel.
75
Section
8.18 LIMITATION
ON LIABILITY; WAIVER OF PUNITIVE DAMAGES.
EACH
OF
THE PARTIES HERETO, INCLUDING THE LENDER BY ACCEPTANCE HEREOF, AGREES THAT
IN
ANY JUDICIAL, MEDIATION OR ARBITRATION PROCEEDING OR ANY CLAIM OR CONTROVERSY
BETWEEN OR AMONG THEM THAT MAY ARISE OUT OF OR BE IN ANY WAY CONNECTED WITH
THIS
AGREEMENT, THE OTHER FINANCING DOCUMENTS OR ANY OTHER AGREEMENT OR DOCUMENT
BETWEEN OR AMONG THEM OR THE OBLIGATIONS EVIDENCED HEREBY OR RELATED HERETO,
IN
NO EVENT SHALL ANY PARTY HAVE A REMEDY OF, OR BE LIABLE TO THE OTHER FOR,
(1)
INDIRECT, SPECIAL OR CONSEQUENTIAL DAMAGES OR (2) PUNITIVE OR EXEMPLARY DAMAGES.
EACH OF THE PARTIES HEREBY EXPRESSLY WAIVES ANY RIGHT OR CLAIM TO PUNITIVE
OR
EXEMPLARY DAMAGES THEY MAY HAVE OR WHICH MAY ARISE IN THE FUTURE IN CONNECTION
WITH ANY SUCH PROCEEDING, CLAIM OR CONTROVERSY, WHETHER THE SAME IS RESOLVED
BY
ARBITRATION, MEDIATION, JUDICIALLY OR OTHERWISE.
|
Section
8.19
|
Liability
of Lender.
|
Borrowers
hereby agree that Lender shall not be chargeable for any negligence, mistake,
act or omission of any accountant, examiner, agency or attorney employed
by
Lender in making examinations, investigations or collections, or otherwise
in
perfecting, maintaining, protecting or realizing upon any lien or security
interest or any other interest in the Collateral or other security for the
Obligations.
By
inspecting the Collateral or any other properties of Borrowers or by accepting
or approving anything required to be observed, performed or fulfilled by
Borrowers or to be given to Lender pursuant to this Agreement or any of the
other Financing Documents, Lender shall not be deemed to have warranted or
represented the condition, sufficiency, legality, effectiveness or legal
effect
of the same, and such acceptance or approval shall not constitute any warranty
or representation with respect thereto by Lender.
|
Section
8.20
|
Indemnification.
|
Each
Borrower agrees to indemnify and hold harmless, Lender, Lender’s parent and
Affiliates and Lender’s parent’s and Affiliates’ officers, directors,
shareholders, employees and agents (each an “Indemnified Party,” and
collectively, the “Indemnified Parties”), from and against any and all claims,
liabilities, losses, damages, costs and expenses (whether or not such
Indemnified Party is a party to any litigation), including without limitation,
reasonable attorney’s fees and costs and costs of investigation, document
production, attendance at depositions or other discovery, incurred by any
Indemnified Party with respect to, arising out of or as a consequence of
(a)
this Agreement or any of the other Financing Documents, including without
limitation, any failure of Borrowers to pay when due (at maturity, by
acceleration or otherwise) any principal, interest, fee or any other amount
due
under this Agreement or the other Financing Documents, or any other Event
of
Default (b) the use by Borrowers of any proceeds advanced hereunder; (c)
the
transactions contemplated hereunder; or (d) any claim, demand, action or
cause
of action being asserted against (i) any Borrower or any Affiliates by any
other
Person, or (ii) any Indemnified Party by any Borrower in connection with
the
transactions contemplated hereunder. Notwithstanding anything herein or
elsewhere to the contrary, no Borrower shall be obligated to indemnify or
hold
harmless any Indemnified Party from any liability, loss or damage resulting
from
the gross negligence, willful misconduct or unlawful actions of such Indemnified
Party. Any amount payable to Lender under this Section will bear interest
at the
Post-Default Rate from the due date until paid.
76
Section
8.21 Confidentiality.
Lender
understands that some of the information furnished to it pursuant to this
Agreement and the other Financing Documents may be received by it prior to
the
time that such information shall have been made public, and Lender hereby
agrees
that it will keep, and will direct its officers and employees to keep, all
the
information provided to it pursuant to this Agreement and the other Financing
Documents confidential prior to its becoming public subject, however, to
(a)
disclosure to officers, directors, employees, representatives, agents, auditors,
consultants, advisors, lawyers and Affiliates of Lender, in the ordinary
course
of business, (b) disclosure to such officers, directors, employees, agents
and
representatives of a prospective assignee or participant as need to know
such
information in connection with the evaluation of a possible participation
in the
Commitment (who will be informed of the confidential nature of the material),
or
(c) the obligations of Lender or a participant under applicable Law, or pursuant
to subpoenas or other legal process, to make information available to
governmental agencies and examiners or to others and the right of Lender
to use
such information in proceedings to enforce their rights and remedies hereunder
or under any other Financing Documents or in any proceeding against Lender
in
connection with this Agreement or under any other Financing Document or the
transactions contemplated hereunder or thereunder.
Notwithstanding
the foregoing, each of Lender, Borrowers and any assignee or participant
hereunder (and each employee, representative or other agent of such parties)
may
disclose to any and all Persons, without limitation of any kind, the tax
treatment and any facts that may be relevant to the tax structure of the
transaction; provided, however, that no such Person shall disclose any
information that is not relevant to understanding the tax treatment and
structure of the transaction (including the identity of any party and any
information that could lead another to determine the identity of any party),
or
any information to the extent that such disclosure could result in a violation
of any federal or state securities law or any stock exchange
regulation.
Section
8.22 Patriot
Act Notice.
To
help
fight the funding of terrorism and money laundering activities, Federal law
requires all financial institutions to obtain, verify, and record information
that identifies each person who opens an account. For purposes of this section,
account shall be understood to include loan accounts.
Section
8.23 Compliance
with Laws.
No
Borrower is a Sanctioned Person and no Borrower has any of its assets in
a
Sanctioned Country or does business in or with, or derives any of its operating
income from investments in or transactions with, Sanctioned Persons or
Sanctioned Countries in violation of economic sanctions administered by OFAC.
The proceeds from the Credit Facilities will not be used to fund any operations
in, finance any investments or activities in, or make any payments to, a
Sanctioned Person or a Sanctioned Country.
77
Section
8.24 Electronic
Transmission of Data.
Lender
and Borrowers agree that certain data related to the Credit Facilities
(including confidential information, documents, applications and reports)
may be
transmitted electronically, including transmission over the Internet. This
data
may be transmitted to, received from or circulated among agents and
representatives of Borrowers and/or Lender and their Affiliates and other
Persons involved with the subject matter of this Agreement. Borrowers
acknowledge and agree that (a) there are risks associated with the use of
electronic transmission and that Lender does not control the method of
transmittal or service providers, (b) Lender has no obligation or responsibility
whatsoever and assumes no duty or obligation for the security, receipt or
third
party interception of any such transmission, and (c) Borrowers will release,
hold harmless and indemnify Lender from any claim, damage or loss, including
that arising in whole or part from Lender’s strict liability or sole,
comparative or contributory negligence, which is related to the electronic
transmission of data.
IN
WITNESS WHEREOF, each of the parties hereto have executed and delivered this
Agreement under their respective seals as of the day and year first written
above.
| WITNESS OR ATTEST: |
GENERAL
PHYSICS CORPORATION
|
||
| By: |
(Seal)
|
||
|
|
Xxxxxx
Xxxxxxxx-Xxxxx
Executive
Vice President and
Chief
Financial Officer
|
||
| WITNESS: |
WACHOVIA
BANK,
NATIONAL ASSOCIATION
|
||
| By: |
(Seal)
|
||
|
|
Xxxx
X. Xxxxxxxx
Senior
Vice President
|
||
78
LIST
OF EXHIBITS
A. Additional
Borrower Joinder Supplement
B. Revolving
Credit Note
C. Form
of
Compliance Certificate
79
LIST
OF SCHEDULES
|
Schedule
4.1.10
|
Litigation
|
|
|
|
|
Schedule
4.1.13
|
Other
Indebtedness
|
|
|
|
|
Schedule
4.1.19
|
Employee
Relations
|
|
|
|
|
Schedule
4.1.21
|
Permitted
Liens
|
|
|
|
|
Schedule
6.2.6
|
Indebtedness
|
|
|
|
|
Schedule
6.2.7
|
Investments,
Loans and Other Transactions
|
Schedule
4.1.10
LITIGATION
Schedule
4.1.13
OTHER
INDEBTEDNESS
Schedule
4.1.19
EMPLOYEE
RELATIONS
Schedule
4.1.21
LIENS
ON COLLATERAL
|
Unpaid
Principal
|
Asset
Covered
|
Lienholder
|
Balance
|
|||
Schedule
6.2.6
INDEBTEDNESS
Schedule
6.2.7
INVESTMENTS
