EXHIBIT 10.27
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$150,000,000
AMENDED AND RESTATED CREDIT AGREEMENT
AMONG
COMPUCOM SYSTEMS, INC.
CERTAIN LENDERS PARTY HERETO
AND
NATIONSBANK OF TEXAS, N.A., AS ADMINISTRATIVE LENDER
NOVEMBER 3, 1997
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TABLE OF CONTENTS
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Page
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ARTICLE 1
Definitions
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Section 1.1 Defined Terms....................................... 1
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Section 1.2 Amendments and Renewals............................. 22
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Section 1.3 Construction........................................ 22
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ARTICLE 2
Advances
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Section 2.1 The Advances........................................ 23
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Section 2.2 Manner of Borrowing and Disbursement................ 24
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Section 2.3 Interest............................................ 26
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Section 2.4 Fees................................................ 28
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Section 2.5 Prepayments......................................... 29
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Section 2.6 Reduction of Commitments............................ 30
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Section 2.7 Non-Receipt of Funds by the Administrative Lender... 30
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Section 2.8 Payment of Principal of Advances.................... 31
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Section 2.9 Reimbursement....................................... 32
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Section 2.10 Manner of Payment................................... 33
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Section 2.11 LIBOR Lending Offices............................... 34
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Section 2.12 Sharing of Payments................................. 34
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Section 2.13 Calculation of LIBOR Rate........................... 35
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Section 2.14 Taxes............................................... 35
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Section 2.15 Letters of Credit................................... 38
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ARTICLE 3
Conditions Precedent
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Section 3.1 Conditions Precedent to the Initial Advance and the
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Initial Issuance of Letters of Credit.............. 44
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Section 3.2 Conditions Precedent to All Advances and Letters of
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Credit............................................. 45
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Section 3.3 Conditions Precedent to Conversions and
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Continuations...................................... 47
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ARTICLE 4
Representations and Warranties
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Section 4.1 Representations and Warranties...................... 47
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Section 4.2 Survival of Representations and Warranties, etc..... 54
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ARTICLE 5
General Covenants
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Section 5.1 Preservation of Existence and Similar Matters....... 54
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Section 5.2 Business; Compliance with Applicable Law............ 55
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Section 5.3 Maintenance of Properties........................... 55
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Section 5.4 Accounting Methods and Financial Records............ 55
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Section 5.5 Insurance........................................... 55
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Section 5.6 Payment of Taxes and Claims......................... 55
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Section 5.7 Visits and Inspections.............................. 56
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Section 5.8 Use of Proceeds..................................... 56
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SECTION 5.9 INDEMNITY........................................... 56
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Section 5.10 Environmental Law Compliance........................ 58
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Section 5.11 Further Assurances.................................. 58
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Section 5.12 Subsidiaries........................................ 59
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Section 5.13 Real Property....................................... 59
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Section 5.14 Agreements in Respect of RPA and TAA................ 59
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ARTICLE 6
Information Covenants
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Section 6.2 Annual Financial Statements and Information;
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Certificate of No Default.......................... 60
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Section 6.3 Compliance Certificate.............................. 60
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Section 6.4 Copies of Other Reports and Notices................. 61
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Section 6.5 Notice of Litigation, Default and Other Matters..... 62
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Section 6.6 ERISA Reporting Requirements........................ 62
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Section 6.7 RPA and TAA Reporting Requirements.................. 63
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ARTICLE 7
Negative Covenants
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Section 7.1 Indebtedness........................................ 64
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Section 7.2 Liens............................................... 65
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Section 7.3 Investments......................................... 65
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Section 7.4 Liquidation, Merger................................. 66
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Section 7.5 Sales of Assets..................................... 66
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Section 7.6 Acquisitions........................................ 66
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Section 7.7 Capital Expenditures................................ 67
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Section 7.8 Restricted Payments................................. 67
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Section 7.9 Affiliate Transactions.............................. 67
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Section 7.10 Compliance with ERISA............................... 68
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Section 7.11 Maximum Leverage Ratio.............................. 68
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Section 7.12 Minimum Fixed Charge Coverage Ratio................. 68
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Section 7.13 Minimum Tangible Net Worth.......................... 68
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Section 7.14 Minimum Asset Coverage Ratio........................ 69
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Section 7.15 Maximum Funded Debt to Capital...................... 69
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Section 7.16 Sale and Leaseback.................................. 69
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Section 7.17 Sale or Discount of Accounts........................ 69
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Section 7.18 Capital Stock....................................... 69
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Section 7.19 Business............................................ 69
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Section 7.20 Fiscal Year......................................... 69
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Section 7.21 Amendment of Organizational Documents............... 69
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Section 7.22 Amendments and Waivers of Subordinated Debt......... 70
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Section 7.23 Operating Leases.................................... 70
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ARTICLE 8
Default
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Section 8.1 Events of Default................................... 70
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Section 8.2 Remedies............................................ 73
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ARTICLE 9
Changes in Circumstances
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Section 9.1 LIBOR Basis Determination Inadequate................ 74
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Section 9.2 Illegality.......................................... 74
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Section 9.3 Increased Costs..................................... 75
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Section 9.4 Effect On Base Rate Advances........................ 76
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Section 9.5 Capital Adequacy.................................... 76
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Section 9.6 Replacement Lender.................................. 77
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ARTICLE 10
Agreement Among Lenders
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Section 10.1 Agreement Among Lenders............................. 77
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Section 10.2 Lender Credit Decision.............................. 80
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Section 10.3 Benefits of Article................................. 80
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ARTICLE 11
Miscellaneous
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Section 11.1 Notices............................................. 81
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Section 11.2 Expenses............................................ 81
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Section 11.3 Waivers............................................. 82
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Section 11.4 Calculation by the Lenders Conclusive and Binding... 82
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Section 11.5 Set-Off............................................. 82
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Section 11.6 Assignment.......................................... 83
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Section 11.7 Counterparts........................................ 85
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Section 11.8 Severability........................................ 85
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Section 11.9 Interest and Charges................................ 85
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Section 11.10 Headings............................................ 86
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Section 11.11 Amendment and Waiver................................ 86
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Section 11.12 Exception to Covenants.............................. 86
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Section 11.13 No Liability of Issuing Bank........................ 87
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Section 11.14 Confidentiality..................................... 87
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Section 11.15 Amendment, Restatement, Extension, Renewal and
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Increase........................................... 87
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SECTION 11.16 GOVERNING LAW....................................... 88
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SECTION 11.17 WAIVER OF JURY TRIAL................................ 88
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SECTION 11.18 ENTIRE AGREEMENT.................................... 89
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Section 11.19 Release of Certain Collateral....................... 89
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Schedules and Exhibits
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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
Exhibit A: Facility A Note
Exhibit B: Facility B Note
Exhibit C: Swing Line Note
Exhibit D: Security Agreement
Exhibit E: INTENTIONALLY OMITTED
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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AMENDED AND RESTATED CREDIT AGREEMENT
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THIS AMENDED AND RESTATED CREDIT AGREEMENT is dated as of November 3, 1997,
among COMPUCOM SYSTEMS, INC., a Delaware corporation (the "Borrower"), the
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Lenders from time to time party hereto, and NATIONSBANK OF TEXAS, N.A., a
national banking association, as administrative agent for the Lenders.
BACKGROUND
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The Lenders have been requested to provide the Borrower the funds required to
(i) refinance existing debt of the Borrower, including, inter alia, certain
existing purchase money debt in connection with certain real estate purchased by
the Borrower, outstanding to the Administrative Lender, the Lenders and certain
other lenders pursuant to the terms of that certain Credit Agreement, dated as
of September 26, 1996, as amended, modified, supplemented and restated from time
to time (the "Existing Credit Agreement"), (ii) finance acquisitions permitted
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hereunder, and (iii) finance the ongoing working capital and general corporate
requirements of the Borrower and its Subsidiaries (as hereinafter defined). 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
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Section 1.1 Defined Terms. For purposes of this Agreement:
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"Account" has the meaning assigned to such term in the UCC.
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"Acquisition" means any transaction pursuant to which the Borrower or any of
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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
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association, as administrative agent for Lenders, or such successor
administrative agent appointed pursuant to Section 10.1(b) hereof.
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"Administrative Lender Fee Letter" has the meaning specified in Section 2.4(c)
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hereof.
"Advance" means a Facility A Advance, a Facility B Advance or a Swing Line
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Advance and "Advances" means Facility A Advances, Facility B Advances and Swing
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Line Advances.
"Affiliate" means, as applied to any Person, any other Person that, directly
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or indirectly, through one or more Persons, Controls or is Controlled By or
Under Common Control with, that Person.
"Agreement" means this Amended and Restated Credit Agreement, as amended,
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modified, supplemented or restated from time to time.
"Agreement Date" means the date of this Agreement.
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"Applicable Environmental Laws" means applicable laws pertaining to health or
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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
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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").
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"Applicable Law" means (a) in respect of any Person, all provisions of
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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
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the laws of the United States of America, including without limitation 12 USC ''
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
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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,
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applicable in the following situations:
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Applicability
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(a) Initial Pricing Period 0.750%
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(b) Subsequent Pricing Period
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(1) The Fixed Charge Coverage Ratio is greater 0.625%
than or equal to 2.50 to 1
(2) The Fixed Charge Coverage Ratio is less than 0.750%
2.50 to 1 but greater than or equal to 2.00 to 1
(3) The Fixed Charge Coverage Ratio is less than 0.875%
2.00 to 1 but greater than or equal to 1.50 to 1
(4) The Fixed Charge Coverage Ratio is less than 1.125%
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
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with respect to LIBOR Advances (i) made following receipt by the Administrative
Lender of the financial statements required to be delivered pursuant to Section
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6.1 or 6.2 hereof, as applicable, for each such fiscal quarter, and the
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corresponding Compliance Certificate required pursuant to Section 6.3 hereof, on
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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
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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
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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.
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"Authorized Signatory" means such senior personnel of the Borrower as may be
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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.
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"Base Rate Basis" means, for any day, a per annum interest rate equal to the
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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.
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"Business Day" means a day on which commercial banks are open (a) for the
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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
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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
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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,
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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.
"Capitalized Lease Obligations" means that portion of any obligation of the
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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
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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
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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
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Subsidiary of the Borrower, as purchaser under the RPA.
"CFI Note" means the "Subordinated Note" as defined by the RPA, and any and
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all renewals, extensions, modifications, amendments, supplements or restatements
thereof.
"Change of Control" means the occurrence of any of the following events after
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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
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Exchange Act of 1934, as amended (the "Exchange Act"), or any successor
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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 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 IPO" means the sale or issuance by the Borrower or by ClientLink,
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Inc. to any Person other than the Borrower or any of the Borrower's Subsidiaries
of any Equity in ClientLink, Inc. as a part of the initial public offering of
such Equity in ClientLink, Inc. pursuant to the registration requirements of the
Securities Act of 1933, as amended.
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"ClientLink Note" means that certain promissory note, dated September 5, 1996,
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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.
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"Collateral" means any collateral subject to a Lien granted at any time by any
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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
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any document related thereto.
"Commitment Fee" has the meaning specified in Section 2.4(a) hereof.
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"Commitments" means, collectively, the Facility A Commitment and the Facility
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B Commitment, as reduced from time to time pursuant to Section 2.6 hereof.
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"Compliance Certificate" means a certificate, signed by an Authorized
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Signatory, in substantially the form of Exhibit G, appropriately completed.
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"Control" or "Controlled By" or "Under Common Control" means possession,
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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
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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
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and shall not include any Affiliate of any such creditor.
"Current Maturities" means, with respect to any Person, the principal portion
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payable by such Person on Long Term Debt during the twelve-month period
immediately succeeding the date of determination.
"Debtor Relief Laws" means any applicable liquidation, conservatorship,
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bankruptcy, moratorium, rearrangement, insolvency, reorganization or similar
debtor relief Laws affecting the
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rights of creditors generally from time to time in effect.
"Deed of Trust" means any Deed of Trust or Mortgage, as applicable, relating
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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
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Section 8.1, regardless of whether there shall have occurred any passage of time
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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
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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
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the Lenders having in excess of 50.0% 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
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Percentages aggregate in excess of 50.0%.
"Dividend" means, as to any Person, (a) any declaration or payment of any
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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.
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"Domestic Subsidiary" means any Subsidiary of the Borrower other than a
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Foreign Subsidiary.
"EBIT" means, for any period, determined in accordance with GAAP on a
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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.
"EBITDA" means, for any period, determined in accordance with GAAP on a
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consolidated
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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
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purchaser of an undivided interest in a portion of the Receivables, as provided
by the TAA.
"Equipment" has the meaning assigned to such term in the UCC.
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"Equity" means shares of capital stock or partnership, profits, capital or
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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
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from time to time, and any regulation promulgated thereunder.
"ERISA Event" means, with respect to the Borrower and its Subsidiaries, (a) a
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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
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that any requirement for notice or lapse of time has been satisfied.
"Existing Credit Agreement" has the meaning specified in the Background
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provision hereof.
"Facility A Advance" means an Advance made pursuant to Section 2.1(a) hereof.
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"Facility A Commitment" means $125,000,000.00, as reduced pursuant to Section
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2.6 hereof.
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"Facility A Maturity Date" means November 2, 2002, or the earlier date of
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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.
-8-
"Facility B Advance" means an Advance made pursuant to Section 2.1(b) hereof
------------------ --------------
in order to refinance the outstanding Facility B Advances under the Existing
Credit Agreement as of the Agreement Date.
"Facility B Commitment" means $25,000,000.00, as reduced from time to time
---------------------
pursuant to Section 2.6 hereof.
-----------
"Facility B Maturity Date" means November 2, 2002, 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.
"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
-9-
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.
"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
-10-
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., (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 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:
-11-
(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.
---------
"Inventory Release Event" means the the occurrence of all of the following
-----------------------
events: (i) the release in writing (in form and substance acceptable to the
Administrative Lender) by all holders (other than the Administrative Lender) of
all Liens covering the Inventory, or any of same, of the Borower and/or any of
its Subsidiaries, (ii) the release or termination, as applicable, of any and all
UCC financing statements with respect to such Liens on such Inventory, (iii) the
delivery to the Administrative Lender of UCC searches, or other evidence
acceptable to the Administrative Lender, evidencing such releases, and (iv) the
delivery to the Administrative Lender of such other documents, agreements and
papers as the Administrative Lender shall reasonably request in order to
evidence that such Inventory is not subject to any Lien(s) in favor of any
Person (other than the Administrative Lender).
"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
-12-
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.
"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
-13-
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 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, 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.
"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.
"NationsBank" means NationsBank of Texas, N.A., a national banking
-----------
association, in its capacity as a Lender hereunder.
-14-
"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 or
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.
"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.
------------------- --------------
-15-
"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;
(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;
-16-
(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; provided, however, that from and after the occurrence of the
Inventory Release Event, Liens covering Inventory of the Borrower or any of its
Subsidiaries shall not constitute Permitted Liens hereunder;
(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; provided, however, that from and after the occurrence of
the Inventory Release Event, Liens covering Inventory of the Borrower or any of
its Subsidiaries shall not constitute Permitted Liens hereunder;
(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;
(l) Any Lien in favor of any Lender to secure any obligations owed to such
Lender in respect of any Hedge Agreement;
-17-
(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 Intercreditor Agreements;
provided, however, that from and after the occurrence of the Inventory Release
Event, Liens covering Inventory of the Borrower or any of its Subsidiaries shall
not constitute Permitted Liens hereunder;
(p) Liens in favor of EFC under, or in connection with, the TAA and/or the
RPA;
(q) any replacements or renewals of Liens (but no increases in the
Indebtedness secured thereby) permitted by clauses (f), (h), (i), (j), (m), (o)
and (p) hereof; and
(r) 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;
provided, however, that from and after the occurrence of the Inventory Release
Event, Liens covering Inventory of the Borrower or any of its Subsidiaries shall
not constitute Permitted Liens hereunder.
"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.
"Quarterly Date" means the last day of each March, June, September and
--------------
December,
-18-
beginning December 31, 1997.
"Rate Adjustment Date" means the date which is two Business Days following
--------------------
the date that the Lenders receive the financial statements for the fiscal
quarter ending September 30, 1997, required to be delivered pursuant to Section
-------
6.1 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.
"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,
-19-
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 that certain Amended and Restated Receivables Purchase
---
Agreement, dated as of November 3, 1997, between the Borrower and CFI providing
for the sale by the Borrower to CFI and the purchase by CFI from the Borrower of
certain 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.
"Securitization" means, collectively, the transactions evidenced and
--------------
governed by the Securitization Documents.
"Securitization Documents" means, collectively, 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 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 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.
------------
-20-
"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.
"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 that certain Amended and Restated Transfer and Administration
---
Agreement, dated as of November 3, 1997, among 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
an undivided interest in certain Receivables acquired by CFI from the Borrower
pursuant to the RPA, from time to time, on the terms provided therein, as the
same may be renewed, extended, modified, amended or restated from time to time.
-21-
"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.
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.
-------------
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.
------------
-22-
(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
result of (A) Facility A Commitment, minus (B) the aggregate outstanding
Reimbursement Obligations and Swing Line Advances.
(b) Facility B Advances. Each Lender severally agrees, upon the terms and
-------------------
subject to the conditions of this Agreement, to purchase on the Agreement Date a
portion, equal to its Specified Percentage of the Facility B Commitment, of the
then-outstanding balance of the Facility B Advances under the Existing Credit
Agreement. 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. The Borrower hereby acknowledges and agrees that the "Facility
B Commitment Termination" (as such term is defined in the Existing Credit
Agreement) has heretofore occurred and that, except as provided herein with
respect to the purchase by the Lenders of the outstanding Facility B Advances
under the Existing Credit Agreement as of the Agreement Date, none of the
Lenders under the Existing Credit Agreement or hereunder have any obligation to
make any further or additional Facility B Advance(s) thereunder or hereunder.
(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 Facility A Commitment, 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.
(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.
------------------------------------
-23-
(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 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
-24-
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.
-25-
(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.
-26-
(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 rescind the charging of interest at the Default
-27-
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 0.250%
----------------------
(b) Subsequent Pricing Period
-------------------------
(1) The Fixed Charge Coverage Ratio is greater than or equal to 0.225%
2.50 to 1
(2) The Fixed Charge Coverage Ratio is less than 2.50 to 1 but 0.250%
greater than or equal to 2.00 to 1
(3) The Fixed Charge Coverage Ratio is less than 2.00 to 1 but 0.300%
greater than or equal to 1.50 to 1
(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 6.1 or 6.2
----------- ---
hereof, as applicable, and the corresponding Compliance Certificate required
pursuant to Section 6.3 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.
-28-
(b) Other Fees. Subject to Section 11.9 hereof, the Borrower agrees to pay to
---------- ------------
the Administrative Lender, for the account of the Administrative Lender or its
affiliates, as applicable, the fees on the dates and in the amounts specified in
the letter agreement (the "Administrative Lender Fee Letter"), dated August 21,
--------------------------------
1997, among the Borrower, the Administrative Lender and NationsBanc Capital
Markets, Inc..
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. Subject to the other terms and provisions hereof, Base Rate
Advances may be voluntarily prepaid at any time.
(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 Facility A Commitment, 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
(other than a sale or disposition of Equity permitted by clauses (v) or (vi) of
Section 7.18 hereof), 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).
--------------
(d) Payments, Generally. Any prepayment of any LIBOR Advance shall be
-------------------
-29-
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. Contemporaneously with any
voluntary or other prepayment of any Facility B Advances, the Facility B
Commitment shall be automatically reduced by the amount of such prepayment(s).
(c) 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
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
-30-
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.
--------------------------------
(a) Facility A 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.
-31-
(b) Facility B Advances. To the extent not otherwise required to be paid
-------------------
earlier as provided herein, the principal amount of the Facility B Advances
shall be repaid on each of the following dates in such amounts as set forth next
to each such date below:
Amount of Reduction of
Payment Date Facility B Advances as of each Date
------------ -----------------------------------
April 1, 1999 $ 500,000
July 1, 1999 $ 500,000
October 1, 1999 $ 500,000
January 1, 2000 $1,000,000
April 1, 2000 $1,000,000
July 1, 2000 $1,000,000
October 1, 2000 $1,000,000
January 1, 2001 $2,000,000
April 1, 2001 $2,000,000
July 1, 2001 $2,000,000
October 1, 2001 $2,000,000
January 1, 2002 $2,000,000
April 1, 2002 $2,000,000
July 1, 2002 $2,000,000
April 30, 2002 $2,000,000
Facility B Maturity Date $3,500,000
or such other amount of Facility B
Advances then outstanding
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.
(c) Swing Line Advances. 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)
-32-
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.
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
-33-
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.
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
-34-
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 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").
-----------
-35-
(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.
(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;
-36-
(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;
(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
-37-
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 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.
-----------------
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(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 Facility A Commitment, 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 Agreement (a "Letter of Credit Agreement"), provided
-------------------------- --------
that if any such terms and conditions 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
-39-
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 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
-40-
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;
(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
-41-
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 dai ly 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.
(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
-42-
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 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
-43-
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 Administrative 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;
(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;
-44-
(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) evidence of payment of any and all fees or expenses required to be paid on
or before the Agreement Date pursuant to the Administrative Lender 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 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;
(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
-45-
Borrower, and the enforceability of the Obligations; and
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;
(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 6.5(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.
-46-
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.
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.
-47-
(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 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
-48-
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).
(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, 1996, 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, 1997, 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
-49-
delivered to the Lenders pursuant to Section 6.1, and 6.2 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
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, 1996, 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
-50-
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 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
-51-
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.
(o) Absence of Default. The Borrower and its Subsidiaries are in compliance
------------------
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
-52-
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
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
-53-
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 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.
-54-
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.
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.
-55-
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 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 refinance the
outstanding balance, as of the Agreement Date, of the "Facility B Advances" (as
such term is defined in the Existing Credit Agreement", which original Facility
B Advances were used by the Borrower solely to purchase real property to be
utilized as the corporate headquarters for the Borrower.
SECTION 5.9 INDEMNITY.
---------
-56-
(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 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
-57-
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 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
-58-
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 (in
substantially the form of Exhibit D hereto, appropriately completed) 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 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, (b) at all times after the occurrence and during
-------
the continuance of any Default or Event of Default, the Borrower shall cause
-59-
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 Receivable(s) under
the RPA to be paid directly to the Administrative Lender for application to the
Obligations, (c) 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, the TAA or any of the other Securitization Documents without the
prior written consent of the Determining Lenders if such agreement, or the
amendment to the applicable Securitizations Document(s) 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:
Section 6.1 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 6.2 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.
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(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 6.3 Compliance Certificate. At the time financial statements are
----------------------
furnished pursuant to Sections 6.1 and 6.2 hereof, the Compliance Certificate,
------------ ---
completed as provided therein, executed by the Chief Financial Officer,
Treasurer or Vice President of Finance of the Borrower.
Section 6.4 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
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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
(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 6.5 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 6.6 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;
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(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";
(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 6.7 RPA and TAA Reporting Requirements.
----------------------------------
(a) (i) At such times as the Administrative Lender may request, the amount of
the Maximum Net Investment (as defined by the TAA), (ii) 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, (iii)
promptly at any time when the "Percentage Factor" exceeds the "Maximum
Percentage Factor" (as those terms are defined by the TAA); (iv) 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.
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(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, the TAA and/or
any of the other Securitization Documents; (ii) each notice, if any, at any time
given by CFI pursuant to Section 5.1(b)(i) of the TAA (notifications in 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 (a) during the fiscal year ending December 31, 1997 in an aggregate
amount in excess of $25,000,000 and (b) during any fiscal year thereafter 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) 4.25 to 1 at the end of any fiscal quarter
ending prior to and including December 31, 2000 and (b) 3.75 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)
$130,000,000, plus (b) 75% of cumulative Net Income for the period from, but not
including, March 31, 1997 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
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amount equal to the net worth of any Person that 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; provided, however, that the Borrower and its Subsidiaries may enter into
such arrangements if the fair market value of the property covered thereby does
not, in the aggregate, exceed $25,000,000.
Section 7.17 Sale or Discount of Accounts. 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 (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, (v) the disposition of Capital Stock of ClientLink as part of the
ClientLink IPO and (vi) the issuance of Capital Stock of the Borrower to
officers and other employees of the Borrower as the result of the exercise by
such officers and other employees of stock options granted to them by the
Borrower pursuant to stock option or similar incentive compensation plans of the
Borrower.
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.
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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.
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
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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;
(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
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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 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;
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(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 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 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, together with accrued interest thereon and any
reimbursement required under Section 2.9 hereof, on either (a) the last day
-----------
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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 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
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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 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
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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 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.
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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 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.
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(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
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.
---------------
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(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.
ARTICLE 11
Miscellaneous
-------------
Section 11.1 Notices.
-------
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(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: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Vice President - Finance
(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 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
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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 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
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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.
--------- -
(g) Any Lender may, in connection with any assignment or participation or
proposed
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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 Highest Lawful Rate, the Lenders
shall refund to the Borrower the amount of such excess or credit the amount of
such excess against
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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 or any prior financing arrangement and (ii)
cover property other than the Borrower's Inventory (provided, however, that the
Administrative Lender may release any and all Liens insofar as same cover
Inventory upon the occurrence of the Inventory Release Event), the CFI 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
"Lender" (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.
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
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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 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
-------------------------------------------------------
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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 "Facility A Notes" and the "Facility B Notes" (as such terms are 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 each of the lenders under the
Existing Credit Agreement and of NationsBank of Texas, N.A., as administrative
lender thereunder, and under the other Loan Documents (as defined in the
Existing Credit Agreement) shall be acquired by the Administrative Lender
hereunder for the ratable benefit of the Lenders hereunder in their respective
Specified Percentages. On the Agreement Date, the outstanding indebtedness of
the Borrower under the Facility A Notes (as such term is defined in the Existing
Credit Agreement) shall be renewed, extended, modified and restated by the
Facility A Notes hereunder. On the Agreement Date, the outstanding indebtedness
of the Borrower under the Facility B Notes (as such term is defined in the
Existing Credit Agreement) shall be renewed, extended, modified and restated by
the Facility B Notes hereunder. 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. Except insofar as any of same may have
heretofore been, or may contemporaneoualy herewith or hereafter be, released
pursuant to written release documentation executed and delivered by the
Administrative Lender, 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, as security for the Obligations hereunder.
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
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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 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.
Section 11.19 Release of Certain Collateral. On the Agreement Date or as
-----------------------------
soon as practical thereafter the Administrative Lender shall release any Liens
held by the Administrative Lender insofar as such Liens cover the Receivables of
the Borrower other than such portion of such Receivables as constitute property
of the type(s) covered by (i) the Security Agreement to be executed by the
Borrower in favor of the Administrative Lender on the Agreement Date and/or (ii)
the Deed of Trust, Assignment of Leases and Rents, Security Agreement and
Financing Statement, executed by the Borrower for the benefit of the
Administrative Lender and the other Lenders as of September 27, 1996, as amended
by a certain First Amendment thereto, dated as of the Agreement Date. Upon the
occurrence of the Inventory Release Event, the Administrative Lender shall
release any Liens held by the Administrative Lender insofar as such Liens cover
the Inventory of the Borrower or any of its Subsidiaries.
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IN WITNESS WHEREOF, this Amended and Restated Credit Agreement is executed as
of the date first set forth above.
BORROWER: COMPUCOM SYSTEMS, INC.
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
----------------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Vice President - Finance
-90-
ADMINISTRATIVE LENDER: NATIONSBANK OF TEXAS, N.A., as Administrative
Lender
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇'▇▇▇▇▇▇
-----------------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇'▇▇▇▇▇▇
Title: Vice President
-91-
LENDERS: NATIONSBANK OF TEXAS, N.A., as a Lender, Swing
Line Bank and Issuing Bank
Specified Percentage:
16.666666667%
By: ▇▇▇▇▇▇▇ ▇. ▇'▇▇▇▇▇▇
-----------------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇'▇▇▇▇▇▇
Title: Vice President
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇▇ ▇. ▇'▇▇▇▇▇▇
Vice President
-92-
Specified Percentage: SANWA BUSINESS CREDIT CORPORATION
9.066666667%
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
--------------------------------------
Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Title: Vice President
▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
-93-
Specified Percentage: CORESTATES BANK, N.A.
10.666666667%
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇
-----------------------------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇▇▇
Title: Vice President
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇ ▇-▇-▇-▇▇
▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
-94-
Specified Percentage: NATIONAL CITY BANK OF KENTUCKY
9.066666667%
By: ▇▇▇▇ ▇. ▇▇▇▇
--------------------------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇
Title: Senior Vice President
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
-95-
Specified Percentage: PNC BANK, NATIONAL ASSOCIATION, successor-by-merger
to Midlantic Bank, N.A.
10.666666667%
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
Title: Vice President
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
-96-
Specified Percentage: CREDIT LYONNAIS NEW YORK BRANCH
10.000000000%
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Name: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Title: Senior Vice President
▇▇▇▇ ▇▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
-97-
Specified Percentage: UNION BANK OF CALIFORNIA, N.A.
9.066666667%
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
-----------------------------------------
Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Title: Vice President
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
------------------------------------
Name: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Title: Vice President
▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
-▇▇-
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇: ▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇ ▇▇▇▇▇▇
9.▇▇▇▇▇▇▇▇▇%
By: /s/ ▇▇▇▇ ▇▇▇▇▇▇▇
-----------------------------------------
Name: ▇▇▇▇ ▇▇▇▇▇▇▇
Title: Vice President
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇
-----------------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Group Vice President
▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
-99-
Specified Percentage: COMERICA BANK
6.666666667%
By: /s/ ▇▇▇ ▇. ▇▇▇▇▇▇▇▇
----------------------------------------
Name: ▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: Vice President
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇
Mail Code 3281
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
-100-
Specified Percentage: FLEET NATIONAL BANK
9.066666667%
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇
-----------------------------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇▇
Title: Vice President
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇-▇▇-▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
-101-
