INTEGRATED DEFENSE TECHNOLOGIES, INC.
AMENDED AND RESTATED CREDIT AGREEMENT
This CREDIT AGREEMENT is dated as of October 31, 2002
and entered into by and among INTEGRATED DEFENSE TECHNOLOGIES,
INC., a Delaware corporation ("Borrower"), THE FINANCIAL
INSTITUTIONS LISTED ON THE SIGNATURE PAGES HEREOF OR PARTY FROM
TIME TO TIME HERETO (each individually referred to herein as a
"Lender" and collectively as "Lenders"), CANADIAN IMPERIAL BANK
OF COMMERCE, acting through one or more of its agencies, branches
or affiliates ("CIBC"), as administrative agent for Lenders (in
such capacity, "Administrative Agent").
R E C I T A L S
WHEREAS, Borrower is the borrower under that certain
Credit Agreement (the "Existing Credit Agreement") dated as of
February 27, 2002 among Borrower, CIBC, as administrative agent,
General Electric Capital Corporation, as co-syndication agent,
Credit Lyonnais New York Branch, as co-syndication agent and co-
lead arranger, CIBC World Markets Corp., as lead arranger, and
certain other lenders named therein (the "Existing Lenders");
WHEREAS, Borrower desires to continue the Loans
outstanding under the Existing Credit Agreement, increase the
amount of the Loans and acquire through its wholly-owned
subsidiary Signia-IDT, Inc. ("Newco") substantially all of the
assets of the Gaithersburg, Maryland division of BAE Systems
Aerospace Electronics Inc. (the "Target") for approximately
$146,000,000 (the "Acquisition") through the credit facility
contemplated hereby;
WHEREAS, Lenders, at the request of Borrower, have
agreed to extend certain credit facilities to Borrower, in the
aggregate original principal amount of $262,525,000, the proceeds
of which will be used (a) to complete the Acquisition and the
amendment and restatement of the Existing Credit Agreement
(collectively, the "Transactions") and (b) thereafter, to provide
financing for general corporate purposes of Borrower and its
Subsidiaries, including working capital, capital expenditures,
refinancing, acquisitions and investments made in accordance with
the terms hereof;
WHEREAS, Borrower may increase the original principal
amount of the credit facility contemplated hereby, at Lead
Arranger's and Borrower's mutual discretion, in an aggregate
amount of up to $45,000,000 at any time on or before the date
that is two years after the Effective Date in accordance with the
terms hereof;
WHEREAS, Borrower desires to continue to secure all of
the Obligations hereunder and under the other Loan Documents by
continuing and confirming the grant to Administrative Agent, on
behalf of Lenders, of a First Priority Lien on substantially all
of its real, personal and mixed property, including a pledge of
all of the Capital Stock of each of its domestic Subsidiaries
(including Newco) and all of the non-voting and 65% of the voting
Capital Stock of its foreign Subsidiaries (if any);
WHEREAS, all of the domestic Subsidiaries of Borrower
party to the Subsidiary Guaranty have agreed to continue and
confirm their guarantee of the Obligations hereunder and under
the other Loan Documents and to continue and confirm their prior
grant to Administrative Agent, on behalf of Lenders, a First
Priority Lien on substantially all of their real, personal and
mixed property, including a pledge of all of the Capital Stock of
each of their domestic Subsidiaries (if any) and 65% of the
voting and 100% of the non-voting Capital Stock of their
respective foreign Subsidiaries (if any) to secure their
guaranties;
WHEREAS, Newco has agreed to guarantee the obligations
hereunder and under the other Loan Documents and to secure its
guaranty by granting to Administrative Agent on behalf of
Lenders, a First Priority Lien on substantially all of its real,
personal and mixed property, including a pledge of all of the
Capital Stock of each of its domestic Subsidiaries (if any) and
65% of the voting and 100% of the non-voting Capital Stock of
their respective foreign Subsidiaries (if any);
WHEREAS, for ease of reference and clarity, Borrower,
Administrative Agent, and the Existing Lenders and Lenders that
are not Existing Lenders ("New Lenders") desire to amend and
restate the Existing Credit Agreement in its entirety (i) to
provide for new credit facilities to Borrower and (ii) to make
certain other amendments to the terms and provisions of the
Existing Credit Agreement, all on the terms and conditions set
forth in this Agreement; and
WHEREAS, it is the intent of the parties that this
Agreement shall not cause a novation or repayment of any of the
indebtedness or obligations of Borrower under the Existing Credit
Agreement or other loan documents executed in connection
therewith (collectively, the "Existing Loan Documents"), nor
shall it extinguish, discharge, terminate or impair Borrower's
indebtedness or obligations or Administrative Agent's or any
Lender's rights or remedies under the Existing Credit Agreement
and the other Existing Loan Documents except to the extent
expressly provided for herein; in addition, this Agreement shall
not release, limit or impair in any way the priority of any
security interests and liens held by Administrative Agent for the
benefit of Lenders against any assets of Borrower or its
Subsidiaries arising under the Existing Credit Agreement or the
other Existing Loan Documents.
NOW, THEREFORE, in consideration of the premises and
the agreements, provisions and covenants herein contained,
Borrower, Lenders and Administrative Agent agree that the
Existing Credit Agreement is hereby amended and restated to read
in its entirety as follows:
Section 1. DEFINITIONS
1.1 Certain Defined Terms.
The following terms used in this Agreement shall have
the following meanings:
"Accounts" means all present and future rights of
Borrower and its Subsidiaries to payment for goods sold or leased
or for services rendered (including any such rights evidenced by
instruments or chattel paper), whether due or to become due,
whether now existing or hereinafter arising and wherever arising,
and whether or not they have been earned by performance.
"Acquisition" has the meaning assigned to that term in
the Recitals.
"Acquisition Agreement" means that certain Asset
Purchase Agreement by and among Seller, IDT Acquisition Co. and
Borrower, dated as of September 12, 2002, in the form delivered
to Administrative Agent and Lenders prior to their execution of
this Agreement.
"Acquisition Consideration" means the aggregate Cash
consideration paid to Seller in connection with the Acquisition.
"Additional Mortgaged Property" has the meaning
assigned to that term in subsection 6.9A.
"Additional Mortgages" has the meaning assigned to that
term in subsection 6.9A.
"Adjusted LIBOR" means, for any Interest Rate
Determination Date with respect to an Interest Period for a LIBOR
Loan, the rate per annum obtained by dividing (x) the rate of
interest equal to (a) the rate per annum determined on the basis
of the rate for deposits in Dollars for a period equal to such
Interest Period commencing on the first day of such Interest
Period and appearing on Moneyline Telerate Screen 3750 at or
about 11:00 A.M., London time, two Business Days prior to the
commencement of such Interest Period, or (b) if such a rate does
not appear on Moneyline Telerate Screen 3750, the average of the
rates per annum at which Dollar deposits in immediately available
funds are offered to CIBC in the interbank LIBOR market as at or
about 10:00 A.M. (New York City time) two Business Days prior to
the beginning of such Interest Period for delivery on the first
day of such Interest Period, and for a period approximately equal
to such Interest Period, by (y) a percentage equal to 100% minus
the stated maximum rate (expressed as a percentage) of all
reserve requirements (including any marginal, emergency,
supplemental, special or other reserves) applicable on such
Interest Rate Determination Date to any member bank of the
Federal Reserve System in respect of "Eurocurrency liabilities"
as defined in Regulation D (or any successor category of
liabilities under Regulation D).
"Administrative Agent" has the meaning assigned to that
term in the introduction to this Agreement and also means and
includes any successor Administrative Agent appointed pursuant to
subsection 9.5A.
"Administrative Agent's Office" means (i) the office of
Administrative Agent located at CIBC, 425 Lexington Avenue, New
York, NY 10017, or (ii) such other office of Administrative Agent
as may from time to time hereafter be designated as such in a
written notice delivered by Administrative Agent to Borrower and
each Lender.
"Affected Lender" has the meaning assigned to that term
in subsection 2.6C.
"Affected Loans" has the meaning assigned to that term
in subsection 2.6C.
"Affiliate", as applied to any Person, means any other
Person directly or indirectly controlling, controlled by, or
under common control with, that Person. For the purposes of this
definition, "control" (including, with correlative meanings, the
terms "controlling", "controlled by" and "under common control
with"), as applied to any Person, means the possession, directly
or indirectly, of the power to direct or cause the direction of
the management and policies of that Person, whether through the
ownership of voting securities or by contract or otherwise. For
purposes of this definition, a Person shall be deemed to be
"controlled by" a Person if such Person possesses, directly or
indirectly, power to vote 10% or more of the securities having
ordinary voting power for the election of directors of such
Person. Notwithstanding the foregoing, neither Administrative
Agent nor any Lender shall be deemed to be an Affiliate of any of
the Loan Parties.
"Agents" means collectively, Administrative Agent and
any documentation agent or syndication agent appointed under this
Agreement.
"Agreement" means this Amended and Restated Credit
Agreement dated as of October 31, 2002.
"Alabama Mortgage" means the Mortgage, Security
Agreement, Assignment of Rents and Leases and Fixture Filing
(Alabama), executed by Enterprise Electronics Corporation on the
Original Closing Date in favor of Administrative Agent.
"Applicable Base Rate Margin" means, as at any date of
determination, with respect to any Type of Loan that is a Base
Rate Loan, a percentage per annum equal to the Applicable LIBOR
Margin for such Type of Loan less 1.00%.
"Applicable LIBOR Margin" means with respect to
Revolving Loans, Tranche A Term Loans and Tranche B Term Loans
that are LIBOR Loans, a percentage per annum as set forth below
opposite the applicable Consolidated Total Leverage Ratio:
Consolidated Revolving Loan Tranche B
Total Leverage and Tranche A Applicable LIBOR
Ratio Applicable LIBOR Margin
Margin
----------------- ----------------- ------------------
greater than or 3.00% 4.00%
equal to
3.00:1.00
less than 2.75% 4.00%
3.00:1.00 but
greater than or
equal to 2.50:1.00
less than 2.50% 4.00%
2.50:1.00
but greater than
or equal to
2.00:1.00
less than 2.25% 4.00%
2.00:1.00
but greater than
or equal to
1.50:1.00
less than 2.00% 4.00%
1.50:1.00
"Applied Amount" has the meaning assigned to that term
in subsection 2.4B(iv)(b).
"Approved Fund" means any fund that invests (in whole
or in part) in commercial loans or any other fund that is managed
or advised by a Lender, the same investment advisor as such
Lender or by an Affiliate of such Lender or investment advisor.
"Asset Sale" means the sale (in any single transaction
or related series of transactions) by Borrower or any of its
Subsidiaries to any Person other than Borrower or any of its
wholly-owned domestic Subsidiaries of (i) any of the Capital
Stock of any of Borrower's Subsidiaries, (ii) substantially all
of the assets of any division or line of business of Borrower or
any of its Subsidiaries, or (iii) any other assets (whether
tangible or intangible) of Borrower or any of its Subsidiaries
(other than (a) Inventory sold in the ordinary course of
business, (b) Capital Stock of Borrower, and (c) sales of assets
from Borrower or any of its Subsidiaries to Borrower or any
Subsidiary Guarantor).
"Assignment Agreement" means an Assignment Agreement in
substantially the form of Exhibit XII annexed hereto.
"Assignment and Assumption Agreement and Bill of Sale"
means that certain Assignment and Assumption Agreement and Bill
of Sale by and among Seller and Newco, dated as of October 31,
2002, in the form delivered to Administrative Agent and Lenders
prior to their execution of this Agreement.
"Assignment of Patents" means that certain Assignment
of Patents by and among Seller and Newco, dated October 31, 2002,
in the form delivered to Administrative Agent and Lenders prior
to their execution of this Agreement.
"Bankruptcy Code" means Title 11 of the United States
Code entitled "Bankruptcy", as now and hereafter in effect, or
any successor statute.
"Base Rate" means, at any time, the higher of (i) the
Reference Rate and (ii) the rate which is one-half of 1% in
excess of the Federal Funds Effective Rate.
"Base Rate Loans" means Loans bearing interest at rates
determined by reference to the Base Rate as provided in
subsection 2.2A.
"Borrower" has the meaning assigned to that term in the
introductory paragraph to this Agreement.
"Borrowing Base" means (i) the sum of (a) 90% of the
face amount of Eligible Accounts Receivable, (b) 50% of the lower
of the cost or fair market value of Eligible Inventory, and (c)
50% of the face amount of Eligible Unbilled Accounts Receivable
less (ii) the amount of the obligations secured by Permitted
Encumbrances on such Eligible Accounts Receivable, Eligible
Unbilled Accounts Receivable or Eligible Inventory.
"Borrowing Base Certificate" means a certificate
substantially in the form of Exhibit IV annexed hereto delivered
to Administrative Agent and Lenders by Borrower pursuant to
subsection 4.1T or subsection 6.1(i).
"Business Day" means (i) any day excluding Saturday,
Sunday and any day which is a legal holiday under the laws of the
State of New York or is a day on which banking institutions
located in such state are authorized or required by law or other
governmental action to close, and (ii) with respect to all
notices, determinations, fundings and payments in connection with
Adjusted LIBOR or any LIBOR Loan, any day that (a) is a Business
Day described in clause (i) above, and (b) is a day for trading
by and between banks in Dollar deposits in the London Interbank
Market.
"Capital Lease", as applied to any Person, means any
lease of any property (whether real, personal or mixed) by that
Person as lessee that, in conformity with GAAP, is accounted for
as a capital lease on the balance sheet of that Person.
"Capital Stock" means (i) in the case of a corporation,
capital stock, (ii) in the case of an association or business
entity, any and all shares, interests, participations, rights or
other equivalents (however designated) of capital stock, (iii) in
the case of a partnership, partnership interests (whether general
or limited), (iv) in the case of a limited liability company,
membership interests, and (v) any other interest or participation
that confers on a Person the right to receive a share of the
profits and losses of, or distributions of assets of, the issuing
Person.
"Cash" means money, currency or a credit balance in a
Deposit Account.
"Cash Equivalents" means (i) securities issued or
directly and fully guaranteed or insured by the United States of
America or any agency or instrumentality thereof (provided that
the full faith and credit of the United States of America is
pledged in support thereof) having maturities of not more than
twelve months from the date of acquisition ("Government
Obligations"), (ii) U.S. dollar denominated (or foreign currency
fully hedged) time deposits, certificates of deposit, Eurodollar
time deposits and Eurodollar certificates of deposit of
(y) any domestic commercial bank of recognized standing having
capital and surplus in excess of $250,000,000 or (z) any bank
whose short-term commercial paper rating from S&P is at least A-1
or the equivalent thereof or from Moody's is at least P-1 or the
equivalent thereof (any such bank being an "Approved Bank") in
each case with maturities of not more than 364 days from the date
of acquisition, (iii) commercial paper and variable or fixed rate
notes issued by any Approved Bank (or by the parent company
thereof) or any variable rate notes issued by, or guaranteed by
any domestic corporation rated A-1 (or the equivalent thereof) or
better by S&P or P-1 (or the equivalent thereof) or better by
Moody's and maturing within six months of the date of
acquisition, (iv) repurchase agreements with a bank or trust
company (including a Lender) or a recognized securities dealer
having capital and surplus in excess of $500,000,000 for direct
obligations issued by or fully guaranteed by the United States of
America, (v) obligations of any state of the United States or any
political subdivision thereof for the payment of the principal
and redemption price of and interest on which there shall have
been irrevocably deposited Government Obligations maturing as to
principal and interest at times and in amounts sufficient to
provide such payment, and (vi) auction preferred stock rated in
the highest short-term credit rating category by S&P or Moody's.
"Certificate re: Non-Bank Status" means a certificate
substantially in the form of Exhibit XXI annexed hereto delivered
by a Lender to Administrative Agent pursuant to subsection
2.7B(iii).
"CEC" means Continental Electronics Corporation, a
Nevada corporation.
"Change in Control" means the occurrence of any of the
following events: (a) (i) any Person or two or more Persons
acting in concert (other than Veritas and its Affiliates) shall
have acquired beneficial ownership, directly or indirectly, or
shall have acquired by contract or otherwise, or shall have
entered into a contract or arrangement that, upon consummation,
will result in its or their acquisition of control over, Voting
Stock of Borrower (or other securities convertible into such
Voting Stock) representing 25% or more of the combined voting
power of all Voting Stock of Borrower, and (ii) such Person or
Persons acting in concert have beneficial ownership of more
Voting Stock of Borrower than Veritas and its Affiliates, (b)
individuals who were members of the board of directors of
Borrower on the Effective Date, together with any other
individuals whose nomination or election to the board of
directors was approved by a majority of the members of the board
of directors then in office, fail to constitute a majority of the
members of the board of directors of Borrower then in office, or
(c) a "change in control" (as such term is defined therein) shall
occur as provided in any agreement with respect to Subordinated
Indebtedness. As used herein, "beneficial ownership" shall have
the meaning provided in Rule 13d-3 of the Securities and Exchange
Commission promulgated under the Securities Exchange Act of 1934.
"Collateral" means, collectively, all of the real,
personal and mixed property (including Capital Stock) in which
Liens are purported to be granted pursuant to the Collateral
Documents as security for the Obligations.
"Collateral Access Agreement" means any landlord
waiver, mortgagee waiver, bailee letter or any similar
acknowledgement or agreement of any landlord or mortgagee in
respect of any Real Property Asset where any Collateral is
located or any warehouseman or processor in possession of any
Inventory of any Loan Party, substantially in the form of
Exhibit XVI annexed hereto with such changes thereto as may be
agreed to by Administrative Agent in the reasonable exercise of
its discretion.
"Collateral Account" has the meaning assigned to that
term in the Security Agreement.
"Collateral Documents" means the Security Agreement,
the Mortgages, the Existing Deposit Account Control Agreement,
the Deposit Account Control Agreement, the Instruments of
Assignment, the Master Confirmation and all other instruments or
documents delivered by any Loan Party pursuant to this Agreement
or any of the other Loan Documents in order to grant to
Administrative Agent, on behalf of Lenders, a Lien on any real,
personal or mixed property of that Loan Party as security for the
Obligations.
"Commitments" means the commitments of Lenders to make
Loans as set forth in subsection 2.1A.
"Compliance Certificate" means a certificate
substantially in the form of Exhibit IX annexed hereto delivered
to Administrative Agent and Lenders by Borrower pursuant to
subsection 6.1(iv).
"Conforming Leasehold Interest" means any Recorded
Leasehold Interest as to which the lessor has agreed in writing
for the benefit of Administrative Agent (which writing has been
delivered to Administrative Agent), whether under the terms of
the applicable lease, under the terms of a Landlord Consent and
Estoppel, or otherwise, to the matters described in the
definition of "Landlord Consent and Estoppel," which interest, if
a subleasehold or sub-subleasehold interest, is not subject to
any contrary restrictions contained in a superior lease or
sublease.
"Consolidated Capital Expenditures" means, for any
period, the sum of the aggregate of all expenditures (whether
paid in Cash or other consideration or accrued as a liability and
including that portion of Capital Leases which is capitalized on
the consolidated balance sheet of Borrower and its Subsidiaries)
by Borrower and its Subsidiaries during that period that, in
conformity with GAAP, are included in "additions to property,
plant or equipment" or comparable items reflected in the
consolidated statement of cash flows of Borrower and its
Subsidiaries. For purposes of this definition, (a) the purchase
price of equipment that is purchased simultaneously with the
trade-in of existing equipment or with insurance proceeds shall
be included in Consolidated Capital Expenditures only to the
extent of the gross amount of such purchase price less the credit
granted by the seller of such equipment for the equipment being
traded in at such time or the amount of such proceeds, as the
case may be, (b) the aggregate of all expenditures by Borrower
and its Subsidiaries during that period to acquire (by purchase
or otherwise) the business, property or fixed assets of any
Person, or the Capital Stock or other evidence of beneficial
ownership of any Person that, as a result of such acquisition,
becomes a Subsidiary of Borrower shall be included in
Consolidated Capital Expenditures and (c) the portion which is
capitalized on the consolidated balance sheet of Borrower and its
Subsidiaries for software and related purchases of software, up
to an aggregate maximum of $2,500,000 in each Fiscal Year, shall
be excluded from Consolidated Capital Expenditures.
"Consolidated Current Assets" means, as of any date of
determination, the total assets of Borrower and its Subsidiaries
on a consolidated basis that may properly be classified as
current assets in conformity with GAAP, excluding Cash and Cash
Equivalents.
"Consolidated Current Liabilities" means, as of any
date of determination, the total liabilities of Borrower and its
Subsidiaries on a consolidated basis that may properly be
classified as current liabilities in conformity with GAAP,
excluding the current portions of Funded Debt and Capital Leases.
"Consolidated EBITDA" means, for any period, the sum,
without duplication, of the amounts for such period of
(i) Consolidated Net Income, plus (ii) an amount that, in the
determination of Consolidated Net Income for such period, has
been deducted for (A) Consolidated Interest Expense, (B) total
federal, state, local and foreign income, value added and similar
taxes, (C) losses (or minus gains) on the sale or disposition of
assets outside the ordinary course of business, and
(D) depreciation, amortization expense and other non-cash, non-
recurring extraordinary charges reducing Consolidated Net Income
plus (iii) management fees to the extent paid as permitted by
subsection 7.10A(iii), plus (iv) on a one-time basis, costs and
expenses incurred by the Loan Parties in connection with the
Transactions, plus (v) for the period commencing with the Fiscal
Quarter ending December 31, 2002 through the end of the Fiscal
Quarter ending December 31, 2003 an amount equal to $1,400,000
(and the parties expressly agree that such amount shall not be
added back for any purposes for any measurement date after
December 31, 2003) (it being understood that any amount which
under clause (ii)(D) above was added back to Consolidated EBITDA
during any period but was paid in cash during a subsequent period
will reduce Consolidated EBITDA to the extent of such payment in
such subsequent period), all of the foregoing components as
determined on a consolidated basis for Borrower and its
Subsidiaries in conformity with GAAP; provided that in
calculating any such items for purposes of Consolidated Total
Leverage Ratio for such period, any Asset Sales or other
acquisitions or dispositions of assets during such period shall
have been deemed to have occurred on the first day of such
period.
"Consolidated Excess Cash Flow" means, for any period,
an amount (if positive) equal to (i) the sum, without
duplication, of the amounts for such period of (a) Consolidated
EBITDA (determined by adding back thereto any amount deducted in
the calculation of Consolidated Net Income that was paid,
incurred or accrued in violation of any of the provisions of this
Agreement) and (b) the Consolidated Working Capital Adjustment
minus (ii) the sum, without duplication, of the amounts for such
period of (a) voluntary and scheduled repayments of Consolidated
Total Debt (excluding repayments of Revolving Loans except to the
extent the Revolving Loan Commitments are permanently reduced in
connection with such repayments), (b) Consolidated Capital
Expenditures, (c) Consolidated Interest Expense, (d) the
provision for current taxes based on income of Borrower and its
Subsidiaries and payable in Cash with respect to such period, (e)
management fees to the extent paid as permitted by subsection
7.10A(iii) and bank fees paid by Borrower in connection with the
Transactions to the extent not deducted in determining
Consolidated EBITDA, (f) for the period commencing with the
Fiscal Quarter ending December 31, 2002 through the end of the
Fiscal Quarter ending December 31, 2003 an amount equal to
$1,400,000 (and the parties expressly agree that such amount
shall not be subtracted for any purposes for any measurement date
after December 31, 2003) and (g) severance and other costs and
expenses related to the restructuring of certain operations of
Borrower's Subsidiaries in an aggregate amount not to exceed
$7,500,000 to the extent excluded in determining Consolidated Net
Income.
"Consolidated Fixed Charges" means, for any period, the
sum (without duplication) of the amounts for such period of
(i) Consolidated Interest Expense, (ii) Cash payments for taxes
based on income, and (iii) all scheduled principal payments to be
made by Borrower or any of its Subsidiaries (whether or not such
payments are actually made) on all Indebtedness of Borrower and
its Subsidiaries (including the principal component of all
Capital Leases), all of the foregoing as determined on a
consolidated basis for Borrower and its Subsidiaries in
conformity with GAAP.
"Consolidated Interest Expense" means, for any period,
total cash interest expense (including that portion attributable
to Capital Leases in accordance with GAAP and capitalized
interest) of Borrower and its Subsidiaries on a consolidated
basis with respect to all outstanding Indebtedness of Borrower
and its Subsidiaries, including all commissions, discounts and
other fees and charges owed with respect to letters of credit and
bankers' acceptance financing and net costs under Interest Rate
Agreements, but excluding, however, any amounts referred to in
subsection 2.3 payable to Administrative Agent and Lenders on or
before the Effective Date.
"Consolidated Net Income" means, for any period, the
net income (or loss) of Borrower and its Subsidiaries on a
consolidated basis for such period taken as a single accounting
period determined in conformity with GAAP, without giving effect
to any non-cash losses as a result of impairment of goodwill to
the extent required by Statement of Financial Accounting
Standards No. 142; provided that there shall be excluded (i) the
income (or loss) of any Person (other than a Subsidiary of
Borrower) in which any other Person (other than Borrower or any
of its Subsidiaries) has a joint interest, except to the extent
of the amount of dividends or other distributions actually paid
to Borrower or any of its Subsidiaries by such Person during such
period, (ii) the income (or loss) of any Person accrued prior to
the date it becomes a Subsidiary of Borrower or is merged into or
consolidated with Borrower or any of its Subsidiaries or that
Person's assets are acquired by Borrower or any of its
Subsidiaries, (iii) the income of any Subsidiary of Borrower to
the extent that the declaration or payment of dividends or
similar distributions by that Subsidiary of that income is not at
the time permitted by operation of the terms of its charter or
any agreement, instrument, judgment, decree, order, statute, rule
or governmental regulation applicable to that Subsidiary,
(iv) any after-tax gains or losses attributable to Asset Sales or
returned surplus assets of any Pension Plan, (v) severance and
other costs and expenses related to the restructuring of certain
operations of Borrower's Subsidiaries in an aggregate amount not
to exceed $7,500,000, (vi) (to the extent not included in clauses
(i) through (v) above) any net extraordinary gains or net non-
cash extraordinary losses, and (vii) (to the extent not included
in clauses (i) through (vi) above) any net income (or loss) of
Borrower's Subsidiaries in connection with operations of
Borrower's Subsidiaries that were discontinued on or before the
Effective Date.
"Consolidated Net Worth" means, as at any date of
determination, the sum of the Capital Stock and additional paid-
in capital plus retained earnings (or minus accumulated deficits)
of Borrower and its Subsidiaries on a consolidated basis
determined in conformity with GAAP, without giving effect to any
non-cash losses (i) as a result of impairment of goodwill to the
extent required by Statement of Financial Accounting Standards
No. 142 or (ii) as a result of severance and other costs and
expenses related to the restructuring of certain operations of
Borrower's Subsidiaries in an aggregate amount not to exceed
$7,500,000.
"Consolidated Rental Payments" means, for any period,
the aggregate amount of all rents paid or payable by Borrower and
its Subsidiaries on a consolidated basis during that period under
all Operating Leases to which Borrower or any of its Subsidiaries
is a party as lessee.
"Consolidated Total Debt" means, as at any date of
determination, the aggregate principal amount of all Indebtedness
of Borrower and its Subsidiaries other than the face amount of
performance letters of credit where the conditions to drawing
have not been met less the amount of Cash and Cash Equivalents in
excess of $500,000.
"Consolidated Total Leverage Ratio" means, as at the
last day of any Fiscal Quarter, the ratio of (a) Consolidated
Total Debt as of the last day of such Fiscal Quarter, to
(b) Consolidated EBITDA for the four Fiscal Quarter period then
ended.
"Consolidated Working Capital" means, as of any date of
determination, the excess (or deficit) of Consolidated Current
Assets over Consolidated Current Liabilities.
"Consolidated Working Capital Adjustment" means, for
any period on a consolidated basis, the amount (which may be a
negative number) by which Consolidated Working Capital as of the
beginning of such period exceeds (or is less than) Consolidated
Working Capital as of the end of such period.
"Consultant" has the meaning assigned to that term in
subsection 6.7C.
"Contingent Obligation", as applied to any Person,
means any direct or indirect liability, contingent or otherwise,
of that Person (i) with respect to any Indebtedness, lease,
dividend or other obligation of another if the primary purpose or
intent thereof by the Person incurring the Contingent Obligation
is to provide assurance to the obligee of such obligation of
another that such obligation of another will be paid or
discharged, or that any agreements relating thereto will be
complied with, or that the holders of such obligation will be
protected (in whole or in part) against loss in respect thereof,
or (ii) under Hedge Agreements. Contingent Obligations shall
include (a) the direct or indirect guaranty, endorsement
(otherwise than for collection or deposit in the ordinary course
of business), co-making, discounting with recourse or sale with
recourse by such Person of the obligation of another, (b) the
obligation to make take-or-pay or similar payments if required
regardless of non-performance by any other party or parties to an
agreement, and (c) any liability of such Person for the
obligation of another through any agreement (contingent or
otherwise) (1) to purchase, repurchase or otherwise acquire such
obligation or any security therefor, or to provide funds for the
payment or discharge of such obligation (whether in the form of
loans, advances, stock purchases, capital contributions or
otherwise) or (2) to maintain the solvency or any balance sheet
item, level of income or financial condition of another if, in
the case of any agreement described under subclauses (1) or (2)
of this sentence, the primary purpose or intent thereof is as
described in the preceding sentence. The amount of any
Contingent Obligation shall be equal to the amount of the
obligation so guaranteed or otherwise supported or, if less, the
amount to which such Contingent Obligation is specifically
limited.
"Contractual Obligation", as applied to any Person,
means any provision of any Security issued by that Person or of
any Material Contract to which that Person is a party or by which
it or any of its properties is bound or to which it or any of its
properties is subject.
"Currency Agreement" means any foreign exchange
contract, currency swap agreement, futures contract, option
contract, synthetic cap or other similar agreement or arrangement
to which Borrower or any of its Subsidiaries is a party.
"Deed of Conveyance" means that certain Deed of
Conveyance, dated as of October 31, 2002, relating to the real
property and improvements thereon located at 700 Quince Orchard
Road, Gaithersburg, Maryland 20878, in the form delivered to
Administrative Agent and Lenders prior to their execution of this
Agreement.
"Deposit Account" means a demand, time, savings,
passbook, brokerage or similar account maintained with a Person
or securities intermediary engaged in the business of banking,
including a savings bank, savings and loan association, credit
union or trust company.
"Deposit Account Control Agreement" means (i) the
Deposit Account Control Agreement executed and delivered by
Borrower, Administrative Agent and the financial institution at
which a Deposit Account is maintained, substantially in the form
of Exhibit XX annexed hereto or (ii) an agreement, satisfactory
in form and substance to Administrative Agent and executed by the
financial institution at which a Deposit Account is maintained,
pursuant to which such financial institution confirms and
acknowledges Administrative Agent's security interest in such
Deposit Account, and agrees that the financial institution will
comply with instructions originated by Administrative Agent as to
disposition of funds in the Deposit Account, without further
consent by Borrower or any Subsidiary and waives its right to set
off with respect to amounts in the Deposit Account.
"Dollars" and the sign "$" mean the lawful money of the
United States of America.
"Effective Date" means the date on or before November
25, 2002 on which the conditions precedent set forth in Section
4.1 have been satisfied or waived.
"Effective Date Mortgage" means collectively, the New
Mortgages and the Existing Mortgages.
"Effective Date Mortgage Policies" means collectively,
the New Mortgage Policies and the Existing Mortgage Policies.
"Effective Date Mortgaged Properties" means
collectively, the New Mortgage Properties and the Existing
Mortgage Properties.
"Eligible Accounts Receivable" means, as at any date of
determination, the total face amount of those invoiced Accounts
of Borrower and the Subsidiary Guarantors consisting of ordinary
trade accounts receivable owned by Borrower and the Subsidiary
Guarantors, payable in Cash in Dollars on delivery or at a future
date and arising out of the final sale of Inventory or the
provision of services in the ordinary course of business of
Borrower and the Subsidiary Guarantors; provided that in
determining the eligibility of Eligible Accounts Receivable for
Borrower and the Subsidiary Guarantors, there shall be excluded
(to the extent included above):
(i) Accounts with respect to which more than 120 days
have elapsed since the invoice date;
(ii) Accounts with respect to which the Account debtor
is a director, officer, shareholder, employee or an
Affiliate of Borrower if the terms of such Accounts are less
favorable to Borrower or any such Subsidiary than those
which might be obtained at the time from a Person who is not
such a director, officer, shareholder, employee or an
Affiliate;
(iii) Accounts with respect to which the Account
debtor is the United States of America or any department,
agency or instrumentality thereof, except for those Accounts
as to which Borrower or any such Subsidiary has assigned its
right to payment thereof to the Administrative Agent, and
the assignment has been acknowledged pursuant to the
Assignment of Claims Act of 1940 (31 U.S.C. 3727); provided,
however, that until the date that is 180 days after the
Effective Date, such Accounts shall not be excluded on the
basis that the assignment has not been acknowledged pursuant
to the Assignment of Claims Act of 1940; and provided
further, however, if a Government Contract to which any such
Account relates is required to be novated in accordance with
applicable laws, an aggregate amount of up to $10,000,000 of
such Accounts shall not be excluded on the basis that a
valid and effective Instrument of Assignment and notice of
assignment have not been executed and delivered and an
acknowledgement has not been received;
(iv) Accounts with respect to which the Account debtor
is not a resident of the United States or Canada, unless the
Account debtor has supplied Borrower or any such Subsidiary
with (a) an irrevocable commercial letter of credit, issued
by a financial institution, or (b) credit insurance, in each
case in form and substance satisfactory to the
Administrative Agent;
(v) Accounts with respect to which the Account debtor
has asserted a counterclaim, allowance, deduction, or right
to set off or which is otherwise unearned or disputed,
including Accounts which reflect "barter" activity;
(vi) Accounts with respect to which the Administrative
Agent, on behalf of Lenders and the Issuing Lender, does not
have a valid, First Priority Lien or which are not free of
all Liens or other claims of all other Persons other than
Liens permitted under this Agreement;
(vii) Accounts with respect to which the Account
debtor is the subject of bankruptcy or a similar insolvency
proceeding, or has made an assignment for the benefit of
creditors, whose assets have been conveyed to a receiver or
trustee, or who has failed or suspended or gone out of
business;
(viii) Accounts with respect to which the Account
debtor's obligation to pay the Account is conditional upon
the Account debtor's approval or otherwise subject to return
rights with respect to the goods purchased giving rise to
any such Account (other than return rights based on product
warranties in the ordinary course of business);
(ix) Accounts which are not in full force and effect or
do not constitute legal, valid and binding obligations of
the Account debtor enforceable against the Account debtor in
accordance with their terms;
(x) Accounts with respect to which the terms or
conditions prohibit or restrict assignment or collection
rights;
(xi) Accounts with respect to which the Account debtor
is located in New Jersey which exceed, individually or in
the aggregate, $150,000, unless Borrower or such Subsidiary
has filed, or is exempt from filing, a Notice of Business
Activities Report with the New Jersey Division of Taxation
for the then current year;
(xii) Accounts with respect to which the Account
debtor is a supplier or a creditor of Borrower or any of its
Subsidiaries up to an amount equal to the amount owed by
Borrower and its Subsidiaries to such Account debtor;
(xiii)Accounts evidenced by notes, chattel paper or
other instruments, unless such notes, chattel paper or
instruments (a) have been delivered to and are in the
possession of the Administrative Agent, or (b) the aggregate
amount of such Accounts is not greater than $50,000;
(xiv) Accounts (if any) created in connection with
any sale where payment is due on delivery of Inventory sold
until the Inventory is actually delivered; and
(xv) Accounts which fail to meet such other
specifications and requirements as may from time to time to
be established by the Administrative Agent in its reasonable
discretion.
"Eligible Assignee" means (A) (i) a commercial bank
organized under the laws of the United States or any state
thereof; (ii) a savings and loan association or savings bank
organized under the laws of the United States or any state
thereof; (iii) a commercial bank organized under the laws of any
other country or a political subdivision thereof (provided that
(x) such bank is acting through a branch or agency located in the
United States or (y) such bank is organized under the laws of a
country that is a member of the Organization for Economic
Cooperation and Development or a political subdivision of such
country); and (iv) any other entity which is an "accredited
investor" (as defined in Regulation D under the Securities Act)
which extends credit or buys loans as one of its businesses
including insurance companies, mutual funds, lease financing
companies and investment funds and any Approved Funds; (B) a
Lender, an Affiliate of a Lender, or an Approved Fund; or (C) any
other Person (other than a natural Person) approved by (1)
Administrative Agent, (2) in the case of any assignment of a
Revolving Loan, Issuing Lender, and (3) unless (x) such Person is
taking delivery of an assignment in connection with physical
settlement of a credit derivatives transaction, or (y) an Event
of Default or Potential Event of Default has occurred and is
continuing, Borrower (each such approval not to be unreasonably
withheld or delayed); provided that no Affiliate of Borrower
shall be an Eligible Assignee. If the consent of Borrower to an
assignment to an Eligible Assignee is required hereunder
(including a consent to an assignment which does not meet the
minimum assignment thresholds specified in subsection 10.1B(i)),
Borrower shall be deemed to have given its consent five Business
Days after the date notice thereof has been delivered by the
assigning Lender (through Administrative Agent) unless such
consent is expressly refused by Borrower prior to such fifth
Business Day.
"Eligible Inventory" means, as at any date of
determination, the gross dollar value (valued at the lower of
cost (on a "first-in, first-out" basis) or fair market value) of
all Inventory owned by Borrower and the Subsidiary Guarantors,
less appropriate reserves determined in accordance with GAAP
applied on a consistent basis; provided that in determining the
eligibility of Eligible Inventory for Borrower and the Subsidiary
Guarantors, there shall be excluded (to the extent included
above):
(i) Inventory with respect to which the Administrative
Agent, on behalf of Lenders and the Issuing Lender, does not
have a valid, First Priority Lien or which are not free of
all Liens or other claims of all other Persons other than
Liens permitted under this Agreement;
(ii) Inventory that fails to meet standards for sale or
use imposed by Governmental Authorities having a regulatory
authority over such Inventory or its use or sale;
(iii) Inventory that is not useable or saleable at
prices approximating their cost (after taking into account,
without duplication, the amount of any reserves for
obsolescence, unsaleability or decline in value);
(iv) Inventory that is not in the possession and
control of Borrower or a Subsidiary Guarantor (including a
common carrier under a bill of lading in such Person's
name), and if located in a warehouse or other facility
leased by Borrower or any of the Subsidiary Guarantors, the
warehouseman or lessor has not delivered to Administrative
Agent a lien waiver or subordination in such form, if any,
as may be requested by the Administrative Agent; and
(v) Inventory consisting of materials, supplies and
work in process.
"Eligible Unbilled Accounts Receivable" means all
Accounts from Government Contracts or a prime contractor on a
Government Contract that would otherwise be Eligible Accounts
Receivables and with respect to which the sale of Inventory has
occurred or the rendering of services has been performed and the
payment obligations therefore are owing but which have not yet
been invoiced in the ordinary course of business.
"Employee Benefit Plan" means any "employee benefit
plan" as defined in Section 3.3 of ERISA, which is or was
maintained or contributed to by Borrower, any of its Subsidiaries
or any of their respective ERISA Affiliates.
"Environmental Claim" means any investigation, notice,
notice of violation, claim, action, suit, proceeding, demand,
abatement order or other order or directive (conditional or
otherwise), by any Governmental Authority or any other Person,
arising (i) pursuant to or in connection with any actual or
alleged violation of any Environmental Law, (ii) in connection
with any Hazardous Materials or any actual or alleged Hazardous
Materials Activity, or (iii) in connection with any actual or
alleged damage, injury, threat or harm to health, safety, natural
resources or the environment.
"Environmental Indemnity" means the Environmental
Indemnity Agreement executed and delivered by Borrower and the
domestic Subsidiaries of Borrower on the Original Closing Date,
substantially in the form of Exhibit XVII annexed hereto as
confirmed by the Master Confirmation.
"Environmental Indemnity Counterpart" means the
Counterpart for Additional Indemnitors attached as Exhibit A to
the Environmental Indemnity.
"Environmental Laws" means any and all current or
future statutes, ordinances, orders, rules, regulations, guidance
documents, judgments, Governmental Authorizations, or any other
requirements of any Governmental Authority relating to
(i) environmental matters, including those relating to any
Hazardous Materials Activity, (ii) the generation, use, storage,
transportation or disposal of Hazardous Materials, or
(iii) occupational safety and health, industrial hygiene, land
use or the protection of human, plant or animal health or
welfare, in any manner applicable to Borrower or any of its
Subsidiaries or any Facility, including the Comprehensive
Environmental Response, Compensation, and Liability Act (42
U.S.C. Section 9601 et seq.), the Hazardous Materials Transportation
Act (49 U.S.C. Section 1801 et seq.), the Resource Conservation and
Recovery Act (42 U.S.C. Section 6901 et seq.), the Federal Water
Pollution Control Act (33 U.S.C. Section 1251 et seq.), the Clean Air
Act (42 U.S.C. Section 7401 et seq.), the Toxic Substances Control Act
(15 U.S.C. Section 2601 et seq.), the Federal Insecticide, Fungicide
and Rodenticide Act (7 U.S.C. Section 136 et seq.), the Occupational
Safety and Health Act (29 U.S.C. Section 651 et seq.), the Oil
Pollution Act (33 U.S.C. Section 2701 et seq.) and the Emergency
Planning and Community Right-to-Know Act (42 U.S.C. Section 11001 et
seq.), each as amended or supplemented, any analogous present or
future state or local statutes or laws, and any regulations
promulgated pursuant to any of the foregoing.
"ERISA" means the Employee Retirement Income Security
Act of 1974.
"ERISA Affiliate" means, as applied to any Person
(i) any corporation that is a member of a controlled group of
corporations within the meaning of Section 414(b) of the Internal
Revenue Code of which that Person is a member; (ii) any trade or
business (whether or not incorporated) that is a member of a
group of trades or businesses under common control within the
meaning of Section 414(c) of the Internal Revenue Code of which
that Person is a member; and (iii) any member of an affiliated
service group within the meaning of Section 414(m) or (o) of the
Internal Revenue Code of which that Person, any corporation
described in clause (i) above or any trade or business described
in clause (ii) above is a member. Any former ERISA Affiliate of
a Person or any of its Subsidiaries shall continue to be
considered an ERISA Affiliate of such Person or such Subsidiary
within the meaning of this definition with respect to the period
such entity was an ERISA Affiliate of such Person or such
Subsidiary and with respect to liabilities arising after such
period (but attributable to the period such entity was an ERISA
Affiliate of such Person or such Subsidiary) for which such
Person or such Subsidiary could be liable under the Internal
Revenue Code or ERISA.
"ERISA Event" means (i) a "reportable event" within the
meaning of Section 4043 of ERISA and the regulations issued
thereunder with respect to any Pension Plan (excluding those for
which the provision for 30-day notice to the PBGC has been waived
by regulation); (ii) the failure to meet the minimum funding
standard of Section 412 of the Internal Revenue Code with respect
to any Pension Plan (whether or not waived in accordance with
Section 412(d) of the Internal Revenue Code) or the failure to
make by its due date a required installment under Section 412(m)
of the Internal Revenue Code with respect to any Pension Plan or
the failure to make any required contribution to a Multiemployer
Plan, unless the failure is cured within two Business Days after
such failure; (iii) the provision by the administrator of any
Pension Plan pursuant to Section 4041(a)(2) of ERISA of a notice
of intent to terminate such plan in a distress termination
described in Section 4041(c) of ERISA; (iv) the withdrawal by
Borrower, any of its Subsidiaries or any of their respective
ERISA Affiliates from any Pension Plan with two or more
contributing sponsors or the termination of any such Pension Plan
resulting in liability pursuant to Section 4063 or 4064 of ERISA;
(v) the institution by the PBGC of proceedings to terminate any
Pension Plan, or the occurrence of any event or condition which
might reasonably constitute grounds under ERISA for the
termination of, or the appointment of a trustee to administer,
any Pension Plan; (vi) the imposition of liability on Borrower,
any of its Subsidiaries or any of their respective ERISA
Affiliates pursuant to Section 4062(e) or 4069 of ERISA or by
reason of the application of Section 4212(c) of ERISA; (vii) the
withdrawal of Borrower, any of its Subsidiaries or any of their
respective ERISA Affiliates in a complete or partial withdrawal
(within the meaning of Sections 4203 and 4205 of ERISA) from any
Multiemployer Plan if there is any potential liability therefor,
or the receipt by Borrower, any of its Subsidiaries or any of
their respective ERISA Affiliates of notice from any
Multiemployer Plan that it is in reorganization or insolvency
pursuant to Section 4241 or 4245 of ERISA, or that it intends to
terminate or has terminated under Section 4041A or 4042 of ERISA;
(viii) the occurrence of an act or omission which would give rise
to the imposition on Borrower, any of its Subsidiaries or any of
their respective ERISA Affiliates of fines, penalties, taxes or
related charges under Chapter 43 of the Internal Revenue Code or
under Section 409, Section 502(c), (i) or (l), or Section 4071 of
ERISA in respect of any Employee Benefit Plan any of which would
constitute a Material Adverse Effect; (ix) the assertion of a
material claim (other than routine claims for benefits) against
any Employee Benefit Plan other than a Multiemployer Plan or the
assets thereof, or against Borrower, any of its Subsidiaries or
any of their respective ERISA Affiliates in connection with any
Employee Benefit Plan; (x) receipt from the Internal Revenue
Service of final determination of the failure of any Pension Plan
(or any other Employee Benefit Plan intended to be qualified
under Section 401(a) of the Internal Revenue Code) to qualify
under Section 401(a) of the Internal Revenue Code, or the failure
of any trust forming part of any Pension Plan to qualify for
exemption from taxation under Section 501(a) of the Internal
Revenue Code which cannot be remedied; or (xi) the imposition of
a Lien pursuant to Section 401(a)(29) or 412(n) of the Internal
Revenue Code or pursuant to ERISA with respect to any Pension
Plan.
"Event of Default" means each of the events set forth
in Section 8.
"Exchange Act" means the Securities Exchange Act of 1934.
"Existing Credit Agreement" has the meaning assigned to
that term in the Recitals.
"Existing Deposit Account Control Agreement" means the
Deposit Account Control Agreement executed and delivered by
Borrower, Administration Agent and First Union National Bank on
the Original Closing Date.
"Existing Instruments of Assignment" means the
Instruments of Assignment executed and delivered variously by
Borrower or its Subsidiaries on the Original Closing Date.
"Existing Lenders" has the meaning assigned to that
term in the Recitals.
"Existing Loan Documents" has the meaning assigned to
that term in the Recitals.
"Existing Mortgage" means each of the Florida Mortgage,
the Alabama Mortgage and the Texas Deed of Trust.
"Existing Mortgage Policies" has the meaning assigned
to that term in subsection 4.1N(v).
"Existing Mortgaged Properties" has the meaning
assigned to that term in subsection 4.1N(ii).
"Facilities" means all real property (including all
buildings, fixtures or other improvements located thereon) now,
hereafter or heretofore owned, leased, operated or used by
Borrower or any of its Subsidiaries or any of their respective
predecessors or Affiliates.
"Federal Funds Effective Rate" means, for any period, a
fluctuating interest rate equal for each day during such period
to the weighted average of the rates on overnight Federal funds
transactions with members of the Federal Reserve System arranged
by Federal funds brokers, as published for such day (or, if such
day is not a Business Day, for the next preceding Business Day)
by the Federal Reserve Bank of New York, or, if such rate is not
so published for any day which is a Business Day, the average of
the quotations for such day on such transactions received by
Administrative Agent from three Federal funds brokers of
recognized standing selected by Administrative Agent.
"Financial Plan" has the meaning assigned to that term
in subsection 6.1(xii).
"First Amendment to Alabama Mortgage" means the First
Amendment to the Mortgage, Security Agreement, Assignment of
Rents and Leases and Fixture Filing (Alabama), executed by
Enterprise Electronics Corporation in favor of Administrative
Agent.
"First Amendment to Florida Mortgage" means the First
Amendment to the Mortgage, Security Agreement, Assignment of
Rents and Leases and Fixture Filing (Florida), executed by Metric
Systems Corporation in favor of Administrative Agent.
"First Amendment to Texas Deed of Trust" means the
First Amendment to the Deed of Trust, Security Agreement,
Assignment of Rents and Leases and Fixture Filing (Texas),
executed by Continental Electronics Corporation in favor of the
trustee named therein for the benefit of Administrative Agent as
beneficiary.
"First Priority" means, with respect to any Lien
purported to be created in any Collateral pursuant to any
Collateral Document, that (i) such Lien is perfected and has
priority over any other Lien on such Collateral (other than
Permitted Encumbrances) and (ii) such Lien is the only Lien
(other than Liens permitted pursuant to subsection 7.2A) to which
such Collateral is subject.
"Fiscal Quarter" means a fiscal quarter of any Fiscal Year.
"Fiscal Year" means the fiscal year of Borrower and its
Subsidiaries ending on December 31 of each calendar year.
"Flood Hazard Property" means an Effective Date
Mortgaged Property or an Additional Mortgaged Property located in
an area designated by the Federal Emergency Management Agency as
having special flood or mud slide hazards.
"Florida Mortgage" means the Mortgage, Security
Agreement, Assignment of Rents and Leases and Fixture Filing
(Florida), executed on the Original Closing Date by Metric
Systems Corporation in favor of Administrative Agent.
"Fund" means any Person (other than a natural Person)
that is (or will be) engaged in making, purchasing, holding or
otherwise investing in commercial loans and similar extensions of
credit in the ordinary course of its business.
"Funded Debt", as applied to any Person, means (a) all
Indebtedness of that Person (including any current portions
thereof) which by its terms or by the terms of any instrument or
agreement relating thereto matures more than one year from, or is
directly renewable or extendable at the option of that Person to
a date more than one year from (including an option of that
Person under a revolving credit or similar agreement obligating
the lender or lenders to extend credit over a period of one year
or more from), the date of the creation thereof, other than (i)
any performance letters of credit (i.e., letters of credit which
can be drawn upon only if Borrower or any of its Subsidiaries
fails to comply with or perform under any material provision of
any contract) issued for the account of such Person, (b) all
Funded Debt of others of the type referred to in clause (a) above
secured by (or for which the holder of such Indebtedness has an
existing right, contingent or otherwise, to be secured by) any
Lien on, or payable out of the proceeds of production from,
property owned or acquired by such Person, whether or not the
obligations secured thereby have been assumed, (c) all Contingent
Obligations of such Person with respect to Funded Debt of the
type referred to in clause (a) above of another Person and
(d) Funded Debt of the type referred to in clause (a) above of
any partnership or unincorporated joint venture in which such
Person is legally obligated or has a reasonable expectation of
being liable with respect thereto.
"Funding Date" means the date of the funding of a Loan.
"GAAP" means, subject to the limitations on the
application thereof set forth in subsection 1.2, generally
accepted accounting principles set forth in opinions and
pronouncements of the Accounting Principles Board of the American
Institute of Certified Public Accountants and statements and
pronouncements of the Financial Accounting Standards Board or in
such other statements by such other entity as may be approved by
a significant segment of the accounting profession, in each case
as the same are applicable to the circumstances as of the date of
determination.
"Governing Body" means the board of directors or other
body having the power to direct or cause the direction of the
management and policies of a Person that is a corporation,
partnership, trust or limited liability company.
"Governmental Authority" means any political
subdivision or department thereof, any other governmental or
regulatory body, commission, central bank, board, bureau, organ
or instrumentality or any court, in each case whether federal,
state, local or foreign, and any corporation or other entity
owned or controlled, through stock or capital ownership or
otherwise, by any of the foregoing.
"Governmental Authorization" means any permit, license,
registration, authorization, plan, directive, consent, order or
consent decree of or from, or notice to, any Governmental
Authority.
"Government Contract" means (i) any contract entered
into between Borrower or any of its Subsidiaries and the
government of the United States of America, the District of
Columbia, or any department, agency or instrumentality thereof
and (ii) any contract entered into between Target and the
government of the United States of America, the District of
Columbia, or any department, agency or instrumentality thereof
that is being assigned, transferred or otherwise acquired by
Newco in connection with the Acquisition.
"Hazardous Materials" means (i) any chemical, material
or substance at any time defined as or included in the definition
of "hazardous substances", "hazardous wastes", "hazardous
materials", "extremely hazardous waste", "acutely hazardous
waste", "radioactive waste", "biohazardous waste", "pollutant",
"toxic pollutant", "contaminant", "restricted hazardous waste",
"infectious waste", "toxic substances", or any other term or
expression intended to define, list or classify substances by
reason of properties harmful to health, safety or the indoor or
outdoor environment (including harmful properties such as
ignitability, corrosivity, reactivity, carcinogenicity, toxicity,
reproductive toxicity, "TCLP toxicity" or "EP toxicity" or words
of similar import under any applicable Environmental Laws);
(ii) any oil, petroleum, petroleum fraction or petroleum derived
substance; (iii) any drilling fluids, produced waters and other
wastes associated with the exploration, development or production
of crude oil, natural gas or geothermal resources; (iv) any
flammable substances or explosives; (v) any radioactive
materials; (vi) any asbestos-containing materials; (vii) urea
formaldehyde foam insulation; (viii) electrical equipment which
contains any oil or dielectric fluid containing polychlorinated
biphenyls; (ix) pesticides; and (x) any other chemical, material
or substance, exposure to which is prohibited, limited or
regulated by any Governmental Authority or which poses a hazard
to the health and safety of the owners, occupants or any Persons
in the vicinity of any Facility or to the indoor or outdoor
environment.
"Hazardous Materials Activity" means any past, current,
proposed or threatened activity, event or occurrence involving
any Hazardous Materials, including the use, manufacture,
possession, storage, holding, presence, existence, location,
Release, threatened Release, discharge, placement, generation,
transportation, processing, construction, treatment, abatement,
removal, remediation, disposal, disposition or handling of any
Hazardous Materials, and any corrective action or response action
with respect to any of the foregoing.
"Hedge Agreement" means an Interest Rate Agreement or a
Currency Agreement designed to hedge against fluctuations in
interest rates or currency values, respectively.
"Increasing Lenders" has the meaning assigned to that
term in subsection 2.1A(iv).
"Indebtedness", as applied to any Person, means,
without duplication, (a) all obligations of such Person for
borrowed money, (b) all obligations of such Person evidenced by
bonds, debentures, notes or similar instruments, or upon which
interest payments are customarily made without regard to any
original issue discount relating thereto, (c) all obligations of
such Person under conditional sale or other title retention
agreements relating to property purchased by such Person (other
than customary reservations or retentions of title under
agreements with suppliers entered into in the ordinary course of
business), (d) all obligations of such Person issued or assumed
as the deferred purchase price of property or services purchased
by such Person (other than trade debt incurred in the ordinary
course of business and due within six months of the incurrence
thereof) which would appear as liabilities on a balance sheet of
such Person, (e) all obligations of such Person under take-or-pay
or similar arrangements or under commodities agreements, (f) all
indebtedness of others secured by (or for which the holder of
such Indebtedness has an existing right, contingent or otherwise,
to be secured by) any Lien on, or payable out of the proceeds of
production from, property owned or acquired by such Person,
whether or not the obligations secured thereby have been assumed,
(g) all Contingent Obligations of such Person with respect to
Indebtedness of another Person, (h) the principal portion of all
obligations of such Person under Capital Leases, (i) all
obligations of such Person under Hedge Agreements, (j) the
maximum amount of all letters of credit issued or bankers'
acceptances facilities created for the account of such Person
and, without duplication, all drafts drawn thereunder (to the
extent unreimbursed), (k) all preferred Capital Stock issued by
such Person and which by the terms thereof could be (at the
request of the holders thereof or otherwise) subject to mandatory
sinking fund payments, redemption or other acceleration, (1) the
principal balance outstanding under any synthetic lease, tax
retention operating lease, off-balance sheet loan or similar off-
balance sheet financing product, and (m) the Indebtedness of any
partnership or unincorporated joint venture in which such Person
is a general partner or a joint venturer, but not including any
Indebtedness payable to the United States Armed Forces.
Obligations under Interest Rate Agreements and Currency
Agreements constitute (1) in the case of Hedge Agreements,
Contingent Obligations, and (2) in all other cases, Investments,
and in neither case constitute Indebtedness.
"Indemnitees" has the meaning assigned to that term in
subsection 10.3.
"Instruments of Assignment" means collectively, the
Existing Instruments of Assignment and the New Instruments of
Assignment.
"Intellectual Property" means (i) all trademarks,
service marks, designs, logos, indicia, tradenames, trade
dresses, corporate names, business names, fictitious business
names and/or other source and/or business identifiers and
applications pertaining thereto, used in or necessary for the
conduct of the business of Borrower or any of its Subsidiaries
that are material to the condition (financial or otherwise),
business or operations of Borrower and its Subsidiaries,
including the trademarks identified in Schedule 5.5C (all the
foregoing being referred to herein collectively as the
"Trademarks"); and all goodwill associated therewith (the
"Associated Goodwill") relating to the Trademarks; (ii) all
registrations that have been or may hereafter be issued or
applied for on the Trademarks in the United States and any state
thereof and in foreign countries (the "Trademark Registrations");
(iii) all patents and patent applications and rights and
interests in patents and patent applications that are used in or
necessary for the conduct of the business of Borrower or its
Subsidiaries that are material to the condition (financial or
otherwise), business or operations of Borrower or any of its
Subsidiaries, including the patents and patent applications
listed in Schedule 5.5C, and all re-issues, divisions,
continuations, renewals, extensions and continuations-in-part
thereof (all of the foregoing being collectively referred to as
the "Patents") and all Associated Goodwill related to such
Patents; (iv) various published and unpublished works of
authorship, including, computer programs, computer data bases,
other computer software, including, without limitation, object
code and source code, mask works, semiconductor chips, masks,
trade secrets, trade secret rights, ideas, drawings, designs,
writings, know-how, techniques, processes and formulas, used in
or necessary for the conduct of the business of Borrower or any
of its Subsidiaries that are material to the condition (financial
or otherwise), business or operations of Borrower and its
Subsidiaries (all the foregoing being referred to herein
collectively as the "Copyrights") and all Associated Goodwill
relating to such Copyrights; (v) all copyright registrations
issued to Borrower or any of its Subsidiaries for any copyright
registrations that have been issued or applied for on the
Copyrights in the United States and any state thereof and in
foreign countries (all the foregoing being referred to herein
collectively as the "Copyright Registrations") and all Associated
Goodwill relating to such Copyright Registrations and (vi) all
common law and other rights in and to the Copyrights (including
all copyright licenses) in the United States and any state
thereof and in foreign countries used in or necessary for the
conduct of the business of Borrower or its Subsidiaries that are
material to the condition (financial or otherwise), business or
operations of Borrower and its Subsidiaries (all of the foregoing
being referred to herein collectively as the "Copyright Rights")
and all Associated Goodwill relating to such Copyright Rights.
"Interest Payment Date" means (i) with respect to any
Base Rate Loan, the last Business Day of each March, June,
September and December of each year, commencing on the first such
date to occur after the Effective Date, and (ii) with respect to
any LIBOR Loan, the last day of each Interest Period applicable
to such Loan; provided that in the case of each Interest Period
of six months "Interest Payment Date" shall also include the date
that is three months after the commencement of such Interest
Period and in the case of each Interest Period of twelve months,
to the extent a Lender is willing to so provide pursuant to
subsection 2.2B, "Interest Period" shall also include the date
that is three months, six months and nine months after the
commencement of such Interest Period.
"Interest Period" has the meaning assigned to that term
in subsection 2.2B.
"Interest Rate Agreement" means any interest rate swap
agreement, interest rate cap agreement, interest rate collar
agreement or other similar agreement or arrangement to which
Borrower or any of its Subsidiaries is a party.
"Interest Rate Determination Date", with respect to any
Interest Period, means the second Business Day prior to the first
day of such Interest Period.
"Internal Revenue Code" means the Internal Revenue Code
of 1986, as amended to the date hereof and from time to time
hereafter, and any successor statute.
"Inventory" means, with respect to any Person as of any
date of determination, all goods, merchandise and other personal
property which are then held by such Person for sale or lease,
including raw materials and work in process.
"Investment" means (i) any direct or indirect purchase
or other acquisition by Borrower or any of its Subsidiaries of,
or of a beneficial interest in, any Securities of any other
Person (including any Subsidiary of Borrower), (ii) any direct or
indirect redemption, retirement, purchase or other acquisition
for value, by any Subsidiary of Borrower from any Person other
than Borrower or any of its Subsidiaries, of any equity
Securities of such Subsidiary, (iii) any direct or indirect loan,
advance (other than advances to employees for moving,
entertainment and travel expenses, drawing accounts and similar
expenditures in the ordinary course of business) or capital
contribution by Borrower or any of its Subsidiaries to any other
Person (other than a wholly-owned Subsidiary of Borrower),
including all indebtedness and accounts receivable from that
other Person that are not current assets or did not arise from
sales to that other Person in the ordinary course of business, or
(iv) Interest Rate Agreements or Currency Agreements not
constituting Hedge Agreements. The amount of any Investment shall
be the original cost of such Investment plus the cost of all
additions thereto, without any adjustments for increases or
decreases in value, or write-ups, write-downs or write-offs with
respect to such Investment (other than adjustments for the
repayment of, or the refund of capital with respect to, the
original principal amount of any such Investment).
"IP Collateral" means, collectively, the Collateral
consisting of rights in or to Intellectual Property under the
Security Agreement.
"Issuing Lender" means, with respect to any Letter of
Credit, the Lender who agrees or is otherwise obligated to issue
such Letter of Credit, determined as provided in subsection
3.1B(iii).
"Joint Venture" means a joint venture, partnership or
other similar arrangement, whether in corporate, partnership or
other legal form; provided that in no event shall any corporate
Subsidiary of any Person be considered to be a Joint Venture to
which such Person is a party.
"Landlord Consent and Estoppel" means, with respect to
any Leasehold Property, a letter, certificate or other instrument
in writing from the lessor under the related lease, satisfactory
in form and substance to Administrative Agent, pursuant to which
such lessor agrees, for the benefit of Administrative Agent, (i)
that without any further consent of such lessor or any further
action on the part of the Loan Party holding such Leasehold
Property, such Leasehold Property may be encumbered pursuant to a
Mortgage and may be assigned to the purchaser at a foreclosure
sale or in a transfer in lieu of such a sale (and to a subsequent
third party assignee if Administrative Agent, any Lender, or an
Affiliate of either so acquires such Leasehold Property), (ii)
that such lessor shall not terminate such lease as a result of a
default by such Loan Party thereunder without first giving
Administrative Agent notice of such default and at least 60 days
(or, if such default cannot reasonably be cured by Administrative
Agent within such period, such longer period as may reasonably be
required) to cure such default, (iii) to the matters contained in
a Collateral Access Agreement, and (iv) to such other matters
relating to such Leasehold Property as Administrative Agent may
reasonably request.
"LC Reimbursement Amount" has the meaning assigned to
that term in subsection 3.3B.
"Lead Arranger" means CIBC World Markets Corp.
"Leasehold Property" means any leasehold interest of
any Loan Party as lessee under any lease of real property.
"Lender" and "Lenders" means the Persons identified as
"Lenders" and listed on the signature pages of this Agreement,
together with their successors and permitted assigns pursuant to
subsection 10.1; provided that the term "Lenders", when used in
the context of a particular Commitment, shall mean Lenders having
that Commitment.
"Letter of Credit" or "Letters of Credit" means any
standby letter of credit or similar instrument issued for the
purpose of supporting (i) Indebtedness of Borrower or any of its
Subsidiaries in respect of industrial revenue or development
bonds or financings, (ii) workers' compensation liabilities of
Borrower or any of its Subsidiaries, (iii) the obligations of
third party insurers of Borrower or any of its Subsidiaries
arising by virtue of the laws of any jurisdiction requiring third
party insurers, (iv) obligations with respect to Capital Leases
or Operating Leases of Borrower or any of its Subsidiaries, and
(v) performance, payment, deposit or surety obligations of
Borrower or any of its Subsidiaries, in any case if required by
law or governmental rule or regulation or in accordance with
custom and practice in the industry; provided that Letters of
Credit may not be issued for the purpose of supporting (a) trade
payables or (b) any Indebtedness constituting "antecedent debt"
(as that term is used in Section 547 of the Bankruptcy Code).
"Letter of Credit Usage" means, as at any date of
determination, the sum of (i) the maximum aggregate amount which
is or at any time thereafter may become available for drawing
under all Letters of Credit then outstanding plus (ii) the
aggregate amount of all drawings under Letters of Credit honored
by Issuing Lenders and not theretofore reimbursed out of the
proceeds of Revolving Loans pursuant to subsection 3.3B or
otherwise reimbursed by Borrower.
"LIBOR Loans" means Loans bearing interest at rates
determined by reference to Adjusted LIBOR as provided in
subsection 2.2A.
"Lien" means any lien, mortgage, pledge, assignment,
security interest, charge or encumbrance of any kind (including
any conditional sale or other title retention agreement, any
lease in the nature thereof, and any agreement to give any
security interest) and any option, trust or other preferential
arrangement having the practical effect of any of the foregoing.
"Loan" or "Loans" means one or more of the Tranche A
Term Loans, Tranche B Term Loans or Revolving Loans or any
combination thereof.
"Loan Documents" means this Agreement, the Notes, the
Letters of Credit (and any applications for, or reimbursement
agreements or other documents or certificates executed by
Borrower in favor of an Issuing Lender relating to, the Letters
of Credit), the Subsidiary Guaranty, the Master Confirmation and
the Collateral Documents.
"Loan Party" means each of Borrower and any of
Borrower's Subsidiaries from time to time executing a Loan
Document, and "Loan Parties" means all such Persons,
collectively.
"Margin Determination Certificate" means an Officer's
Certificate of Borrower delivered (a) with respect to each Fiscal
Quarter (other than each fourth Fiscal Quarter), together with
the three most recent financial statements required pursuant to
subsection 6.1(ii), and (b) with respect to each fourth Fiscal
Quarter, within 45 days of the last day of such fourth Fiscal
Quarter, setting forth in reasonable detail the Consolidated
Total Leverage Ratio that is applicable as of the last day of the
fiscal period for which such financial statements and Officer's
Certificate are being delivered.
"Margin Stock" has the meaning assigned to that term in
Regulation U of the Board of Governors of the Federal Reserve
System as in effect from time to time.
"Maryland Landlord's Estoppel Certificate" means that
certain Landlord's Estoppel Certificate, dated September 19,
2002, by and among Robert E. Hawkins, Joan O. Hawkins and Seller
relating to the leased property located at the "Sugarland" Sod
Farm situated on the north side of Route 107, Poolsville,
Maryland, in the form delivered to Administrative Agent and
Lenders prior to their execution of this Agreement.
"Maryland Lease Assignment and Assumption Agreement"
means that certain Lease Assignment and Assumption Agreement by
and among Seller and Newco, dated November 1, 2002, relating to
the leased property located at the "Sugarland" Sod Farm situated
on the north side of Route 107, Poolsville, Maryland, in the form
delivered to Administrative Agent and Lenders prior to their
execution of this Agreement.
"Maryland Property" has the meaning assigned to that
term in subsection 4.1M(ii).
"Master Confirmation" means the Acknowledgement and
Consent to be executed and delivered by Borrower and the
Subsidiary Guarantors on the Effective Date, substantially in the
form of Exhibit XXIV annexed hereto.
"Material Adverse Effect" means any act, omission,
situation, circumstance, event or undertaking which could
reasonably be expected to have, singly or in any combination with
one or more other acts, omissions, situations, circumstances,
events or undertakings, a materially adverse effect upon (a) the
business, assets, properties, liabilities, condition (financial
or otherwise), results of operations or business prospects of
Borrower and its Subsidiaries taken as a whole, (b) the value of
the whole or any material part of the Collateral, or the
enforceability or priority of the security interest in the
Collateral, (c) the respective ability of Borrower or any of the
other Loan Parties to perform any obligations under this
Agreement or any other Loan Document to which it is a party, or
(d) the legality, validity, binding effect, enforceability or
admissibility into evidence of any Loan Document or the rights or
remedies of Administrative Agent or Lenders under or in
connection with any Loan Document.
"Material Contract" means any contract, indenture,
mortgage, deed of trust, undertaking, agreement, instrument or
other arrangement, whether written or oral, (a) having annual
revenues in excess of $5,000,000, if Borrower or any of its
Subsidiaries is a provider of services, and (b) having remaining
payments in excess of $1,000,000, if Borrower or any of its
Subsidiaries is the recipient of services, inventory, materials
or other goods.
"Material Leasehold Property" means a Leasehold
Property reasonably determined by Administrative Agent to be of
material value as Collateral or of material importance to the
operations of Borrower or any of its Subsidiaries; provided,
however, no Leasehold Property with respect to which the
aggregate amount of all rents payable during any one Fiscal Year
never exceeds $500,000 shall be a "Material Leasehold Property".
"Metric" means Metric Systems Corporation, a Florida
corporation.
"Minimum Amount" means, with respect to each of the
following actions, the minimum amount and any multiples in excess
thereof set forth opposite such action:Credit Agreement - Integrated Defense Technologies Inc. and Canadian Imperial Bank of Commerce
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