Exhibit 10.2
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$225,000,000
CREDIT AGREEMENT
AMONG
COMPUCOM SYSTEMS, INC.
CERTAIN LENDERS PARTY HERETO
AND
NATIONSBANK OF TEXAS, N.A., AS ADMINISTRATIVE LENDER
September 26, 1996
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TABLE OF CONTENTS
Page
ARTICLE 1
DEFINITIONS
Section 1.1 DEFINED TERMS............................................ 1
Section 1.2 AMENDMENTS AND RENEWALS.................................. 25
Section 1.3 CONSTRUCTION............................................. 26
ARTICLE 2
ADVANCES
Section 2.1 THE ADVANCES............................................. 26
Section 2.2 MANNER OF BORROWING AND DISBURSEMENT..................... 27
Section 2.3 INTEREST................................................. 29
Section 2.4 FEES..................................................... 31
Section 2.5 PREPAYMENTS.............................................. 32
Section 2.6 REDUCTION OF COMMITMENTS................................. 33
Section 2.7 NON-RECEIPT OF FUNDS BY THE ADMINISTRATIVE LENDER........ 33
Section 2.8 PAYMENT OF PRINCIPAL OF ADVANCES......................... 34
Section 2.9 REIMBURSEMENT............................................ 34
Section 2.10 MANNER OF PAYMENT........................................ 35
Section 2.11 LIBOR LENDING OFFICES.................................... 36
Section 2.12 SHARING OF PAYMENTS...................................... 36
Section 2.13 CALCULATION OF LIBOR RATE................................ 36
Section 2.14 TAXES.................................................... 36
Section 2.15 LETTERS OF CREDIT........................................ 40
ARTICLE 3
CONDITIONS PRECEDENT
Section 3.1 CONDITIONS PRECEDENT TO THE INITIAL ADVANCE AND THE INITIAL
ISSUANCE OF LETTERS OF CREDIT..................................... 45
Section 3.2 CONDITIONS PRECEDENT TO ALL ADVANCES AND LETTERS OF CREDIT 47
Section 3.3 CONDITIONS PRECEDENT TO CONVERSIONS AND CONTINUATIONS.... 48
ARTICLE 4
REPRESENTATIONS AND WARRANTIES
Section 4.1 REPRESENTATIONS AND WARRANTIES........................... 49
Section 4.2 SURVIVAL OF REPRESENTATIONS AND WARRANTIES, ETC.......... 56
ARTICLE 5
GENERAL COVENANTS
Section 5.1 PRESERVATION OF EXISTENCE AND SIMILAR MATTERS............ 56
Section 5.2 BUSINESS; COMPLIANCE WITH APPLICABLE LAW................. 57
Section 5.3 MAINTENANCE OF PROPERTIES................................ 57
Section 5.4 ACCOUNTING METHODS AND FINANCIAL RECORDS................. 57
Section 5.5 INSURANCE................................................ 57
Section 5.6 PAYMENT OF TAXES AND CLAIMS.............................. 57
Section 5.7 VISITS AND INSPECTIONS................................... 57
Section 5.8 USE OF PROCEEDS.......................................... 58
SECTION 5.9 INDEMNITY................................................ 58
Section 5.10 ENVIRONMENTAL LAW COMPLIANCE............................. 59
Section 5.11 FURTHER ASSURANCES....................................... 60
Section 5.12 SUBSIDIARIES............................................. 60
Section 5.13 REAL PROPERTY............................................ 61
Section 5.14 AGREEMENTS IN RESPECT OF RPA AND TAA..................... 61
ARTICLE 6
INFORMATION COVENANTS
Section 6.1 BORROWING BASE REPORT.................................... 62
Section 6.3 ANNUAL FINANCIAL STATEMENTS AND INFORMATION; CERTIFICATE
OF NO DEFAULT .......................................... 62
Section 6.4 COMPLIANCE CERTIFICATE................................... 62
Section 6.5 COPIES OF OTHER REPORTS AND NOTICES...................... 63
Section 6.6 NOTICE OF LITIGATION, DEFAULT AND OTHER MATTERS.......... 64
Section 6.7 ERISA REPORTING REQUIREMENTS............................. 64
Section 6.8 RPA AND TAA REPORTING REQUIREMENTS....................... 65
ARTICLE 7
NEGATIVE COVENANTS
Section 7.1 INDEBTEDNESS............................................. 66
Section 7.2 LIENS.................................................... 67
Section 7.3 INVESTMENTS.............................................. 67
Section 7.4 LIQUIDATION, MERGER...................................... 68
Section 7.5 SALES OF ASSETS.......................................... 68
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Section 7.6 ACQUISITIONS............................................. 69
Section 7.7 CAPITAL EXPENDITURES..................................... 69
Section 7.8 RESTRICTED PAYMENTS...................................... 69
Section 7.9 AFFILIATE TRANSACTIONS................................... 70
Section 7.10 COMPLIANCE WITH ERISA.................................... 70
Section 7.11 MAXIMUM LEVERAGE RATIO................................... 70
Section 7.12 MINIMUM FIXED CHARGE COVERAGE RATIO...................... 70
Section 7.13 MINIMUM TANGIBLE NET WORTH............................... 70
Section 7.14 MINIMUM ASSET COVERAGE RATIO............................. 71
Section 7.15 MAXIMUM FUNDED DEBT TO CAPITAL........................... 71
Section 7.16 SALE AND LEASEBACK....................................... 71
Section 7.17 SALE OR DISCOUNT OF RECEIVABLES.......................... 71
Section 7.18 CAPITAL STOCK............................................ 71
Section 7.19 BUSINESS................................................. 71
Section 7.20 FISCAL YEAR.............................................. 71
Section 7.21 AMENDMENT OF ORGANIZATIONAL DOCUMENTS.................... 71
Section 7.22 AMENDMENTS AND WAIVERS OF SUBORDINATED DEBT.............. 72
Section 7.23 OPERATING LEASES......................................... 72
ARTICLE 8
DEFAULT
Section 8.1 EVENTS OF DEFAULT........................................ 72
Section 8.2 REMEDIES................................................. 75
ARTICLE 9
CHANGES IN CIRCUMSTANCES
Section 9.1 LIBOR BASIS DETERMINATION INADEQUATE..................... 76
Section 9.2 ILLEGALITY............................................... 76
Section 9.3 INCREASED COSTS.......................................... 77
Section 9.4 EFFECT ON BASE RATE ADVANCES............................. 78
Section 9.5 CAPITAL ADEQUACY......................................... 78
Section 9.6 REPLACEMENT LENDER....................................... 79
ARTICLE 10
AGREEMENT AMONG LENDERS
Section 10.1 AGREEMENT AMONG LENDERS.................................. 79
Section 10.2 LENDER CREDIT DECISION................................... 82
Section 10.3 BENEFITS OF ARTICLE...................................... 82
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ARTICLE 11
MISCELLANEOUS
Section 11.1 NOTICES.................................................. 83
Section 11.2 EXPENSES................................................. 83
Section 11.3 WAIVERS.................................................. 84
Section 11.4 CALCULATION BY THE LENDERS CONCLUSIVE AND BINDING........ 84
Section 11.5 SET-OFF.................................................. 84
Section 11.6 ASSIGNMENT............................................... 85
Section 11.7 COUNTERPARTS............................................. 87
Section 11.8 SEVERABILITY............................................. 87
Section 11.9 INTEREST AND CHARGES..................................... 87
Section 11.10 HEADINGS................................................. 88
Section 11.11 AMENDMENT AND WAIVER..................................... 88
Section 11.12 EXCEPTION TO COVENANTS................................... 89
Section 11.13 NO LIABILITY OF ISSUING BANK............................. 89
Section 11.14 CONFIDENTIALITY.......................................... 89
Section 11.15 AMENDMENT, RESTATEMENT, EXTENSION, RENEWAL AND INCREASE.. 90
SECTION 11.16 GOVERNING LAW............................................ 90
SECTION 11.17 WAIVER OF JURY TRIAL..................................... 90
SECTION 11.18 ENTIRE AGREEMENT......................................... 91
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SCHEDULES AND EXHIBITS
Schedule 1: LIBOR Lending Offices
Schedule 2: Existing Liens
Schedule 3: Existing Litigation and Material Liabilities
Schedule 4: Subsidiaries
Schedule 5: Existing Investments
Schedule 6: Existing Indebtedness
Schedule 7: Qualification and Good Standing
Schedule 8: Labor Relations
Schedule 9: Permitted Real Estate Expenditures
Exhibit A: Facility A Note
Exhibit B: Facility B Note
Exhibit C: Swing Line Note
Exhibit D: Security Agreement
Exhibit E: Borrowing Base Report
Exhibit F: Pledge Agreement
Exhibit G: Compliance Certificate
Exhibit H: Assignment Agreement
Exhibit I: Subsidiary Guaranty
Exhibit J: Notice of Borrowing
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CREDIT AGREEMENT
THIS CREDIT AGREEMENT is dated as of September 26, 1996, among COMPUCOM
SYSTEMS, INC., a Delaware corporation (the "BORROWER"), the Lenders from time to
time party hereto, and NATIONSBANK OF TEXAS, N.A., a national banking
association, as administrative agent for the Lenders.
BACKGROUND
The Lenders have been requested to provide the Borrower the funds required
to (i) refinance existing debt of the Borrower outstanding to NationsBank of
Texas, N.A. pursuant to the terms of that certain Financing and Security
Agreement, dated as of August 4, 1993, as amended, modified, supplemented and
restated from time to time (the "EXISTING CREDIT AGREEMENT"), (ii) finance
acquisitions permitted hereunder, (iii) finance the ongoing working capital and
general corporate requirements of the Borrower and its Subsidiaries (as
hereinafter defined) and (iv) finance the purchase of certain real estate. The
Lenders have agreed to provide such financing, subject to the terms and
conditions set forth below.
In consideration of the mutual covenants and agreements contained herein,
and other good and valuable consideration hereby acknowledged, the parties
hereto agree that the Existing Credit Agreement shall be amended, restated and
superseded as follows:
ARTICLE 1
DEFINITIONS
Section 1.1 DEFINED TERMS. For purposes of this Agreement:
"ACCOUNT" has the meaning assigned to such term in the UCC.
"ACQUISITION" means any transaction pursuant to which the Borrower or any
of its Subsidiaries, (i) whether by means of a capital contribution or purchase
or other acquisition of stock or other securities or other equity participation
or interest, (A) acquires more than 50% of the equity interest in any Person
pursuant to a solicitation by the Borrower or such Subsidiary of tenders of
equity securities of such Person, or through one or more negotiated block,
market, private or other transactions, or a combination of any of the foregoing,
or (B) makes any corporation a Subsidiary of the Borrower or such Subsidiary, or
causes any corporation, other than a Subsidiary of the Borrower or such
Subsidiary, to be merged into the Borrower or such Subsidiary (or agrees to be
merged into any other corporation other than a wholly-owned Subsidiary
(excluding directors' qualifying shares) of the Borrower or such Subsidiary), or
(ii) purchases all or substantially all of the business or assets of any Person
or of any operating division of any Person.
"ADMINISTRATIVE LENDER" means NationsBank of Texas, N.A., a national
banking association, as administrative agent for Lenders, or such successor
administrative agent appointed pursuant to SECTION 10.1(B) hereof.
"ADMINISTRATIVE LENDER FEE LETTER" has the meaning specified in
SECTION 2.4(C) hereof.
"ADVANCE" means a Facility A Advance, a Facility B Advance or a Swing Line
Advance and "ADVANCES" means Facility A Advances, Facility B Advances and Swing
Line Advances.
"AFFILIATE" means, as applied to any Person, any other Person that,
directly or indirectly, through one or more Persons, Controls or is Controlled
By or Under Common Control with, that Person.
"AGREEMENT" means this Credit Agreement, as amended, modified, supplemented
or restated from time to time.
"AGREEMENT DATE" means the date of this Agreement.
"APPLICABLE ENVIRONMENTAL LAWS" means applicable laws pertaining to health
or the environment, including without limitation, the Comprehensive
Environmental Response, Compensation, and Liability Act of 1980, as amended by
the Superfund Amendments and Reauthorization Act of 1986 (as amended from time
to time, "CERCLA"), the Resource Conservation and Recovery Act of 1976, as
amended by the Used Oil Recycling Act of 1980, the Solid Waste Disposal Act
amendments of 1980, and the Hazardous and Solid Waste Amendments of 1984 (as
amended from time to time, "RCRA").
"APPLICABLE LAW" means (a) in respect of any Person, all provisions of
constitutions, statutes, rules, regulations and orders of governmental bodies or
regulatory agencies applicable to such Person and its properties, including,
without limiting the foregoing, all orders and decrees of all courts and
arbitrators in proceedings or actions to which the Person in question is a
party, and (b) in respect of contracts relating to interest or finance charges
that are made or performed in the State of Texas, "APPLICABLE LAW" shall mean
the laws of the United States of America, including without limitation 12 USC
SECTIONS 85 and 86, as amended from time to time, and any other statute of the
United States of America now or at any time hereafter prescribing the maximum
rates of interest on loans and extensions of credit, and the laws of the State
of Texas, including, without limitation, Article 5069-1.04, Title 79, Revised
Civil Statutes of Texas, 1925, as amended ("ART. 1.04"), and any other statute
of the State of Texas; provided that the parties hereto agree that the
provisions of Chapter 15, Title 79, Revised Civil Statutes of Texas, 1925, as
amended, shall not apply to Advances, this Agreement, the Notes or any other
Loan Documents.
"APPLICABLE LIBOR RATE MARGIN" means the following per annum percentages,
applicable in the following situations:
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APPLICABILITY FACILITY A FACILITY B
(a) INITIAL PRICING PERIOD 1.000% 1.250%
(b) SUBSEQUENT PRICING PERIOD
(1) The Fixed Charge Coverage Ratio is greater 0.750% 1.000%
than or equal to 2.50 to 1
(2) The Fixed Charge Coverage Ratio is less 0.875% 1.125%
than 2.50 to 1 but greater than or equal to
2.00 to 1
(3) The Fixed Charge Coverage Ratio is less 1.000% 1.250%
than 2.00 to 1 but greater than or equal to
1.50 to 1
(4) The Fixed Charge Coverage Ratio is less 1.250% 1.500%
than 1.50 to 1
The Applicable LIBOR Rate Margin payable by the Borrower on the LIBOR Advances
outstanding hereunder shall be subject to reduction or increase, as applicable
and as set forth in the table above, on a quarterly basis according to the
performance of the Borrower as tested by using the Fixed Charge Coverage Ratio
calculated as of the end of each fiscal quarter during the Subsequent Pricing
Period; PROVIDED, that each adjustment in the LIBOR Basis shall be effective
with respect to LIBOR Advances (i) made following receipt by the Administrative
Lender of the financial statements required to be delivered pursuant to
SECTION 6.2 or 6.3 hereof, as applicable, for each such fiscal quarter, and the
corresponding Compliance Certificate required pursuant to SECTION 6.4 hereof, on
the date of making such LIBOR Advance and (ii) outstanding on the date of
receipt of such financial statements and Compliance Certificate referred to in
clause (i) immediately preceding, on the date which is two Business Days
following the date of receipt of such financial statements and Compliance
Certificate. If such financial statements and Compliance Certificate are not
received by the Administrative Lender by the date required, effective as of the
first Business Day following notification thereof from the Administrative Lender
to the Borrower, the Applicable LIBOR Rate Margin shall be determined as if the
Fixed Charge Coverage Ratio is less than 1.50 to 1 until such time as such
financial statements and Compliance Certificate are received.
"ASSET COVERAGE RATIO" means, for the Borrower and its Subsidiaries
determined in accordance with GAAP on a consolidated basis, at the time in
question, the ratio of (a) the sum of (i) Cash and Cash Equivalents, plus
(ii) Accounts, plus (iii) Inventory to (b) the sum of (i) outstanding
obligations in respect of Facility A and Swing Line Advances, Reimbursement
Obligations and other Indebtedness, plus (ii) the Net Exposure Under
Securitization, plus (iii) accounts payable and accrued liabilities in the
ordinary course of business.
"ASSIGNEES" means any assignee of a Lender pursuant to an Assignment
Agreement and shall have the meaning ascribed thereto in SECTION 11.6 hereof.
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"ASSIGNMENT AGREEMENT" has the meaning specified in SECTION 11.6 hereof.
"AUTHORIZED SIGNATORY" means such senior personnel of the Borrower as may
be duly authorized and designated in writing by the Borrower to execute
documents, agreements and instruments on behalf of the Borrower, and to request
Advances and Letters of Credit hereunder.
"BASE RATE ADVANCE" means any Advance bearing interest at the Base Rate
Basis.
"BASE RATE BASIS" means, for any day, a per annum interest rate equal to
the higher of (a) the sum of (i) 0.50% plus (ii) the Federal Funds Rate on such
day or (b) the Prime Rate on such day. The Base Rate Basis shall be adjusted
automatically without notice as of the opening of business on the effective date
of each change in the Prime Rate to account for such change.
"BORROWER" has the meaning specified in the introductory provision hereof.
"BORROWING BASE" means, at the time in question, an amount equal to the sum
of (i) 85% of the net amount of the Borrower's and its Subsidiaries (other than
CFI) ownership interest in Eligible Accounts, plus (ii) an amount equal to 50%
of Eligible Inventory.
"BORROWING BASE REPORT" means a report, signed by an Authorized Signatory,
in substantially the form of EXHIBIT E, appropriately completed.
"BUSINESS DAY" means a day on which commercial banks are open (a) for the
transaction of business in Dallas, Texas, and, (b) with respect to any LIBOR
Advance, for the transaction of international business (including dealings in
U.S. dollar deposits) in London, England.
"CAPITAL" means, for any date of calculation, for the Borrower and its
Subsidiaries, on a consolidated basis determined in accordance with GAAP, the
sum of (a) Funded Debt plus (b) Net Worth.
"CAPITAL EXPENDITURES" means, for any period, expenditures made by the
Borrower and its Subsidiaries to acquire or construct fixed assets, plant and
equipment (including renewals, improvements and replacements during such period
and the aggregate amount of items leased or acquired under Capitalized Lease
Obligations at the cost of the item, but excluding capital expenditures made
with insurance proceeds to the extent used to replace or repair damaged fixed
assets, plant and equipment) computed in accordance with GAAP, consistently
applied.
"CAPITAL STOCK" means, as to any Person, the equity interests in such
Person, including, without limitation, the shares of each class of capital stock
in any Person that is a corporation, and each class of partnership interest
(including, without limitation, general, limited and preference units) in any
Person that is a partnership.
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"CAPITALIZED LEASE OBLIGATIONS" means that portion of any obligation of the
Borrower or any Subsidiary of the Borrower as lessee under a lease which at the
time are recorded as capitalized lease obligations on the balance sheet of the
Borrower or such Subsidiary prepared in accordance with GAAP.
"CASH AND CASH EQUIVALENTS" means with respect to the Borrower and each
Subsidiary of the Borrower (i) cash (which, after the occurrence of an Event of
Default, shall exclude any cash proceeds of Accounts), (ii) securities issued or
directly and fully guaranteed or insured by the United States Government or any
agency or instrumentality thereof having maturities of not more than six months
from the date of acquisition, (iii) certificates of deposit and eurodollar time
deposits with maturities of six months or less from the date of acquisition,
bankers' acceptances with maturities not exceeding six months and overnight bank
deposits, in each case with any Lender or with any domestic commercial bank
having capital and surplus in excess of $500,000,000, (iv) repurchase
obligations with a term of not more than seven days for underlying securities of
the types described in clauses (ii) and (iii) entered into with any financial
institution meeting the qualifications specified in clause (iii) above,
(v) commercial paper issued by any Lender or the parent corporation of any
Lender, and commercial paper rated A-1 or the equivalent thereof by Standard &
Poor's Ratings Group, a Division of ▇▇▇▇▇▇-▇▇▇▇, Inc., a New York corporation,
or P-1 or the equivalent thereof by ▇▇▇▇▇'▇ Investors Service, Inc., and in each
case maturing within six months after the date of acquisition, and (vi) a
readily redeemable "money market mutual fund" advised by a bank described in
clause (iii) hereof, or an investment advisor registered under Section 203 of
the Investment Advisors Act of 1940, that has and maintains an investment policy
limiting its investments primarily to instruments of the types described in
clauses (i) through (v) hereof and having on the date of such Investment total
assets of at least One Hundred Million Dollars ($100,000,000.00).
"CFI" means CSI Funding, Inc., a Delaware corporation and wholly-owned
Subsidiary of the Borrower, as purchaser under the RPA.
"CFI NOTE" means the "Subordinated Note" as defined by the RPA, and any and
all renewals, extensions, modifications, amendments, supplements or restatements
thereof.
"CHANGE OF CONTROL" means the occurrence of any of the following events
after the Agreement Date: (a) any Person or any Persons acting together which
would constitute a "group" (a "GROUP") for purposes of Section 13(d) of the
Securities Exchange Act of 1934, as amended (the "EXCHANGE ACT"), or any
successor provision thereto, other than the Group whose nominees constituted a
majority of the board of directors of the Borrower as of the close of business
on the Agreement Date, together with any Affiliates or Related Persons thereof,
shall beneficially own (as defined in Rule 13d-3 of the Securities and Exchange
Commission under the Exchange Act or any successor provision thereto) at least
30% of the aggregate voting power of all classes of Capital Stock of the
Borrower entitled to vote generally in the election of directors of the
Borrower; or (b) any Person or Group, other than any Person or Group whose
nominees constituted a majority of the board of directors of the Borrower as of
the close of business on the Agreement Date, together with any Affiliates or
Related Persons thereof, shall succeed in having sufficient of its or their
nominees elected to the Board of Directors of the
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Borrower, such that such nominees, when added to any existing director remaining
on the Board of Directors of the Borrower after such election who is an
Affiliate or Related Person of such Group, shall constitute a majority of the
Board of Directors of the Borrower.
"CLIENTLINK NOTE" means that certain promissory note, dated September 5,
1996, in the original principal amount of $2,500,000 executed and delivered by
ClientLink, Inc. and payable to the order of the Borrower, and any and all
renewals, extensions, modifications, amendments, supplements or restatements
thereof.
"CODE" means the Internal Revenue Code of 1986, as amended.
"COLLATERAL" means any collateral hereafter granted by any Person to the
Administrative Lender for the benefit of the Lenders to secure the Obligations.
"COLLATERAL DOCUMENT" means any document under which Collateral is granted
and any document related thereto.
"COMMITMENT FEE" has the meaning specified in SECTION 2.4(a) hereof.
"COMMITMENTS" means, collectively, the Facility A Commitment and the
Facility B Commitment, as reduced from time to time pursuant to SECTION 2.6
hereof.
"COMPLIANCE CERTIFICATE" means a certificate, signed by an Authorized
Signatory, in substantially the form of EXHIBIT G, appropriately completed.
"CONTROL" or "CONTROLLED BY" or "UNDER COMMON CONTROL" means possession,
directly or indirectly, of power to direct or cause the direction of management
or policies (whether through ownership of voting securities, by contract or
otherwise); provided, however, that in any event any Person which beneficially
owns, directly or indirectly, 10% or more (in number of votes) of the securities
having ordinary voting power for the election of directors of a corporation
shall be conclusively presumed to control such corporation.
"CONTROLLED GROUP" means as of the applicable date, as to any Person not an
individual, all members of a controlled group of corporations and all trades or
businesses (whether or not incorporated) which are under common control with
such Person and which, together with such Person, are treated as a single
employer under Section 414(b), (c), (m) or (o) of the Code; provided, however,
that the Subsidiaries of the Borrower shall be deemed to be members of the
Borrower's Controlled Group.
"CREDITOR" means a creditor of the Borrower or any Subsidiary of the
Borrower and shall not include any Affiliate of any such creditor.
"CURRENT MATURITIES" means, with respect to any Person, the principal
portion payable by such Person on Long Term Debt during the twelve-month period
immediately succeeding the date of determination.
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"DEBTOR RELIEF LAWS" means any applicable liquidation, conservatorship,
bankruptcy, moratorium, rearrangement, insolvency, reorganization or similar
debtor relief Laws affecting the rights of creditors generally from time to time
in effect.
"DEED OF TRUST" means any Deed of Trust or Mortgage, as applicable,
relating to the real property of the Borrower purchased with the proceeds of the
Facility B Advances, in a form acceptable to the Administrative Lender, as
amended, modified, renewed, supplemented or restated from time to time.
"DEFAULT" means an Event of Default and/or any of the events specified in
SECTION 8.1, regardless of whether there shall have occurred any passage of time
or giving of notice that would be necessary in order to constitute such event an
Event of Default.
"DEFAULT RATE" means a simple per annum interest rate equal to (a) with
respect to Base Rate Advances the lesser of (i) the Highest Lawful Rate or
(ii) the Prime Rate plus 2.00% or (b) with respect to LIBOR Advances, the lesser
of (i) the Highest Lawful Rate or (ii) the LIBOR Basis plus 2% in excess of the
Applicable Rate Margin then in effect.
"DETERMINING LENDERS" means, on any date of determination, any combination
of the Lenders having at least 66-2/3% of the aggregate amount of the Advances
(which for purposes of the calculation shall include for each Lender an amount
equal to the product of such Lender's Specified Percentage multiplied by the
aggregate principal amount of Swing Line Advances outstanding) then outstanding;
provided, however, that if there are no Advances outstanding hereunder,
"DETERMINING LENDERS" shall mean any combination of Lenders whose Specified
Percentages aggregate at least 66-2/3%.
"DIVIDEND" means, as to any Person, (a) any declaration or payment of any
dividend (other than a stock dividend) on, or the making of any distribution on
account of, any shares of Capital Stock of, or other similar interest in, such
Person and (b) any purchase, redemption, or other acquisition or retirement for
value of any shares of Capital Stock of, or similar interest in, such Person.
"DOLLAR" or "$" means the lawful currency of the United States of America.
"DOMESTIC SUBSIDIARY" means any Subsidiary of the Borrower other than a
Foreign Subsidiary.
"EBIT" means, for any period, determined in accordance with GAAP on a
consolidated basis for the Borrower and its Subsidiaries, the sum of (a) Pretax
Net Income (excluding therefrom, to the extent included in determining Pretax
Net Income, any items of extraordinary gain, including net gains on the sale of
assets other than asset sales in the ordinary course of business, and adding
thereto, to the extent included in determining Pretax Net Income, any items of
extraordinary loss, including net losses on the sale of assets other than asset
sales in the ordinary course of business), plus (b) interest expense.
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"EBITDA" means, for any period, determined in accordance with GAAP on a
consolidated basis for the Borrower and its Subsidiaries, the sum of (a) EBIT
plus (b) depreciation, amortization and other non-cash charges (to the extent
included in determining EBIT).
"EFC" means Enterprise Funding Corporation, a Delaware corporation, as
purchaser of a portion of the RPA Interest as provided by the TAA.
"ELIGIBLE ACCOUNTS" means at the time of any determination thereof, the net
amount of the Accounts of the Obligors which are reasonably acceptable to the
Determining Lenders in their discretion for the purposes of determining the
Borrowing Base and as to which the following requirements have been fulfilled,
less any reserves against such Eligible Accounts as the Determining Lenders may,
from time to time in their sole discretion without prior notice, deem to be
necessary or appropriate:
(i) An Obligor has lawful and absolute (subject to the RPA Interest)
title to such Account;
(ii) Such Account is a valid, legally enforceable obligation of the Person
who is obligated under such Account (the "ACCOUNT DEBTOR") for goods or services
that have been delivered or that have been rendered to such Person;
(iii) If such Account and other Accounts are owed by a Creditor of the
Borrower or any Subsidiary of the Borrower, the amount of all such Accounts
included as Eligible Accounts shall be the amount by which all such Accounts
exceeds the aggregate accounts payable owed by the Borrower or such Subsidiary
to such Creditor;
(iv) There has been excluded from such Account any portion that is
subject to any asserted dispute, offset, discount, counterclaim or other claim
or defense on the part of the account debtor or to any asserted claim on the
part of the account debtor denying liability under such Account;
(v) The applicable Obligor(s) have full and unqualified right to
assign and grant a security interest in such Account (or the applicable
Obligor's ownership interest in such Account) to Administrative Lender as
security for the Obligations;
(vi) Such Account is not evidenced by chattel paper, promissory note or
other instrument payable to any Obligor;
(vii) Such Account has not been due and payable for more than 120 days
from the invoice date; provided, that, unless Determining Lenders agree
otherwise, no Accounts from an account debtor shall constitute Eligible Accounts
if 50% or more of the aggregate dollar amount of all Accounts owed to the
Borrower or any Subsidiary of the Borrower by such account debtor have been due
and payable for 120 days or more from their respective invoice dates;
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(viii) No account debtor in respect of such Account is (a) primarily
conducting business in and organized under the laws of any jurisdiction located
outside the United States of America, (b) the subject of a proceeding under any
Debtor Relief Laws or (c) a Tribunal;
(ix) No account debtor in respect of such Account is (a) an Affiliate
of the Borrower or any Subsidiary or (b) an employee of the Borrower or any
Subsidiary of the Borrower;
(x) The interest of the applicable Obligor(s) in such Account is
(a) subject to a fully perfected first priority (subject, in the case of the
Borrower, to Liens in favor of the Administrative Secured Party under the MSAA)
security interest in favor of Administrative Lender pursuant to the Loan
Documents, prior to the rights of, and enforceable as such against, any other
Person (including holders of a purchase money security interest) and (b) not
subject to any Lien in favor of any other Person except for Liens in favor of
the Administrative Secured Party under the MSAA.
(xi) Such Account was generated in the ordinary course of the
Borrower's business, represents amounts payable in respect of goods that have
been delivered or services that have been performed and is denominated and
payable only in United States dollars in the United States; and
(xii) Such Account is required to be paid in full not more than 30 days
after the original invoice date and satisfies all applicable requirements of the
Borrower's credit and collection policies and practices, as in effect from time
to time.
"ELIGIBLE INVENTORY" means, at the time of any determination thereof, each
item of the Obligors' Inventory (excluding work-in-process, obsolete Inventory,
Inventory on consignment and Inventory used for demonstrations and display)
valued at the lower of cost or market value (allocated on a first-in, first-out
basis), which is reasonably acceptable to the Determining Lenders in their
discretion for purposes of determining the Borrowing Base and as to which the
following requirements have been fulfilled to the satisfaction of the
Determining Lenders, less any reserves against such Eligible Inventory as the
Determining Lenders may, from time to time in their sole discretion without
prior notice, deem to be necessary or appropriate:
(i) An Obligor has lawful and absolute title to such Inventory;
(ii) Such Inventory is not defective or unmerchantable goods;
(iii) Such Inventory is located in the United States of America;
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(iv) Such Inventory is (a) subject to a fully perfected first priority
security interest in favor of Administrative Lender pursuant to the Loan
Documents, prior to the rights of, and enforceable as such against, any other
Person (including holders of a purchase money security interest) and (b) not
subject to any Lien in favor of any other Person;
(v) The sale of such Inventory by Administrative Lender (or its
successors or assigns) upon an Event of Default is not subject to any Necessary
Authorization, restriction or limitation;
(vi) Such Inventory was not supplied (directly or through an agent or
bailee) to the Borrower or any Subsidiary of the Borrower by Compaq Computer
Corporation and such Inventory has not been, and will not be, attached to,
integrated into or installed on any such Inventory supplied by Compaq Computer
Corporation while such Inventory is owned by the Borrower or any Subsidiary of
the Borrower;
(vii) Such Inventory was not manufactured by, or provided to the
Borrower or any Subsidiary of the Borrower by, Hewlett-Packard Company and such
Inventory has not been, and will not be, attached to, integrated into or
installed on any such Inventory manufactured or provided by Hewlett-Packard
Company while such Inventory is owned by the Borrower or any Subsidiary of the
Borrower;
(viii) Such Inventory was not manufactured by, or sold or provided to
the Borrower or any Subsidiary of the Borrower by, Apple Computer, Inc. or any
company affiliated with Apple Computer, Inc. and such Inventory has not been,
and will not be, attached to, integrated into or installed on any such Inventory
manufactured, sold or provided by Apple Computer, Inc. or any company affiliated
with Apple Computer, Inc. while such Inventory is owned by the Borrower or any
Subsidiary of the Borrower;
(ix) Such Inventory was not manufactured by, or sold to the Borrower
or any Subsidiary of the Borrower by, International Business Machines
Corporation or any of its affiliates or Lexmark International, Inc.
(collectively, the "IBM PARTIES"), such Inventory does not bear the trademark,
trade name or label of any of the IBM Parties and such Inventory has not been,
and will not be, attached to, integrated into or installed on any such Inventory
manufactured by, sold by or bearing the trademark, trade name or label of any of
the IBM Parties while such Inventory is owned by the Borrower or any Subsidiary
of the Borrower;
(x) Such Inventory is not included in the items classified as "Other
Accessories" in the Borrower's monthly DIMS Valuation Report; and
(xi) Such Inventory is not included in the items classified as "▇▇▇▇
Inventory" in the Borrower's monthly ▇▇▇▇ Valuation Report.
- 10 -
Provided, however, that until November 25, 1996, the failure of the
Borrower to deliver Landlord's Waivers to the Administrative Lender shall not
preclude the Borrower from including in "Eligible Inventory" any of its
inventory that otherwise satisfies the foregoing requirements. Provided
further, however, that if, on or before November 25, 1996, the Borrower has not
delivered to the Administrative Lender Landlord's Waivers covering the
Borrower's Eastern Distribution Center warehouse in Paulsboro, New Jersey, the
Borrower's Western Distribution Center warehouse in Stockton, California, the
Borrower's RMA location on Lombardy Lane in Dallas, Texas and the Borrower's SLC
location in Coppell, Texas, none of the Borrower's Inventory shall thereafter
constitute "Eligible Inventory", or otherwise be included in the calculation of
the Borrowing Base, until all of such Landlord's Waivers have been delivered to
the Administrative Lender.
"EQUIPMENT" has the meaning assigned to such term in the UCC.
"EQUITY" means shares of capital stock or partnership, profits, capital or
member interest, or options, warrants or any other right to subscribe for or
otherwise acquire capital stock or a partnership, profits, capital or member
interest, of the Borrower or any Subsidiary of the Borrower.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended from time to time, and any regulation promulgated thereunder.
"ERISA EVENT" means, with respect to the Borrower and its Subsidiaries,
(a) a Reportable Event (other than a Reportable Event not subject to the
provision for 30-day notice to the PBGC pursuant to regulations issued under
Section 4043 of ERISA), (b) the withdrawal of any such Person or any member of
its Controlled Group from a Plan subject to Title IV of ERISA during a plan year
in which it was a "substantial employer" as defined in Section 4001(a)(2) of
ERISA, (c) the filing of a notice of intent to terminate under Section 4041(c)
of ERISA, (d) the institution of proceedings to terminate a Plan by the PBGC,
(e) the failure to make required contributions which could result in the
imposition of a lien under Section 412 of the Code or Section 302 of ERISA, or
(f) any other event or condition which might reasonably be expected to
constitute grounds under Section 4042 of ERISA for the termination of, or the
appointment of a trustee to administer, any Plan or the imposition of any
liability under Title IV of ERISA other than PBGC premiums due but not
delinquent under Section 4007 of ERISA.
"EVENT OF DEFAULT" means any of the events specified in SECTION 8.1,
provided that any requirement for notice or lapse of time has been satisfied.
"EXISTING CREDIT AGREEMENT" has the meaning specified in the Background
provision hereof.
"FACILITY A ADVANCE" means an Advance made pursuant to SECTION 2.1(a)
hereof.
"FACILITY A COMMITMENT" means $200,000,000.00, as reduced pursuant to
SECTION 2.6 hereof.
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"FACILITY A MATURITY DATE" means September 25, 1999, or the earlier date of
termination in whole of the Facility A Commitment pursuant to SECTION 2.6 or 8.2
hereof.
"FACILITY A NOTES" means the promissory notes of Borrower evidencing
Facility A Advances hereunder, substantially in the form of EXHIBIT A hereto,
together with any extension, renewal, or amendment thereof, or substitution
therefor.
"FACILITY B ADVANCE" means an Advance made pursuant to SECTION 2.1(b)
hereof.
"FACILITY B COMMITMENT" means $25,000,000.00, as reduced from time to time
pursuant to SECTION 2.6 hereof.
"FACILITY B COMMITMENT TERMINATION" means the earlier of (a) September 24,
1997 or (b) the date on which the Facility B Advances are made.
"FACILITY B MATURITY DATE" means September 25, 1999, or the earlier date of
termination in whole of the Facility B Commitment pursuant to SECTION 2.6 or 8.2
hereof.
"FACILITY B NOTES" means the promissory notes of Borrower evidencing
Facility B Advances hereunder, substantially in the form of EXHIBIT B hereto,
together with any extension, renewal, or amendment thereof, or substitution
therefor.
"FEDERAL FUNDS RATE" means, for any day, the rate per annum equal to the
weighted average of the rates on overnight Federal funds transactions with
members of the Federal Reserve System arranged by Federal funds brokers on such
day, as published by the Federal Reserve Bank of Dallas on the Business Day next
succeeding such day, provided that (a) if such day is not a Business Day, the
Federal Funds Rate for such day shall be such rate on such transactions on the
next preceding Business Day as so published on the next succeeding Business Day,
and (b) if no such rate is so published on such next succeeding Business Day,
the Federal Funds Rate for such day shall be the average of the quotations for
the day for such transactions received by the Administrative Lender from three
Federal funds brokers of recognized standing selected by it.
"FIXED CHARGES" means, for any date of calculation, calculated for Borrower
and its Subsidiaries on a consolidated basis, the sum of, without duplication,
(a) the greater of (i) Current Maturities and (ii) 10% of Funded Debt, plus
(b) interest expense (including interest expense pursuant to Capitalized Lease
Obligations).
"FIXED CHARGE COVERAGE RATIO" means the ratio of EBITDA to Fixed Charges,
calculated for the four consecutive fiscal quarters immediately preceding the
date of calculation.
"FOREIGN SUBSIDIARY" means any Subsidiary of the Borrower which is not
organized under the laws of any state of the United States of America or the
District of Columbia.
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"FUNDED DEBT" means, as of any date of determination, determined for the
Borrower and its Subsidiaries on a consolidated basis, (i) indebtedness for
borrowed money, (ii) obligations evidenced by bonds, debentures, notes or other
similar instruments, (iii) obligations to pay the deferred purchase price of
property or services other than trade payables incurred in the ordinary course
of business, (iv) Capitalized Lease Obligations and (v) Net Exposure Under
Securitization.
"GAAP" means generally accepted accounting principles applied on a
consistent basis, set forth in the Opinions of the Accounting Principles Board
of the American Institute of Certified Public Accountants, or their successors
which are applicable in the circumstances as of the date in question. The
requirement that such principles be applied on a consistent basis shall mean
that the accounting principles applied in a current period are comparable in all
material respects to those applied in a preceding period.
"GUARANTIES" means, collectively, the Parent Guaranty and the Subsidiary
Guaranty.
"GUARANTOR" means each direct and indirect Subsidiary of the Borrower that
executes and delivers a Subsidiary Guaranty hereunder.
"GUARANTY" or "GUARANTEED", as applied to an obligation of another Person,
means (a) a guaranty, direct or indirect, in any manner, of any part or all of
such obligation, and (b) an agreement, direct or indirect, contingent or
otherwise, the practical effect of which is to assure in any way the payment or
performance (or payment of damages in the event of nonperformance) of any part
or all of such obligation, including, without limiting the foregoing, any
reimbursement obligations with respect to amounts which may be drawn by
beneficiaries of outstanding letters of credit; provided, however, Guaranty does
not mean (i) the endorsement of instruments for collection or deposit in the
ordinary course of business and (ii) customary indemnities given in connection
with asset sales in the ordinary course of business.
"HEDGE AGREEMENTS" means any and all agreements, devices or arrangements
designed to protect at least one of the parties thereto from the fluctuations of
interest rates, exchange rates or forward rates applicable to such party's
assets, liabilities or exchange transactions, including, but not limited to,
dollar-denominated or cross-currency interest rate exchange agreements, forward
currency exchange agreements, interest rate cap, swap or collar protection
agreements, and forward rate currency or interest rate options, as the same may
be amended or modified and in effect from time to time, and any and all
cancellations, buy backs, reversals, terminations or assignments of any of the
foregoing.
"HIGHEST LAWFUL RATE" means at the particular time in question the maximum
rate of interest which, under Applicable Law, the Lenders are then permitted to
charge on the Obligations. If the maximum rate of interest which, under
Applicable Law, the Lenders are permitted to charge on the Obligations shall
change after the date hereof, the Highest Lawful Rate shall be automatically
increased or decreased, as the case may be, from time to time as of the
effective time of each change in the Highest Lawful Rate without notice to the
Borrower.
- 13 -
"INDEBTEDNESS" means, with respect to any Person, without duplication,
(a) all obligations for borrowed money, (b) all obligations evidenced by bonds,
debentures, notes or similar instruments, (c) all obligations under conditional
sale or other title retention agreements relating to property or assets
purchased by such Person, (d) all obligations issued or assumed as the deferred
purchase price of property or services, (e) all obligations secured by any Lien
on any property or asset owned by such Person (other than accounts payable
arising in the ordinary course of business), whether or not the obligation
secured thereby shall have been assumed (provided that, unless such obligations
shall have been assumed, for purposes of this definition the amount of such
Indebtedness at any time shall be deemed to equal the fair market value of such
property or asset at such time), (f) to the extent not otherwise included, all
Capitalized Lease Obligations of such Person, all obligations in respect of
letters of credit, bankers' acceptances and similar instruments, and all
obligations under Hedge Agreements, (g) any Guaranty of such Person of any
obligation of another Person constituting obligations of a type set forth above
and (h) the Net Exposure Under Securitization.
"INDEMNIFIED MATTERS" has the meaning specified in SECTION 5.9(a) hereof.
"INDEMNITEES" has the meaning specified in SECTION 5.9(a) hereof.
"INITIAL PRICING PERIOD" means the period from and including the Agreement
Date to and including the Rate Adjustment Date.
"INTANGIBLE ASSETS" means those assets which are treated as intangible
pursuant to GAAP, and in any event including, without limitation:
(i) obligations, if any, owing by Affiliates to the Borrower or any Subsidiary
of the Borrower, (ii) the amount, if any, by which inventory exceeds the lower
of cost or market value thereof, (iii) the value of any inventory which is
obsolete or damaged or is otherwise deemed by the Administrative Lender not to
be of a marketable quality commensurate with the inventory of the Borrower and
its Subsidiaries as a whole; (iv) accounts receivable which are deemed by the
Borrower, any of its Subsidiaries or the Administrative Lender to be
uncollectible or which should be subject to a reserve for bad debts in
accordance with GAAP or which are subject to claims or setoffs; (v) leases and
leasehold improvements; (vi) any asset which is intangible or lacks intrinsic
and marketable value or collectibility, including without limitation goodwill,
noncompetition agreements, patents, copyrights, trademarks, franchises or
organization or research and development costs; (vii) organizational and
experimental expense; and (viii) unamortized debt discount and expense.
"INTERCREDITOR AGREEMENTS" collectively means the following certain
agreements: (i) Amended and Restated Intercreditor Agreement dated effective as
of April 1, 1996 among NationsBank of Texas, N.A., in its capacity as a lender,
the Borrower, IBM Credit Corporation and NationsBank of Texas, N.A. in its
capacity as Administrative Secured Party under the MSAA, (ii) Subordination
Agreement dated August 22, 1994 among NationsBank of Texas, N.A., in its
capacity as a lender, the Borrower, IBM Credit Corporation and Hewlett-Packard
Company, (iii) Intercreditor Agreement dated December 27, 1993 among NationsBank
of Texas, N.A., in its capacity as a lender, the Borrower and Compaq Computer
Corporation, and (iv) any other intercreditor agreement hereafter entered into
among NationsBank of Texas, N.A., in its
- 14 -
capacity as the Administrative Lender, the Borrower and any Person that is a
vendor to the Borrower of Inventory, as any of the foregoing may be renewed,
extended, modified, amended, supplemented or restated from time to time.
"INTEREST PERIOD" means the period beginning on the day any LIBOR Advance
is made and ending one, two, three or six months thereafter (as the Borrower
shall select); PROVIDED, HOWEVER, that all of the foregoing provisions are
subject to the following:
(i) if any Interest Period would otherwise end on a day which is not a
Business Day, such Interest Period shall be extended to the next succeeding
Business Day, unless, with respect to a LIBOR Advance, the result of such
extension would be to extend such Interest Period into another calendar month,
in which event such Interest Period shall end on the immediately preceding
Business Day;
(ii) any Interest Period with respect to a LIBOR Advance that begins on
the last Business Day of a calendar month (or on a day for which there is no
numerically corresponding day in the calendar month at the end of such Interest
Period) shall end on the last Business Day of a calendar month; and
(iii) the Borrower may not select any Interest Period which ends after the
date of a scheduled principal payment on the Advances unless, after giving
effect to such selection, the aggregate unpaid principal amount of the LIBOR
Advances for which Interest Periods end after such scheduled principal payment
shall be equal to or less than the principal amount to which the Advances or
Facility B Commitment are required to be reduced after such scheduled principal
payment is made.
"INVENTORY" has the meaning assigned to such term in the UCC.
"INVESTMENT" means any acquisition of all or substantially all assets of
any Person, or any direct or indirect purchase or other acquisition of, or
beneficial interest in, capital stock or other securities of any other Person,
or any direct or indirect loan, advance (other than loans or advances to
employees for moving and travel expenses, drawing accounts and similar
expenditures in the ordinary course of business) or capital contribution to, or
investment in any other Person, including without limitation the purchase of
accounts receivable of any other Person that are not current assets or do not
arise in the ordinary course of business.
"ISSUING BANK" means NationsBank of Texas, N.A., a national banking
association, in its capacity as issuer of the Letters of Credit.
"LANDLORD'S WAIVER" means an agreement in form and substance satisfactory
to the Administrative Lender pursuant to which the landlord of any leased
location where any Collateral is located shall waive its rights, if any, to the
Collateral and shall grant to the Administrative Lender rights to enter upon the
premises to inspect, remove or dispose of the Collateral.
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"LAW" means any statute, law, ordinance, regulation, rule, order, writ,
injunction, or decree of any Tribunal.
"LENDER" means each financial institution shown on the signature pages
hereof so long as such financial institution maintains a portion of the
Commitments or is owed any part of the Obligations (including the Administrative
Lender in its individual capacity), and each Assignee that hereafter becomes a
party hereto pursuant to SECTION 11.6 hereof, subject to the limitations set
forth therein.
"L/C RELATED DOCUMENTS" has the meaning specified in SECTION 2.15(e)
hereof.
"LETTER OF CREDIT" has the meaning specified in SECTION 2.15(a) hereof.
"LETTER OF CREDIT AGREEMENT" has the meaning specified in SECTION 2.15(b)
hereof.
"LETTER OF CREDIT FACILITY" has the meaning specified in SECTION 2.15(a)
hereof.
"LEVERAGE RATIO" means, for any date of calculation, the ratio of Funded
Debt as of the date of determination to EBITDA calculated for the four
consecutive fiscal quarters immediately preceding the date of calculation.
"LIBOR ADVANCE" means an Advance which the Borrower requests to be made as
a LIBOR Advance or which is reborrowed as a LIBOR Advance, in accordance with
the provisions of SECTION 2.2 hereof.
"LIBOR BASIS" means a simple per annum interest rate equal to the lesser of
(a) the Highest Lawful Rate, or (b) the sum of the LIBOR Rate plus the
Applicable LIBOR Rate Margin. The LIBOR Basis shall, with respect to LIBOR
Advances subject to reserve or deposit requirements, be subject to premiums for
such reserve or deposit requirements assessed by each Lender to the extent
incurred by such Lender, which are payable directly to each Lender. Once
determined, the LIBOR Basis shall remain unchanged during the applicable
Interest Period.
"LIBOR LENDING OFFICE" means, with respect to a Lender, the office
designated as its LIBOR Lending Office on SCHEDULE 1 attached hereto, and such
other office of the Lender or any of its Affiliates hereafter designated by
notice to the Borrower and the Administrative Lender.
"LIBOR RATE" means, for any LIBOR Advance for any Interest Period therefor,
the rate per annum (rounded upwards, if necessary, to the nearest 1/100 of 1%)
appearing on Telerate Page 3750 (or any successor page) as the London interbank
offered rate for deposits in Dollars at approximately 11:00 a.m. (London time)
two Business Days prior to the first day of such Interest Period for a term
comparable to such Interest Period. If for any reason such rate is not
available, the term "LIBOR RATE" shall mean, for any LIBOR Advance for any
Interest Period therefor, the rate per annum (rounded upwards, if necessary, to
the nearest 1/100 of 1%) appearing on Reuters Screen LIBO Page as the London
interbank offered rate for deposits in
- 16 -
Dollars at approximately 11:00 a.m. (London time) two Business Days prior to the
first day of such Interest Period for a term comparable to such Interest Period;
PROVIDED, HOWEVER, if more than one rate is specified on Reuters Screen LIBO
Page, the applicable rate shall be the arithmetic mean of all such rates.
"LIEN" means, with respect to any property, any mortgage, lien, pledge,
collateral assignment, hypothecation, charge, security interest, title retention
agreement, levy, execution, seizure, attachment, garnishment or other similar
encumbrance of any kind in respect of such property, whether or not ▇▇▇▇▇▇,
vested or perfected.
"LITIGATION" means any proceeding, claim, lawsuit, arbitration, and/or
investigation by or before any Tribunal, including, without limitation,
proceedings, claims, lawsuits, and/or investigations under or pursuant to any
environmental, occupational, safety and health, antitrust, unfair competition,
securities, Tax or other Law, or under or pursuant to any contract, agreement or
other instrument.
"LOAN DOCUMENTS" means this Agreement, the Notes, the Security Agreement,
the Pledge Agreement, the Subsidiary Guaranty, any other Collateral Document,
the Administrative Lender Fee Letter, the Upfront Fee Letter, any Hedge
Agreements entered into with any Lender, and any other document or agreement
executed or delivered from time to time by the Borrower, any Subsidiary of the
Borrower or any other Person in connection herewith or as security for the
Obligations.
"LONG TERM DEBT" means any obligation which is due one year or more from
the date of creation thereof which under GAAP is shown as a liability, plus
(without duplication) amounts equal to the aggregate net rentals (after making
allowances for any interest, taxes or other expenses included therein) payable
more than one year from the date of creation thereof under Capitalized Lease
Obligations.
"MATERIAL ADVERSE EFFECT" means any act or circumstance or event that
(a) could reasonably be expected to be material and adverse to the business,
financial condition, results of operations, or business prospects of the
Borrower and its Subsidiaries taken as a whole, or (b) in any manner whatsoever
does or could reasonably be expected to materially and adversely affect the
validity or enforceability of any Loan Document.
"MSAA" means the certain Master Security and Administration Agreement,
dated as of April 1, 1996, among the Borrower, NationsBank of Texas, N.A. in its
capacity as the original Administrative Secured Party thereunder, NationsBank of
Texas, N.A., in its capacity as a lender, CFI and EFC, as the same may be
renewed, extended, modified, amended or restated from time to time.
"MULTIEMPLOYER PLAN" means, as to any Person, at any time, a "multiemployer
plan" within the meaning of Section 4001(a)(3) of ERISA and to which such Person
or any member of its Controlled Group is making, or is obligated to make
contributions or has made, or been obligated to make, contributions.
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"NATIONSBANK" means NationsBank of Texas, N.A., a national
banking association, in its capacity as a Lender hereunder.
"NCGI NOTE" means that certain subordinated convertible
note, dated October 31, 1995, in the original principal amount of
$3,000,000, executed and delivered by the Borrower and payable to
the order of Network Compatibility Group, Inc.
"NECESSARY AUTHORIZATION" means any right, franchise,
license, permit, consent, approval or authorization from, or any
filing or registration with, any Tribunal or any Person necessary
or appropriate to enable the Borrower or any Subsidiary of the
Borrower to maintain and operate its business and properties,
including the sale of any Inventory.
"NET CASH PROCEEDS" means, with respect to any sale, lease,
transfer or other disposition of any asset by any Person, the
amount of cash received by such Person in connection with such
transaction (including cash proceeds of any property received in
consideration of any such sale, lease, transfer or other
disposition) after deducting therefrom the aggregate, without
duplication, of the following amounts to the extent properly
attributable to such transaction or to the asset that is the
subject thereof: (i) reasonable brokerage commissions, legal
fees, finder's fees, financial advisory fees, accounting fees,
underwriting fees, investment banking fees and other similar
commissions and fees, in each case, to the extent paid or payable
by such Person; (ii) filing, recording or registration fees or
charges or similar fees or charges paid by such Person;
(iii) taxes paid or payable by such Person or any shareholder,
partner or member of such Person to governmental taxing
authorities as a result of such sale or other disposition; and
(iv) payment of the outstanding principal amount of, premium or
penalty, if any, and interest on any Indebtedness that is secured
by a Lien on the asset in question and that is required to be
repaid under the terms thereof as a result of such asset sale.
"NET EXPOSURE UNDER SECURITIZATION" means, for any date of
calculation, the sum of the following (without duplication): (i)
the "Net Investment" (as such term is defined in the TAA) as of
such date of calculation and (ii) any and all obligations and
liabilities of the Borrower, CFI or any other Subsidiary of
Borrower under, or in connection with, the Securitization, as of
such date of calculation, to the extent that same constitute
liabilities of the Borrower of any Subsidiary of the Borrower
under GAAP or would, under GAAP, constitute liabilities of the
Borrower or of any Subsidiary of the Borrower if the
Securitization was treated as an on balance sheet transaction.
"NET INCOME" means, with respect to any Person for any
period, the net income (loss) of such Person, after provisions
for taxes and extraordinary items, determined in accordance with
GAAP.
"NET WORTH" means, as of any date of calculation, for the
Borrower and its Subsidiaries, on a consolidated basis,
determined in accordance with GAAP, the consolidated total
stockholders' equity of the Borrower and its Subsidiaries.
-18-
"NOTES" means, collectively, the Facility A Notes, the
Facility B Notes and the Swing Line Note.
"NOTICE OF BORROWING" has the meaning specified in
SECTION 2.2(a) hereof.
"NOTICE OF ISSUANCE" has the meaning specified in
SECTION 2.15(b) hereof.
"OBLIGATIONS" means (a) all obligations of any nature
(whether matured or unmatured, fixed or contingent, including the
Reimbursement Obligations) of the Borrower or any other Obligor
to any Lender or the Administrative Lender under any of the Loan
Documents as they may be amended from time to time, and (b) all
obligations of the Borrower or any other Obligor for losses,
damages, expenses or any other liabilities of any kind that any
Lender may suffer by reason of a breach by the Borrower or any
other Obligor of any obligation, covenant or undertaking with
respect to any Loan Document payable by the Borrower or any other
Obligor under any Loan Document.
"OBLIGOR" means the Borrower and each Guarantor.
"OPERATING LEASE" means any operating lease, as defined in
the Financial Accounting Standard Board Statement of Financial
Accounting Standards No. 13, dated November, 1976 or otherwise in
accordance with GAAP.
"PARTICIPANT" has the meaning specified in SECTION 11.6(c)
hereof.
"PARTICIPATION" has the meaning specified in SECTION 11.6(c)
hereof.
"PAYMENT DATE" means the last day of the Interest Period for
any LIBOR Advance.
"PBGC" means the Pension Benefit Guaranty Corporation or any
entity succeeding to any or all of its functions under ERISA.
"PERMITTED LIENS" means, as applied to any Person:
(a) Any Lien in favor of the Lenders to secure the
Obligations hereunder;
(b) (i) Liens on real estate for ad valorem taxes not yet
delinquent, and (ii) Liens for taxes, assessments, governmental
charges, levies or claims that are not yet delinquent or that are
being diligently contested in good faith by appropriate
proceedings in accordance with SECTION 5.6 hereof and for which
adequate reserves shall have been set aside on such Person's
books, but only so long as no foreclosure, restraint, sale or
similar proceedings have been commenced with respect thereto;
-19-
(c) Liens of carriers, warehousemen, mechanics, laborers
and materialmen incurred in the ordinary course of business for
sums not yet due or being contested in good faith, if such
reserve or appropriate provision, if any, as shall be required by
GAAP shall have been made therefor;
(d) Liens incurred in the ordinary course of business in
connection with worker's compensation, unemployment insurance or
similar legislation;
(e) Easements, right-of-way, restrictions and other similar
encumbrances on the use of real property which do not interfere
in any material respect with the ordinary conduct of the business
of such Person;
(f) Liens created to secure the purchase price of assets
acquired (or existing on property at the time such property is
acquired) by such Person or created to secure Indebtedness
permitted by SECTION 7.1(c) or 7.1(d) hereof, which is incurred
solely for the purpose of financing the acquisition of such
assets and incurred at the time of acquisition or which exists
against such assets at the time of acquisition thereof, so long
as each such Lien shall at all times be confined solely to the
asset or assets so acquired (and proceeds thereof), and
refinancings thereof so long as any such Lien remains solely on
the asset or assets acquired and the amount of Indebtedness
related thereto is not increased;
(g) Liens in respect of judgments or awards for which
appeals or proceedings for review are being prosecuted and in
respect of which a stay of execution upon any such appeal or
proceeding for review shall have been secured, provided that
(i) such Person shall have established adequate reserves for such
judgments or awards, (ii) such judgments or awards shall be fully
insured (subject to customary deductibles) and the insurer shall
not have denied coverage, or (iii) such judgments or awards shall
have been bonded to the satisfaction of the Determining Lenders;
(h) Any Liens which are described on SCHEDULE 2 hereto, and
Liens resulting from the refinancing of the related Indebtedness,
provided that the Indebtedness secured thereby shall not be
increased and the Liens shall not cover additional assets of the
Borrower;
(i) Liens arising from filing Uniform Commercial Code
financing statements for precautionary purposes relating solely
to true leases of personal property permitted by this Agreement
under which the Borrower or any of its Subsidiaries is a lessee;
(j) Any zoning or similar law or right reserved to or
vested in any Tribunal to control or regulate the use of any real
property;
(k) Any other title exception with respect to real property
assets disclosed by any preliminary title report, title
commitment report or other search of title provided to the
Administrative Lender in accordance with this Agreement unless
disapproved by the Administrative Lender prior to the Agreement
Date;
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(l) Any Lien in favor of any Lender to secure any
obligations owed to such Lender in respect of any Hedge
Agreement;
(m) Liens incurred or deposits made to secure the
performance of bids, trade contracts (other than for
Indebtedness), statutory obligations, surety and appeal bonds,
performance bonds and other obligations of a like nature incurred
in the ordinary course of business;
(n) Liens securing Indebtedness or other obligations of the
Borrower or a Subsidiary of the Borrower owing to the Borrower or
a Subsidiary;
(o) Liens to the extent allowed under the MSAA or the
Intercreditor Agreements;
(p) any replacements or renewals of Liens (but no increases
in the Indebtedness secured thereby) permitted by clauses (f),
(h), (i), (j), (m) and (o) hereof; and
(q) Liens securing Indebtedness permitted by SECTION 7.1(K)
hereof, to the extent only that such Liens cover Inventory
manufactured by, purchased from or acquired from the holder of
such Indebtedness and any renewals thereof.
"PERMITTED REAL ESTATE EXPENDITURES" means those Capital
Expenditures in respect of real estate described on SCHEDULE 9
hereto.
"PERSON" means an individual, corporation, partnership,
trust or unincorporated organization, or a government or any
agency or political subdivision thereof.
"PLAN" means an employee benefit plan as defined in Section
3(3) of ERISA (including a Multiemployer Plan) pursuant to which
any employees of the Borrower, its Subsidiaries or any member of
their Controlled Group participate.
"PLEDGE AGREEMENT" means the pledge agreement, substantially
in the form of EXHIBIT F hereto, as amended, modified, renewed,
supplemented or restated from time to time, executed by the
Borrower.
"PRETAX NET INCOME" means net profit (or loss) before taxes
of the Borrower and its Subsidiaries, on a consolidated basis,
determined in accordance with GAAP.
"PRIME RATE" means, at any time, the prime interest rate
announced or published by the Reference Lender from time to time
as its reference rate for the determination of interest rates for
loans of varying maturities in United States dollars to United
States residents of varying degrees of creditworthiness and being
quoted at such time by the Reference Lender as its "prime rate;"
it being understood that such rate may not be the lowest rate of
interest charged by the Reference Lender.
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"PROJECTED UNUSED AVAILABILITY" means, as of any date of
determination, the amount, if any, by which the lesser of (i) the
Borrowing Base or (ii) the Facility A Commitment, exceeds the sum
of outstanding Facility A Advances, Swing Line Advances and
Reimbursement Obligations, plus the amount of pending Facility A
Advances, Swing Line Advances and Letters of Credit to be made or
issued on such date (calculated after giving effect to any
proposed increase in the RPA Interest as of such date).
"QUARTERLY DATE" means the last day of each March, June,
September and December, beginning December 31, 1996.
"RATE ADJUSTMENT DATE" means the date which is two Business
Days following the date that the Lenders receive the financial
statements for the fiscal year ending December 31, 1996, required
to be delivered pursuant to SECTION 6.2 hereof.
"RECEIVABLES" means all of the Obligors' present and future
accounts, contract rights and accounts receivable, whether now or
hereafter owned, held, or acquired by any Obligor and includes,
without limitation, all of the following insofar as same
constitute, result from or are attributable to any of the
foregoing: all of the Obligors' chattel paper, documents,
instruments, deposit accounts, general intangibles and accounts
receivable, including all rights to payment for goods sold or
leased or for services rendered, whether or not earned by
performance (and in any case where an account arises from the
sale of goods, the interest of the Obligor(s) in such goods);
lease receivables; license receivables; notes receivable; all
other rights to receive payments of money from any Person; the
Obligors' right, title and interest under equipment leases; the
Obligors' rights under any service, lease rental, consulting or
similar agreements; rights or claims under contracts; books of
account, customer lists and other records relating in any way to
any of the foregoing.
"REFERENCE LENDER" means NationsBank; provided that if the
NationsBank Commitments shall terminate and it shall have no
Advances and Letters of Credit outstanding hereunder, NationsBank
shall cease to be the Reference Lender, and Administrative Lender
(after consultation with Borrower) shall, with notice to Borrower
and Lenders, designate another Lender as the Reference Lender.
"REIMBURSEMENT OBLIGATIONS" means, in respect of any Letter
of Credit as at any date of determination, the sum of (a) the
maximum aggregate amount which is then available to be drawn
under such Letter of Credit plus (b) the aggregate amount of all
drawings under such Letter of Credit not theretofore reimbursed
by the Borrower.
"RELATED PERSON" means (a) any Affiliate of the Borrower,
(b) any individual or entity who directly or indirectly holds 10%
or more of any class of Capital Stock of the Borrower, (c) any
relative of such individual by blood, marriage or adoption not
more remote than first cousin and (d) any officer or director of
the Borrower.
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"RELEASE DATE" means the date on which the Notes have been
paid, all other Obligations due and owing have been paid and
performed in full, and the Commitments have been terminated.
"REPORTABLE EVENT" has the meaning set forth in Section
4043(b) of ERISA.
"RESTRICTED PAYMENTS" means, collectively, (i) Dividends and
(ii) any (A) payment or prepayment of principal, premium or
penalty on any Subordinated Debt of the Borrower or any
Subsidiary of the Borrower or any defeasance, redemption,
purchase, repurchase or other acquisition or retirement for
value, in whole or in part, of any Subordinated Debt (including,
without limitation, the setting aside of assets or the deposit of
funds therefor) and (B) prepayment of interest on any
Subordinated Debt.
"RIGHTS" means rights, remedies, powers and privileges.
"RPA" means the certain Receivables Purchase Agreement,
dated as of April 1, 1996, between the Borrower and CFI providing
for the sale by the Borrower to CFI and the purchase by CFI from
the Borrower (subject to the terms of the MSAA) of an undivided
fractional ownership interest in all Receivables now owned and
hereafter acquired and arising from time to time prior to
termination of the RPA, on the terms provided therein, as the
same may be renewed, extended, modified, amended or restated from
time to time.
"RPA INTEREST" means, at any time, the undivided fractional
ownership interest in the Receivables sold and transferred by the
Borrower to CFI pursuant to the RPA.
"SECURITIZATION" means, collectively, the transactions
evidenced and governed by the Securitization Documents.
"SECURITIZATION DOCUMENTS" means, collectively, the MSAA,
the RPA and the TAA and any other agreements or documents
executed or delivered by any Person in connection therewith.
"SECURITY AGREEMENT" means the security agreement relating
to all Receivables, Inventory and Equipment (and all computer
programs, applications, disks, plans, manuals, specifications,
files and other records pertaining thereto) of the Borrower and
its Subsidiaries, substantially in the form of EXHIBIT D hereto,
as amended, modified, renewed, supplemented or restated from time
to time.
"SOLVENT" means, with respect to any Person, that the fair
value of the assets of such Person (both at fair valuation and at
present fair saleable value) is, on the date of determination,
greater than the total amount of liabilities (including
contingent and unliquidated liabilities) of such Person as of
such date and that, as of such date, such Person is able to pay
all liabilities of such Person as such liabilities mature and
such Person does not have unreasonably small capital with which
to carry on its business. In computing the amount of contingent
or unliquidated liabilities at any time, such liabilities will be
computed at the amount which, in light of all the facts and
circumstances existing at such time, represents the amount that can
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reasonably be expected to become an actual or matured liability discounted to
present value at rates believed to be reasonable by such Person.
"SPECIAL COUNSEL" means the law firm of ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ &
▇▇▇▇▇▇▇, P.C., or such other legal counsel as the Administrative
Lender may select.
"SPECIFIED PERCENTAGE" means, as to any Lender, the
percentage indicated beside its name on the signature pages
hereof, or if applicable, specified in its most recent Assignment
Agreement.
"SUBORDINATED DEBT" means (i) the NCGI Note and (ii) any
other Indebtedness of the Borrower or any Subsidiary of the
Borrower having maturities and terms, and which is subordinated
to payment of the Obligations in a manner, approved in writing by
the Administrative Lender and the Determining Lenders, with only
such changes or amendments as are not prohibited by SECTION 7.22
hereof.
"SUBSEQUENT PRICING PERIOD" means the period from and
including the date which is the first day following the end of
the Initial Pricing Period to and including the Facility A
Maturity Date or Facility B Maturity Date, whichever is later.
"SUBSIDIARY" of any Person means any corporation,
partnership, joint venture, trust or estate or other Person of
which (or in which) more than 50% of:
(a) the outstanding capital stock having voting power
to elect a majority of the Board of Directors of such
corporation (irrespective of whether at the time capital
stock of any other class or classes of such corporation
shall or might have voting power upon the occurrence of any
contingency),
(b) the interest in the capital or profits of such
partnership or joint venture,
(c) the beneficial interest of such trust or estate, or
(d) the equity interest of such other Person,
is at the time directly or indirectly owned by such Person,
by such Person and one or more of its Subsidiaries or by one
or more of such Person's Subsidiaries; provided, however,
that no Person shall be deemed to be a Subsidiary of the
Borrower solely by virtue of the fact that certain shares of
the stock of such Person have been pledged to the Borrower.
"SUBSIDIARY GUARANTY" means a guaranty, substantially in the
form of EXHIBIT I hereto, executed and delivered by each
Guarantor, as such guaranty(ies) may be amended, supplemented,
modified, renewed or otherwise restated from time to time.
"SWING LINE ADVANCE" means an Advance made pursuant to
SECTION 2.1(c) hereof.
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"SWING LINE BANK" means NationsBank of Texas, N.A. and any
successor thereto appointed in accordance with SECTION 10.1(b)
hereof.
"SWING LINE FACILITY" has the meaning specified in
SECTION 2.1(c) hereof.
"SWING LINE NOTE" means the Swing Line Note of the Borrower
payable to the order of the Swing Line Bank, substantially in the
form of EXHIBIT C hereto, together with any extension, renewal,
or amendment thereof, or substitution therefor.
"TAA" means the certain Transfer and Administration
Agreement, dated as of April 1, 1996, between the Borrower, CFI,
EFC and NationsBank, N.A. in its capacity as Agent and a Bank
Investor thereunder, providing for the transfer by CFI to EFC and
the acceptance by EFC from CFI of a portion of the RPA Interest,
from time to time, on the terms provided therein, as the same may
be renewed, extended, modified, amended or restated from time to
time.
"TANGIBLE NET WORTH" means the sum of the following for the
Borrower and its Subsidiaries, on a consolidated basis,
determined in accordance with GAAP, (a) Net Worth minus (b) the
sum of the following (without duplication in respect of items
already deducted in arriving at Net Worth): Intangible Assets,
and any write-up in the book value of assets resulting from
revaluation thereof subsequent to December 31, 1995.
"TAXES" has the meaning specified in SECTION 2.14 hereof.
"TRIBUNAL" means any state, commonwealth, federal, foreign,
territorial, or other court or government body, subdivision,
agency, department, commission, board, bureau, or instrumentality
of a governmental or other regulatory or public body or
authority.
"UCC" means the Uniform Commercial Code of Texas, as amended
from time to time, and the Uniform Commercial Code applicable in
such other states as any Collateral may be located.
"UNUSED PORTION" means an amount equal to the result of
(a) the sum of (i) the Facility A Commitment plus (ii) the
Facility B Commitment minus (b) the sum of (i) the outstanding
Facility A Advances plus (ii) the outstanding Facility B Advances
plus (iii) the outstanding Reimbursement Obligations in respect
of the Letters of Credit.
"UPFRONT FEE LETTER" has the meaning specified in SECTION
2.4(b) hereof.
Section 1.2 AMENDMENTS AND RENEWALS. Each definition of
an agreement in this ARTICLE 1 shall include such agreement as
amended to date, and as amended or renewed from time to time in
accordance with its terms, but only with the prior written
consent of the Determining Lenders or all the Lenders as required
pursuant to SECTION 11.11 hereof.
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Section 1.3 CONSTRUCTION. The terms defined in this
Article 1 (except as otherwise expressly provided in this
Agreement) for all purposes shall have the meanings set forth in
SECTION 1.1 hereof, and the singular shall include the plural,
and vice versa, unless otherwise specifically required by the
context. All accounting terms used in this Agreement which are
not otherwise defined herein shall be construed in accordance
with GAAP on a consolidated basis for the Borrower and its
Subsidiaries, unless otherwise expressly stated herein.
ARTICLE 2
ADVANCES
Section 2.1 THE ADVANCES.
(a) FACILITY A ADVANCES. Each Lender severally agrees,
upon the terms and subject to the conditions of this Agreement,
to make Facility A Advances to the Borrower from time to time
until the Facility A Maturity Date in an aggregate amount not to
exceed its Specified Percentage of the Facility A Commitment less
its Specified Percentage of the aggregate amount of all
Reimbursement Obligations then outstanding (assuming compliance
with all conditions to drawing), for the purposes set forth in
SECTION 5.8(a) hereof. Subject to SECTION 2.9 hereof, Facility A
Advances may be repaid and then reborrowed. Notwithstanding any
provision in any Loan Document to the contrary, in no event shall
the principal amount of all outstanding Facility A Advances
exceed the lesser of (i) the result of (A) the Borrowing Base
minus (B) the aggregate outstanding Reimbursement Obligations and
Swing Line Advances and (ii) the Facility A Commitment.
(b) FACILITY B ADVANCES. Each Lender severally agrees,
upon the terms and subject to the conditions of this Agreement,
to make a one-time Facility B Advance to the Borrower prior to or
on the Facility B Commitment Termination Date in an amount not to
exceed its Specified Percentage of the Facility B Commitment for
the purposes set forth in SECTION 5.8(b) hereof. Notwithstanding
any provision in any Loan Document to the contrary, in no event
shall the principal amount of all outstanding Facility B Advances
exceed the Facility B Commitment. Facility B Advances may not be
repaid and then reborrowed.
(c) THE SWING LINE LOANS. The Borrower may request Swing
Line Bank to make, and Swing Line Bank agrees to make, on the
terms and conditions hereinafter set forth, advances ("SWING LINE
ADVANCES") to the Borrower from time to time on any Business Day
during the period from the date hereof until the Facility A
Maturity Date in an aggregate amount not to exceed at any time
outstanding the lesser of (i) $5,000,000, and (ii) the Borrowing
Base, less the sum of (A) the aggregate principal amount of
Facility A Advances then outstanding PLUS (B) the aggregate
principal amount of all Reimbursement Obligations then
outstanding (assuming compliance with all conditions to drawing)
(the "SWING LINE FACILITY"). Each Swing Line Advance shall be in
an amount not less than $100,000 and in multiples thereof. Each
Swing Line Advance shall be a Base Rate Advance. Within the
limits of the Swing Line Facility, Swing Line Advances may be
repaid and then reborrowed.
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(d) Any Advance shall, at the option of the Borrower as
provided in SECTION 2.2 hereof (and, in the case of LIBOR
Advances, subject to the provisions of ARTICLE 9 hereof), be made
as a Base Rate Advance or a LIBOR Advance; provided that there
shall not be outstanding, at any one time, more than ten LIBOR
Advances.
Section 2.2 MANNER OF BORROWING AND DISBURSEMENT.
(a) In the case of Base Rate Advances, the Borrower,
through an Authorized Signatory, shall give the Administrative
Lender prior to 11:00 a.m., Dallas, Texas time, on the date of
any proposed Base Rate Advance irrevocable written notice, or
irrevocable telephonic notice followed immediately by written
notice, in substantially the form of EXHIBIT J hereto (a "NOTICE
OF BORROWING") (provided, however, that the Borrower's failure to
confirm any telephonic notice in writing shall not invalidate any
notice so given), of its intention to borrow a Base Rate Advance
hereunder. Such notice of borrowing shall specify the requested
funding date, which shall be a Business Day, and the amount of
the proposed aggregate Base Rate Advances to be made by Lenders.
(b) In the case of LIBOR Advances, the Borrower, through an
Authorized Signatory, shall give the Administrative Lender at
least two Business Days' irrevocable written notice, or
irrevocable telephonic notice followed immediately by written
notice (provided, however, that the Borrower's failure to confirm
any telephonic notice in writing shall not invalidate any notice
so given) pursuant to a Notice of Borrowing, of its intention to
borrow a LIBOR Advance hereunder. Notice shall be given to the
Administrative Lender prior to 11:00 a.m., Dallas, Texas time, in
order for such Business Day to count toward the minimum number of
Business Days required. LIBOR Advances shall in all cases be
subject to ARTICLE 9 hereof. For LIBOR Advances, the notice of
borrowing shall specify the requested funding date, which shall
be a Business Day, the amount of the proposed aggregate LIBOR
Advances to be made by Lenders and the Interest Period selected
by the Borrower, provided that no such Interest Period shall
extend past the Facility A Maturity Date or the Facility B
Maturity Date, as appropriate, or prohibit or impair the
Borrower's ability to comply with SECTION 2.5 or 2.8 hereof.
(c) In the case of Swing Line Advances, the Borrower,
through an Authorized Signatory, shall give the Swing Line Bank
and the Administrative Lender prior to 12:00 noon, Dallas, Texas
time, on the date of any proposed Swing Line Advance irrevocable
written notice or irrevocable telephonic notice followed
immediately by written notice (provided, however, that the
Borrower's failure to confirm any telephonic notice in writing
shall not invalidate any notice so given), of its intention to
borrow or reborrow a Swing Line Advance. Such notice of
borrowing shall specify the requested funding date, which shall
be a Business Day, and the amount of the proposed Swing Line
Advance.
(d) Subject to SECTIONS 2.1 and 2.9 hereof, the Borrower
shall have the option (i) to convert at any time all or any part
(subject to the requirements contained herein as to the minimum
amounts of LIBOR Advances) of the outstanding Base Rate Advances
to LIBOR Advances and all or any part of the outstanding LIBOR
Advances to Base Rate Advances or (ii) upon expiration of any
Interest Period applicable to a LIBOR Advance, to continue all or
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any portion of such LIBOR Advance equal to $5,000,000 and
integral multiples of $1,000,000 in excess of that amount as a
LIBOR Advance and the succeeding Interest Period(s) of such
continued LIBOR Advance shall commence on the last day of the
Interest Period of the LIBOR Advance to be continued; provided,
however, (a) LIBOR Advances may only be converted into Base Rate
Advances on the expiration date of the Interest Period applicable
thereto and (b) notwithstanding anything in this Agreement to the
contrary, no outstanding Advance may be continued as, or
converted into, a LIBOR Advance when any Default or Event of
Default has occurred and is continuing. At least two Business
Days prior to a proposed conversion/continuation date, the
Borrower, through an Authorized Signatory, shall give the
Administrative Lender irrevocable written notice, or irrevocable
telephonic notice followed immediately by written notice
(provided, however, that the Borrower's failure to confirm any
telephonic notice in writing shall not invalidate any notice so
given), stating (i) the proposed conversion/continuation date
(which shall be a Business Day), (ii) the amount of the Advance
to be converted/continued, (iii) in the case of a conversion to,
or a continuation of, a LIBOR Advance, the requested Interest
Period, and (iv) in the case of a conversion of a Base Rate
Advance to a LIBOR Advance or continuation of a LIBOR Advance,
stating that no Default or Event of Default has occurred and is
continuing. If the Borrower shall fail to give any notice in
accordance with this SECTION 2.2(d), the Borrower shall be deemed
irrevocably to have requested that such LIBOR Advance be
converted to a Base Rate Advance in the same principal amount.
Notice shall be given to the Administrative Lender prior to 11:00
a.m., Dallas, Texas time, in order for such Business Day to count
toward the minimum number of Business Days required.
(e) The aggregate amount of Base Rate Advances to be made
by the Lenders on any day shall be in a principal amount which is
at least $3,000,000 and which is an integral multiple of
$500,000; provided, however, that such amount may equal the
unused amount of the applicable Commitment. The aggregate amount
of LIBOR Advances having the same Interest Period and to be made
by the Lenders on any day shall be in a principal amount which is
at least $5,000,000 and which is an integral multiple of
$1,000,000.
(f) The Administrative Lender shall promptly notify the
Lenders of each notice (other than with respect to a Swing Line
Advance) received from the Borrower pursuant to this Section.
Each Lender shall, not later than 2:00 p.m., Dallas, Texas time,
on the date of any Advance, deliver to the Administrative Lender,
at its address set forth herein, such Lender's Specified
Percentage of such Advance in immediately available funds in
accordance with the Administrative Lender's instructions. Prior
to 2:30 p.m., Dallas, Texas time, on the date of any Advance
hereunder, the Administrative Lender shall, subject to
satisfaction of the conditions set forth in ARTICLE 3, disburse
the amounts made available to the Administrative Lender by the
Lenders by (i) transferring such amounts by wire transfer
pursuant to the Borrower's instructions, or (ii) in the absence
of such instructions, crediting such amounts to the account of
the Borrower maintained with the Administrative Lender. All
Advances shall be made by each Lender according to its Specified
Percentage.
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(g) The Swing Line Bank shall, not later than 1:30 p.m.,
Dallas, Texas time, on the date of any Swing Line Advance,
deliver to the Administrative Lender at its address set forth
herein, the amount of such Swing Line Advance in immediately
available funds in accordance with the Administrative Lender's
instructions. Prior to 2:00 p.m., Dallas, Texas time, on the
date of any Swing Line Advance, the Administrative Lender shall,
subject to the conditions set forth in ARTICLE 3, disburse the
amount made available to the Administrative Lender by the Swing
Line Bank by (i) transferring such amounts by wire transfer
pursuant to the Borrower's instruction or (ii) in the absence of
such instructions, crediting such amounts to the account of the
Borrower maintained with the Administrative Lender. Forthwith
upon demand by the Swing Line Bank and in any event upon the
making of the request or the granting of the consent specified by
SECTION 8.2 to authorize the Administrative Lender to declare the
Advances due and payable pursuant to the provisions of
SECTION 8.2, each Lender, including the Swing Line Bank,
notwithstanding the failure of the Borrower at such time to
satisfy each condition specified in Article 3, shall make by
12:00 noon (Dallas, Texas time) on the first Business Day
following receipt by such Lender of notice from the Swing Line
Bank, a Facility A Advance which is a Base Rate Advance in an
amount equal to the product of (i) the Specified Percentage of
such Lender times (ii) the aggregate outstanding principal amount
of the Swing Line Advances. The proceeds of such Facility A
Advances shall be applied by the Administrative Lender to repay
the outstanding Swing Line Advance.
Section 2.3 INTEREST.
(a) ON BASE RATE ADVANCES.
(i) The Borrower shall pay interest on the outstanding
unpaid principal amount of the Base Rate Advances
outstanding from time to time, until such Base Rate Advances
are due (whether at maturity, by reason of acceleration, by
scheduled reduction, or otherwise) or repaid at a simple
interest rate per annum equal to the Base Rate Basis for the
Base Rate Advances as in effect from time to time. If at
any time the Base Rate Basis would exceed the Highest Lawful
Rate, interest payable on the Base Rate Advances shall be
limited to the Highest Lawful Rate, but the Base Rate Basis
shall not thereafter be reduced below the Highest Lawful
Rate until the total amount of interest accrued on the Base
Rate Advances equals the amount of interest that would have
accrued if the Base Rate Basis had been in effect at all
times.
(ii) Interest on the Base Rate Advances shall be
computed on the basis of a year of 365 or 366 days, as
appropriate, for the actual number of days elapsed, and
shall be payable in arrears on each Quarterly Date and on
the Facility A Maturity Date or the Facility B Maturity
Date, as appropriate.
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(b) ON LIBOR ADVANCES.
(i) The Borrower shall pay interest on the unpaid
principal amount of each LIBOR Advance, from the date such
Advance is made until it is due (whether at maturity, by
reason of acceleration, by scheduled reduction, or
otherwise) or repaid, at a rate per annum equal to the LIBOR
Basis for such LIBOR Advance. The Administrative Lender,
whose determination shall be controlling in the absence of
manifest error, shall determine the LIBOR Basis on the
second Business Day prior to the applicable funding date and
shall notify the Borrower and the Lenders of such LIBOR
Basis.
(ii) Subject to SECTION 11.9 hereof, interest on each
LIBOR Advance shall be computed on the basis of a 360-day
year for the actual number of days elapsed, and shall be
payable in arrears on the applicable Payment Date and on the
Facility A Maturity Date and the Facility B Maturity Date,
as appropriate; provided, however, that if the Interest
Period for such LIBOR Advance exceeds three months, interest
shall also be due and payable in arrears on each three-month
anniversary of the commencement of such Interest Period
during such Interest Period.
(c) ON SWING LINE ADVANCES.
(i) The Borrower shall pay interest on the outstanding
principal amount of each Swing Line Advance, from the date
each Swing Line Advance is made until it is due (whether at
maturity, by acceleration or otherwise) or repaid, at a rate
per annum equal to the Base Rate Basis in effect from time
to time. If at any time the Base Rate Basis would exceed
the Highest Lawful Rate, interest payable on the Swing Line
Advances shall be limited to the Highest Lawful Rate, but
the Base Rate Basis shall not thereafter be reduced below
the Highest Lawful Rate until the total amount of interest
accrued on the Swing Line Advances equals the amount of
interest that would have accrued if the Base Rate Basis had
been in effect at all times.
(ii) Interest on each Swing Line Advance shall be
computed on the basis of a year of 365 or 366 days, as
applicable, for the number of days elapsed, and shall be
payable quarterly in arrears on each Quarterly Date and on
the Facility A Maturity Date.
(d) INTEREST AFTER AN EVENT OF DEFAULT. (i) After an Event
of Default (other than an Event of Default specified in
SECTION 8.1(f) or (g) hereof) and during any continuance thereof,
at the option of Determining Lenders and provided that the
Administrative Lender has given notice of the decision to charge
interest at the Default Rate, and (ii) after an Event of Default
specified in SECTION 8.1(f) or (g) hereof and during any
continuance thereof, automatically and without any action or
notice by the Administrative Lender or any Lender, the
Obligations shall bear interest at a rate per annum equal to the
Default Rate. Such interest shall be payable on the earlier of
demand or the Facility A Maturity Date or the Facility B Maturity
Date, as appropriate, and shall accrue until the earlier of
(i) waiver or cure (to the satisfaction of the Determining
Lenders) of the applicable Event of Default, (ii) agreement by
the Lenders to
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rescind the charging of interest at the Default Rate, or (iii) payment in
full of the Obligations. The Lenders shall not be required to accelerate the
maturity of the Advances, to exercise any other rights or remedies under the
Loan Documents, or to give notice to the Borrower of the decision to charge
interest at the Default Rate.
Section 2.4 FEES.
(a) COMMITMENT FEE. Subject to SECTION 11.9 hereof, the
Borrower agrees to pay to the Administrative Lender, for the
ratable account of the Lenders, a commitment fee (the "COMMITMENT
FEE") on the daily average Unused Portion during the period
commencing on the Agreement Date and ending on the Facility A
Maturity Date, at the following per annum percentages, applicable
in the following situations:
Applicability Percentage
------------- ----------
(a) INITIAL PRICING PERIOD 0.300%
(b) SUBSEQUENT PRICING PERIOD
(1) The Fixed Charge Coverage Ratio is
greater than or equal to 2.50 to 1 0.225%
(2) The Fixed Charge Coverage Ratio is
less than 2.50 to 1 but greater
than or equal to 2.00 to 1 0.250%
(3) The Fixed Charge Coverage Ratio is
less than 2.00 to 1 but greater
than or equal to 1.50 to 1 0.300%
(4) The Fixed Charge Coverage Ratio is
less than 1.50 to 1 0.375%
The Commitment Fee shall be subject to reduction or increase, as
applicable and as set forth in the table above, on a quarterly
basis according to the performance of the Borrower as tested by
using the Fixed Charge Coverage Ratio calculated as of the end of
each fiscal quarter during the Subsequent Pricing Period;
PROVIDED, that each adjustment in the Commitment Fee shall be
effective on the date which is two Business Days following the
date of receipt of the financial statements required to be
furnished pursuant to SECTION 6.2 or 6.3 hereof, as applicable,
and the corresponding Compliance Certificate required pursuant to
SECTION 6.4 hereof. If such financial statements are not
received by the Administrative Lender by the date required,
effective as of the first Business Day following notification
thereof from the Administrative Lender to the Borrower the
Commitment Fee shall be determined as if the Fixed Charge
Coverage Ratio is less than 1.50 to 1 until such time as such
financial statements and Compliance Certificate are received.
The fee shall be (i) payable in arrears on each Quarterly Date
and on the Facility A Maturity Date, (ii) fully earned when due
and, subject to SECTION 11.9 hereof, nonrefundable when paid and
(iii) subject to SECTION 11.9 hereof, computed on the basis of a
year of 365 or 366 days, as appropriate, for the actual number of
days elapsed.
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(b) UPFRONT FEE. Subject to SECTION 11.9 hereof, the
Borrower agrees to pay to the Administrative Lender, for the
account of the Lenders (other than the Administrative Lender) the
fees on the dates and in the amounts specified in the letter
agreement, dated July 26, 1996, between the Borrower and the
Administrative Lender and the term sheet attached thereto
(collectively, the "Upfront Fee Letter").
(c) OTHER FEES. Subject to SECTION 11.9 hereof, the
Borrower agrees to pay to the Administrative Lender, for the
account of the Administrative Lender, the fees on the dates and
in the amounts specified in the letter agreement (the
"ADMINISTRATIVE LENDER FEE LETTER"), dated as of the Agreement
Date, between the Borrower and the Administrative Lender.
Section 2.5 PREPAYMENTS.
(a) VOLUNTARY LIBOR ADVANCE PREPAYMENTS. Upon three
Business Days' prior telephonic notice (to be promptly followed
by written notice) by an Authorized Signatory to the
Administrative Lender, LIBOR Advances may be voluntarily prepaid
but only so long as the Borrower concurrently reimburses the
Lenders in accordance with SECTION 2.9 hereof. Any notice of
prepayment shall be irrevocable.
(b) MANDATORY PREPAYMENT. On or before the date of any
reduction of the Facility A Commitment, the Borrower shall prepay
applicable outstanding Facility A Advances in an amount necessary
to reduce the sum of outstanding Facility A Advances, Swing Line
Advances and Reimbursement Obligations to an amount less than or
equal to the Facility A Commitment as so reduced. On any date
that the aggregate principal amount of outstanding Facility A
Advances, Swing Line Advances and Reimbursement Obligations
(other than such Reimbursement Obligations which are fully
secured by funds in the L/C Cash Collateral Account pursuant to
SECTION 2.15(g) hereof) exceed the Borrowing Base, the Borrower
shall immediately prepay Facility A Advances in an amount equal
to such excess amount and all interest attributable to such
excess amount. To the extent required by the immediately
preceding two sentences, the Borrower shall first prepay all Base
Rate Advances, second prepay all Swing Line Advances and shall
thereafter prepay LIBOR Advances. To the extent that any
prepayment requires that a LIBOR Advance be repaid on a date
other than the last day of its Interest Period, the Borrower
shall reimburse each Lender in accordance with SECTION 2.9
hereof. To the extent that outstanding Facility A and Swing Line
Advances exceed the Facility A Commitment after any reduction
thereof, the Borrower shall repay any such excess amount and all
accrued interest attributable to such excess Facility A Advances
on the date of such reduction.
(c) PREPAYMENT FROM SALES OF EQUITY/ISSUANCE OF INDEBTEDNESS.
Concurrently with receipt of Net Cash Proceeds from (i) the issuance of any
Indebtedness the proceeds of which are used to purchase or refinance
Indebtedness with respect to real property or (ii) the sale or disposition by
the Borrower of any Equity, the Borrower shall prepay Facility B Advances in
an aggregate principal amount equal to 100% of the aggregate Net Cash
Proceeds received by the Borrower from such issuance, sale or disposition of
Equity or Indebtedness. Any such prepayments shall be applied in the inverse
order of maturity to the scheduled payments of the Facility B Advances
required pursuant to SECTION 2.6(c).
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(d) PAYMENTS, GENERALLY. Any prepayment of any LIBOR
Advance shall be accompanied by interest accrued on the principal
amount being prepaid. Any voluntary partial payment of a Base
Rate Advance shall be in a principal amount which is at least
$3,000,000 and which is an integral multiple of $500,000. Any
voluntary partial payment of a LIBOR Advance shall be in a
principal amount which is at least $5,000,000 and which is an
integral multiple of $1,000,000, and to the extent that any
prepayment of a LIBOR Advance is made on a date other than the
last day of its Interest Period, the Borrower shall reimburse
each Lender in accordance with SECTION 2.9 hereof. Any voluntary
partial payment of a Swing Line Advance shall be in a principal
amount which is at least $100,000 or an integral multiple
thereof.
Section 2.6 REDUCTION OF COMMITMENTS.
(a) VOLUNTARY REDUCTION. The Borrower shall have the
right, upon not less than ten Business Days' notice by an
Authorized Signatory to the Administrative Lender (if telephonic,
to be confirmed by telex or in writing on or before the date of
reduction or termination), which shall promptly notify the
Lenders, to terminate or reduce either the Facility A Commitment
or the Facility B Commitment, in whole or in part, without
premium or penalty except as provided in the next sentence. Each
partial termination shall be in an aggregate amount which is at
least $5,000,000 and which is an integral multiple of $1,000,000,
and no voluntary reduction of the Facility A Commitment shall
cause any LIBOR Advance to be repaid prior to the last day of its
Interest Period unless the Borrower shall reimburse each Lender
in accordance with SECTION 2.9 hereof.
(b) MANDATORY REDUCTION. The Facility A Commitment shall
be automatically reduced to zero on the Facility A Maturity Date.
The Facility B Commitment shall be automatically reduced to zero
on the Facility B Commitment Termination Date.
(c) AMORTIZATION. An amount equal to 50% of the principal
amount of the Facility B Advances outstanding on the Facility B
Commitment Termination shall be payable on (i) September 25, 1998
and (ii) the Facility B Maturity Date.
(d) GENERAL REQUIREMENTS. Upon any reduction of a
Commitment pursuant to this Section, the Borrower shall
immediately make a repayment of applicable Advances in accordance
with SECTION 2.5(b) hereof. The Borrower shall reimburse each
Lender in connection with any such payment in accordance with
SECTION 2.9 hereof to the extent applicable. The Borrower shall
not have any right to rescind any termination or reduction. Once
reduced, the Commitments may not be increased or reinstated.
Section 2.7 NON-RECEIPT OF FUNDS BY THE ADMINISTRATIVE LENDER.
Unless the Administrative Lender shall have been notified by a Lender prior
to the date of any proposed Advance (other than a Swing Line Advance) that
such Lender does not intend to make the proceeds of such Advance available to
the Administrative Lender, the Administrative Lender may assume that such
Lender has made such proceeds available to the Administrative Lender on such
date, and the Administrative Lender may in reliance upon such assumption (but
shall not be required to) make available to the Borrower a corresponding
amount. If such
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corresponding amount is not in fact made available to the Administrative
Lender by such Lender, the Administrative Lender shall be entitled to recover
such amount on demand from such Lender (or, if such Lender fails to pay such
amount forthwith upon such demand, from the Borrower) together with interest
thereon in respect of each day during the period commencing on the date such
amount was available to the Borrower and ending on (but excluding) the date
the Administrative Lender receives such amount from (a) the Lender, at a per
annum rate equal to the lesser of (i) the Highest Lawful Rate or (ii) the
Federal Funds Rate or (b) the Borrower, at the per annum rate applicable at
the time to such Advance. No Lender shall be liable for any other Lender's
failure to fund an Advance hereunder.
Section 2.8 PAYMENT OF PRINCIPAL OF ADVANCES. To the extent not
otherwise required to be paid earlier as provided herein, the principal
amount of the Facility A Advances, all accrued interest and fees thereon, and
all other Obligations related thereto, shall be due and payable in full on
the Facility A Maturity Date. To the extent not otherwise required to be
paid earlier as provided herein, the principal amount of the Facility B
Advances, all accrued interest and fees thereon, and all other Obligations
related thereto, shall be due and payable in full on the Facility B Maturity
Date. To the extent not otherwise required to be paid earlier as provided
herein, the principal amount of each Swing Line Advance, all accrued interest
and fees thereon, and all other Obligations related thereto, shall be due and
payable in full on the seventh Business Day following the making of such
Swing Line Advance.
Section 2.9 REIMBURSEMENT. Whenever any Lender shall sustain or
incur (other than through a default by that Lender) any losses (inclusive of
any such losses attributable to change(s) in the LIBOR Rate during the
applicable period(s), but exclusive of any losses of any other anticipated
profits on the part of such Lender) or reasonable out-of-pocket expenses
actually incurred in connection with (a) failure by the Borrower to borrow
any LIBOR Advance after having given notice of its intention to borrow in
accordance with SECTION 2.2 hereof (whether by reason of the Borrower's
election not to proceed or the non-fulfillment of any of the conditions set
forth in Article 3 hereof) or (b) any prepayment for any reason of any LIBOR
Advance in whole or in part (including a prepayment pursuant to SECTION
9.3(b) hereof) on other than the last day of an Interest Period applicable to
such LIBOR Advance, the Borrower agrees to pay to any such Lender, within 30
days after demand by such Lender, an amount sufficient to compensate such
Lender for all such losses (inclusive of any such losses attributable to
change(s) in the LIBOR Rate during the applicable period(s), but exclusive of
any losses of any other anticipated profits on the part of such Lender) and
out-of-pocket expenses, subject to SECTION 11.9 hereof. Such losses shall
include, without limiting the generality of the foregoing, reasonable
expenses incurred by such Lender in connection with the re-employment of
funds prepaid, repaid, converted or not borrowed, converted or paid, as the
case may be. A certificate as to any amounts payable to any Lender under
this SECTION 2.9 submitted to the Borrower by such Lender shall certify that
such amounts were actually incurred by such Lender and shall show in
reasonable detail an accounting of the amount payable and the calculations
used to determine in good faith such amount and shall be conclusive absent
manifest or demonstrable error. Nothing in this SECTION 2.9 shall provide
the Borrower or any Subsidiary of the Borrower the right to inspect the
records, files or books of any Lender.
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Section 2.10 MANNER OF PAYMENT.
(a) Each payment (including prepayments) by the Borrower of the
principal of or interest on the Advances, fees, and any other amount owed
under this Agreement or any other Loan Document shall be made not later than
12:00 noon (Dallas, Texas time) on the date specified for payment under this
Agreement to the Administrative Lender at the Administrative Lender's office,
in lawful money of the United States of America constituting immediately
available funds.
(b) If any payment under this Agreement or any other Loan Document
shall be specified to be made upon a day which is not a Business Day, it
shall be made on the next succeeding day which is a Business Day, unless,
with respect to a payment due in respect of a LIBOR Advance, such Business
Day falls in another calendar month, in which case payment shall be made on
the preceding Business Day. Any extension of time shall in such case be
included in computing interest and fees, if any, in connection with such
payment.
(c) Without waiving any other rights or recourse that the Borrower may
otherwise have against any Lender for such Lender's breach of its obligations
hereunder, the Borrower agrees to pay principal, interest, fees and all other
amounts due under the Loan Documents without deduction for set-off or
counterclaim or any deduction whatsoever.
(d) If some but less than all amounts due from the Borrower are
received by the Administrative Lender, the Administrative Lender shall apply
such amounts in the following order of priority: (i) to the payment of the
Administrative Lender's expenses incurred on behalf of the Lenders then due
and payable, if any; (ii) to the payment of all other fees then due and
payable; (iii) to the payment of interest then due and payable on the
Advances; (iv) to the payment of all other amounts not otherwise referred to
in this clause (d) then due and payable under the Loan Documents; and (v) to
the payment of principal then due and payable on the Advances.
(e) Each payment by the Borrower in respect of obligations relating to
the Facility A Advances, Facility B Advances and the Letters of Credit
(whether for principal, interest, fees or otherwise) shall be made to the
Administrative Lender for the account of the Lenders pro rata in accordance
with their respective Specified Percentages. Each payment by the Borrower in
respect of obligations relating to Swing Line Advances (whether for
principal, interest, fees or otherwise) shall be made to the Administrative
Lender for the account of the Swing Line Bank. Notwithstanding anything in
this SECTION 2.10(e) or any other provision of this Agreement or any other
Loan Document to the contrary, any payment by the Borrower in respect of any
Advances after acceleration of the Advances pursuant to SECTION 8.2 or any
monies received by the Administrative Lender as a result of the exercise of
remedies under any Loan Documents after acceleration of the Advances pursuant
to SECTION 8.2 shall be distributed pro rata to each Lender based on the
percentage that the outstanding Advances and Reimbursement Obligations owed
to such Lender bears to the aggregate Advances and Reimbursement Obligations
owed to all Lenders.
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Section 2.11 LIBOR LENDING OFFICES. Each Lender's initial LIBOR
Lending Office is set forth opposite its name in SCHEDULE 1 attached hereto.
Each Lender shall have the right at any time and from time to time to
designate a different office of itself or of any Affiliate of such Lender as
such Lender's LIBOR Lending Office, and to transfer any outstanding LIBOR
Advance to such LIBOR Lending Office. No such designation or transfer shall
result in any liability on the part of the Borrower for increased costs or
expenses resulting solely from such designation or transfer (except any such
transfer which is made by a Lender pursuant to SECTION 9.2 or 9.3 hereof, or
otherwise for the purpose of complying with Applicable Law, to the extent
that Applicable Law, or any relevant construction or interpretation thereof,
changes after the Agreement Date). Increased costs for expenses resulting
from a change in law occurring subsequent to any such designation or transfer
shall be deemed not to result solely from such designation or transfer.
Section 2.12 SHARING OF PAYMENTS. Any Lender obtaining a payment
(whether voluntary or involuntary, due to the exercise of any right of
set-off, or otherwise) on account of its Facility A Advances, Facility B
Advances or its participation in the Letters of Credit (other than pursuant
to SECTIONS 2.4(b), 2.14, 2.15(d), 9.3 or 9.5) in excess of its Specified
Percentage of all payments made by the Borrower with respect to Facility A
Advances, Facility B Advances and the Letters of Credit shall purchase from
each other Lender such participation in the Facility A Advances and Facility
B Advances made by such other Lender or its participation in the Letters of
Credit as shall be necessary to cause such purchasing Lender to share the
excess payment pro rata according to Specified Percentages with each other
Lender; provided, however, that if all or any portion of such excess payment
is thereafter recovered from such purchasing Lender, the purchase shall be
rescinded and the purchase price restored to the extent of such recovery, but
without interest. The Borrower agrees that any Lender so purchasing a
participation from another Lender pursuant to this Section, to the fullest
extent permitted by law, may exercise all its rights of payment (including
the right of set-off) with respect to such participation as fully as if such
Lender were the direct creditor of the Borrower in the amount of such
participation.
Section 2.13 CALCULATION OF LIBOR RATE. The provisions of this
Agreement relating to calculation of the LIBOR Rate are included only for the
purpose of determining the rate of interest or other amounts to be paid
hereunder that are based upon such rate, it being understood that each Lender
shall be entitled to fund and maintain its funding of all or any part of a
LIBOR Advance as it sees fit.
Section 2.14 TAXES.
(a) Any and all payments by the Borrower hereunder shall be made, in
accordance with SECTION 2.10, free and clear of and without deduction for any
and all present or future taxes, levies, imposts, deductions, charges and
withholdings, and all liabilities with respect thereto, EXCLUDING, in the
case of each Lender and the Administrative Lender, (i) taxes imposed on,
based upon or measured by its overall net income, net worth or capital, and
franchise taxes, doing business taxes or minimum taxes imposed on it, (A) by
the jurisdiction under the laws of which such Lender or the Administrative
Lender (as the case may be) is organized or in which
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it has its applicable lending office or any political subdivision thereof; or
(B) by any other jurisdiction, or any political subdivision thereof, other
than those imposed by reason of (1) an asserted relation of such jurisdiction
to the transactions contemplated by this Agreement, (2) the activities of the
Borrower in such jurisdiction or (3) the activities in connection with the
transactions contemplated by this Agreement of a Lender or the Administrative
Lender; (ii) taxes imposed by reason of failure by the Lender or the
Administrative Lender to comply with the requirements of paragraph (e) of
this SECTION 2.14; and (iii) in the case of any Lender, any Taxes in the
nature of transfer, stamp, recording or documentary taxes resulting from a
transfer (other than as a result of foreclosure) by such Lender of all or any
portion of its interest in this Agreement, the Notes or any other Loan
Documents; (all such non-excluded taxes, levies, imposts, deductions,
charges, withholdings and liabilities being hereinafter referred to as
"TAXES"). If the Borrower shall be required by Law to deduct or withhold any
Taxes from or in respect of any sum payable hereunder to any Lender or the
Administrative Lender, (x) the sum payable shall be increased as may be
necessary so that after making all required deductions for Taxes (including
deductions applicable to additional sums payable under this SECTION 2.14)
such Lender or the Administrative Lender (as the case may be) receives an
amount equal to the sum it would have received had no such deductions been
made, (y) the Borrower shall make such deductions and (z) the Borrower shall
pay the full amount of Taxes deducted to the relevant taxation authority or
other authority in accordance with Applicable Law.
(b) In addition, the Borrower agrees to pay any and all stamp and
documentary taxes and any and all other excise and property taxes, charges
and similar levies (other than Taxes described in clause (iii) of the first
sentence of SECTION 2.14(a)) that arise from any payment made hereunder or
from the execution, delivery or registration of, or otherwise with respect
to, this Agreement or any other Loan Document (hereinafter referred to as
"OTHER TAXES").
(c) The Borrower will indemnify each Lender and the Administrative
Lender for the full amount of Taxes and Other Taxes (including, without
limitation, any Taxes or Other Taxes imposed by any jurisdiction on amounts
payable under this SECTION 2.14) paid by such Lender or the Administrative
Lender (as the case may be) and all liabilities (including penalties,
additions to tax, interest and reasonable expenses) arising therefrom or with
respect thereto whether or not such Taxes or Other Taxes were correctly or
legally asserted, other than penalties, additions to tax, interest and
expenses arising as a result of gross negligence or wilful misconduct on the
part of such Lender or the Administrative Lender, PROVIDED, HOWEVER, that the
Borrower shall have no obligation to indemnify such Lender or the
Administrative Lender unless and until such Lender or the Administrative
Lender shall have delivered to the Borrower a certificate certifying that
such Taxes or Other Taxes (and/or penalties, additions to tax, interest and
reasonable expenses) were actually incurred by such Lender or the
Administrative Lender and showing in reasonable detail an accounting of the
amount payable and the calculations used to determine in good faith such
amount, which certificate shall be conclusive absent manifest or demonstrable
error. Nothing in this SECTION 2.14 shall provide the Borrower or any
Subsidiary of the Borrower the right to inspect the records, files or books
of any Lender or the Administrative Lender. This indemnification shall be
made within 30 days from the date such Lender or the Administrative Lender
(as the case may be) makes written demand therefor.
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(d) As soon as practicable after the date of any payment of Taxes, the
Borrower will furnish to the Administrative Lender the original or a
certified copy of a receipt evidencing payment thereof. For purposes of this
SECTION 2.14 the terms "UNITED STATES" and "UNITED STATES PERSON" shall have
the meanings set forth in Section 7701 of the Code.
(e) Each Lender which is not a United States Person hereby
agrees that:
(i) it shall, no later than the Agreement Date (or, in
the case of a Lender which becomes a party hereto pursuant
to SECTION 11.6 after the Agreement Date, the date upon
which such Lender becomes a party hereto) and at such times
as necessary in the reasonable determination of the
Borrower, deliver to the Borrower through the Administrative
Lender, with a copy to the Administrative Lender:
(A) if any lending office is located in the United
States of America, two (2) accurate and complete
signed originals of Internal Revenue Service Form
4224 or any successor thereto ("FORM 4224"),
(B) if any lending office is located outside the
United States of America, two (2) accurate and
complete signed originals of Internal Revenue
Service Form 1001 or any successor thereto ("FORM
1001"),
in each case indicating that such Lender is on the date of
delivery thereof entitled to receive payments of principal,
interest and fees for the account of such lending office or
lending offices under this Agreement free from withholding
of United States Federal income tax;
(ii) if at any time such Lender changes its lending
office or lending offices or selects an additional lending
office it shall, at the same time or reasonably promptly
thereafter but only to the extent the forms previously
delivered by it hereunder are no longer effective, deliver
to the Borrower through the Administrative Lender, with a
copy to the Administrative Lender, in replacement for the
forms previously delivered by it hereunder:
(A) if such changed or additional lending office is
located in the United States of America, two (2)
accurate and complete signed originals of Form
4224; or
(B) otherwise, two (2) accurate and complete signed
originals of Form 1001,
in each case indicating that such Lender is on the date of
delivery thereof entitled to receive payments of principal,
interest and fees for the account of such changed or
additional lending office under this Agreement free from
withholding of United States Federal income tax;
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(iii) it shall, before or promptly after the
occurrence of any event (including the passing of time but
excluding any event mentioned in clause (ii) above)
requiring a change in the most recent Form 4224 or Form 1001
previously delivered by such Lender and if the delivery of
the same be lawful, deliver to the Borrower through the
Administrative Lender with a copy to the Administrative
Lender, two (2) accurate and complete original signed copies
of Form 4224 or Form 1001 in replacement for the forms
previously delivered by such Lender;
(iv) it shall, promptly upon the request of the
Borrower to that effect, deliver to the Borrower such other
forms or similar documentation as may be required from time
to time by any applicable law, treaty, rule or regulation in
order to establish such Lender's tax status for withholding
purposes; and
(v) it shall notify the Borrower after any event
(including an amendment to, or a change in any applicable
law or regulation or in the written interpretation thereof
by any regulatory authority or any judicial authority, or by
ruling applicable to such Lender of any governmental
authority charged with the interpretation or administration
of any law) shall occur that results in such Lender no
longer being capable of receiving payments under this
Agreement without any deduction or withholding of United
States federal income tax.
(f) Without prejudice to the survival of any other
agreement of the Borrower hereunder, the agreements and
obligations of the Borrower contained in this SECTION 2.14 shall
survive the payment in full of principal and interest hereunder.
(g) Each Lender (and the Administrative Lender with respect to payments
to the Administrative Lender for its own account) agrees that (i) it will
take all reasonable actions by all usual means to maintain all exemptions, if
any, available to it from United States withholding taxes (whether available
by treaty, existing administrative waiver or by virtue of the location of any
Lender's lending office), (ii) it will use reasonable best efforts
(consistent with its internal policy and legal and regulatory restrictions)
to change the jurisdiction of its lending office, if the making of such a
change would avoid the need for, or reduce the amount of, any such additional
amounts which may thereafter accrue and would not, in the reasonable judgment
of such Lender, be materially disadvantageous to such Lender, and (iii)
otherwise cooperate with the Borrower to minimize amounts payable by the
Borrower under this SECTION 2.14; PROVIDED, HOWEVER, the Lenders and the
Administrative Lender shall not be obligated by reason of this SECTION
2.14(g) to contest the payment of any Taxes or Other Taxes or to disclose any
information regarding its tax affairs or tax computations or reorder its tax
or other affairs or tax or other planning. Subject to the foregoing, to the
extent the Borrower pays sums pursuant to this SECTION 2.14 and the Lender or
the Administrative Lender receives a refund of any or all of such sums, such
refund shall be applied to reduce any amounts then due and owing under this
Agreement or, to the extent that no amounts are due and owing under this
Agreement at the time such refunds are received, the party receiving such
refund shall promptly pay over all such refunded sums to the Borrower,
provided that (i) no Event of Default is in existence at such time or (ii)
all of the Obligations have been fully and finally paid or satisfied. At
such time, if any, that such Default
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or Event of Default is cured or waived, the party receiving such refund shall
promptly pay over all such refunded sums to the Borrower.
(h) If the Borrower becomes obligated to pay additional amounts
described in this SECTION 2.14 to any Lender, the Borrower may designate a
financial institution reasonably acceptable to the Administrative Lender to
replace such Lender by purchasing for cash and receiving an assignment of
such Lender's pro rata share of the Commitments and the Rights of such Lender
under the Loan Documents without recourse to or warranty by, or expense to,
such Lender, for a purchase price equal to the outstanding amounts owed to
such Lender (including such additional amounts owing to such Lender pursuant
to this SECTION 2.14). Upon execution of an Assignment Agreement, such other
financial institution shall be deemed to be a "Lender" for all purposes of
this Agreement as set forth in SECTION 11.6 hereof.
Section 2.15 LETTERS OF CREDIT.
(a) THE LETTER OF CREDIT FACILITY. The Borrower may request the
Issuing Bank, on the terms and conditions hereinafter set forth, to issue,
and the Issuing Bank shall, if so requested, issue, letters of credit (the
"LETTERS OF CREDIT") for the account of the Borrower from time to time on any
Business Day from the date of the initial Advance until the Facility A
Maturity Date in an aggregate maximum amount (assuming compliance with all
conditions to drawing) not to exceed, at any time outstanding, the lesser of
(i) $5,000,000 (the "LETTER OF CREDIT FACILITY") and (ii) the Borrowing Base,
less the sum of (A) the aggregate principal amount of Facility A Advances
then outstanding plus (B) the aggregate principal amount of Swing Line
Advances outstanding. No Letter of Credit shall have an expiration date
(including all rights of renewal) later than the earlier of (i) the Facility
A Maturity Date or (ii) one year after the date of issuance thereof.
Immediately upon the issuance of each Letter of Credit, the Issuing Bank
shall be deemed to have sold and transferred to each Lender, and each Lender
shall be deemed to have purchased and received from the Issuing Bank, in each
case irrevocably and without any further action by any party, an undivided
interest and participation in such Letter of Credit, each drawing thereunder
and the obligations of the Borrower under this Agreement in respect thereof
in an amount equal to the product of (x) such Lender's Specified Percentage
times (y) the maximum amount available to be drawn under such Letter of
Credit (assuming compliance with all conditions to drawing). Within the
limits of the Letter of Credit Facility, and subject to the limits referred
to above, the Borrower may request the issuance of Letters of Credit under
this SECTION 2.15(a), repay any Facility A Advances resulting from drawings
thereunder pursuant to SECTION 2.15(c) and request the issuance of additional
Letters of Credit under this SECTION 2.15(a).
(b) REQUEST FOR ISSUANCE. Each Letter of Credit shall be issued upon
notice, given not later than 11:00 a.m. (Dallas, Texas time) on the fourth
Business Day prior to the date of the proposed issuance of such Letter of
Credit, by the Borrower to the Issuing Bank. Each Letter of Credit shall be
issued upon notice given in accordance with the terms of any separate
agreement between the Borrower and the Issuing Bank in form and substance
reasonably satisfactory to the Borrower and the Issuing Bank providing for
the issuance of Letters of Credit pursuant to this Agreement and containing
terms and conditions not inconsistent with this
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Agreement (a "LETTER OF CREDIT AGREEMENT"), PROVIDED that if any such terms
and conditions are inconsistent with this Agreement, this Agreement shall
control. Each such notice of issuance of a Letter of Credit by the Borrower
(a "NOTICE OF ISSUANCE") shall be by telecopier, specifying therein, in the
case of a Letter of Credit, the requested (A) date of such issuance (which
shall be a Business Day), (B) maximum amount of such Letter of Credit, (C)
expiration date of such Letter of Credit, (D) name and address of the
beneficiary of such Letter of Credit, and (E) form of such Letter of Credit
and specifying such other information as shall be required pursuant to the
relevant Letter of Credit Agreement. If the requested terms of such Letter
of Credit are acceptable to the Issuing Bank in its reasonable discretion,
the Issuing Bank will, upon fulfillment of the applicable conditions set
forth in ARTICLE 3 hereof, make such Letter of Credit available to the
Borrower at its office referred to in SECTION 11.1 or as otherwise agreed
with the Borrower in connection with such issuance.
(c) DRAWING AND REIMBURSEMENT. The payment by the Issuing Bank of a
draft drawn under any Letter of Credit shall constitute for all purposes of
this Agreement the making by the Issuing Bank of a Facility A Advance, which
shall bear interest at the Base Rate Basis, in the amount of such draft (but
without any requirement for compliance with the conditions set forth in
ARTICLE 3 hereof). In the event that a drawing under any Letter of Credit is
not reimbursed by the Borrower by 11:00 a.m. (Dallas, Texas time) on the
first Business Day after such drawing, the Issuing Bank shall promptly notify
Administrative Lender and each other Lender. Each such Lender shall, on the
first Business Day following such notification, make a Facility A Advance,
which shall bear interest at the Base Rate Basis, and shall be used to repay
the applicable portion of the Issuing Bank's Advance with respect to such
Letter of Credit, in an amount equal to the amount of its participation in
such drawing for application to reimburse the Issuing Bank (but without any
requirement for compliance with the applicable conditions set forth in
ARTICLE 3 hereof) and shall make available to the Administrative Lender for
the account of the Issuing Bank, by deposit at the Administrative Lender's
office, in same day funds, the amount of such Advance. In the event that any
Lender fails to make available to the Administrative Lender for the account
of the Issuing Bank the amount of such Advance, the Issuing Bank shall be
entitled to recover such amount on demand from such Lender together with
interest thereon at a rate per annum equal to the lesser of (i) the Highest
Lawful Rate or (ii) the Federal Funds Rate.
(d) INCREASED COSTS. If after the Agreement Date any change in any Law
or in the interpretation thereof by any court or administrative or
governmental authority charged with the administration thereof shall either
(i) impose, modify or deem applicable any reserve, special deposit or similar
requirement against letters of credit or guarantees issued by, or assets held
by, or deposits in or for the account of, the Issuing Bank or any Lender or
any corporation controlling the Issuing Bank or any Lender or (ii) impose on
the Issuing Bank or any Lender or any corporation controlling the Issuing
Bank or any Lender any other condition regarding this Agreement or any Letter
of Credit, and the result of any event referred to in the preceding clause
(i) or (ii) shall be to increase the cost to the Issuing Bank or any
corporation controlling the Issuing Bank of issuing or maintaining any Letter
of Credit or to any Lender or any corporation controlling such Lender of
purchasing any participation therein or making any Advance pursuant to
SECTION 2.15(c), then, within 30 days after demand by the Issuing Bank or
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such Lender (which demand shall be made not later than one year after the
Issuing Bank or applicable Lender receives notice of the relevant change),
the Borrower shall, subject to SECTION 11.9 hereof, pay to the Issuing Bank
or such Lender, from time to time as specified by the Issuing Bank or such
Lender, additional amounts that shall be sufficient to compensate the Issuing
Bank or such Lender or any corporation controlling such Lender for such
increased cost. A certificate as to the amount of such increased cost,
submitted to the Borrower by the Issuing Bank or such Lender, shall certify
that such increased costs were actually incurred by the Issuing Bank or such
Lender and shall show in reasonable detail an accounting of the amount
payable and the calculation used to determine in good faith such amount and
shall be conclusive absent manifest or demonstrable error. In determining
such amount, the Issuing Bank or such Lender may use any reasonable averaging
or attribution method. Nothing in this SECTION 2.15(d) shall provide the
Borrower or any Subsidiary of the Borrower the right to inspect the records,
files or books of the Issuing Bank or any Lender. If the Borrower becomes
obligated to pay additional amounts described in this SECTION 2.15(d) to any
Lender, the Borrower may designate a financial institution reasonably
acceptable to the Administrative Lender to replace such Lender by purchasing
for cash and receiving an assignment of such Lender's pro rata share of the
Commitments and the Rights of such Lender under the Loan Documents without
recourse to or warranty by, or expenses to, such Lender, for a purchase price
equal to the outstanding amounts owing to such Lender (including such
additional amounts owing to such Lender pursuant to this SECTION 2.15(d).
Upon execution of an Assignment Agreement, such other financial institution
shall be deemed to be a "Lender" for all purposes of this Agreement as set
forth in SECTION 11.6 hereof. The obligations of the Borrower under this
SECTION 2.15(d) shall survive termination of this Agreement. The Issuing
Bank or any Lender claiming any additional compensation under this SECTION
2.15(d) shall use reasonable efforts (consistent with legal and regulatory
restrictions) to reduce or eliminate any such additional compensation which
may thereafter accrue and which efforts would not, in the reasonable judgment
of the Issuing Bank or such Lender, be otherwise disadvantageous.
(e) OBLIGATIONS ABSOLUTE. Except in the case of gross negligence or
wilful misconduct on the part of the Issuing Bank, the obligations of the
Borrower under this Agreement with respect to any Letter of Credit, any
Letter of Credit Agreement and any other agreement or instrument relating to
any Letter of Credit or any Facility A Advance pursuant to SECTION 2.15(c)
shall be unconditional and irrevocable, and shall be paid strictly in
accordance with the terms of this Agreement, such Letter of Credit Agreement
and such other agreement or instrument under all circumstances, including,
without limitation, the following circumstances:
(i) any lack of validity or enforceability of this
Agreement, any other Loan Document, any Letter of Credit
Agreement, any Letter of Credit or any other agreement or
instrument relating thereto (collectively, the "L/C RELATED
DOCUMENTS");
(ii) (A) any change in the time, manner or place of
payment of, or in any other term of, all or any of the
Obligations of the Borrower in respect of the Letters of
Credit or any Facility A Advance pursuant to SECTION 2.15(c)
or (B) any other amendment or waiver of or any consent to
departure from all or any of the L/C Related Documents;
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(iii) the existence of any claim, set-off, defense
or other right that the Borrower may have at any time
against any beneficiary or any transferee of a Letter of
Credit (or any Persons for whom any such beneficiary or any
such transferee may be acting), the Issuing Bank, any Lender
or any other Person, whether in connection with this
Agreement, the transactions contemplated hereby or by the
L/C Related Documents or any unrelated transaction;
(iv) any statement or any other document presented
under a Letter of Credit proving to be forged, fraudulent,
invalid or insufficient in any respect or any statement
therein being untrue or inaccurate in any respect;
(v) payment by the Issuing Bank under a Letter of
Credit against presentation of a draft or certificate that
does not comply with the terms of the Letter of Credit;
(vi) any exchange, release or non-perfection of any
Collateral, or any release or amendment or waiver of or
consent to departure from any guarantee, for all or any of
the Obligations of the Borrower in respect of the Letters of
Credit or any Revolving Credit Advance pursuant to
SECTION 2.15(c); or
(vii) any other circumstance or happening
whatsoever, whether or not similar to any of the foregoing,
including, without limitation, any other circumstance that
might otherwise constitute a defense available to, or a
discharge of, the Borrower or a guarantor.
(f) COMPENSATION FOR LETTERS OF CREDIT.
(i) CREDIT FEE. Subject to SECTION 11.9 hereof, the
Borrower shall pay to the Administrative Lender for the
ratable account of each Lender a fee (which shall be payable
quarterly in arrears on each Quarterly Date and on the
Facility A Maturity Date) equal to a rate per annum equal to
the product of the Applicable LIBOR Rate Margin in effect
from time to time multiplied by the average daily amount
available for drawing under all outstanding Letters of
Credit. Subject to SECTION 11.9 hereof, such fee shall be
computed on the basis of a 360-day year for the actual
number of days elapsed.
(ii) ISSUANCE FEE. Subject to SECTION 11.9 hereof, the
Borrower shall pay to the Administrative Lender for the
account of the Issuing Bank an issuance fee (which shall be
payable on the date of issuance of each Letter of Credit) in
an amount equal to the greater of (a) $250 or (b) the
product of (x) 0.125% times (y) the face amount of the
Letter of Credit being issued.
(iii) OTHER FEES. Subject to SECTION 11.9 hereof,
the Borrower shall pay, with respect to each amendment,
renewal or transfer of each Letter of Credit and each
drawing made thereunder, reasonable documentary and
processing charges in accordance with the Issuing Bank's
standard schedule for such charges in effect at the time of
such amendment, renewal, transfer or drawing, as the case
may be.
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(g) L/C CASH COLLATERAL ACCOUNT.
(i) Upon the Facility A Maturity Date or the
occurrence, and during the continuance, of an Event of
Default and demand by the Administrative Lender pursuant to
SECTION 8.2(c), the Borrower will promptly pay to the
Administrative Lender in immediately available funds an
amount equal to the maximum amount then available to be
drawn under the Letters of Credit then outstanding. Any
amounts so received by the Administrative Lender shall be
deposited by the Administrative Lender in a deposit account
maintained by the Issuing Bank (the "L/C CASH COLLATERAL
ACCOUNT").
(ii) As security for the payment of all Reimbursement
Obligations and for any other Obligations, the Borrower
hereby grants, conveys, assigns, pledges, sets over and
transfers to the Administrative Lender (for the benefit of
the Issuing Bank and Lenders), and creates in the
Administrative Lender's favor (for the benefit of the
Issuing Bank and Lenders) a Lien in, all money, instruments
and securities at any time held in or acquired in connection
with the L/C Cash Collateral Account, together with all
proceeds thereof. The L/C Cash Collateral Account shall be
under the sole dominion and control of the Administrative
Lender and the Borrower shall have no right to withdraw or
to cause the Administrative Lender to withdraw any funds
deposited in the L/C Cash Collateral Account. At any time
and from time to time, upon the Administrative Lender's
request, the Borrower promptly shall execute and deliver any
and all such further instruments and documents, including
UCC financing statements, as may be necessary, appropriate
or desirable in the Administrative Lender's judgment to
obtain the full benefits (including perfection and priority)
of the security interest created or intended to be created
by this paragraph (ii) and of the rights and powers herein
granted. The Borrower shall not create or suffer to exist
any Lien on any amounts or investments held in the L/C Cash
Collateral Account other than the Lien granted under this
paragraph (ii).
(iii) The Administrative Lender shall (A) apply any
funds in the L/C Cash Collateral Account on account of
Reimbursement Obligations when the same become due and
payable, (B) after the Facility A Maturity Date, apply any
proceeds remaining in the L/C Cash Collateral Account FIRST
to pay any unpaid Obligations then outstanding hereunder and
THEN to refund any remaining amount to the Borrower.
(iv) The Borrower, no more than once in any calendar
month, may direct the Administrative Lender to invest the
funds held in the L/C Cash Collateral Account (so long as
the aggregate amount of such funds exceeds any relevant
minimum investment requirement) in (A) Cash and Cash
Equivalents or direct obligations of the United States or
any agency thereof, or obligations guaranteed by the United
States or any agency thereof and (B) one or more other types
of investments permitted by the Determining Lenders, in each
case with such maturities as the Borrower, with the consent
of the Determining Lenders, may specify, pending application
of such funds on account of Reimbursement Obligations or on
account of other Obligations, as the case may be. In the
absence of any such direction from the Borrower, the
Administrative Lender shall invest the funds held in the L/C
Cash Collateral Account (so long as the aggregate
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amount of such funds exceeds any relevant minimum investment
requirement) in one or more types of investments with the consent of
the Determining Lenders with such maturities as the Borrower, with the
consent of the Determining Lenders, may specify, pending application of
such funds on account of Reimbursement Obligations or on account of
other Obligations, as the case may be. All such investments shall be
made in the Administrative Lender's name for the account of the
Lenders, subject to the ownership interest therein of the Borrower.
The Borrower recognizes that any losses or taxes with respect to such
investments shall be borne solely by the Borrower, and the Borrower
agrees to hold the Administrative Lender and the Lenders harmless from
any and all such losses and taxes, except to the extent that such
losses or taxes are finally judicially determined by a court of
competent jurisdiction to be the result of gross negligence or wilful
misconduct of the Administrative Lender. Administrative Lender may
liquidate any investment held in the L/C Cash Collateral Account in
order to apply the proceeds of such investment on account of the
Reimbursement Obligations as provided in SECTION 2.15(g)(iii) hereof
(or on account of any other Obligation then due and payable, as the
case may be) without regard to whether such investment has matured and
without liability for any penalty or other fee incurred (with respect
to which the Borrower hereby agrees to reimburse the dAministrative
Lender) as a result of such application.
(v) After the establishment of the L/C Cash Collateral
Account pursuant to SECTION 2.15(g)(i) hereof, the Borrower
shall pay to the Administrative Lender the fees customarily
charged by the Issuing Bank with respect to the maintenance
of accounts similar to the L/C Cash Collateral Account.
ARTICLE 3
CONDITIONS PRECEDENT
Section 3.1 CONDITIONS PRECEDENT TO THE INITIAL ADVANCE AND THE
INITIAL ISSUANCE OF LETTERS OF CREDIT. The obligation of each Lender to make
any Advance and the obligation of the Issuing Bank to issue Letters of Credit
is subject to (i) receipt by the Administrative Lender of the following items
which are to be delivered, in form and substance satisfactory to each Lender,
with a copy (except for the Notes and this Agreement) for each Lender, and
(ii) satisfaction of the following conditions which are to be satisfied:
(a) A loan certificate of each Obligor certifying as to the accuracy of
its representations and warranties in the Loan Documents, certifying that no
Default has occurred, and including a certificate of incumbency with respect
to each Authorized Signatory, and including (i) a copy of the articles or
certificate of incorporation of such Obligor, certified to be true, complete
and correct by the secretary of state of its state of organization, and (ii)
a copy of a certificate of good standing and a certificate of existence for
its state of organization and, with respect to the Borrower, the States of
Texas, California and New Jersey;
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(b) a duly executed Facility A Note and Facility B Note payable to the
order of each Lender and in an amount for each Lender equal to its Specified
Percentage of each Commitment, respectively;
(c) UCC searches in appropriate jurisdictions where Collateral is
located;
(d) opinions of counsel to each Obligor addressed to the Lenders and in
form and substance satisfactory to the Lenders, dated the Agreement Date, and
covering certain of the matters set forth in SECTIONS 4.1(a), (b), (c), (e),
(f), (h), (m), (n), (o) and (p) and such other matters incident to the
transactions contemplated hereby as the Administrative Lender or Special
Counsel may reasonably request;
(e) reimbursement for the Administrative Lender for Special Counsel's
reasonable and customary fees (on an hourly basis) and expenses rendered
through the date hereof, to the extent invoiced;
(f) evidence that all proceedings of each Obligor taken in connection
with the transactions contemplated by this Agreement and the other Loan
Documents shall be reasonably satisfactory in form and substance to the
Lenders and Special Counsel; and the Lenders shall have received copies of
all documents or other evidence which the Administrative Lender, Special
Counsel or any Lender may reasonably request in connection with such
transactions;
(g) any fees or expenses required to be paid on or before the Agreement
Date pursuant to the Administrative Lender Fee Letter and/or the Upfront Fee
Letter;
(h) duly executed and completed Security Agreements, dated as of the
Agreement Date, granting a Lien, in all Collateral covered thereby, together
with related financing statements, the CFI Note and the ClientLink Note duly
endorsed, and insurance certificates listing Administrative Lender as loss
payee and additional insured and otherwise in a form required by the
Collateral Documents;
(i) the duly executed Swing Line Note payable to the order of the Swing
Line Bank in the aggregate principal amount of $5,000,000;
(j) a duly executed completed Pledge Agreement, dated as of the
Agreement Date, granting a Lien in all Collateral covered thereby, together
with related financing statements, stock powers and stock certificates
evidencing ownership of CFI;
(k) simultaneously with the making of the initial Advance, executed
UCC-3 Termination Statements to be filed in appropriate jurisdictions to
terminate all Liens against assets of the Borrower and its Subsidiaries other
than Permitted Liens;
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(l) all Securitization Documents, which shall be on terms and
conditions acceptable to the Administrative Lender, including any amendments
and modifications thereto as the Administrative Lender determines are
necessary as a result of the transactions contemplated by this Agreement and
the other Loan Documents;
(m) there shall have occurred no material adverse change in the
business, assets or financial condition of the Borrower and its Subsidiaries,
taken as a whole, since the date of the financial statements referred to in
SECTION 4.1(j)(i) hereof;
(n) each of the Guaranties, duly executed by the Guarantor party
thereto;
(o) all Indebtedness of the Borrower under the Existing Credit
Agreement shall have been (or shall simultaneously therewith be) refinanced
in full pursuant to the terms hereof;
(p) in form and substance reasonably satisfactory to the Lenders and
Special Counsel, such other documents, instruments and certificates as the
Administrative Lender or any Lender may reasonably require in connection with
the transactions contemplated hereby, including without limitation, evidence
of the status, organization or authority of the Borrower or any Subsidiary of
the Borrower, and the enforceability of the Obligations; and
(q) The Borrower shall have delivered a Borrowing Base Report
reflecting Eligible Accounts and Eligible Inventory as of August 31, 1996,
but reflecting the RPA Interest as of the Agreement Date.
Section 3.2 CONDITIONS PRECEDENT TO ALL ADVANCES AND LETTERS OF
CREDIT. The obligation of each Lender to make each Advance hereunder
(including the initial Advance) and the obligation of the Issuing Bank to
issue each Letter of Credit (including the initial Letter of Credit) is
subject to fulfillment of the following conditions immediately prior to or
contemporaneously with each such Advance or issuance:
(a) With respect to each Advance and each issuance of a Letter of
Credit, all of the representations and warranties of each Obligor under the
Loan Documents, which, pursuant to SECTION 4.2 hereof, are made at and as of
the time of each such Advance or issuance, shall be true and correct at such
time in all material respects, both before and after giving effect to the
application of the proceeds of the Advance or Letter of Credit.
(b) The incumbency of the Authorized Signatories shall be as stated in
the certificate of incumbency delivered in the Borrower's loan certificate
pursuant to SECTION 3.1(a) or as subsequently modified and reflected in a
certificate of incumbency delivered to the Administrative Lender. The
Lenders may, without waiving this condition, consider it fulfilled and a
representation by the Borrower made to such effect if no written notice to
the contrary, dated on or before the date of such Advance or Letter of
Credit, is received by the Administrative Lender from the Borrower prior to
the making of such Advance or issuance of such Letter of Credit;
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(c) There shall not exist a Default or Event of Default hereunder that
has not been waived;
(d) The aggregate Advances and Letters of Credit, after giving effect
to such proposed Advance or Letter of Credit, shall not exceed the maximum
principal amount then permitted to be outstanding hereunder;
(e) No order, judgment, injunction or decree of any Tribunal shall
purport to enjoin or restrain any Lender or the Issuing Bank from making any
Advance or issuing any Letter of Credit;
(f) There shall not be pending, or to the knowledge of the Borrower,
threatened any Litigation against or affecting the Borrower or any Subsidiary
of the Borrower or any property of the Borrower or any Subsidiary of the
Borrower that has not been disclosed in writing by the Borrower pursuant to
SECTION 4.1(h) or 6.6(a) prior to the making of the last preceding Advance or
the issuance of the last preceding Letter of Credit (or in the case of the
initial Advances and Letters of Credit, prior to the Agreement Date) and
there shall have occurred no development not so disclosed in any such
Litigation that, in either event, could reasonably be expected to have a
Material Adverse Effect; and
(g) There shall have occurred no material adverse change in the
business, financial condition, results of operations or business prospects of
the Borrower and its Subsidiaries, taken as a whole, since December 31, 1995.
Notwithstanding anything herein to the contrary, the obligation of each
Lender to make a Facility A Advance, pursuant to SECTION 2.2(g) and 2.15(c)
shall be absolute and unconditional and shall not be affected by any
circumstances, including, without limitation, (i) the occurrence of any
Default or Event of Default, (ii) the failure of the Borrower to satisfy any
condition set forth in this SECTION 3.2 or (iii) any other circumstance,
happening or event whatsoever.
Section 3.3 CONDITIONS PRECEDENT TO CONVERSIONS AND CONTINUATIONS.
The obligation of the Lenders to convert any existing Base Rate Advance into
a LIBOR Advance or to continue any existing LIBOR Advance is subject to the
condition precedent that on the date of such conversion or continuation no
Default or Event of Default shall have occurred and be continuing or would
result from the making of such conversion or continuation. The acceptance of
the benefits of each such conversion and continuation shall constitute a
representation and warranty by the Borrower to each of the Lenders that no
Default or Event of Default shall have occurred and be continuing or would
result from the making of such conversion or continuation.
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ARTICLE 4
REPRESENTATIONS AND WARRANTIES
Section 4.1 REPRESENTATIONS AND WARRANTIES. The Borrower hereby
represents and warrants to each Lender as follows:
(a) ORGANIZATION; POWER; QUALIFICATION. The respective jurisdiction of
organization or incorporation and percentage ownership by the Borrower of the
Subsidiaries listed on SCHEDULE 4 are true and correct as of the Agreement
Date. SCHEDULE 4 is a complete and accurate listing as of the Agreement Date,
showing with respect to the Borrower and each Subsidiary of the Borrower (a)
its mailing address, which is its principal place of business, (b) the
classes of its Capital Stock and the number and amount of its Capital Stock
authorized and outstanding, (c) each record and beneficial owner of 5% or
more of its outstanding Capital Stock, and (d) all outstanding options,
rights, rights of conversion, redemption, purchase or repurchase, rights of
first refusal and similar rights relating to the Capital Stock. All of the
outstanding Capital Stock of the Borrower and each Subsidiary of the Borrower
is validly issued, fully paid and non-assessable. Each of the Borrower and
its Subsidiaries is a corporation or other legal Person duly organized,
validly existing and in good standing under the laws of its state of
incorporation or organization. Each of the Borrower and its Subsidiaries has
the legal power and authority to own its properties and to carry on its
business as now being and hereafter proposed to be conducted. Each of the
Borrower and its Subsidiaries is authorized to do business, duly qualified
and in good standing as set forth in SCHEDULE 7 and no qualification or
authorization is necessary in any other jurisdictions in which the character
of its properties or the nature of its business requires such qualification
or authorization, except where the failure to be so qualified or authorized
could not reasonably be expected to have a Material Adverse Effect.
(b) AUTHORIZATION. The Borrower has legal power and has taken all
necessary legal action to authorize it to borrow and request Letters of
Credit hereunder. Each of the Borrower and its Subsidiaries has legal power
and has taken all necessary legal action to execute, deliver and perform the
Loan Documents to which it is party in accordance with the terms thereof, and
to consummate the transactions contemplated thereby. Each Loan Document has
been duly executed and delivered by the Borrower or the Subsidiary of the
Borrower executing it. Each of the Loan Documents to which the Borrower or
any of its Subsidiaries is a party is a legal, valid and binding obligation
of the Borrower or such Subsidiary, as applicable, enforceable in accordance
with its terms, subject, to enforcement of remedies, to the following
qualifications: (i) equitable principles generally, and (ii) Debtor Relief
Laws (insofar as any such law relates to the bankruptcy, insolvency or
similar event of the Borrower or any Subsidiary of the Borrower).
(c) COMPLIANCE WITH OTHER LOAN DOCUMENTS AND CONTEMPLATED TRANSACTIONS.
The execution, delivery and performance by the Borrower and its Subsidiaries
of the Loan Documents to which they are respectively a party, and the
consummation of the transactions contemplated thereby, do not and will not
(i) require any consent or approval necessary on or
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prior to the Agreement Date not already obtained, except to the extent that
the failure to obtain any such consent or approval could not reasonably be
expected to have a Material Adverse Effect, (ii) violate any Applicable Law,
(iii) conflict with, result in a breach of, or constitute a default under the
certificate of incorporation or by-laws of the Borrower or any Subsidiary of
the Borrower, (iv) conflict with, result in a breach of, or constitute a
default under any Necessary Authorization, indenture, agreement or other
instrument, to which the Borrower or any Subsidiary of the Borrower is a
party or by which they or their respective properties may be bound, the
result of which could reasonably be expected to have a Material Adverse
Effect, or (v) result in or require the creation or imposition of any Lien
(other than Liens in favor of the Lenders to secure the Obligations
hereunder) upon or with respect to any property now owned or hereafter
acquired by the Borrower or any Subsidiary of the Borrower.
(d) BUSINESS. The Borrower and its Subsidiaries are engaged primarily
in the business of providing distributed desktop computer-related products
and network integration services for large corporate customers worldwide and
providing related services, including LAN/WAN projects and consulting,
network management, help desk, field engineering configuration, distribution
and procurement and activities directly related thereto.
(e) LICENSES, ETC. All Necessary Authorizations have been duly
obtained, and are in full force and effect without any known conflict with
the rights of others and free from any unduly burdensome restrictions, unless
the failure to obtain or have in effect such Necessary Authorizations could
not reasonably be expected to result in a Material Adverse Effect. The
Borrower and its Subsidiaries are and will continue to be in compliance in
all material respects with all provisions thereof. No circumstance exists
which could reasonably be expected to impair the utility of the Necessary
Authorization or the right to renew such Necessary Authorization the effect
of which could reasonably be expected to have a Material Adverse Effect. No
Necessary Authorization is the subject of any pending or, to the best of the
Borrower's knowledge, threatened challenge, suspension, cancellation or
revocation, the effect of which could reasonably be expected to have a
Material Adverse Effect.
(f) COMPLIANCE WITH LAW. The Borrower and its Subsidiaries are in
compliance in all respects with all Applicable Laws, except where the failure
to so comply could not reasonably be expected to have a Material Adverse
Effect.
(g) TITLE TO PROPERTIES. The Borrower and its Subsidiaries have good
and indefeasible title to, or a valid leasehold interest in, all of their
material assets. None of their assets are subject to any Liens, except
Permitted Liens. No financing statement or other Lien filing (except
relating to Permitted Liens) is on file in any state or jurisdiction that
names the Borrower or any of its Subsidiaries as debtor or covers (or
purports to cover) any assets of the Borrower or any of its Subsidiaries.
The Borrower and its Subsidiaries have not signed any such financing
statement or filing, nor any security agreement authorizing any Person to
file any such financing statement or filing (except relating to Permitted
Liens).
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(h) LITIGATION. Except as reflected on SCHEDULE 3 hereto, as of the
Agreement Date there is no Litigation pending against, or, to the Borrower's
current actual knowledge, threatened against the Borrower, or in any other
manner relating directly and adversely to the Borrower or any of its
Subsidiaries, or any of their respective properties, in any court or before
any arbitrator of any kind or before or by any governmental body in which the
amount claimed (in excess of applicable insurance) exceeds $100,000.
(i) TAXES. All material federal, state and other tax returns of the
Borrower and its Subsidiaries required by law to be filed have been duly
filed or extensions have been timely filed, and all material federal, state
and other Taxes upon the Borrower, its Subsidiaries or any of their
properties, income, profits and assets, which are due and payable, have been
paid, unless the same are being diligently contested in accordance with
SECTION 5.6 hereof. The charges, accruals and reserves on the books of the
Borrower and its Subsidiaries in respect of their Taxes are, in the
reasonable judgment of the Borrower, adequate.
(j) FINANCIAL STATEMENTS; MATERIAL LIABILITIES.
(i) The Borrower has heretofore delivered to Lenders
(a) the audited consolidated balance sheets of the Borrower
and its Subsidiaries as at December 31, 1995, and the
related statements of earnings and changes in investment and
statement of cash flows for the twelve-month period then
ended, and (b) unaudited consolidated balance sheets of the
Borrower and its Subsidiaries as at June 30, 1996, and the
related statements of earnings and changes in investment and
statement of cash flows for the six-month period then ended.
Such financial statements were prepared in conformity with
GAAP (except for the absence of footnotes) and fairly
present, in all material respects, the financial position of
the Borrower and its Subsidiaries as at the date thereof and
the combined results of operations and cash flows for the
period covered thereby.
(ii) The projected financial statements of the Borrower
and its Subsidiaries delivered to the Lenders prior to or on
the Agreement Date were prepared in good faith and
management of the Borrower believes them to be based on
reasonable assumptions (which assumptions have been included
in the most recent projections furnished to the Lenders
prior to the Agreement Date) and to fairly present in all
material respects the projected financial condition of the
Borrower and its Subsidiaries and the projected results of
operations as of the dates and for the periods shown for the
Borrower and its Subsidiaries, it being recognized by the
Lenders that such projections as to future events are not to
be viewed as facts and that actual results during the period
or periods covered by any such projections may differ from
the projected results.
(iii) The financial statements of the Borrower and
its Subsidiaries delivered to the Lenders pursuant to
SECTION 6.1, 6.2 and 6.3 hereof fairly present in all
material respects their respective financial condition and
their respective results of operations as of the dates and
for the periods shown, all in accordance with GAAP, subject
to normal year-end adjustments. The latest of such
financial statements reflects all material liabilities,
direct and contingent, of the Borrower and each Subsidiary
of the Borrower
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that are required to be disclosed in accordance with GAAP. As of the
date of the latest of such financial statements, there were no
Guaranties, liabilities for Taxes, forward or long-term commitments or
unrealized or anticipated losses from any unfavorable commitments that
are substantial in amount that are required to be reflected but that
are not reflected on such financial statements.
(k) NO ADVERSE CHANGE. Since December 31, 1995, no event or
circumstance has occurred or arisen which is reasonably likely to have a
Material Adverse Effect.
(l) ERISA. None of the Borrower or its Controlled Group maintains or
contributes to any Plan subject to Title IV of ERISA other than those
disclosed to the Administrative Lender in writing. Each such Plan (other
than any Multiemployer Plan) is in compliance in all material respects with
the applicable provisions of ERISA, the Code, and any other applicable Law,
except to the extent that failure to so comply would not reasonably be
expected to have a Material Adverse Effect. With respect to each Plan (other
than any Multiemployer Plan) of the Borrower and each member of its
Controlled Group, all reports required under ERISA or any other Applicable
Law to be filed with any Tribunal, the failure of which to file could
reasonably be expected to result in liability of the Borrower or any member
of its Controlled Group in excess of $100,000, have been duly filed. All such
reports are true and correct in all material respects as of the date given.
No Plan of the Borrower or any member of its Controlled Group has been
terminated under Section 4041(c) of ERISA nor has any accumulated funding
deficiency (as defined in Section 412(a) of the Code) been incurred (without
regard to any waiver granted under Section 412 of the Code), nor has any
funding waiver from the Internal Revenue Service been received or requested
the result of which could reasonably be expected to have a Material Adverse
Effect. None of the Borrower or any member of its Controlled Group has
failed to make any contribution or pay any amount due or owing as required
under the terms of any such Plan, or by Section 412 of the Code or Section
302 of ERISA by the due date under Section 412 of the Code and Section 302 of
ERISA, the result of which could reasonably be expected to have a Material
Adverse Effect. There has been no ERISA Event or any event requiring
disclosure under Section 4041(c)(3)(C) or 4063(a) of ERISA with respect to
any Plan or its related trust of the Borrower or any member of its Controlled
Group since the effective date of ERISA. The present value of the benefit
liabilities, as defined in Title IV of ERISA, of each Plan subject to Title
IV of ERISA (other than a Multiemployer Plan) of the Borrower and each member
of its Controlled Group does not exceed by more than $500,000 the present
value of the assets of each such Plan as of the most recent valuation date
using each such Plan's actuarial assumptions at such date. There are no
pending, or to the Borrower's knowledge threatened, claims, lawsuits or
actions (other than routine claims for benefits in the ordinary course)
asserted or instituted against, and neither the Borrower nor any member of
its Controlled Group has knowledge of any threatened litigation or claims
against, the assets of any Plan or its related trust or against any fiduciary
of a Plan with respect to the operation of such Plan, the result of which
could reasonably be expected to have a Material Adverse Effect. None of the
Borrower or, to the Borrower's knowledge, any member of its Controlled Group
has engaged in any prohibited transactions, within the meaning of Section 406
of ERISA or Section 4975 of the Code, in connection with any Plan the result
of which could reasonably be expected to have a Material Adverse Effect.
None of the Borrower or any member of its Controlled
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Group has withdrawn from any Multiemployer Plan, nor has incurred or
reasonably expects to incur (A) any liability under Title IV of ERISA (other
than premiums due under Section 4007 of ERISA to the PBGC), (B) any
withdrawal liability (and no event has occurred which with the giving of
notice under Section 4219 of ERISA would result in such liability) under
Section 4201 of ERISA as a result of a complete or partial withdrawal (within
the meaning of Section 4203 or 4205 of ERISA) from a Multiemployer Plan, or
(C) any liability under Section 4062 of ERISA to the PBGC or to a trustee
appointed under Section 4042 of ERISA. None of the Borrower, any member of
its Controlled Group, or any organization to which the Borrower or any member
of its Controlled Group is a successor or parent corporation within the
meaning of ERISA Section 4069(b), has engaged in a transaction within the
meaning of ERISA Section 4069, the result of which could reasonably be
expected to have a Material Adverse Effect. None of the Borrower or any
member of its Controlled Group maintains or has established any Plan, which
is a welfare benefit plan within the meaning of Section 3(1) of ERISA and
which provides for continuing benefits or coverage for any participant or any
beneficiary of any participant after such participant's termination of
employment, except as may be required by any Applicable Law, the result of
which could reasonably be expected to have a Material Adverse Effect. Each
of Borrower and its Controlled Group which maintains a Plan which is a
welfare benefit plan within the meaning of Section 3(1) of ERISA has complied
in all material respects with any applicable notice and continuation
requirements of the Consolidated Omnibus Budget Reconciliation Act of 1985,
as amended, and the regulations thereunder. None of the Borrower or any
member of its Controlled Group maintains, has established, or has ever
participated in a multiemployer welfare benefit arrangement within the
meaning of Section 3(40)(A) of ERISA.
(m) COMPLIANCE WITH REGULATIONS G, T, U AND X. The Borrower is not
engaged principally or as one of its important activities in the business of
extending credit for the purpose of purchasing or carrying any margin stock
within the meaning of Regulations G, T, U and X of the Board of Governors of
the Federal Reserve System, and no part of the proceeds of the Advances or
Letters of Credit will be used to purchase or carry any margin stock or to
extend credit to others for the purpose of purchasing or carrying any margin
stock. No more than 25% of the assets of the Borrower and its Subsidiaries
are margin stock. None of the Borrower and its Subsidiaries nor any agent
acting on their behalf, have taken or will knowingly take any action which
would cause this Agreement or any other Loan Documents to violate any
regulation of the Board of Governors of the Federal Reserve System or to
violate the Securities Exchange Act of 1934, in each case as in effect now or
as the same may hereafter be in effect.
(n) AUTHORIZATION. The Borrower and its Subsidiaries are not required
to obtain any Necessary Authorization on or prior to the Agreement Date that
has not already been obtained from, or effect any material filing or
registration that has not already been effected with, any Tribunal in
connection with the execution and delivery of this Agreement or any other
Loan Document, or the performance thereof, in accordance with their
respective terms, including any borrowings hereunder, except for the filing
of financing statements (and other similar notices) containing a description
of the Collateral with certain Tribunals, including the United States
Trademark and Copyright Offices.
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(o) ABSENCE OF DEFAULT. The Borrower and its Subsidiaries are in
compliance in all material respects with all of the provisions of their
certificate of incorporation and by-laws, and no event has occurred or failed
to occur, which has not been remedied or waived, the occurrence or
non-occurrence of which constitutes, or which with the passage of time or
giving of notice or both would constitute, (i) an Event of Default or (ii) a
default by the Borrower or any of its Subsidiaries under any material
indenture, agreement or other instrument, or any judgment, decree or order to
which the Borrower or any of its Subsidiaries or by which they or any of
their respective properties is bound, except to the extent that such default
could not reasonably be expected to have a Material Adverse Effect.
(p) GOVERNMENTAL REGULATION. Neither the Borrower nor any of its
Subsidiaries is subject to regulation under the Public Utility Holding
Company Act of 1935, the Federal Power Act, the Interstate Commerce Act or
the Investment Company Act of 1940. Neither the entering into or performance
by the Borrower of this Agreement nor the issuance of the Notes violates any
provision of such act or requires any consent, approval, or authorization of,
or registration with, the Securities and Exchange Commission or any other
Tribunal pursuant to any provisions of such act.
(q) ENVIRONMENTAL MATTERS. Neither the Borrower nor any Subsidiary has
any current actual knowledge that any substance deemed hazardous by any
Applicable Environmental Law, has been installed (i) on any real property fee
title to which is now owned by the Borrower or any of its Subsidiaries or
(ii) by Borrower or any of its Subsidiaries on any real property leased by
the Borrower or any of its Subsidiaries, in either case in a manner which
does not comply with Applicable Environmental Laws, except to the extent that
the failure to so comply could not reasonably be expected to have a Material
Adverse Effect. The Borrower and its Subsidiaries are not in violation of or
subject to any existing, pending or, to the best of the Borrower's knowledge,
threatened investigation or inquiry by any Tribunal or to any remedial
obligations under any Applicable Environmental Laws, the effect of which
could reasonably be expected to have a Material Adverse Effect. The Borrower
and its Subsidiaries have not obtained and are not required to obtain any
permits, licenses or similar authorizations other than certificates of
occupancy and building permits and other authorizations that have been
obtained to construct, occupy, operate or use any buildings, improvements,
fixtures, and equipment forming a part of any real property owned or leased
by the Borrower or any Subsidiary of the Borrower by reason of any Applicable
Environmental Laws, except to the extent that the failure to so obtain could
not reasonably be expected to have a Material Adverse Effect. The Borrower
and its Subsidiaries undertook, at the time of acquisition of fee title to
any real property, reasonable inquiry into the previous ownership and uses of
such real property consistent with good commercial or customary practice.
The Borrower and its Subsidiaries have taken reasonable steps to determine,
and the Borrower and its Subsidiaries have no current actual knowledge, that
any hazardous substances or solid wastes have been disposed of or otherwise
released (i) on or to the real property fee title to which is owned by the
Borrower or any of its Subsidiaries or (ii) by Borrower or any of its
Subsidiaries on or to any real property leased by Borrower or any of its
Subsidiaries, all within the meaning of the Applicable Environmental Laws,
the effect of which could reasonably be expected to have a Material Adverse
Effect. The Borrower and its Subsidiaries have disposed of all hazardous
substances and solid wastes (if
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any), all within the meaning of the Applicable Environmental Laws, generated
in their respective businesses in compliance with all Applicable
Environmental Laws, except to the extent that the failure to so comply could
not reasonably be expected to have a Material Adverse Effect.
(r) CERTAIN FEES. No broker's, finder's or other fee or commission
will be payable by the Borrower (other than to the Lenders hereunder) with
respect to the making of the Commitments or the Advances hereunder. The
Borrower agrees to indemnify and hold harmless the Administrative Lender and
each Lender from and against any claims, demand, liability, proceedings,
costs or expenses asserted with respect to or arising in connection with any
such fees or commissions.
(s) PATENTS, ETC. The Borrower and its Subsidiaries have collectively
obtained or applied for all patents, trademarks, service marks, trade names,
copyrights, licenses and other rights, free from burdensome restrictions,
that are necessary for the operation of their business as presently conducted
and as proposed to be conducted, except to the extent that the failure to so
obtain or apply could not reasonably be expected to have a Material Adverse
Effect. Nothing has come to the current actual knowledge of the Borrower or
any of its Subsidiaries to the effect that (i) any process, method, part or
other material presently contemplated to be employed by the Borrower or any
Subsidiary of the Borrower may infringe any patent, trademark, service ▇▇▇▇,
trade name, copyright, license or other right owned by any other Person, or
(ii) there is pending or overtly threatened any claim or litigation against
or affecting the Borrower or any Subsidiary of the Borrower contesting its
right to sell or use any such process, method, part or other material, which
could reasonably be expected to have a Material Adverse Effect.
(t) DISCLOSURE. All factual information furnished by the Borrower or
any of its Subsidiaries in writing to the Administrative Lender or any Lender
in connection with this Agreement, the other Loan Documents or any
transaction contemplated herein or therein is, and all other factual
information hereafter furnished by or on behalf of the Borrower or any of its
Subsidiaries in writing to the Administrative Lender or any Lender will be,
true and accurate in all material respects on the date as of which such
information is dated or certified and not incomplete by omitting to state any
fact necessary to make such information (taken as a whole) not misleading at
such time in light of the circumstances under which such information was
provided. There is no fact known to the Borrower and not known to the public
generally that could reasonably be expected to have a Material Adverse
Effect, which has not been set forth in this Agreement or in the documents,
certificates and statements furnished to the Lenders by or on behalf of the
Borrower prior to the date hereof in connection with the transaction
contemplated hereby.
(u) SOLVENCY. The Borrower is, and Borrower and its Subsidiaries on a
consolidated basis are, Solvent.
(v) LABOR RELATIONS. Except as provided on SCHEDULE 8, neither the
Borrower nor any Subsidiary is a party to a collective bargaining agreement
or similar agreement, and the Borrower and each Subsidiary is in compliance
in all material respects with all Laws respecting employment and employment
practices, terms and conditions of employment, wages and hours
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and other laws related to the employment of its employees, except where the
failure to comply could not reasonably be expected to result in a Material
Adverse Effect, and there are no arrears in the payment of wages, withholding
or social security taxes, unemployment insurance premiums or other similar
obligations of the Borrower or any Subsidiary or for which the Borrower or
any Subsidiary may be responsible other than in the ordinary course of
business, except for such unpaid or unwithheld arrears which could not
reasonably be expected to result in a Material Adverse Effect. There is no
strike, work stoppage or labor dispute with any union or group of employees
pending or overtly threatened involving Borrower or any Subsidiary that could
reasonably be expected to have a Material Adverse Effect.
(w) CONSOLIDATED BUSINESS ENTITY. The Borrower and its Material
Subsidiaries are operated as a part of one consolidated business entity and
are directly or indirectly dependent upon each other for and in connection
with their respective business activities.
Section 4.2 SURVIVAL OF REPRESENTATIONS AND WARRANTIES, ETC. All
representations and warranties made under this Agreement and the other Loan
Documents shall be deemed to be made at and as of the Agreement Date and at
and as of the date of each Advance and the date of issuance of each Letter of
Credit, and each shall be true and correct in all material respects when
made, except to the extent (a) previously fulfilled in accordance with the
terms hereof or (b) previously waived in writing by the Determining Lenders
with respect to any particular factual circumstance or permitted by the terms
of this Agreement. All such representations and warranties shall survive,
and not be waived by, the execution hereof by any Lender, any investigation
or inquiry by any Lender, or by the making of any Advance or the issuance of
any Letter of Credit under this Agreement.
ARTICLE 5
GENERAL COVENANTS
So long as any of the Obligations are outstanding and unpaid or any
Commitment is outstanding (whether or not the conditions to borrowing have
been or can be fulfilled):
Section 5.1 PRESERVATION OF EXISTENCE AND SIMILAR MATTERS. The
Borrower shall, and shall cause each Subsidiary of the Borrower to:
(a) except as otherwise permitted pursuant to SECTION 7.4 hereof,
preserve and maintain, or timely obtain and thereafter preserve and maintain,
its existence, rights, franchises, licenses, authorizations, consents,
privileges and all other Necessary Authorizations from any Tribunal, the loss
of which could reasonably be expected to have a Material Adverse Effect; and
(b) except as otherwise permitted pursuant to SECTION 7.4 hereof,
qualify and remain qualified and authorized to do business in each
jurisdiction in which the character of its properties or the nature of its
business requires such qualification or authorization, unless the failure to
do so could not reasonably be expected to have a Material Adverse Effect.
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Section 5.2 BUSINESS; COMPLIANCE WITH APPLICABLE LAW. The Borrower
and its Subsidiaries shall (a) engage primarily in the businesses set forth
in SECTION 4.1(d) hereof, and (b) comply in all respects with the
requirements of all Applicable Law, except where the failure to so comply
could not reasonably be expected to have a Material Adverse Effect.
Section 5.3 MAINTENANCE OF PROPERTIES. The Borrower shall, and shall
cause each Subsidiary of the Borrower to, maintain or cause to be maintained
all its properties (whether owned or held under lease) in reasonably good
repair, working order and condition, taken as a whole, and from time to time
make or cause to be made all appropriate (in the reasonable judgment of the
Borrower) repairs, renewals, replacements, additions, betterments and
improvements thereto, except where the failure to so maintain, repair, renew,
replace or improve could not reasonably be expected to have a Material
Adverse Effect.
Section 5.4 ACCOUNTING METHODS AND FINANCIAL RECORDS. The Borrower
shall, and shall cause each Subsidiary of the Borrower to, maintain a system
of accounting established and administered in accordance with GAAP, keep
adequate records and books of account in which complete entries will be made
and all transactions reflected in accordance with GAAP, and keep accurate and
complete records of its respective assets. Except with respect to a change
in the fiscal year of any Subsidiary to conform to the fiscal year of the
Borrower, the Borrower and each of its Subsidiaries shall maintain its fiscal
year in the manner in existence on the Agreement Date.
Section 5.5 INSURANCE. The Borrower shall, and shall cause each
Subsidiary of the Borrower to, maintain insurance from responsible companies
in such amounts and against such risks as shall be customary and usual in the
industry for companies of similar size and capability. Each insurance policy
shall (a) provide for at least 30 days' prior notice to the Administrative
Lender of any proposed termination or cancellation of such policy, whether on
account of default or otherwise and (b) otherwise contain the requirements
for insurance set forth in the Security Agreements.
Section 5.6 PAYMENT OF TAXES AND CLAIMS. The Borrower shall, and
shall cause each Subsidiary of the Borrower to, pay and discharge all
material Taxes to which they are subject prior to the date on which penalties
attach thereto, and all lawful material claims for labor, materials and
supplies which, if unpaid, might become a Lien upon any of its properties;
except that no such Tax or claim need be paid which is being diligently
contested in good faith by appropriate proceedings and for which adequate
reserves shall have been set aside on the appropriate books, but only so long
as no Lien shall attach with respect thereto and no foreclosure, distraint,
sale or similar proceedings shall have been commenced. The Borrower shall,
and shall cause each Subsidiary of the Borrower to, timely file all
information returns (or extensions of such filing deadlines) required by
federal, state or local tax authorities.
Section 5.7 VISITS AND INSPECTIONS. The Borrower shall, and shall
cause each Subsidiary of the Borrower to, promptly permit representatives of
the Administrative Lender or any Lender from time to time after reasonable
notice by the Administrative Lender or any Lender to (a) visit and inspect
the properties of the Borrower and its Subsidiaries as often as the
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Administrative Lender or any Lender shall reasonably deem advisable, (b)
audit, inspect and make extracts from and copies of the Borrower's and each
such Subsidiary's books and records, and (c) discuss with the Borrower's and
each such Subsidiary's appropriate directors, officers, employees and
auditors its business, assets, liabilities, financial positions, results of
operations and business prospects, PROVIDED that such representatives of the
Administrative Lender or any Lender shall keep confidential all information
obtained pursuant to this SECTION 5.7 to the extent required by SECTION
11.14. The Borrower shall pay the reasonable expenses related to inspections
and audits performed by the Administrative Lender. Prior to the occurrence
of an Event of Default, all such visits and inspections shall be conducted
during normal business hours. Following the occurrence and during the
continuance of an Event of Default, such visits and inspections shall be
conducted at any time requested by the Administrative Lender or any Lender
without any requirement for reasonable notice.
Section 5.8 USE OF PROCEEDS. The proceeds of (a) the Facility A
Advances and the Letters of Credit shall be used by the Borrower for
refinancing of Indebtedness of the Borrower, Capital Expenditures,
Acquisitions permitted under SECTION 7.6 hereof and for working capital and
for other general corporate purposes and (b) the Facility B Advances shall be
used solely to purchase real property to be utilized as the corporate
headquarters for the Borrower.
SECTION 5.9 INDEMNITY.
(a) THE BORROWER AGREES TO DEFEND, PROTECT, INDEMNIFY AND HOLD HARMLESS
THE ADMINISTRATIVE LENDER, EACH LENDER, EACH OF THEIR RESPECTIVE AFFILIATES,
AND EACH OF THEIR RESPECTIVE (INCLUDING SUCH AFFILIATES') OFFICERS,
DIRECTORS, EMPLOYEES, AGENTS, ATTORNEYS AND CONSULTANTS (INCLUDING, WITHOUT
LIMITATION, THOSE RETAINED IN CONNECTION WITH THE SATISFACTION OR ATTEMPTED
SATISFACTION OF ANY OF THE CONDITIONS SET FORTH HEREIN) OF EACH OF THE
FOREGOING (COLLECTIVELY, "INDEMNITEES") FROM AND AGAINST ANY AND ALL
LIABILITIES, OBLIGATIONS, LOSSES, DAMAGES, PENALTIES, ACTIONS, JUDGMENTS,
SUITS, CLAIMS, REASONABLE COSTS, REASONABLE EXPENSES AND REASONABLE
DISBURSEMENTS OF ANY KIND OR NATURE WHATSOEVER (INCLUDING, WITHOUT
LIMITATION, THE REASONABLE FEES AND DISBURSEMENTS OF COUNSEL FOR SUCH
INDEMNITEES IN CONNECTION WITH ANY INVESTIGATIVE, ADMINISTRATIVE OR JUDICIAL
PROCEEDING, WHETHER OR NOT SUCH INDEMNITEES SHALL BE DESIGNATED A PARTY
THERETO), IMPOSED ON, INCURRED BY, OR ASSERTED AGAINST SUCH INDEMNITEES
(WHETHER DIRECT, INDIRECT OR CONSEQUENTIAL AND WHETHER BASED ON ANY FEDERAL,
STATE, OR LOCAL LAWS AND REGULATIONS, UNDER COMMON LAW OR AT EQUITABLE CAUSE,
OR ON CONTRACT, TORT OR OTHERWISE, ARISING FROM OR CONNECTED WITH THE PAST,
PRESENT OR FUTURE OPERATIONS OF THE BORROWER, ITS SUBSIDIARIES OR THEIR
RESPECTIVE PREDECESSORS IN INTEREST, OR THE PAST, PRESENT OR FUTURE
ENVIRONMENTAL CONDITION OF PROPERTY OF THE BORROWER OR ITS SUBSIDIARIES),
RELATING TO OR ARISING OUT OF
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THIS AGREEMENT, THE OTHER LOAN DOCUMENTS, OR ANY ACT, EVENT OR TRANSACTION OR
ALLEGED ACT, EVENT OR TRANSACTION RELATING OR ATTENDANT THERETO, THE
MANAGEMENT OF THE ADVANCES OR LETTERS OF CREDIT, INCLUDING IN CONNECTION
WITH, OR AS A RESULT, IN WHOLE OR IN PART, OF ANY ORDINARY OR MERE NEGLIGENCE
OF ADMINISTRATIVE LENDER OR ANY LENDER (OTHER THAN THOSE MATTERS RAISED
EXCLUSIVELY BY A PARTICIPANT AGAINST THE ADMINISTRATIVE LENDER OR ANY LENDER
AND NOT THE BORROWER OR ANY OF ITS SUBSIDIARIES), OR THE USE OR INTENDED USE
OF THE PROCEEDS OF THE ADVANCES OR LETTERS OF CREDIT HEREUNDER, OR IN
CONNECTION WITH ANY INVESTIGATION OF ANY POTENTIAL MATTER COVERED HEREBY, BUT
EXCLUDING (i) ANY CLAIM OR LIABILITY THAT ARISES AS THE RESULT OF THE GROSS
NEGLIGENCE OR WILFUL MISCONDUCT OF ANY INDEMNITEE, AS FINALLY JUDICIALLY
DETERMINED BY A COURT OF COMPETENT JURISDICTION, AND (ii) MATTERS RAISED BY
ONE LENDER AGAINST ANOTHER LENDER OR BY ANY SHAREHOLDERS OF A LENDER AGAINST
A LENDER OR ITS MANAGEMENT (COLLECTIVELY, "INDEMNIFIED MATTERS"). TO THE
EXTENT THAT ANY INDEMNIFIED MATTER INVOLVES ONE OR MORE INDEMNITEES, SUCH
INDEMNITEES SHALL USE THE SAME LEGAL COUNSEL UNLESS ANY INDEMNITEE IN ITS
REASONABLE DISCRETION DETERMINES THAT CONFLICTS EXIST OR MAY ARISE IN
CONNECTION WITH SUCH REPRESENTATION.
(b) WITHOUT DUPLICATION, THE BORROWER SHALL PERIODICALLY, UPON REQUEST,
REIMBURSE EACH INDEMNITEE FOR ITS REASONABLE LEGAL AND OTHER ACTUAL
REASONABLE EXPENSES (INCLUDING THE REASONABLE COST OF ANY INVESTIGATION AND
PREPARATION) INCURRED IN CONNECTION WITH ANY INDEMNIFIED MATTER. THE
REIMBURSEMENT, INDEMNITY AND CONTRIBUTION OBLIGATIONS UNDER THIS SECTION
SHALL BE IN ADDITION TO ANY LIABILITY WHICH THE BORROWER MAY OTHERWISE HAVE,
SHALL EXTEND UPON THE SAME TERMS AND CONDITIONS TO EACH INDEMNITEE, AND SHALL
BE BINDING UPON AND INURE TO THE BENEFIT OF ANY SUCCESSORS, ASSIGNS, HEIRS
AND PERSONAL REPRESENTATIVES OF THE BORROWER, THE ADMINISTRATIVE LENDER, THE
LENDERS AND ALL OTHER INDEMNITEES. THIS SECTION SHALL SURVIVE ANY TERMINATION
OF THIS AGREEMENT AND PAYMENT OF THE OBLIGATIONS.
Section 5.10 ENVIRONMENTAL LAW COMPLIANCE. The use which the Borrower
or any Subsidiary of the Borrower intends to make of any real property which
is owned or leased by it will not result in the disposal or other release of
any hazardous substance or solid waste on or to such real property which is
in violation of Applicable Environmental Laws, the effect of which could
reasonably be expected to have a Material Adverse Effect. As used herein,
the terms "hazardous substance" and "release" as used in this Section shall
have the meanings specified in CERCLA (as defined in the definition of
Applicable Environmental Laws), and the terms "solid waste" and "disposal"
shall have the meanings specified in RCRA (as defined in the definition of
Applicable Environmental Laws); provided, however, that if CERCLA or
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RCRA is amended so as to broaden or lessen the meaning of any term defined
thereby, such broader or lesser meaning shall apply subsequent to the
effective date of such amendment; and provided further, to the extent that
any other law applicable to the Borrower, any Subsidiary or any of their
properties establishes a meaning for "hazardous substance," "release," "solid
waste," or "disposal" which is broader or lesser than that specified in
either CERCLA or RCRA, such broader or lesser meaning shall apply. The
Borrower agrees to indemnify and hold the Administrative Lender and each
Lender harmless from and against, and to reimburse them with respect to, any
and all claims, demands, causes of action, loss, damage, liabilities,
reasonable costs and reasonable expenses (including reasonable attorneys'
fees and courts costs) of any kind or character, known or unknown, fixed or
contingent, asserted against or incurred by any of them at any time and from
time to time by reason of or arising out of (a) the failure of the Borrower
or any Subsidiary to perform any of their obligations hereunder regarding
asbestos or Applicable Environmental Laws, (b) any violation on or before the
Release Date of any Applicable Environmental Law in effect on or before the
Release Date, and (c) any act, omission, event or circumstance existing or
occurring on or prior to the Release Date (including without limitation the
presence on such real property or release from such real property of
hazardous substances or solid wastes disposed of or otherwise released on or
prior to the Release Date), resulting from or in connection with the
ownership of the real property, regardless of whether the act, omission,
event or circumstance constituted a violation of any Applicable Environmental
Law at the time of its existence or occurrence; provided that, the Borrower
shall not be under any obligation to indemnify the Administrative Lender or
any Lender to the extent that any such liability arises as the result of the
gross negligence or wilful misconduct of such Person, as finally judicially
determined by a court of competent jurisdiction. The provisions of this
paragraph shall survive the Release Date and shall continue thereafter in
full force and effect.
Section 5.11 FURTHER ASSURANCES. At any time or from time to time
upon request by the Administrative Lender, the Borrower or any Subsidiary of
the Borrower shall execute and deliver such further documents and do such
other acts and things as the Administrative Lender may reasonably request in
order to effect fully the purposes of this Agreement and the other Loan
Documents and to provide for payment of the Obligations in accordance with
the terms of this Agreement and the other Loan Documents. Without limiting
the generality of the foregoing, the Borrower agrees to (a) update and
deliver to the Administrative Lender SCHEDULES 3 AND 4 hereto at the time of
delivery of the financial statements set forth in SECTIONS 6.1 and 6.2 hereof
if the information provided therein is not complete and correct, and (b)
update and deliver to the Administrative Lender SCHEDULE 1 to the Security
Agreements promptly upon discovery if the information provided therein is not
complete and correct.
Section 5.12 SUBSIDIARIES. At any time that any Person becomes a
Subsidiary other than pursuant to SECTION 7.3(f) hereof, (a) such Subsidiary
shall execute a Subsidiary Guaranty of the Obligations and a Security
Agreement granting a first priority Lien in all its assets of the types or
classes included in the Collateral, except, to the extent applicable, for
Liens permitted in clause (f) of the definition of Permitted Liens, to secure
the Obligations and (b) the Lenders shall receive such board resolutions,
officer's certificates and opinions of counsel as the
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Administrative Lender shall reasonably request in connection with the actions
described in clause (a) above.
Section 5.13 REAL PROPERTY. At any time that the Borrower acquires
any real property with the proceeds of a Facility B Advance, the Borrower
shall (a) execute a Deed of Trust granting a first priority Lien in the real
property acquired with such proceeds, (b) deliver to the Administrative
Lender a title insurance policy with respect to such real property, in form
and substance acceptable to the Administrative Lender, (c) deliver to the
Administrative Lender an environmental site assessment with respect to such
real property, in form and substance acceptable to the Administrative Lender,
prepared by a Person acceptable to the Administrative Lender, (d) deliver to
the Administrative Lender surveys with respect to such real property, in form
and substance acceptable to the Administrative Lender, and (e) the Lenders
shall receive such board resolutions, officer's certificates and opinions of
counsel as the Administrative Lender shall reasonably request with respect
thereto.
Section 5.14 AGREEMENTS IN RESPECT OF RPA AND TAA. With respect to
the RPA and the TAA, respectively, (a) unless otherwise agreed by the
Administrative Lender, the Borrower at all times shall have and maintain the
sole and exclusive right to service, administer and collect the Receivables,
SUBJECT AT ALL TIMES, HOWEVER, to the Loan Documents and the MSAA, (b) the
Borrower will not in any event effect an increase in the RPA Interest
Percentage (as defined by the MSAA) if as of the proposed time of the
effectiveness of any such increase (i) any Default or Event of Default is in
existence, or would exist upon such effectiveness or (ii) Projected Unused
Availability is less than zero dollars ($0.00), (c) contemporaneously upon
effecting any increase in the RPA Interest Percentage (as defined by the
MSAA) the Borrower shall deliver to the Administrative Lender a current
Borrowing Base Report, dated as of the effective date of any such increase,
(d) at all times after the occurrence and during the continuance of any
Default or Event of Default, the Borrower shall cause all proceeds of any
increase in the Net Investment (as defined by the TAA) received by CFI and
paid to the Borrower in payment of any RPA Interest under the RPA to be paid
directly to the Administrative Lender for application to the Obligations, (e)
the Borrower will not effect any increase in the Maximum Net Investment (as
defined by the TAA) without the prior written consent of the Administrative
Lender and (f) the Borrower will not enter into any agreement to amend the
RPA without the prior written consent of the Determining Lenders if such
agreement, or the amendment to the RPA contemplated thereby, would have a
material adverse effect upon any of the Lenders or the Administrative Lender.
ARTICLE 6
INFORMATION COVENANTS
So long as any of the Obligations are outstanding and unpaid or any
Commitment is outstanding (whether or not the conditions to borrowing have
been or can be fulfilled), the Borrower shall furnish or cause to be
furnished to each Lender or shall notify each Lender of the following events:
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Section 6.1 BORROWING BASE REPORT. Within 15 days after the end of
each month of each fiscal year and contemporaneously with any change in the
RPA Interest or any change in the Administrative Lender's beneficial interest
under the MSAA, the Borrowing Base Report setting forth a certification of
Eligible Accounts and Eligible Inventory, and calculation of the Borrowing
Base. Each Borrowing Base Report shall certify the CompuCom Interest
Percentage and the RPA Interest Percentage (each as defined in the MSAA)
outstanding as of the effective date thereof.
Section 6.2 QUARTERLY FINANCIAL STATEMENTS AND INFORMATION. Within
45 days after the end of each fiscal quarter of each fiscal year, the
consolidated balance sheets of the Borrower and its Subsidiaries as at the
end of such fiscal quarter and the related consolidated statements of income
for such fiscal quarter and for the elapsed portion of the year ended with
the last day of such fiscal quarter, and consolidated statements of cash flow
for the elapsed portion of the year ended with the last day of such fiscal
quarter, all of which shall be certified by the president, chief financial
officer, treasurer or controller of the Borrower, to, in his or her opinion
acting solely in his or her capacity as an officer of the Borrower, present
fairly in all material respects, in accordance with GAAP (except for the
absence of footnotes), the financial position and results of operations of
the Borrower and its Subsidiaries as at the end of and for such fiscal
quarter, and for the elapsed portion of the year ended with the last day of
such fiscal quarter, subject only to normal year-end adjustments.
Section 6.3 ANNUAL FINANCIAL STATEMENTS AND INFORMATION;
CERTIFICATE OF NO DEFAULT.
(a) Within 120 days after the end of each fiscal year, a copy of (i)
the consolidated and consolidating balance sheets of the Borrower and its
Subsidiaries, as of the end of the current and prior fiscal years and (ii)
the consolidated and consolidating statements of earnings and consolidated
statements of changes in shareholders' equity, and statements of cash flow as
of and through the end of such Fiscal Year, all of which are prepared in
accordance with GAAP, and certified by independent certified public
accountants reasonably acceptable to the Lenders (provided, however, any big
six public accounting firm shall be acceptable to the Lenders), whose opinion
shall be in scope and substance in accordance with generally accepted
auditing standards and shall be unqualified as to scope of audit and going
concern.
(b) As soon as available, but in any event within 30 days after
December 31, 1997 and within 30 days after the end of each fiscal year
thereafter, a copy of the annual consolidated financial projections
(including proforma income statements, balance sheets and statements of cash
flow) of the Borrower and its Subsidiaries for the succeeding three fiscal
years.
Section 6.4 COMPLIANCE CERTIFICATE. At the time financial statements
are furnished pursuant to SECTIONS 6.2 and 6.3 hereof, the Compliance
Certificate, completed as provided therein, executed by the Chief Financial
Officer, Treasurer or Vice President of Finance of the Borrower.
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Section 6.5 COPIES OF OTHER REPORTS AND NOTICES.
(a) Promptly upon their becoming available, a copy of (i) all material
final reports or letters submitted to the Borrower or any Subsidiary of the
Borrower by accountants in connection with any annual, interim or special
audit, including without limitation any final report prepared in connection
with the annual audit referred to in SECTION 6.2 hereof, and, if requested by
the Administrative Lender, any other comment letter submitted to management
in connection with any such audit, (ii) each financial statement, report,
notice or proxy statement sent by the Borrower to stockholders generally,
(iii) each regular, periodic or other report and any registration statement
(other than statements on Form S-8) or prospectus (or material written
communication in respect of any thereof) filed by the Borrower or any
Subsidiary of the Borrower with any securities exchange, with the Securities
and Exchange Commission or any successor agency, and (iv) all press releases
concerning material financial aspects of the Borrower or any Subsidiary of
the Borrower;
(b) Promptly upon becoming aware that (i) the holder(s) of any note(s)
or other evidence of indebtedness or other security of the Borrower or any
Subsidiary of the Borrower in excess of $500,000 in the aggregate has given
notice or taken any action with respect to a breach, failure to perform,
claimed default or event of default thereunder, (ii) any occurrence or
non-occurrence of any event which constitutes or which with the passage of
time or giving of notice or both could constitute a material breach by the
Borrower or any Subsidiary of the Borrower under any material agreement or
instrument other than this Agreement to which the Borrower or any Subsidiary
of the Borrower is a party or by which any of their properties may be bound,
or (iii) any event, circumstance or condition which could reasonably be
expected to be classified as a Material Adverse Effect, a written notice
specifying the details thereof (or the nature of any claimed default or event
of default) and what action is being taken or is proposed to be taken with
respect thereto;
(c) Promptly upon becoming aware that any party to any Capitalized
Lease Obligations or Operating Lease, in each case, in excess of $500,000,
has given notice or taken any action with respect to a breach, failure to
perform, claimed default or event of default thereunder, a written notice
specifying the details thereof (or the nature of any claimed default or event
of default) and what action is being taken or is proposed to be taken with
respect thereto;
(d) Promptly upon receipt thereof, information with respect to and
copies of any notices received from any Tribunal relating to any order,
ruling, law, information or policy that relates to a breach of or
noncompliance with any Law, or could reasonably be expected to result in the
payment of money by the Borrower or any Subsidiary of the Borrower in an
amount of $500,000 or more in the aggregate, or otherwise have a Material
Adverse Effect, or result in the loss or suspension of any Necessary
Authorization where such loss could reasonably be expected to have a Material
Adverse Effect; and
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(e) From time to time and promptly upon each request, such data,
certificates, reports, statements, documents or further information regarding
the assets, business, liabilities, financial position, projections, results
of operations or business prospects of the Borrower and its Subsidiaries, as
the Administrative Lender or any Lender may reasonably request.
Section 6.6 NOTICE OF LITIGATION, DEFAULT AND OTHER MATTERS. Prompt
notice of the following events after the Borrower has knowledge or notice
thereof:
(a) The commencement of all Litigation and investigations by or before
any Tribunal, and all actions and proceedings in any court or before any
arbitrator involving claims for damages (including punitive damages) in
excess of $500,000 (after deducting the amount with respect to the Borrower
or any Subsidiary of the Borrower is insured), against or in any other way
relating directly to the Borrower, any Subsidiary of the Borrower, or any of
their respective properties or businesses; and
(b) Promptly upon the happening of any condition or event of which the
Borrower has current actual knowledge which constitutes a Default, a written
notice specifying the nature and period of existence thereof and what action
is being taken or is proposed to be taken with respect thereto.
Section 6.7 ERISA REPORTING REQUIREMENTS.
(a) Promptly and in any event (i) within 30 days after the Borrower or
any member of its Controlled Group has current actual knowledge that any
ERISA Event described in clause (a) of the definition of ERISA Event or any
event described in Section 4063(a) of ERISA with respect to any Plan of the
Borrower or any member of its Controlled Group has occurred, and (ii) within
10 days after the Borrower or any member of its Controlled Group has current
actual knowledge that any other ERISA Event with respect to any Plan of the
Borrower or any member of its Controlled Group has occurred or a request for
a minimum funding waiver under Section 412 of the Code has been made with
respect to any Plan of the Borrower or any member of its Controlled Group, a
written notice describing such event and describing what action is being
taken or is proposed to be taken with respect thereto, together with a copy
of any notice of such event that is given to the PBGC;
(b) Promptly and in any event within three Business Days after receipt
thereof by the Borrower or any member of its Controlled Group from the PBGC,
copies of each notice received by the Borrower or any member of its
Controlled Group of the PBGC's intention to terminate any Plan or to have a
trustee appointed to administer any Plan;
(c) Promptly and in any event within 30 days after the filing thereof
by the Borrower or any member of its Controlled Group with the United States
Department of Labor or the Internal Revenue Service, copies of each annual
report (including Schedule B thereto, if applicable) with respect to each
Plan subject to Title IV of ERISA of which Borrower or any member of its
Controlled Group is the "plan sponsor";
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(d) Promptly, and in any event within 10 Business Days after receipt
thereof, a copy of any correspondence the Borrower or any member of its
Controlled Group receives from the Plan Sponsor (as defined by Section
4001(a)(10) of ERISA) of any Plan concerning potential withdrawal liability
pursuant to Section 4219 or 4202 of ERISA, and a statement from the chief
financial officer of the Borrower or such member of its Controlled Group
setting forth details as to the events giving rise to such potential
withdrawal liability and the action which the Borrower or such member of its
Controlled Group is taking or proposes to take with respect thereto;
(e) Notification within 30 days of any material increases in the
benefits provided under any existing Plan which is not a Multiemployer Plan,
or the establishment of any new Plans, or the commencement of contributions
to any Plan to which the Borrower or any member of its Controlled Group was
not previously contributing, which could reasonably be expected in any such
case to result in an additional material liability to the Borrower;
(f) Notification within three Business Days after the Borrower or any
member of its Controlled Group knows that the Borrower or any such member of
its Controlled Group has filed or intends to file a notice of intent to
terminate any Plan under a distress termination within the meaning of Section
4041(c) of ERISA and a copy of such notice; and
(g) Within three Business Days after receipt of written notice of
commencement thereof, notice of all actions, suits and proceedings before any
court or governmental department, commission, board, bureau, agency or
instrumentality, domestic or foreign, affecting the Borrower or any member of
its Controlled Group with respect to any Plan, except those which, in the
aggregate, if adversely determined could not reasonably be expected to have a
Material Adverse Effect.
Section 6.8 RPA AND TAA REPORTING REQUIREMENTS.
(a) (i) At such times as the Administrative Lender may request, the
amount of the RPA Interest Percentage (as defined by the MSAA) and the
Maximum Net Investment (as defined by the TAA), (ii) at least one (1)
Business Day before effecting any change in the RPA Interest under the terms
of the RPA, as provided in Section 2.2(b) of the MSAA, (iii) promptly upon
any termination of the RPA or the TAA, or upon receiving or sending any
notice of intended or pending or potential termination of the RPA or the TAA,
(iv) promptly at any time when the "Percentage Factor" exceeds the "Maximum
Percentage Factor" (as those terms are defined by the TAA); (v) promptly upon
becoming aware of any assignment by EFC, or any request by CFI for an
assignment by EFC, of EFC's interest under the TAA to any "Bank Investor" (as
defined in the TAA) pursuant to Section 9.7 of the TAA and (vi) promptly upon
becoming aware of any "Termination Event" or "Potential Termination Event"
(as those terms are defined in the TAA) under the TAA.
(b) A true and correct copy of (i) at Administrative Lender's request,
each report delivered by the Borrower to CFI and/or EFC under the RPA and/or
the TAA; (ii) each notice, if any, at any time given by CFI pursuant to
Section 5.1(b)(i) of the TAA (notifications in
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respect of any "Termination Event" or "Potential Termination Event", as those
terms are defined by the TAA) and (iii) any notice (or copy of any such
notice) of termination, or of intended, pending or potential termination of
the RPA or the TAA sent or received by the Borrower or CFI.
ARTICLE 7
NEGATIVE COVENANTS
So long as any of the Obligations are outstanding and unpaid or any
Commitment is outstanding (whether or not the conditions to borrowing have
been or can be fulfilled):
Section 7.1 INDEBTEDNESS. The Borrower shall not, and shall not
permit any Subsidiary of the Borrower to, create, assume, incur or otherwise
become or remain obligated in respect of, or permit to be outstanding, or
suffer to exist any Indebtedness, except:
(a) Indebtedness under the Loan Documents;
(b) Accounts payable and accrued liabilities incurred in the ordinary
course of business;
(c) Indebtedness, including in respect of Capitalized Lease
Obligations, incurred to purchase, or to finance the purchase of, assets
which constitute property, plant and equipment, in an aggregate principal
amount not in excess of $10,000,000 outstanding at any time;
(d) Indebtedness incurred or assumed in respect of Acquisitions
permitted pursuant to SECTION 7.6 hereof in an aggregate principal amount not
in excess of $20,000,000 per calendar year;
(e) Hedging obligations under Agreements entered into with any Lender;
(f) Indebtedness existing on the Agreement Date which is described on
SCHEDULE 6 hereto, including renewals, replacements and refinancings (but no
increases) thereof;
(g) Indebtedness in respect of endorsement of negotiable instruments in
the ordinary course of business;
(h) Indebtedness owing to the Borrower or any Guarantor by any
Subsidiary or the Borrower, which Indebtedness is evidenced by an entry on
the financial records of the Borrower and any such Subsidiary of the Borrower;
(i) Indebtedness of ClientLink, Inc. not to exceed $3,000,000 for
working capital;
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(j) Guaranties by the Borrower or by Subsidiaries of the Borrower of
Indebtedness of the Borrower or Subsidiaries of the Borrower, to the extent
such underlying Indebtedness is permitted hereunder;
(k) Trade accounts payable owing by the Borrower or any of its
Subsidiaries to any of (i) IBM Credit Corporation, (ii) Compaq Computer
Corporation, (iii) Hewlett-Packard Company or (iv) Apple Computer, Inc. for
goods furnished by any of such Persons to any of the Obligors;
(l) Unsecured trade accounts payable, incurred in the ordinary course
of the business of Borrower or any of its Subsidiaries; and
(m) Indebtedness of CFI to the Borrower evidenced by the CFI Note if,
and to the extent that, the Administrative Lender has a valid, perfected
first priority Lien in, and physical possession of, the CFI Note, together
with any and all necessary or appropriate endorsements to such CFI Note.
(n) Unsecured Indebtedness not otherwise permitted pursuant to clauses
(a) through (m) above not to exceed $50,000,000 (less any and all
Indebtedness under Subsections (c), (d) and/or (i) of this SECTION 7.1) in
the aggregate principal amount outstanding at any time.
Section 7.2 LIENS. The Borrower shall not, and shall not permit any
Subsidiary of Borrower to, create, assume, incur, permit or suffer to exist,
directly or indirectly, any Lien on any of its assets, whether now owned or
hereafter acquired, except Permitted Liens. The Borrower shall not, and
shall not permit any Subsidiary to, agree with any other Person that it shall
not create, assume, incur, permit or suffer to exist or to be created,
assumed, incurred or permitted to exist, directly or indirectly, any Lien on
any of its assets other than in respect of Indebtedness permitted by SECTIONS
7.1(c), (d), (f) and (k), provided that such agreement relates only to the
assets purchased or acquired.
Section 7.3 INVESTMENTS. The Borrower shall not, and shall not
permit any Subsidiary of Borrower to, make any Investment, except that the
Borrower and any Subsidiary of the Borrower may purchase or otherwise acquire
and own:
(a) Cash and Cash Equivalents;
(b) Accounts receivable that arise in the ordinary course of business
and are payable on standard terms;
(c) Investments in existence on the Agreement Date which are described
on SCHEDULE 5 hereto;
(d) Investments which are Acquisitions permitted pursuant to SECTION
7.6 hereof;
(e) Investments in the form of Hedge Agreements permitted by SECTION
7.1(e) hereof;
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(f) Investments (excluding accounts receivable from Subsidiaries of the
Borrower created in the ordinary course of business) in, and expenditures in
respect of Acquisitions of, Subsidiaries which are not Guarantors by the
Borrower in an aggregate amount not to exceed (calculated immediately prior
to the date of each such Investment or Acquisition) 5% of Net Worth at any
time outstanding;
(g) Investments in Subsidiaries of the Borrower (i) which have executed
a Subsidiary Guaranty and a Security Agreement granting a first priority Lien
in all its assets of the types or classes included in the Collateral to
secure the Obligations and (ii) which have delivered to the Lenders such
board resolutions, officer's certificates and opinions of counsel as the
Administrative Lender shall reasonably request;
(h) Guaranties permitted under SECTION 7.1(j) hereof;
(i) Investments arising from transactions by the Borrower or any of its
Subsidiaries with customers or suppliers in the ordinary course of business,
including endorsements of negotiable instruments, debt obligations and other
investments received in connection with the bankruptcy or reorganization of
customers and suppliers and in settlement of delinquent obligations of, and
other disputes with, customers and suppliers; and
(j) Other Investments not to exceed $5,000,000 in aggregate amount
outstanding at any time.
Section 7.4 LIQUIDATION, MERGER. The Borrower shall not, and shall
not permit any Subsidiary of Borrower to, at any time:
(a) liquidate or dissolve itself (or suffer any liquidation or
dissolution) or otherwise wind up, except that a Subsidiary of the Borrower
may liquidate or dissolve into the Borrower or a Subsidiary of the Borrower;
or
(b) enter into any merger or consolidation unless (i) with respect to a
merger or consolidation involving the Borrower, the Borrower shall be the
surviving corporation, or if the merger or consolidation involves a
Subsidiary of the Borrower and not the Borrower, such Subsidiary shall be the
surviving corporation, (ii) such transaction shall not be utilized to
circumvent compliance with any term or provision herein and (iii) no Default
or Event of Default shall then be in existence or occur as a result of such
transaction.
Section 7.5 SALES OF ASSETS. The Borrower shall not, and shall not
permit any Subsidiary of the Borrower to, sell, lease, transfer or otherwise
dispose of, any of its assets except (a) inventory in the ordinary course of
business, (b) obsolete or worn-out assets, (c) asset sales in which the Net
Cash Proceeds from the disposition thereof are reinvested, within 90 days
before or after such disposition, in productive tangible assets of a similar
nature of the Borrower and its Subsidiaries, (d) asset sales between
Obligors, (e) sales of interests in Accounts pursuant to the Securitization
and (f) other asset sales not to exceed $100,000 in the aggregate amount
during any one fiscal year.
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Section 7.6 ACQUISITIONS. The Borrower shall not, and shall not
permit any Subsidiary of Borrower to, make any Acquisitions; provided,
however, if immediately prior to and after giving effect to the proposed
Acquisition there shall not exist a Default or Event of Default, the Borrower
or any Subsidiary of the Borrower may make Acquisitions so long as (i) such
Acquisition shall not be opposed by the board of the directors of the Person
being acquired, (ii) Lenders shall have received written notice at least 15
Business Days prior to the date of such Acquisition, (iii) the Administrative
Lender shall have received at least 10 Business Days prior to the date of
such Acquisition a Compliance Certificate setting forth the covenant
calculations both immediately prior to and after giving effect to the
proposed Acquisition, (iv) the assets, property or business acquired shall be
in the business described in SECTION 4.1(d) hereof and the Administrative
Lender for the benefit of the Lenders shall have a first priority Lien in
such assets except for Liens permitted in clause (f) of the definition of
Permitted Liens, (v) the aggregate consideration (exclusive of Equity in the
Borrower or any Subsidiary of the Borrower, but inclusive of any Indebtedness
incurred or assumed by the Borrower or any Subsidiary of the Borrower) paid
or given by the Borrower and/or Borrower's Subsidiaries during any calendar
year in connection with Acquisitions shall not exceed $20,000,000 and (vi) at
the Borrower's option, (A) such Subsidiary shall execute a Subsidiary
Guaranty of the Obligations and a Security Agreement granting a first
priority Lien in all its assets of the types or classes included in the
Collateral, except for Liens permitted in clause (f) of the definition of
Permitted Liens, to secure the Obligations and (B) the Lenders receive such
board resolutions, officer's certificates and opinions of counsel as the
Administrative Lender shall reasonably request in connection with the actions
described in clause (A) above. Notwithstanding anything in this SECTION 7.6
or any other provision of this Agreement to the contrary, the aggregate
amount of expenditures in respect of Acquisitions of, and Investments in,
Subsidiaries of the Borrower that are not Obligors shall not exceed
(calculated immediately prior to the date of each such Investment or
Acquisition) 5% of Net Worth at any time outstanding.
Section 7.7 CAPITAL EXPENDITURES. The Borrower shall not, and shall
not permit any Subsidiary of the Borrower to, make or commit to make any
Capital Expenditures (excluding Permitted Real Estate Expenditures) during
any fiscal year in an aggregate amount in excess of $15,000,000.
Section 7.8 RESTRICTED PAYMENTS. The Borrower shall not, and shall
not permit any Subsidiary of the Borrower to, directly or indirectly declare,
pay or make any Restricted Payments except (a) Dividends payable by a
Subsidiary to the Borrower or to a Guarantor, (b) scheduled payments of
principal and interest on the Subordinated Debt, (c) Dividends payable on
"Series B Cumulative Preferred Stock" of the Borrower to Safeguard
Scientifics, Inc. in an aggregate amount for any fiscal year not to exceed
$2,000,000, (d) purchases by the Borrower of treasury stock of the Borrower
in an aggregate amount per fiscal year not to exceed 25% of the Net Income of
the Borrower and its Subsidiaries for the immediately preceding fiscal year
and (e) payments to the Borrower under the CFI Note; provided, however, the
Borrower shall not, and shall not permit any Subsidiary of the Borrower to,
declare, pay or make any Restricted Payments permitted by this SECTION 7.8
unless there shall exist no Default or Event of Default prior to or after
giving effect to any such proposed Restricted Payment.
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Section 7.9 AFFILIATE TRANSACTIONS. The Borrower shall not, and
shall not permit any Subsidiary of the Borrower to, at any time engage in any
transaction with an Affiliate (other than as evidenced by the RPA or the TAA)
other than in the ordinary course of business and on terms not materially
less advantageous to the Borrower or such Subsidiary than would be the case
if such transaction had been effected with a non-Affiliate. The Borrower
shall not, and shall not permit any Subsidiary of the Borrower to, incur or
suffer to exist any Indebtedness or Guaranty in favor of any Affiliate,
unless such Affiliate shall (i) subordinate the payment and performance
thereof to the Obligations on terms, conditions and documentation
satisfactory to the Determining Lenders or (ii) pledge the applicable
Indebtedness to the Administrative Lender pursuant to documentation
acceptable to the Administrative Lender.
Section 7.10 COMPLIANCE WITH ERISA. The Borrower shall not, and shall
not permit any Subsidiary to, directly or indirectly, or permit any member of
its Controlled Group to directly or indirectly, (a) terminate any Plan so as
likely to result in any material (in the reasonable opinion of the
Determining Lenders) liability to the Borrower or any member of its
Controlled Group taken as a whole, (b) permit to exist any ERISA Event, or
any other event or condition with respect to a Plan which could reasonably be
expected to have a Material Adverse Effect, (c) make a complete or partial
withdrawal (within the meaning of Section 4201 of ERISA) from any
Multiemployer Plan so as likely to result in any material (in the reasonable
opinion of the Determining Lenders) liability to the Borrower or any member
of its Controlled Group taken as a whole, (d) enter into any new Plan or
modify any existing Plan so as to increase its obligations thereunder which
could reasonably be expected to have a Material Adverse Effect, or (e) permit
the present value of all benefit liabilities, as defined in Title IV of
ERISA, under any Plan (other than a Multiemployer Plan) of the Borrower or
any member of its Controlled Group that is subject to Title IV of ERISA
(using the actuarial assumptions utilized by each such Plan) to exceed the
fair market value of Plan assets allocable to such benefits by more than
$500,000, all determined as of the most recent valuation date for such Plan.
Section 7.11 MAXIMUM LEVERAGE RATIO. The Borrower shall not permit
the Leverage Ratio to be greater than (a) 4.75 to 1 at the end of any fiscal
quarter ending prior to and including December 31, 1997 and (b) 4.25 to 1 at
the end of any fiscal quarter thereafter.
Section 7.12 MINIMUM FIXED CHARGE COVERAGE RATIO. The Borrower shall
not permit the Fixed Charge Coverage Ratio to be less than 1.25 to 1 at the
end of any fiscal quarter.
Section 7.13 MINIMUM TANGIBLE NET WORTH. The Borrower shall not
permit the Tangible Net Worth to be less than an amount equal to the sum of
(a) $110,000,000, plus (b) 75% of cumulative Net Income for the period from,
but not including, June 30, 1996 through the date of calculation (but
excluding from the calculation of such cumulative Net Income the effect, if
any, of any fiscal quarter (or portion of a fiscal quarter not then ended) of
the Borrower for which Net Income was a negative number), plus (c) 75% of the
Net Cash Proceeds received by the Borrower as a result of any offering of
Equity or pursuant to any conversion or exchange of convertible Indebtedness
or preferred Capital Stock into common Capital Stock of the Borrower, plus
(d) an amount equal to the net worth of any Person that
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becomes a Subsidiary of the Borrower or is merged into or consolidated with
the Borrower or any Subsidiary of the Borrower or substantially all of the
assets of which are acquired by the Borrower or any Subsidiary of the
Borrower to the extent the purchase price paid therefor is paid in equity
securities of the Borrower or any Subsidiary of the Borrower.
Section 7.14 MINIMUM ASSET COVERAGE RATIO. The Borrower shall not
permit the Asset Coverage Ratio to be less than 1.10 to 1 at the end of any
fiscal quarter.
Section 7.15 MAXIMUM FUNDED DEBT TO CAPITAL. The Borrower shall not
permit the ratio of Funded Debt to Capital to exceed 0.65 to 1 at the end of
any fiscal quarter.
Section 7.16 SALE AND LEASEBACK. The Borrower shall not, and shall
not permit any Subsidiary of the Borrower to, enter into any arrangement
whereby it sells or transfers any of its assets, and thereafter rents or
leases such assets.
Section 7.17 SALE OR DISCOUNT OF RECEIVABLES. The Borrower shall not,
and shall not permit any Subsidiary of the Borrower to, directly or
indirectly, sell, with or without recourse, for discount or otherwise, any
notes or Accounts other than pursuant to the Securitization.
Section 7.18 CAPITAL STOCK. The Borrower shall not, and shall not
permit any Subsidiary of the Borrower to, issue, sell or otherwise dispose of
any Capital Stock in the Borrower or any Subsidiary of the Borrower or any
options or any rights to acquire such Capital Stock, except (i) to the extent
that the Net Cash Proceeds thereof during any fiscal year do not exceed
$3,000,000 and the Net Cash Proceeds thereof are, within 90 days after
receipt by the Borrower or the applicable Subsidiary of the Borrower,
reinvested in productive tangible assets of the Borrower and its
Subsidiaries, (ii) to the extent that the Net Cash Proceeds thereof are
applied as provided in SECTION 2.5(c) hereof, (iii) any Subsidiary of the
Borrower may issue Capital Stock to the Borrower or to any Guarantor which is
the parent of such Subsidiary and (iv) the issuance or disposition of Capital
Stock in the Borrower attributable to the conversion of the NCGI Note into
Equity in the Borrower in accordance with the terms of the NCGI Note.
Section 7.19 BUSINESS. Neither the Borrower nor any Subsidiary of the
Borrower shall conduct any business other than the business described in
SECTION 4.1(d) hereof.
Section 7.20 FISCAL YEAR. Except with respect to a change in the
fiscal year of any Subsidiary to conform to the fiscal year of the Borrower,
neither the Borrower nor any Subsidiary of the Borrower shall change its
fiscal year.
Section 7.21 AMENDMENT OF ORGANIZATIONAL DOCUMENTS. The Borrower
shall not, and shall not permit any Subsidiary of the Borrower to, amend its
articles of incorporation or bylaws in any manner that could reasonably be
expected to (a) result in a Material Adverse Effect or (b) impair or affect
the Rights of the Administrative Lender or any Lender under any Loan
Documents or in respect of any Collateral.
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Section 7.22 AMENDMENTS AND WAIVERS OF SUBORDINATED DEBT. The Borrower
shall not, and shall not permit any Subsidiary to, change or amend (or take
any action or fail to take any action the result of which is an effective
amendment or change) or accept any waiver or consent with respect to, any
document, instrument or agreement relating to any Subordinated Debt that
would result in (a) an increase in the principal, interest, overdue interest,
fees or other amounts payable under the Subordinated Debt, (b) an
acceleration in any date fixed for payment or prepayment of principal,
interest, fees or other amounts payable under the Subordinated Debt
(including, without limitation, as a result of any redemption), (c) a
reduction in any percentage of holders of the Subordinated Debt required
under the terms of the Subordinated Debt to take (or refrain from taking) any
action under the Subordinated Debt, (d) a change in any financial covenant
under the Subordinated Debt making such financial covenant more restrictive,
(e) a change in any default or event of default (however designated) under
the Subordinated Debt which makes such default or event of default more
restrictive, (f) a change in the definition of "Change of Control" as
provided in the Subordinated Debt which would result in such definition being
more restrictive than such definition in this Agreement, (g) a change in any
of the subordination provisions of the Subordinated Debt, (h) a change in any
covenant, term or provision in the Subordinated Debt which would result in
such term or provision being more restrictive than the terms of this
Agreement and the other Loan Documents or (i) a change in any term or
provision of the Subordinated Debt that could have, in any material respect,
an adverse effect on the interest of the Lenders.
Section 7.23 OPERATING LEASES. The Borrower shall not, and shall not
permit any Subsidiary of the Borrower to, enter into any Operating Leases
except for Operating Leases entered into in the ordinary course of business
in a manner and to an extent consistent with past practice; provided,
however, that the total rent per annum for all Operating Leases of the
Borrower and its Subsidiaries shall not exceed $12,000,000 in aggregate
amount for any fiscal year.
ARTICLE 8
DEFAULT
Section 8.1 EVENTS OF DEFAULT. Each of the following shall
constitute an Event of Default, whatever the reason for such event, and
whether voluntary, involuntary, or effected by operation of law or pursuant
to any judgment or order of any court or any order, rule or regulation of any
governmental or non-governmental body:
(a) Any representation or warranty made under any Loan Document shall
prove to have been incorrect or misleading in any material respect when made;
(b) The Borrower shall fail to pay any (i) principal under any Note
when due or (ii) interest under any Note or any fees payable hereunder or any
other costs, fees, expenses or other amounts payable hereunder or under any
other Loan Document within two Business Days after the date due;
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(c) The Borrower or any Subsidiary of the Borrower shall default in the
performance or observance of any agreement or covenant contained in SECTION
5.1 or ARTICLE 7;
(d) The Borrower or any Subsidiary of the Borrower shall default in the
performance or observance of any other agreement or covenant contained in
this Agreement not specifically referred to elsewhere in this SECTION 8.1,
and such default shall not be cured within a period of fifteen days after the
earlier of notice from the Administrative Lender thereof or actual notice
thereof by the Borrower or such Subsidiary;
(e) There shall occur any default or breach in the performance or
observance of any agreement or covenant in any of the Loan Documents (other
than this Agreement) and such default shall not be cured within a period of
thirty days after the earlier of notice from the Administrative Lender
thereof or actual notice thereof by an officer of any Obligor;
(f) There shall be entered a decree or order by a court having
jurisdiction in the premises constituting an order for relief in respect of
any Obligor under Title 11 of the United States Code, as now constituted or
hereafter amended, or any other applicable Federal, state or foreign
bankruptcy law or other similar law, or appointing a receiver, liquidator,
assignee, trustee, custodian, sequestrator or similar official of any
Obligor, or of any substantial part of their respective properties, or
ordering the winding-up or liquidation of the affairs of any Obligor, and any
such decree or order shall continue unstayed and in effect for a period of
thirty consecutive days;
(g) Any Obligor shall file a petition, answer or consent seeking relief
under Title 11 of the United States Code, as now constituted or hereafter
amended, or any other applicable Federal, state or foreign bankruptcy law or
other similar law, or any Obligor shall consent to the institution of
proceedings thereunder or to the filing of any such petition or to the
appointment or taking of possession of a receiver, liquidator, assignee,
trustee, custodian, sequestrator or other similar official of any Obligor or
of substantially all of its properties, or any Obligor shall take any
corporate action in furtherance of any such action;
(h) A final judgment or judgments shall be entered by any court against
any Obligor for the payment of money which exceeds $500,000 in the aggregate,
or a warrant of attachment or execution or similar process shall be issued or
levied against property of any Obligor which, together with all other such
property of the Borrower and its Subsidiaries subject to other such process,
exceeds in value $500,000 in the aggregate, and if such judgment or award is
not insured or, within 30 days after the entry, issue or levy thereof, such
judgment, warrant or process shall not have been paid or discharged or stayed
pending appeal, or if, after the expiration of any such stay, such judgment,
warrant or process shall not have been paid or discharged;
(i) With respect to any Plan of the Borrower or any member of its
Controlled Group: (i) the Borrower, any such member, or any other
party-in-interest or disqualified person (other than any Lender) shall engage
in transactions which in the aggregate would reasonably be expected to result
in a direct or indirect liability to the Borrower or any member of its
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Controlled Group under Section 409 or 502 of ERISA or Section 4975 of the
Code; (ii) the Borrower or any member of its Controlled Group shall incur any
accumulated funding deficiency, as defined in Section 412 of the Code, or
request a funding waiver from the Internal Revenue Service for contributions;
(iii) the Borrower or any member of its Controlled Group shall incur any
withdrawal liability as a result of a complete or partial withdrawal within
the meaning of Section 4203 or 4205 of ERISA, or any other liability with
respect to a Plan, unless the amount of such liability has been funded within
the Plan or pursuant to one or more insurance contracts; (iv) the Borrower or
any member of its Controlled Group shall fail to make a required contribution
by the due date under Section 412 of the Code or Section 302 of ERISA which
would result in the imposition of a lien under Section 412 of the Code or
Section 302 of ERISA; (v) the Borrower, any member of its Controlled Group or
any Plan sponsor shall notify the PBGC of an intent to terminate, or the PBGC
shall institute proceedings to terminate, or the PBGC shall institute
proceedings to terminate, any Plan subject to Title IV of ERISA; (vi) a
Reportable Event shall occur with respect to a Plan subject to Title IV of
ERISA, and within 15 days after the reporting of such Reportable Event to the
Administrative Lender, the Administrative Lender shall have notified the
Borrower in writing that the Determining Lenders have made a determination
that, on the basis of such Reportable Event, there are reasonable grounds for
the termination of such Plan by the PBGC or for the appointment by the
appropriate United States District Court of a trustee to administer such Plan
and as a result thereof an Event of Default shall have occurred hereunder;
(vii) a trustee shall be appointed by a court of competent jurisdiction to
administer any Plan or the assets thereof; or (viii) any ERISA Event with
respect to a Plan subject to Title IV of ERISA shall have occurred, and 30
days thereafter (A) such ERISA Event, other than such event described in
clause (f) of the definition of ERISA Event herein, (if correctable) shall
not have been corrected and (B) the then present value of such Plan's benefit
liabilities, as defined in Title IV of ERISA, shall exceed the then current
value of assets accumulated in such Plan; PROVIDED, HOWEVER, that the events
listed in subsections (i) - (viii) above shall constitute Events of Default
only if the maximum aggregate liability which the Borrower or any member of
its Controlled Group has a reasonable likelihood of incurring under the
applicable provisions of ERISA resulting from an event or events exceeds
$100,000.
(j) The Borrower or any Subsidiary of the Borrower shall default in the
payment of any Indebtedness or any lease obligations in an aggregate amount
of $1,000,000 or more beyond any grace period provided with respect thereto,
or any other event or condition shall exist under any agreement or instrument
under which such Indebtedness is created or evidenced beyond any applicable
grace period, if the effect of such event or condition is to permit or cause
the holder of such Indebtedness (or a trustee on behalf of any such holder)
to (i) cause such Indebtedness to be prepaid or to become due prior to its
date of maturity or (ii) require the Borrower or any Subsidiary of the
Borrower to purchase such Indebtedness;
(k) Any lease where the Borrower or any Subsidiary of the Borrower is
the lessee shall terminate or cease to be effective, and termination or
cessation thereof, together with all other leases, if any, which have been
terminated or cease to be effective, could reasonably be expected to have a
Material Adverse Effect; provided, however, that termination or cessation
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of a lease shall not constitute an Event of Default if another lease
reasonably satisfactory to the Determining Lenders is contemporaneously
substituted therefor;
(l) Any material provision of any Loan Document shall for any reason
cease to be valid and binding on or enforceable against any party to it
(other than the Administrative Lender or any Lender) other than in accordance
with its terms, or any such party (other than the Administrative Lender or
any Lender) shall so assert in writing and any such event or circumstance
shall continue for seven days following notification of the occurrence or
existence thereof from the Administrative Lender to the Borrower; provided,
however, that such notice, grace and cure period shall not apply to any event
or circumstance evidenced or represented by any assertion in writing by the
Borrower or any Affiliate of the Borrower;
(m) Any Collateral Document shall for any reason (other than pursuant
to the terms thereof) cease to create a valid and perfected first priority
Lien in Collateral having a value in an aggregate amount in excess of
$100,000;
(n) A Change of Control shall occur; or
(o) The Borrower, CFI or EFC shall breach or be in default of any
obligations under the MSAA and such breach or default continues beyond any
applicable grace and/or cure period contained therein; or there shall occur a
material impairment of the enforceability of the rights and benefits intended
for the benefit of NationsBank as a Beneficial Secured Party (as such term is
defined in the MSAA) under the MSAA or the taking of any action by any Person
to challenge same; or the Borrower, CFI or EFC shall breach or be in default
of any obligations under the RPA and such breach or default continues beyond
any applicable grace and/or cure period contained therein; or there shall
occur any "Termination Event" or "Potential Termination Event" as those terms
are defined by the TAA.
Section 8.2 REMEDIES. If an Event of Default shall have occurred and
shall be continuing:
(a) With the exception of an Event of Default specified in SECTION
8.1(f) or (g) hereof, the Administrative Lender shall, upon the direction of
the Determining Lenders, terminate the Commitments and/or declare the
principal of and interest on the Advances and all Obligations and other
amounts owed under the Loan Documents to be forthwith due and payable without
presentment, demand, protest or notice of any kind, all of which are hereby
expressly waived, anything in the Loan Documents to the contrary
notwithstanding.
(b) Upon the occurrence of an Event of Default specified in SECTION
8.1(f) or (g) hereof, such principal, interest and other amounts shall
thereupon and concurrently therewith become due and payable and the
Commitments shall forthwith terminate, all without any action by the
Administrative Lender, any Lender or any holders of the Notes and without
presentment, demand, protest or other notice of any kind, all of which are
expressly waived, anything in the Loan Documents to the contrary
notwithstanding.
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(c) If any Letter of Credit shall be then outstanding, the
Administrative Lender may, and upon the direction of the Determining Lenders
shall, demand upon the Borrower to, and forthwith upon such demand, the
Borrower shall, pay to the Administrative Lender in same day funds at the
office of the Administrative Lender for deposit in the L/C Cash Collateral
Account, an amount equal to the maximum amount available to be drawn under
the Letters of Credit then outstanding.
(d) The Administrative Lender and the Lenders may exercise all of the
Rights granted to them under the Loan Documents or under Applicable Law.
(e) The Rights of the Administrative Lender and the Lenders hereunder
shall be cumulative, and not exclusive.
ARTICLE 9
CHANGES IN CIRCUMSTANCES
Section 9.1 LIBOR BASIS DETERMINATION INADEQUATE. If with respect to
any proposed LIBOR Advance for any Interest Period, (i) any Lender determines
that deposits in dollars (in the applicable amount) are not being offered to
that Lender in the relevant market for such Interest Period or (ii) the
Determining Lenders determine that the LIBOR Rate for such proposed LIBOR
Advance does not adequately cover the cost to such Lender of making and
maintaining such proposed LIBOR Advance for such Interest Period, such Lender
or Determining Lenders, as the case may be, shall forthwith give notice
thereof to the Borrower, whereupon until such Lender or Determining Lenders,
as the case may be, notify the Borrower that the circumstances giving rise to
such situation no longer exist, the obligation of such Lender to make LIBOR
Advances shall be suspended; PROVIDED, HOWEVER, such Lender or the
Determining Lenders, as the case may be, shall promptly notify the Borrower
if the circumstances giving rise to such situation no longer exist.
Section 9.2 ILLEGALITY. If any change in applicable law, rule or
regulation, or adoption thereof, or any change in any interpretation or
administration thereof by any governmental authority, central bank or
comparable agency charged with the interpretation or administration thereof,
or compliance by any Lender (or its LIBOR Lending Office) with any request or
directive (whether or not having the force of law) of any such authority,
central bank or comparable agency, shall make it unlawful or impossible for
such Lender (or its LIBOR Lending Office) to make, maintain or fund its LIBOR
Advances, such Lender shall so notify the Borrower and the Administrative
Lender. Before giving any notice to the Borrower pursuant to this Section,
the notifying Lender shall designate a different LIBOR Lending Office or
other lending office if such designation will avoid the need for giving such
notice and will not, in the sole judgment of the Lender, be materially
disadvantageous to the Lender. Upon receipt of such notice, notwithstanding
anything contained in ARTICLE 2 hereof, the Borrower shall repay in full the
then outstanding principal amount of each LIBOR Advance owing to the
notifying Lender,
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together with accrued interest thereon and any reimbursement required under
SECTION 2.9 hereof, on either (a) the last day of the Interest Period
applicable to such Advance, if the Lender may lawfully continue to maintain
and fund such Advance to such day, or (b) immediately, if the Lender may not
lawfully continue to fund and maintain such Advance to such day or if the
Borrower so elects. Concurrently with repaying each affected LIBOR Advance
owing to such Lender if the Borrower does not terminate this Agreement,
notwithstanding anything contained in ARTICLE 2 hereof, the Borrower may,
without any requirement to satisfy the conditions precedent set forth in
SECTION 3.1, 3.2 or 3.3, borrow a Base Rate Advance from such Lender, and
such Lender shall make such Base Rate Advance, in an amount such that the
outstanding principal amount of the Advances owing to such Lender shall equal
the outstanding principal amount of the Advances owing immediately prior to
such repayment.
Section 9.3 INCREASED COSTS.
(a) If after the Agreement Date any change in or adoption of any law,
rule or regulation, or any change in the interpretation or administration
thereof by any governmental authority, central bank or comparable agency
charged with the interpretation or administration thereof or compliance by
any Lender (or its LIBOR Lending Office) with any request or directive
(whether or not having the force of law) of any such authority, central bank
or compatible agency:
(i) shall subject a Lender (or its LIBOR Lending Office) to any
Tax (net of any tax benefit engendered thereby) with respect to its
LIBOR Advances or its obligation to make such Advances, or shall change
the basis of taxation of payments to a Lender (or to its LIBOR Lending
Office) of the principal of or interest on its LIBOR Advances or in
respect of any other amounts due under this Agreement, as the case may
be, or its obligation to make such Advances (except for changes in the
rate of tax on the overall net income, net worth or capital of the
Lender and franchise taxes, doing business taxes or minimum taxes
imposed upon such Lender); or
(ii) shall impose, modify or deem applicable any reserve
(including, without limitation, any imposed by the Board of Governors of
the Federal Reserve System), special deposit or similar requirement
against assets of, deposits with or for the account of, or credit
extended by, a Lender's LIBOR Lending Office or shall impose on the
Lender (or its LIBOR Lending Office) or on the London interbank market
any other condition affecting its LIBOR Advances or its obligation to
make such Advances (but excluding any reserves or deposits that are
included in the calculation of LIBOR Basis);
and the result of any of the foregoing is to increase the cost to a Lender
(or its LIBOR Lending Office) of making or maintaining any LIBOR Advances, or
to reduce the amount of any sum received or receivable by a Lender (or its
LIBOR Lending Office) with respect thereto, by an amount deemed by a Lender
to be material, then, within 30 days after demand by a Lender, the Borrower
agrees to pay to such Lender such additional amount as will compensate such
Lender for such increased costs or reduced amounts, subject to SECTION 11.9
hereof. The affected
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Lender will as soon as practicable notify the Borrower of any event of which
it has knowledge, occurring after the date hereof, which will entitle such
Lender to compensation pursuant to this Section and will designate a
different LIBOR Lending Office or other lending office if such designation
will avoid the need for, or reduce the amount of, such compensation and will
not, in the reasonable judgment of the affected Lender made in good faith, be
disadvantageous to such Lender.
(b) A certificate of any Lender claiming compensation under this
Section and setting forth the additional amounts to be paid to it hereunder
shall certify that such amounts or costs were actually incurred by such
Lender and shall show in reasonable detail an accounting of the amount
payable and the calculations used to determine in good faith such amount and
shall be conclusive absent manifest or demonstrable error. In determining
such amount, a Lender may use any reasonable averaging and attribution
methods. Nothing in this SECTION 9.3 shall provide the Borrower or any
Subsidiary of the Borrower the right to inspect the records, files or books
of any Lender. If a Lender demands compensation under this Section, the
Borrower may at any time, upon at least five Business Days' prior notice to
the Lender, after reimbursement to the Lender by the Borrower in accordance
with this Section of all costs incurred, prepay in full the then outstanding
LIBOR Advances of the Lender, together with accrued interest thereon to the
date of prepayment, along with any reimbursement required under SECTION 2.9
hereof. Concurrently with prepaying such LIBOR Advances, the Borrower may
borrow a Base Rate Advance from the Lender, and the Lender shall make such
Base Rate Advance, in an amount such that the outstanding principal amount of
the Advances owing to such Lender shall equal the outstanding principal
amount of the Advances owing immediately prior to such prepayment.
Section 9.4 EFFECT ON BASE RATE ADVANCES. If notice has been given
pursuant to SECTION 9.1, 9.2 or 9.3 hereof suspending the obligation of a
Lender to make LIBOR Advances, or requiring LIBOR Advances of a Lender to be
repaid or prepaid, then, unless and until the Lender notifies the Borrower
that the circumstances giving rise to such repayment no longer apply, all
Advances which would otherwise be made by such Lender as LIBOR Advances shall
be made instead as Base Rate Advances.
Section 9.5 CAPITAL ADEQUACY. If after the Agreement Date, (a) the
introduction of or any change in or in the interpretation of any law, rule or
regulation or (b) compliance by a Lender with any law, rule or regulation or
any guideline or request from any central bank or other governmental
authority (whether or not having the force of law) adopted or promulgated
after the Agreement Date affects or would affect the amount of capital
required or expected to be maintained by a Lender or any corporation
controlling such Lender, and such Lender determines that the amount of such
capital is increased by or based upon the existence of such Lender's
commitment or Advances hereunder and other commitments or advances of such
Lender of this type, then, within 30 days after demand by such Lender,
subject to SECTION 11.9, the Borrower shall immediately pay to such Lender,
from time to time as specified by such Lender, additional amounts sufficient
to compensate such Lender with respect to such circumstances, to the extent
that such Lender reasonably determines in good faith such increase in capital
to be allocable to the existence of such Lender's Commitments hereunder. A
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certificate as to any additional amounts payable to any Lender under this
SECTION 9.5 submitted to the Borrower by such Lender shall certify that such
amounts were actually incurred by such Lender or corporation controlling such
Lender and shall show in reasonable detail an accounting of the amount
payable and the calculations used to determine in good faith such amount and
shall be conclusive absent manifest or demonstrable error. In determining
such amount, such Lender or a corporation controlling such Lender may use any
reasonable averaging and attribution methods. Notwithstanding the foregoing,
nothing in this SECTION 9.5 shall provide the Borrower or any Subsidiary of
the Borrower the right to inspect the records, files or books of any Lender
or any corporation controlling such Lender.
Section 9.6 REPLACEMENT LENDER. If (i) any Lender is unable or
unwilling to make, maintain or fund any LIBOR Advance pursuant to SECTION 9.1
or 9.2 or (ii) the Borrower becomes obligated to pay additional amounts to
any Lender described in SECTION 9.3 or 9.5, the Borrower may designate a
financial institution reasonably acceptable to the Administrative Lender to
replace such Lender by purchasing for cash and receiving an assignment of
such Lender's pro rata share of such Lender's Commitment and the Rights of
such Lender under the Loan Documents without recourse to or warranty by, or
expense to, such Lender, for a purchase price equal to the outstanding
amounts owing to such Lender (including such additional amounts owing to such
Lender pursuant to SECTION 9.2, 9.3 or 9.5). Upon execution of an Assignment
Agreement, such other financial institution shall be deemed to be a "Lender"
for all purposes of this Agreement as set forth in SECTION 11.6 hereof.
ARTICLE 10
AGREEMENT AMONG LENDERS
Section 10.1 AGREEMENT AMONG LENDERS. The Lenders agree among
themselves that:
(a) ADMINISTRATIVE LENDER. Each Lender hereby appoints the
Administrative Lender as its nominee in its name and on its behalf, to
receive all documents and items to be furnished hereunder; to act as nominee
for and on behalf of all Lenders under the Loan Documents; to, except as
otherwise expressly set forth herein, take such action as may be requested by
the Determining Lenders, provided that, (i) unless and until the
Administrative Lender shall have received such requests, the Administrative
Lender may take such administrative action, or refrain from taking such
administrative action, as it may deem advisable and in the best interests of
the Lenders, and (ii) the Administrative Lender shall not be required to take
any action that exposes the Administrative Lender to personal liability or
that is contrary to any Loan Document or Applicable Law; to arrange the means
whereby the proceeds of the Advances of the Lenders are to be made available
to the Borrower; to distribute promptly to each Lender information, requests
and documents received from the Borrower hereunder and not otherwise provided
to such Lender by the Borrower or any other Person, and each payment (in like
funds received) with respect to any of such Lender's Advances, or the ratable
amount of fees or other amounts; and to deliver to the Borrower requests,
demands, approvals and consents received from the
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Lenders. Administrative Lender agrees to promptly distribute to each Lender,
at such Lender's address set forth below information, requests, documents and
payments received from the Borrower and not otherwise provided to such Lender
by the Borrower or any other Person. The Administrative Lender shall have no
fiduciary relationship in respect of any Lender by reason of this Agreement
or any other Loan Document. The Administrative Lender shall have no duties
or responsibilities except those expressly set forth in this Agreement. The
duties of the Administrative Lender are mechanical and administrative in
nature.
(b) REPLACEMENT OF ADMINISTRATIVE LENDER. Should the Administrative
Lender or any successor Administrative Lender ever cease to be a Lender
hereunder, or should the Administrative Lender or any successor
Administrative Lender ever resign as Administrative Lender, or should the
Administrative Lender or any successor Administrative Lender ever be removed
with cause or without cause by the action of all Lenders (other than the
Administrative Lender), then the Lender appointed by the other Lenders (with
the consent of the Borrower, which consent shall not be unreasonably
withheld) shall forthwith become the Administrative Lender, and the Borrower
and the Lenders shall execute such documents as any Lender may reasonably
request to reflect such change. If the Administrative Lender also then
serves in the capacity of the Swing Line Bank or the Issuing Bank, such
resignation or removal shall constitute resignation or removal of the Swing
Line Bank and the Issuing Bank. Any resignation or removal of the
Administrative Lender or any successor Administrative Lender shall become
effective upon the appointment by the Lenders of a successor Administrative
Lender; provided, however, if no successor Administrative Lender shall have
been so appointed and shall have accepted such appointment within 30 days
after the retiring Administrative Lender's giving of notice of resignation or
the Lenders' removal of the retiring Administrative Lender, then the retiring
Administrative Lender may, on behalf of the Lenders, appoint a successor
Administrative Lender, which shall be a commercial bank organized under the
Laws of the United States of America or of any State thereof and having a
combined capital and surplus of at least $500,000,000. Upon the acceptance of
any appointment as the Administrative Lender hereunder by a successor
Administrative Lender, such successor Administrative Lender shall thereupon
succeed to and become vested with all the rights and duties of the retiring
Administrative Lender, and the retiring Administrative Lender shall be
discharged from its duties and obligations under the Loan Documents, provided
that if the retiring or removed Administrative Lender is unable to appoint a
successor Administrative Lender, the Administrative Lender shall, after the
expiration of a 60 day period from the date of notice, be relieved of all
obligations as Administrative Lender hereunder. Notwithstanding any
Administrative Lender's resignation or removal hereunder, the provisions of
this Article shall continue to inure to its benefit as to any actions taken
or omitted to be taken by it while it was the Administrative Lender under
this Agreement.
(c) EXPENSES. Each Lender shall pay its pro rata share, based on its
Specified Percentage, of any expenses paid by the Administrative Lender
directly and solely in connection with any of the Loan Documents and/or the
Securitization Documents if Administrative Lender does not receive
reimbursement therefor from other sources within 60 days after the date
incurred. Any amount so paid by the Lenders to the Administrative Lender
shall be returned
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by the Administrative Lender pro rata to each paying Lender to the extent
later paid by the Borrower or any other Person on the Borrower's behalf to
the Administrative Lender.
(d) DELEGATION OF DUTIES. The Administrative Lender may execute any of
its duties hereunder by or through officers, directors, employees, attorneys
or agents, and shall be entitled to (and shall be protected in relying upon)
advice of counsel concerning all matters pertaining to its duties hereunder.
(e) RELIANCE BY ADMINISTRATIVE LENDER. The Administrative Lender and
its officers, directors, employees, attorneys and agents shall be entitled to
rely and shall be fully protected in relying on any writing, resolution,
notice, consent, certificate, affidavit, letter, cablegram, telegram, telex
or teletype message, statement, order, or other document or conversation
reasonably believed by it or them in good faith to be genuine and correct and
to have been signed or made by the proper Person and, with respect to legal
matters, upon opinions of counsel selected by the Administrative Lender. The
Administrative Lender may, in its reasonable judgment, deem and treat the
payee of any Note as the owner thereof for all purposes hereof.
(f) LIMITATION OF ADMINISTRATIVE LENDER'S LIABILITY. Neither the
Administrative Lender nor any of its officers, directors, employees,
attorneys or agents shall be liable for any action taken or omitted to be
taken by it or them hereunder in good faith and believed by it or them to be
within the discretion or power conferred to it or them by the Loan Documents
or be responsible for the consequences of any error of judgment, except for
its or their own gross negligence or wilful misconduct. Except as aforesaid,
the Administrative Lender shall be under no duty to enforce any rights with
respect to any of the Advances, or any security therefor. The Administrative
Lender shall not be compelled to do any act hereunder or to take any action
towards the execution or enforcement of the powers hereby created or to
prosecute or defend any suit in respect hereof, unless indemnified to its
reasonable satisfaction against loss, cost, liability and expense unless
expressly provided to the contrary herein. The Administrative Lender shall
not be responsible in any manner to any Lender for the effectiveness,
enforceability, genuineness, validity or due execution of any of the Loan
Documents, or for any representation, warranty, document, certificate, report
or statement made herein or furnished in connection with any Loan Documents,
or be under any obligation to any Lender to ascertain or to inquire as to the
performance or observation of any of the terms, covenants or conditions of
any Loan Documents on the part of the Borrower. TO THE EXTENT NOT REIMBURSED
BY THE BORROWER, EACH LENDER HEREBY SEVERALLY INDEMNIFIES AND HOLDS HARMLESS
THE ADMINISTRATIVE LENDER, PRO RATA ACCORDING TO ITS SPECIFIED PERCENTAGE,
FROM AND AGAINST ANY AND ALL LIABILITIES, OBLIGATIONS, LOSSES, DAMAGES,
PENALTIES, ACTIONS, JUDGMENTS, SUITS, COSTS, EXPENSES AND/OR DISBURSEMENTS OF
ANY KIND OR NATURE WHATSOEVER WHICH MAY BE IMPOSED ON, ASSERTED AGAINST, OR
INCURRED BY THE ADMINISTRATIVE LENDER (IN SUCH CAPACITY) IN ANY WAY WITH
RESPECT TO ANY LOAN DOCUMENTS OR ANY ACTION TAKEN OR OMITTED BY THE
ADMINISTRATIVE LENDER UNDER THE LOAN DOCUMENTS (INCLUDING ANY
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NEGLIGENT ACTION OF THE ADMINISTRATIVE LENDER), EXCEPT TO THE EXTENT THE SAME
ARE FINALLY DETERMINED BY A COURT OF COMPETENT JURISDICTION TO RESULT FROM
GROSS NEGLIGENCE OR WILFUL MISCONDUCT BY THE ADMINISTRATIVE LENDER. THE
INDEMNITY PROVIDED IN THIS SECTION 10.1(f) SHALL SURVIVE TERMINATION OF THIS
AGREEMENT.
(g) LIABILITY AMONG LENDERS. No Lender shall incur any liability
(other than the sharing of expenses and other matters specifically set forth
herein and in the other Loan Documents) to any other Lender, except for acts
or omissions in bad faith.
(h) RIGHTS AS LENDER. With respect to its commitment hereunder, the
Advances made by it and the Notes issued to it, the Administrative Lender
shall have the same rights as a Lender and may exercise the same as though it
were not the Administrative Lender, and the term "Lender" or "Lenders" shall,
unless the context otherwise indicates, include the Administrative Lender in
its individual capacity. The Administrative Lender or any Lender may accept
deposits from, act as trustee under indentures of, and generally engage in
any kind of business with, the Borrower and any of its Affiliates, and any
Person who may do business with or own securities of the Borrower or any of
its Affiliates, all as if the Administrative Lender were not the
Administrative Lender hereunder and without any duty to account therefor to
the Lenders.
Section 10.2 LENDER CREDIT DECISION. Each Lender acknowledges that it
has, independently and without reliance upon the Administrative Lender or any
other Lender and based upon the financial statements referred to in SECTIONS
4.1(j), 6.1, and 6.2 hereof, and such other documents and information as it
has deemed appropriate, made its own credit analysis and decision to enter
into this Agreement. Each Lender also acknowledges that it will,
independently and without reliance upon the Administrative Lender or any
other Lender and based upon such documents and information as it shall deem
appropriate at the time, continue to make its own credit decisions in taking
or not taking action under this Agreement and the other Loan Documents. Each
Lender also acknowledges that its decision to fund the initial Advances shall
constitute evidence to the Administrative Lender that such Lender has deemed
all of the conditions set forth in Section 3.1 to have been satisfied.
Section 10.3 BENEFITS OF ARTICLE. None of the provisions of this
Article shall inure to the benefit of any Person other than Lenders and, with
respect to SECTION 10.1(b), the Borrower; consequently, no such other Person
shall be entitled to rely upon, or to raise as a defense, in any manner
whatsoever, the failure of the Administrative Lender or any Lender to comply
with such provisions.
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ARTICLE 11
MISCELLANEOUS
Section 11.1 NOTICES.
(a) All notices and other communications under this Agreement shall be
in writing (except in those cases where giving notice by telephone is
expressly permitted) and shall be deemed to have been given on the date
personally delivered or sent by telecopy (answerback received), or three days
after deposit in the mail, designated as certified mail, return receipt
requested, postage-prepaid, or one day after being entrusted to a reputable
commercial overnight delivery service, addressed to the party to which such
notice is directed at its address determined as provided in this Section.
All notices and other communications under this Agreement shall be given to
the parties hereto at the following addresses:
(i) If to the Borrower, at:
CompuCom Systems, Inc.
▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Senior Vice President, Finance and Chief Financial Officer
(ii) If to the Administrative Lender, at:
NationsBank of Texas, N.A.
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Vice President
(iii) If to a Lender, at its address shown below its name on the
signature pages hereof, or if applicable, set forth in its
Assignment Agreement.
(b) Any party hereto may change the address to which notices shall be
directed by giving 10 days' written notice of such change to the other
parties.
Section 11.2 EXPENSES. The Borrower shall promptly pay:
(a) all reasonable out-of-pocket expenses of the Administrative Lender
in connection with the preparation, negotiation, execution and delivery of
this Agreement and the other Loan Documents, the transactions contemplated
hereunder and thereunder, and the making of
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Advances hereunder, including without limitation the reasonable fees and
disbursements of Special Counsel;
(b) all reasonable out-of-pocket expenses and reasonable attorneys'
fees of the Administrative Lender in connection with the administration of
the transactions contemplated in this Agreement and the other Loan Documents
and the preparation, negotiation, execution and delivery of any waiver,
amendment or consent by the Administrative Lender relating to this Agreement
or the other Loan Documents; and
(c) all reasonable costs, out-of-pocket expenses and reasonable
attorneys' fees of the Administrative Lender and each Lender incurred for
enforcement, collection, restructuring, refinancing and "work-out", or
otherwise incurred in obtaining performance under the Loan Documents, which
in each case shall include without limitation fees and expenses of
consultants, counsel for the Administrative Lender and any Lender, and
administrative fees for the Administrative Lender.
Section 11.3 WAIVERS. The rights and remedies of the Lenders under
this Agreement and the other Loan Documents shall be cumulative and not
exclusive of any rights or remedies which they would otherwise have. No
failure or delay by the Administrative Lender or any Lender in exercising any
right shall operate as a waiver of such right. The Lenders expressly reserve
the right to require strict compliance with the terms of this Agreement in
connection with any funding of a request for an Advance or issuance of a
Letter of Credit. In the event that any Lender decides to fund an Advance at
a time when the Borrower is not in strict compliance with the terms of this
Agreement, such decision by such Lender shall not be deemed to constitute an
undertaking by the Lender to fund any further requests for Advances or
preclude the Lenders from exercising any rights available under the Loan
Documents or at law or equity. Any waiver or indulgence granted by the
Lenders shall not constitute a modification of this Agreement, except to the
extent expressly provided in such waiver or indulgence, or constitute a
course of dealing by the Lenders at variance with the terms of the Agreement
such as to require further notice by the Lenders of the Lenders' intent to
require strict adherence to the terms of the Agreement in the future. Any
such actions shall not in any way affect the ability of the Administrative
Lender or the Lenders, in their discretion, to exercise any rights available
to them under this Agreement or under any other agreement, whether or not the
Administrative Lender or any of the Lenders are a party thereto, relating to
the Borrower.
Section 11.4 CALCULATION BY THE LENDERS CONCLUSIVE AND BINDING. Any
mathematical calculation required or expressly permitted to be made by the
Administrative Lender or any Lender under this Agreement shall be made in its
reasonable judgment and in good faith, and shall when made, absent manifest
error, be controlling.
Section 11.5 SET-OFF. In addition to any rights now or hereafter
granted under Applicable Law and not by way of limitation of any such rights,
upon the occurrence and during the continuation of an Event of Default, each
Lender and any subsequent holder of any Note, and any assignee of any Note is
hereby authorized by the Borrower at any time or from time to
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time, without notice to the Borrower or any other Person, any such notice
being hereby expressly waived, to set-off, appropriate and apply any deposits
(general or special (except trust and escrow accounts), time or demand,
including without limitation Indebtedness evidenced by certificates of
deposit, in each case whether matured or unmatured) and any other
Indebtedness at any time held or owing by such Lender or holder to or for the
credit or the account of the Borrower, against and on account of the
Obligations and other liabilities of the Borrower to such Lender or holder,
irrespective of whether or not (a) the Lender or holder shall have made any
demand hereunder, or (b) the Lender or holder shall have declared the
principal of and interest on the Advances and other amounts due hereunder to
be due and payable as permitted by SECTION 8.2. Any sums obtained by any
Lender or by any assignee or subsequent holder of any Note shall be subject
to pro rata treatment of all Obligations and other liabilities hereunder.
Any Lender exercising any Rights under this SECTION 11.5 shall give the
Borrower prompt notice thereof after such exercise.
Section 11.6 ASSIGNMENT.
(a) The Borrower may not assign or transfer any of its rights or
obligations hereunder or under the other Loan Documents without the prior
written consent of the Lenders.
(b) No Lender shall be entitled to assign or grant a participation in
its interest in this Agreement, its Notes or its Advances, except as
hereinafter set forth.
(c) Without the consent of the Borrower, any Lender may at any time
sell participations in all or any part of its Advances and Reimbursement
Obligations (collectively, "PARTICIPATIONS") to any banks or other financial
institutions ("PARTICIPANTS") provided that neither such Participation nor
any agreement relating thereto shall confer on any Person (other than the
parties hereto) any right to vote on, approve or sign amendments or waivers,
or any other independent benefit or any legal or equitable right, remedy or
other claim under this Agreement or any other Loan Documents, other than the
right to vote on, approve, or sign amendments or waivers or consents with
respect to items that would result in (i) any increase in the commitment of
any Participant; or (ii)(A) the extension of the date of maturity of, or (B)
the extension of the due date for any payment of principal, interest or fees
respecting, or (C) the reduction of the amount of any installment of
principal or interest on or the change or reduction of any mandatory
reduction required hereunder, or (D) a reduction of the rate of interest on,
the Advances, the Letters of Credit, or the Reimbursement Obligations to
which such Participant is entitled; or (iii) the release of security for the
Obligations, including without limitation any guarantee, except pursuant to
this Agreement or the other Loan Documents; or (iv) the reduction of any fees
payable hereunder to which such Participant is entitled. Notwithstanding the
foregoing, the Borrower agrees that the Participants shall be entitled to the
benefits of ARTICLE 9 hereof as though they were Lenders and the Lenders may,
subject to SECTION 11.14 hereof, provide copies of all financial information
received from the Borrower to such Participants.
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(d) Each Lender may assign to one or more financial institutions
organized under the laws of the United States, or any state thereof, or under
the laws of any other country that is a member of the Organization for
Economic Cooperation and Development, or a political subdivision of any such
country, which is engaged in making, purchasing or otherwise investing in
commercial loans in the ordinary course of its business (each, an "ASSIGNEE")
its rights and obligations under this Agreement and the other Loan Documents;
PROVIDED, HOWEVER, that (i) each such assignment shall be subject to the
prior written consent of the Administrative Lender and Borrower, which
consent shall not be unreasonably withheld (PROVIDED, HOWEVER,
notwithstanding anything herein to the contrary, no consent of the Borrower
is required for any assignment during any time that an Event of Default has
occurred and is continuing), (ii) no such assignment shall be in an amount of
Commitments less than $10,000,000 unless such lesser amount represents the
entirety of the Commitments of the applicable Lender, (iii) the applicable
Lender, Administrative Lender and applicable Assignee shall execute and
deliver to the Administrative Lender an Assignment and Acceptance Agreement
(an "ASSIGNMENT AGREEMENT") in substantially the form of EXHIBIT H hereto,
together with the Notes subject to such assignment, (iv) the Assignee
executing the Assignment, shall deliver to the Administrative Lender a
processing fee of $3,000 and (v) each such assignment shall be a constant,
not a varying, percentage of the assigning Lender's Rights and obligations in
respect of the Facility A Advances and the Facility B Advances. Upon such
execution, delivery and acceptance from and after the effective date
specified in each Assignment, which effective date shall be at least three
Business Days after the execution thereof, (A) the Assignee thereunder shall
be party hereto and, to the extent that rights and obligations hereunder have
been assigned to it pursuant to such Assignment, have the rights and
obligations of a Lender hereunder and (B) the applicable Lender shall, to the
extent that rights and obligations hereunder have been assigned by it
pursuant to such Assignment, relinquish such rights and be released from such
obligations under this Agreement.
(e) Notwithstanding anything in clause (d) above to the contrary, any
Lender may assign and pledge all or any portion of its Advances and Notes to
any Federal Reserve Bank as collateral security pursuant to Regulation A of
F.R.S. Board and any Operating Circular issued by such Federal Reserve Bank;
provided, however, that no such assignment under this clause (e) shall
release the assignor Lender from its obligations hereunder.
(f) Upon its receipt of an Assignment Agreement executed by a Lender
and an Assignee, and any Note or Notes subject to such assignment, the
Borrower shall, within five Business Days after its receipt of such
Assignment Agreement, at no expense to the Borrower, execute and deliver to
the Administrative Lender in exchange for the surrendered Notes new Notes to
the order of such Assignee in an amount equal to the portion of the Advances
and Commitments assigned to it pursuant to such Assignment Agreement and new
Notes to the order of the assignor Lender in an amount equal to the portion
of the Advances and Commitments retained by it hereunder. Such new Notes
shall be in an aggregate principal amount equal to the aggregate principal
amount of such surrendered Notes, shall be dated the effective date of such
Assignment Agreement and shall otherwise be in substantially the form of
EXHIBIT A or B hereto, as applicable.
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(g) Any Lender may, in connection with any assignment or participation
or proposed assignment or participation pursuant to this SECTION 11.6,
disclose to the assignee or Participant or proposed assignee or participant,
any information relating to the Borrower furnished to such Lender by or on
behalf of the Borrower, provided such Person agrees in writing to handle such
information in accordance with the standards set forth in SECTION 11.14
hereof.
(h) Except as specifically set forth in this SECTION 11.6, nothing in
this Agreement or any other Loan Documents, expressed or implied, is intended
to or shall confer on any Person other than the respective parties hereto and
thereto and their successors and assignees permitted hereunder and thereunder
any benefit or any legal or equitable right, remedy or other claim under this
Agreement or any other Loan Documents.
(i) Notwithstanding anything in this SECTION 11.6 to the contrary, no
Assignee or Participant (nor the assigning or participating Lender) shall be
entitled to receive (whether individually or collectively) any greater
payment under SECTION 2.14 or SECTION 9.3 or SECTION 9.5 than such assigning
or participating Lender would have been entitled to receive with respect to
the interest assigned or participated to such Assignee or Participant.
Section 11.7 COUNTERPARTS. This Agreement may be executed in any
number of counterparts, each of which shall be deemed to be an original, but
all such separate counterparts shall together constitute but one and the same
instrument.
Section 11.8 SEVERABILITY. Any provision of this Agreement which is
for any reason prohibited or found or held invalid or unenforceable by any
court or governmental agency shall be ineffective to the extent of such
prohibition or invalidity or unenforceability without invalidating the
remaining provisions hereof in such jurisdiction or affecting the validity or
enforceability of such provision in any other jurisdiction.
Section 11.9 INTEREST AND CHARGES. It is not the intention of any
parties to this Agreement to make an agreement in violation of the laws of
any applicable jurisdiction relating to usury. Regardless of any provision
in any Loan Documents, no Lender shall ever be entitled to receive, collect
or apply, as interest on the Obligations, any amount in excess of the Highest
Lawful Amount. If any Lender or participant ever receives, collects or
applies, as interest, any such excess, such amount which would be excessive
interest shall be deemed a partial repayment of principal and treated
hereunder as such; and if principal is paid in full, any remaining excess
shall be paid to the Borrower. In determining whether or not the interest
paid or payable, under any specific contingency, exceeds the Highest Lawful
Rate, the Borrower and the Lenders shall, to the maximum extent permitted
under Applicable Law, (a) characterize any nonprincipal payment as an
expense, fee or premium rather than as interest, (b) exclude voluntary
prepayments and the effect thereof, and (c) amortize, prorate, allocate and
spread in equal parts, the total amount of interest throughout the entire
contemplated term of the Obligations so that the interest rate is uniform
throughout the entire term of the Obligations; provided, however, that if the
Obligations are paid and performed in full prior to the end of the full
contemplated term thereof, and if the interest received for the actual period
of existence thereof exceeds the
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Highest Lawful Rate, the Lenders shall refund to the Borrower the amount of
such excess or credit the amount of such excess against the total principal
amount of the Obligations owing, and, in such event, the Lenders shall not be
subject to any penalties provided by any laws for contracting for, charging
or receiving interest in excess of the Highest Lawful Rate. This Section
shall control every other provision of all agreements pertaining to the
transactions contemplated by or contained in the Loan Documents.
Section 11.10 HEADINGS. Headings used in this Agreement are for
convenience only and shall not be used in connection with the interpretation
of any provision hereof.
Section 11.11 AMENDMENT AND WAIVER. The provisions of this Agreement
may not be amended, modified or waived except by the written agreement of the
Borrower and the Determining Lenders; provided, however, that no such
amendment, modification or waiver shall be made (a) without the consent of
all Lenders, if it would (i) increase the Specified Percentage or commitment
of any Lender, or (ii) extend or postpone the date of maturity of, extend the
due date for any payment of principal or interest on, reduce the amount of
any installment of principal or interest on, or reduce the rate of interest
on, any Advance, the Reimbursement Obligations or other amount owing under
any Loan Documents to which such Lender is entitled, or (iii) release any
security for or guaranty of the Obligations (except pursuant to this
Agreement or the other Loan Documents), or (iv) reduce the fees payable
hereunder to which such Lender is entitled, or (v) revise this SECTION 11.11,
or (vi) waive the date for payment of any principal, interest or fees
hereunder or (vii) amend the definition of Determining Lenders; (b) without
the consent of the Swing Line Bank, if it would alter the rights, duties or
obligations of the Swing Line Bank; (c) without the consent of the
Administrative Lender, if it would alter the rights, duties or obligations of
the Administrative Lender; or (d) without the consent of the Issuing Bank, if
it would alter the rights, duties or obligations of the Issuing Bank.
Neither this Agreement nor any term hereof may be amended orally, nor may any
provision hereof be waived orally but only by an instrument in writing signed
by the Administrative Lender and, in the case of an amendment, by the
Borrower. Notwithstanding the foregoing, each Lender (in its capacity as a
Lender hereunder and, if applicable, in its capacity as a "Participant" under
the Existing Credit Agreement) hereby consents to, and authorizes, the
release by the Administrative Lender of any and all Liens insofar as same (i)
arose under the Existing Credit Agreement and (ii) cover property other than
the Borrower's Receivables, the Borrower's Inventory, the CFI Note, the
ClientLink Note, the Equity interest of the Borrower in CFI, the rights of
CompuCom Properties, Inc. under that certain Trademark License Agreement,
dated as of October 25, 1991, between CompuCom Properties, Inc., as licensor,
and the Borrower, as licensee, and/or any proceeds, products, amendments,
modifications and/or restatements of or to any of the foregoing property.
Furthermore, each Lender which is a "Participant" (as such term is defined in
the Existing Credit Agreement) hereby consents to, and authorizes, the sale
and transfer of the Existing Credit Agreement and the indebtedness, Liens and
other rights thereunder or in connection therewith to the Administrative
Lender, for the ratable benefit of the Lenders hereunder.
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Section 11.12 EXCEPTION TO COVENANTS. Neither the Borrower nor any
Subsidiary of the Borrower shall be deemed to be permitted to take any action
or fail to take any action which is permitted as an exception to any of the
covenants contained herein or which is within the permissible limits of any
of the covenants contained herein if such action or omission would result in
the breach of any other covenant contained herein.
Section 11.13 NO LIABILITY OF ISSUING BANK. The Borrower assumes all
risks of the acts or omissions of any beneficiary or transferee of any Letter
of Credit with respect to its use of such Letter of Credit. Neither the
Issuing Bank nor any Lender nor any of their respective officers or directors
shall be liable or responsible for: (a) the use that may be made of any
Letter of Credit or any acts or omissions of any beneficiary or transferee in
connection therewith; (b) the validity, sufficiency or genuineness of
documents, or of any endorsement thereon, even if such documents should prove
to be in any or all respects invalid, insufficient, fraudulent or forged; (c)
payment by the Issuing Bank against presentation of documents that do not
comply with the terms of a Letter of Credit, including failure of any
documents to bear any reference or adequate reference to the Letter of
Credit, except for any payment made upon the Issuing Bank's gross negligence
or wilful misconduct; or (d) any other circumstances whatsoever in making or
failing to make payment under any Letter of Credit, EXCEPT that the Borrower
shall have a claim against the Issuing Bank, and the Issuing Bank shall be
liable to the Borrower, to the extent of any direct, but not consequential,
damages suffered by the Borrower that a court of competent jurisdiction
determines were caused by (i) the Issuing Bank's wilful misconduct or gross
negligence or (ii) the Issuing Bank's wilful failure to make lawful payment
under a Letter of Credit after the presentation to it of a draft and
certificates strictly complying with the terms and conditions of the Letter
of Credit. In furtherance and not in limitation of the foregoing, the
Issuing Bank may accept documents that appear on their face to be in order,
without responsibility for further investigation, regardless of any notice or
information to the contrary.
Section 11.14 CONFIDENTIALITY. Each Lender and the Administrative
Lender agrees (on behalf of itself and each of its Affiliates, directors,
officers, employees and representatives) to use reasonable precautions to
keep confidential, in accordance with customary procedures for handling
confidential information of this nature and in accordance with safe and sound
banking practices, any non-public information supplied to it by the Borrower
pursuant to this Agreement which is identified by the Borrower as being
confidential at the time the same is delivered to the Lenders or the
Administrative Lender, provided that nothing herein shall limit the
disclosure of any such information (a) to the extent required by statute,
rule, regulation or judicial process, (b) to counsel for any Lender or the
Administrative Lender, (c) to bank examiners, auditors or accountants of any
Lender, (d) to the Administrative Lender or any other Lender, (e) in
connection with any Litigation to which any one or more of Lenders is a
party, provided, further, that, unless specifically prohibited by Applicable
Law or court order, each Lender shall, prior to disclosure thereof, notify
Borrower of any request for disclosure of any such non-public information (i)
by any Tribunal or representative thereof (other than any such request in
connection with an examination of such Lender's financial condition by such
governmental agency) or (ii) pursuant to legal process, or (f) to any
Assignee or Participant (or prospective Assignee or Participant) so long as
such Assignee or Participant (or prospective Assignee or
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Participant) agrees in writing to handle such information in accordance with
the provisions of this SECTION 11.14.
Section 11.15 AMENDMENT, RESTATEMENT, EXTENSION, RENEWAL AND INCREASE.
This Agreement is a renewal, extension, amendment, increase and restatement
of the Existing Credit Agreement, and is not a novation of the "Obligations"
(as defined in the Existing Credit Agreement) thereunder. On the Agreement
Date, the "Revolving Note" (as defined in the Existing Credit Agreement), all
of the outstanding indebtedness of the Borrower under the Existing Credit
Agreement and all of the liens, security interests and other rights and
interests of NationsBank of Texas, N.A. under the Existing Credit Agreement
and under the other Loan Documents (as defined in the Existing Credit
Agreement) shall be acquired by the Administrative Lender for the ratable
benefit of the Lenders in their respective Specified Percentages. On the
Agreement Date, the outstanding indebtedness of the Borrower under the
Revolving Note shall be renewed, extended, modified and restated by the
Facility A Notes. The Borrower hereby consents to the acquisition by the
Administrative Lender of the indebtedness, rights and interests described
above. All terms and provisions of this Agreement supersede in their
entirety the Existing Credit Agreement. All Liens covering the Collateral,
or any part thereof, under the collateral documents executed in connection
with the Existing Credit Agreement shall remain valid, binding and
enforceable Liens against the Persons which granted such Liens.
SECTION 11.16 GOVERNING LAW. THIS AGREEMENT AND THE OTHER LOAN
DOCUMENTS SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE LAWS OF
THE STATE OF TEXAS (WITHOUT REGARD TO THE PRINCIPLES OF CONFLICTS OF LAWS)
AND THE UNITED STATES OF AMERICA. THE LOAN DOCUMENTS ARE PERFORMABLE IN
DALLAS, TEXAS, AND BORROWER AND EACH SURETY, GUARANTOR, ENDORSER AND ANY
OTHER PARTY EVER LIABLE FOR PAYMENT OF ANY MONEY PAYABLE WITH RESPECT TO THE
LOAN DOCUMENTS, JOINTLY AND SEVERALLY WAIVE THE RIGHT TO BE SUED ELSEWHERE.
WITHOUT EXCLUDING ANY OTHER JURISDICTION, THE BORROWER, THE ADMINISTRATIVE
LENDER AND EACH LENDER EACH AGREES THAT THE STATE AND FEDERAL COURTS OF TEXAS
LOCATED IN DALLAS, TEXAS, SHALL HAVE JURISDICTION OVER PROCEEDINGS IN
CONNECTION WITH THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS AND HEREBY
SUBMITS WITH RESPECT TO ITSELF AND ITS PROPERTY TO THE JURISDICTION OF ANY
SUCH COURT FOR THE PURPOSE OF ANY SUIT, ACTION, PROCEEDING OR JUDGMENT
RELATING TO OR ARISING OUT OF THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT.
SECTION 11.17 WAIVER OF JURY TRIAL. EACH OF THE BORROWER, THE
ADMINISTRATIVE LENDER AND THE LENDERS HEREBY KNOWINGLY VOLUNTARILY,
IRREVOCABLY AND INTENTIONALLY WAIVE, TO THE MAXIMUM EXTENT PERMITTED BY LAW,
ALL RIGHT TO TRIAL BY JURY IN ANY ACTION, PROCEEDING OR CLAIM ARISING OUT OF
OR RELATED TO ANY OF THE LOAN DOCUMENTS OR THE TRANSACTIONS CONTEMPLATED
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THEREBY. THIS PROVISION IS A MATERIAL INDUCEMENT TO EACH LENDER ENTERING
INTO THIS AGREEMENT AND MAKING ANY ADVANCES HEREUNDER.
SECTION 11.18 ENTIRE AGREEMENT. THIS WRITTEN AGREEMENT, TOGETHER WITH
THE OTHER LOAN DOCUMENTS, REPRESENTS THE FINAL AGREEMENT BETWEEN THE PARTIES
REGARDING THE SUBJECT MATTER HEREIN AND THEREIN AND MAY NOT BE CONTRADICTED
BY EVIDENCE OF PRIOR, CONTEMPORANEOUS OR SUBSEQUENT ORAL AGREEMENTS OF THE
PARTIES HERETO. THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES.
REMAINDER OF PAGE LEFT INTENTIONALLY BLANK
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IN WITNESS WHEREOF, this Credit Agreement is executed as of the date
first set forth above.
BORROWER: COMPUCOM SYSTEMS, INC.
By: /S/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
-----------------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Senior Vice President, Finance and
Chief Financial Officer
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ADMINISTRATIVE LENDER: NATIONSBANK OF TEXAS, N.A., as Administrative
Lender
By: /S/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, ▇▇.
------------------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: Senior Vice President
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LENDERS: NATIONSBANK OF TEXAS, N.A., as a Lender, Swing
Line Bank and Issuing Bank
Specified Percentage:
14.222222223%
By: /S/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, ▇▇.
------------------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: Senior Vice President
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Vice President
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Specified Percentage: SANWA BUSINESS CREDIT CORPORATION
10.666666667%
By: /S/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
-------------------------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇
-----------------------------------------
Title: Vice President
----------------------------------------
▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
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Specified Percentage: CORESTATES BANK, N.A.
8.888888889% By: /S/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
-------------------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
-----------------------------------------
Title: Commercial Officer
----------------------------------------
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, FC ▇-▇-▇-▇▇
▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
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Specified Percentage: NATIONAL CITY BANK OF KENTUCKY
8.888888889% By: /S/ ▇▇▇▇ ▇. ▇▇▇▇
-------------------------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇
Title: Senior Vice President
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
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Specified Percentage: PNC BANK, NATIONAL ASSOCIATION,
successor-by-merger to Midlantic Bank, N.A.
8.888888889%
By: /S/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
-------------------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
-----------------------------------------
Title: Banking Officer
----------------------------------------
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
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Specified Percentage: CREDIT LYONNAIS NEW YORK BRANCH
8.888888889% By: /S/ ▇▇▇▇▇▇▇-▇▇▇▇ ▇▇▇▇▇▇▇
------------------------------------------
Name: ▇▇▇▇▇▇▇-▇▇▇▇ ▇▇▇▇▇▇▇
-----------------------------------------
Title: Senior Vice President
----------------------------------------
▇▇▇▇ ▇▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
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Specified Percentage: UNION BANK OF CALIFORNIA, N.A.
8.888888889% By: /S/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
-------------------------------------------
Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Title: Vice President
By: /S/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
-------------------------------------------
Name: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Title: Vice President
▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
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Specified Percentage: NATIONAL BANK OF CANADA
8.▇▇▇▇▇▇▇▇▇%
By: /S/ ▇▇▇▇ ▇▇▇▇▇
-------------------------------------------
Name: ▇▇▇▇ ▇▇▇▇▇
-----------------------------------------
Title: Vice President
----------------------------------------
By: /S/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
-------------------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
-----------------------------------------
Title: Vice President
----------------------------------------
▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
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Specified Percentage: THE SUMITOMO BANK, LIMITED
6.666666666% By: /S/ ▇▇▇▇ ▇. ▇▇▇▇▇▇
-------------------------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇
-----------------------------------------
Title: Vice President & Manger
----------------------------------------
By: /S/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
-------------------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
-----------------------------------------
Title: Vice President
----------------------------------------
▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
102
Specified Percentage: ▇▇▇▇▇▇▇ BANK, N.A.
5.333333333% By: /S/ ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
-------------------------------------------
Name: ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Assistant Vice President
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
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Specified Percentage: COMERICA BANK
5.333333333% By: /S/ ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, III
-------------------------------------------
Name: ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, III
-----------------------------------------
Title: Vice President
----------------------------------------
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇
Mail Code 3281
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
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Specified Percentage: FLEET NATIONAL BANK
5.333333333% By: /S/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇ III
-------------------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇ III
-----------------------------------------
Title: Vice President
----------------------------------------
MA-OF-0323
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
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