EXECUTION COPY
$450,000,000
CREDIT AGREEMENT
Dated as of October 28, 1999
Among
MICROAGE TECHNOLOGY SERVICES, L.L.C.
and
PINACOR, INC.,
AS BORROWERS,
MICROAGE, INC.
AS PARENT GUARANTOR,
THE INITIAL LENDERS, INITIAL ISSUING BANK AND
SWING LINE BANK NAMED HEREIN
AS INITIAL LENDERS, INITIAL ISSUING BANK AND SWING LINE BANK,
CITIBANK, N.A.
AS COLLATERAL AGENT,
CITIBANK, N.A.
AS ADMINISTRATIVE AGENT,
IBM CREDIT CORPORATION
AS DOCUMENTATION AGENT
and
THE CIT GROUP/BUSINESS CREDIT, INC.
AS SYNDICATION AGENT
TABLE OF CONTENTS
Section Page
------- ----
ARTICLE I
DEFINITIONS AND ACCOUNTING TERMS
1.01. Certain Defined Terms 1
1.02. Computation of Time Periods; Other Definitional Provisions 29
1.03. Accounting Terms 29
ARTICLE II
AMOUNTS AND TERMS OF THE ADVANCES AND THE LETTERS OF CREDIT
2.01. The Advances and the Letters of Credit 30
2.02. Making the Advances 31
2.03. Issuance of and Drawings and Reimbursement Under Letters of Credit 34
2.04. Repayment of Advances 36
2.05. Termination or Reduction of the Commitments 38
2.06. Prepayments 38
2.07. Interest 39
2.08. Fees 40
2.09. Conversion of Advances 41
2.10. Increased Costs, Etc. 42
2.11. Payments and Computations 43
2.12. Taxes 44
2.13. Sharing of Payments, Etc. 46
2.14. Use of Proceeds 47
2.15. Defaulting Lenders 47
2.16. Evidence of Debt 50
2.17. Increase in the Aggregate Working Capital Commitments 51
ARTICLE III
CONDITIONS OF LENDING ANDISSUANCES OF LETTERS OF CREDIT
3.01. Conditions Precedent to Initial Extension of Credit 53
3.02. Conditions Precedent to Each Borrowing, Increase Date, Issuance
and Increase of Available Amount 59
3.03. Determinations Under Section 3.01 60
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
4.01. Representations and Warranties of the Borrowers and the
Parent Guarantor 60
ARTICLE V
COVENANTS OF THE BORROWERS AND THE PARENT GUARANTOR67
5.01. Affirmative Covenants 67
5.02. Negative Covenants 73
5.03. Reporting Requirements 80
5.04. Financial Covenants 84
ARTICLE VI
EVENTS OF DEFAULT
6.01. Events of Default 86
6.02. Actions in Respect of the Letters of Credit upon Default 90
ARTICLE VII
PARENT GUARANTY
7.01. Guaranty 90
7.02. Guaranty Absolute 91
7.03. Waiver 92
7.04. Payments Free and Clear of Taxes, Etc. 93
7.05. Continuing Guaranty; Assignments 94
7.06. Subrogation 94
ARTICLE VIII
THE AGENTS
8.01. Authorization and Action 96
8.02. Agents' Reliance, Etc. 97
8.03. Citibank and Affiliates 97
8.04. Lender Party Credit Decision 98
8.05. Indemnification 98
8.06. Successor Agents 99
8.07. Other Agents 100
ARTICLE IX
MISCELLANEOUS
9.01. Amendments, Etc. 100
9.02. Notices, Etc. 101
9.03. No Waiver; Remedies 102
9.04. Costs and Expenses 102
9.05. Right of Set-off 104
9.06. Binding Effect 104
9.07. Assignments and Participations 104
9.08. Execution in Counterparts 107
9.09. No Liability of the Issuing Bank 107
9.10. Release of Collateral 108
9.11. Jurisdiction, Etc. 108
9.12. Governing Law 108
9.13. Waiver of Jury Trial 109
SCHEDULES
Schedule I - Commitments and Applicable Lending Offices
Schedule II - Borrowers' Account
Schedule 4.01(b) - Subsidiaries
Schedule 4.01(d) - Authorizations, Approvals, Actions, Notices and Filings
Schedule 4.01(f) - Disclosed Litigation
Schedule 4.01(r) - Open Years
Schedule 4.01(t) - Existing Debt
Schedule 4.01(u) - Surviving Debt
Schedule 4.01(v) - Owned Real Property
Schedule 4.01(w) - Leased Real Property
Schedule 4.01(x) - Investments
Schedule 4.01(y) - Intellectual Property
Schedule 5.02(a) - Liens
EXHIBITS
Exhibit A - Form of Promissory Note
Exhibit B - Form of Notice of Borrowing
Exhibit C - Form of Assignment and Acceptance
Exhibit D - Form of Security Agreement
Exhibit E - Form of Subsidiary Guaranty
Exhibit F - Form of Solvency Certificate
Exhibit G - Form of Opinion of Counsel to the Loan Parties
Exhibit H - Form of Opinion of Local Counsel
Exhibit I - Form of Borrowing Base Certificate
Exhibit J - Form of Flooring Letter of Credit
Exhibit K - Form of Floor Planning Arrangement Intercreditor Agreement
CREDIT AGREEMENT
Dated as of October 28, 1999
MICROAGE TECHNOLOGY SERVICES, L.L.C., a Delaware limited liability company
("MTS"), PINACOR, INC., a Delaware corporation ("PINACOR", and together with
MTS, the "BORROWERS"), MICROAGE, INC., a Delaware corporation (the "PARENT
GUARANTOR"), the banks, financial institutions and other institutional lenders
listed on the signature pages hereof as the Initial Lenders (the "INITIAL
LENDERS"), the bank listed on the signature pages hereof as the Initial Issuing
Bank (the "INITIAL ISSUING BANK") and the Swing Line Bank (as hereinafter
defined), CITIBANK, N.A. ("CITIBANK"), as collateral agent (together with any
successor collateral agent appointed pursuant to Article VII, the "COLLATERAL
AGENT"), IBM CREDIT CORPORATION, as documentation agent (the "DOCUMENTATION
AGENT"), THE CIT GROUP/BUSINESS CREDIT, INC., as syndication agent (the
"SYNDICATION AGENT"), and CITIBANK, as administrative agent (together with any
successor administrative agent appointed pursuant to Article VII, the
"ADMINISTRATIVE AGENT" and, together with the Collateral Agent, the Document
Agent and the Syndication Agent, the "AGENTS") for the Lender Parties (as
hereinafter defined), hereby agree as follows:
ARTICLE I
DEFINITIONS AND ACCOUNTING TERMS
SECTION 1.01. CERTAIN DEFINED TERMS. As used in this Agreement, the
following terms shall have the following meanings (such meanings to be equally
applicable to both the singular and plural forms of the terms defined):
"ADMINISTRATIVE AGENT" has the meaning specified in the recital of parties
to this Agreement.
"ADMINISTRATIVE AGENT'S ACCOUNT" means the account of the Administrative
Agent maintained by the Administrative Agent with Citicorp Industrial Credit at
its office at ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Account No. ▇▇▇▇▇▇▇▇,
ABA ▇▇▇▇▇▇▇▇▇, Attention: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇, or such other account as the
Administrative Agent shall specify in writing to the Lender Parties.
"ADVANCE" means a Working Capital Advance, a Swing Line Advance or a Letter
of Credit Advance.
"AFFILIATE" means, as to any Person, any other Person that, directly or
indirectly, controls, is controlled by or is under common control with such
Person or is a director or officer of such Person. For purposes of this
definition, the term "control" (including the
terms "controlling", "controlled by" and "under common control with") of a
Person means the possession, direct or indirect, of the power to vote 5% or more
of the Voting Stock of such Person or to direct or cause the direction of the
management and policies of such Person, whether through the ownership of Voting
Stock, by contract or otherwise.
"AGENTS" has the meaning specified in the recital of parties to this
Agreement.
"AGREEMENT VALUE" means, for each Hedge Agreement, on any date of
determination, an amount determined by the Administrative Agent equal to: (a) in
the case of a Hedge Agreement documented pursuant to the Master Agreement
(Multicurrency-Cross Border) published by the International Swap and Derivatives
Association, Inc. (the "MASTER AGREEMENT"), the amount, if any, that would be
payable by any Loan Party or any of its Subsidiaries to its counterparty to such
Hedge Agreement, as if (i) such Hedge Agreement was being terminated early on
such date of determination, (ii) such Loan Party or Subsidiary was the sole
"Affected Party", and (iii) the Administrative Agent was the sole party
determining such payment amount (with the Administrative Agent making such
determination pursuant to the provisions of the form of Master Agreement); or
(b) in the case of a Hedge Agreement traded on an exchange, the ▇▇▇▇-to-market
value of such Hedge Agreement, which will be the unrealized loss on such Hedge
Agreement to the Loan Party or Subsidiary of a Loan Party party to such Hedge
Agreement determined by the Administrative Agent based on the settlement price
of such Hedge Agreement on such date of determination, or (c) in all other
cases, the ▇▇▇▇-to-market value of such Hedge Agreement, which will be the
unrealized loss on such Hedge Agreement to the Loan Party or Subsidiary of a
Loan Party party to such Hedge Agreement determined by the Administrative Agent
as the amount, if any, by which (i) the present value of the future cash flows
to be paid by such Loan Party or Subsidiary exceeds (ii) the present value of
the future cash flows to be received by such Loan Party or Subsidiary pursuant
to such Hedge Agreement; capitalized terms used and not otherwise defined in
this definition shall have the respective meanings set forth in the above
described Master Agreement.
"APPLICABLE LENDING OFFICE" means, with respect to each Lender Party, such
Lender Party's Domestic Lending Office in the case of a Base Rate Advance and
such Lender Party's Eurodollar Lending Office in the case of a Eurodollar Rate
Advance.
"APPLICABLE LETTER OF CREDIT FEE" means a percentage per annum determined
by reference to the Debt/EBITDA Ratio as set forth below:
Debt/EBITDA Ratio Applicable Letter of Credit Fee
----------------- -------------------------------
LEVEL I
less than 2.25: 1.0 1.625%
LEVEL II
2.25: 1.0 or greater,
but less than 2.75: 1.0 1.875%
LEVEL III
2.75: 1.0 or greater,
but less than 3.25: 1.0 2.125%
LEVEL IV
3.25: 1.0 or greater,
but less than 3.75: 1.0 2.375%
LEVEL V
3.75: 1.0 or greater,
but less than 4.25:1.0 2.625%
LEVEL VI
4.25:1.0 or greater 2.875%
The Applicable Letter of Credit Fee shall be determined by reference to the
ratio in effect from time to time; PROVIDED, HOWEVER, that (A) no change in the
Applicable Letter of Credit Fee shall be effective until three Business Days
after the date on which the Administrative Agent receives the financial
statements required to be delivered pursuant to Section 5.03(b) or (c), as the
case may be, and a certificate of the chief financial officer of the Parent
Guarantor demonstrating such ratio and (B) the Applicable Letter of Credit Fee
shall be at Level VI until the Parent Guarantor has delivered the financial
statements for the fiscal quarter ended February 1, 2000 and for so long as the
Parent Guarantor has not submitted to the Administrative Agent the information
described in clause (A) of this proviso as and when required under Section
5.03(b) or (c), as the case may be.
"APPLICABLE MARGIN" means a percentage per annum determined by reference to
the Debt/EBITDA Ratio as set forth below:
Debt/EBITDA Ratio Base Rate Advances Eurodollar Rate Advances
----------------- ------------------ ------------------------
LEVEL I
less than 2.25: 1.0 1.00% 2.00%
LEVEL II
2.25: 1.0 or greater,
but less than 2.75: 1.0 1.25% 2.25%
LEVEL III
2.75: 1.0 or greater,
but less than 3.25: 1.0 1.50% 2.50%
LEVEL IV
3.25: 1.0 or greater,
but less than 3.75: 1.0 1.75% 2.75%
LEVEL V
3.75: 1.0 or greater,
but less than 4.25:1.0 2.00% 3.00%
LEVEL VI
4.25:1.0 or greater 2.25% 3.25%
The Applicable Margin for each Advance shall be determined by reference to the
ratio in effect from time to time; PROVIDED, HOWEVER, that (A) no change in the
Applicable Margin shall be effective until three Business Days after the date on
which the Administrative Agent receives the financial statements required to be
delivered pursuant to Section 5.03(b) or (c), as the case may be, and a
certificate of the chief financial officer of the Parent Guarantor demonstrating
such ratio and (B) the Applicable Margin shall be at Level VI until the Parent
Guarantor has delivered the financial statements for the fiscal quarter ended
February 1, 2000 and for so long as the Parent Guarantor has not submitted to
the Administrative Agent the information described in clause (A) of this proviso
as and when required under Section 5.03(b) or (c), as the case may be.
"APPLICABLE PERCENTAGE" means a percentage per annum determined by
reference to the Debt/EBITDA Ratio as set forth below:
Debt/EBITDA Ratio Applicable Percentage
----------------- ---------------------
LEVEL I
less than 2.25: 1.0 0.375%
LEVEL II
2.25: 1.0 or greater,
but less than 2.75: 1.0 0.375%
LEVEL III
2.75: 1.0 or greater,
but less than 3.25: 1.0 0.500%
LEVEL IV
3.25: 1.0 or greater,
but less than 3.75: 1.0 0.500%
LEVEL V
3.75: 1.0 or greater,
but less than 4.25:1.0 0.500%
LEVEL VI
4.25:1.0 or greater 0.500%
The Applicable Percentage shall be determined by reference to the ratio in
effect from time to time; PROVIDED, HOWEVER, that (A) no change in the
Applicable Percentage shall be effective until three Business Days after the
date on which the Administrative Agent receives the financial statements
required to be delivered pursuant to Section 5.03(b) or (c), as the case may be,
and a certificate of the chief financial officer of the Parent
Guarantor demonstrating such ratio and (B) the Applicable Percentage shall be at
Level VI until the Parent Guarantor has delivered the financial statements for
the fiscal quarter ended February 1, 2000 and for so long as the Parent
Guarantor has not submitted to the Administrative Agent the information
described in clause (A) of this proviso as and when required under Section
5.03(b) or (c), as the case may be.
"ARRANGER" means ▇▇▇▇▇▇▇ ▇▇▇▇▇ Barney Inc.
"ASSIGNMENT AND ACCEPTANCE" means an assignment and acceptance entered into
by a Lender Party and an Eligible Assignee, and accepted by the Administrative
Agent, in accordance with Section 9.07 and in substantially the form of Exhibit
C hereto.
"ASSUMING LENDER" has the meaning specified in Section 2.17(d). "ASSUMPTION
AGREEMENT" has the meaning specified in Section 2.17(d)(ii).
"AVAILABLE AMOUNT" of any Letter of Credit means, at any time, the maximum
amount available to be drawn under such Letter of Credit at such time (assuming
compliance at such time with all conditions to drawing).
"BASE RATE" means a fluctuating interest rate per annum in effect from time
to time, which rate per annum shall at all times be equal to the higher of:
(a) the rate of interest announced publicly by Citibank in New York,
New York, from time to time, as Citibank's base rate; and
(b) 1/2 of 1% per annum above the Federal Funds Rate.
"BASE RATE ADVANCE" means an Advance that bears interest as provided in
Section 2.07(a)(i).
"BORROWERS" has the meaning specified in the recital of parties to this
Agreement.
"BORROWERS' ACCOUNT" means the account of the Borrowers maintained by the
Borrowers with Citibank at its office at ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇
▇▇▇▇▇, with the account number so designated on Schedule II, or such other
account as the Borrowers shall specify in writing to the Administrative Agent.
"BORROWING" means a Working Capital Borrowing or a Swing Line Borrowing.
"BORROWING BASE CERTIFICATE" means a certificate in substantially the form
of Exhibit I hereto, duly certified by the chief financial officer of the Parent
Guarantor.
"BUSINESS DAY" means a day of the year on which banks are not required or
authorized by law to close in New York City and, if the applicable Business Day
relates
to any Eurodollar Rate Advances, on which dealings are carried on in the London
interbank market.
"CAPITAL EXPENDITURES" means, for any Person for any period, the sum of,
without duplication, (a) all expenditures made, directly or indirectly, by such
Person or any of its Subsidiaries during such period for equipment, fixed
assets, real property or improvements, or for replacements or substitutions
therefor or additions thereto, that have been or should be, in accordance with
GAAP, reflected as additions to property, plant or equipment on a Consolidated
balance sheet of such Person or have a useful life of more than one year plus
(b) the aggregate principal amount of all Debt (including Obligations under
Capitalized Leases) assumed or incurred in connection with any such
expenditures. For purposes of this definition, the purchase price of equipment
that is purchased simultaneously with the trade-in of existing equipment or with
insurance proceeds shall be included in Capital Expenditures only to the extent
of the gross amount of such purchase price less the credit granted by the seller
of such equipment for the equipment being traded in at such time or the amount
of such proceeds, as the case may be.
"CAPITALIZED LEASES" means all leases that have been or should be, in
accordance with GAAP, recorded as capitalized leases.
"CASH CONCENTRATION ACCOUNT" has the meaning specified in the Security
Agreement.
"CASH EQUIVALENTS" means any of the following, to the extent owned by the
Parent Guarantor or any of its Subsidiaries free and clear of all Liens other
than Liens created under the Collateral Documents and having a maturity of not
greater than 180 days from the date of acquisition thereof: (a) readily
marketable direct obligations of the Government of the United States or any
agency or instrumentality thereof or obligations unconditionally guaranteed by
the full faith and credit of the Government of the United States, (b) insured
certificates of deposit of or time deposits with any commercial bank that is a
Lender Party or a member of the Federal Reserve System, issues (or the parent of
which issues) commercial paper rated as described in clause (c) below, is
organized under the laws of the United States or any State thereof and has
combined capital and surplus of at least $1 billion or (c) commercial paper in
an aggregate amount of no more than $1,000,000 per issuer outstanding at any
time, issued by any corporation organized under the laws of any State of the
United States and rated at least "Prime-1" (or the then equivalent grade) by
▇▇▇▇▇'▇ Investors Service, Inc. or "A-1" (or the then equivalent grade) by
Standard & Poor's, a division of The ▇▇▇▇▇▇-▇▇▇▇ Companies, Inc.
"CERCLA" means the Comprehensive Environmental Response, Compensation and
Liability Act of 1980, as amended from time to time.
"CERCLIS" means the Comprehensive Environmental Response, Compensation and
Liability Information System maintained by the U.S. Environmental Protection
Agency.
"CHANGE OF CONTROL" means the occurrence of any of the following: (a) any
Person (other than ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇) or two or more Persons acting in concert
shall have acquired beneficial ownership (within the meaning of Rule 13d-3 of
the Securities and Exchange Commission under the Securities Exchange Act of
1934), directly or indirectly, of Voting Stock of the Parent Guarantor (or other
securities convertible into such Voting Stock) representing 20% or more of the
combined voting power of all Voting Stock of the Parent Guarantor; or (b) during
any period of up to 24 consecutive months, commencing before or after the date
of this Agreement, individuals who at the beginning of such 24-month period were
directors of the Parent Guarantor shall cease for any reason to constitute a
majority of the board of directors of the Parent Guarantor; or (c) any Person or
two or more Persons acting in concert shall have acquired by contract or
otherwise, or shall have entered into a contract or arrangement that, upon
consummation, will result in its or their acquisition of the power to exercise,
directly or indirectly, a controlling influence over the management or policies
of the Parent Guarantor or (d) ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ shall sell more than 50% of his
ownership of the combined voting power of the Voting Stock of the Parent
Guarantor.
"COLLATERAL" means all "Collateral" referred to in the Collateral Documents
and all other property that is or is intended to be subject to any Lien in favor
of the Collateral Agent for the benefit of the Secured Parties.
"COLLATERAL AGENT" has the meaning specified in the recital of parties to
this Agreement.
"COLLATERAL DOCUMENTS" means the Security Agreement and any other agreement
that creates or purports to create a Lien in favor of the Collateral Agent for
the benefit of the Secured Parties.
"COMMITMENT" means a Working Capital Commitment or a Letter of Credit
Commitment.
"COMMITMENT DATE" has the meaning specified in Section 2.17(b).
"COMMITMENT INCREASE" has the meaning specified in Section 2.17(a).
"CONFIDENTIAL INFORMATION" means information that any Loan Party furnishes
to any Agent or any Lender Party in a writing designated as confidential, but
does not include any such information that is or becomes generally available to
the public or that is or becomes available to such Agent or such Lender Party
from a source other than the Loan Parties.
"CONSOLIDATED" refers to the consolidation of accounts in accordance with
GAAP.
"CONSOLIDATING" refers to the presentation of the Consolidated financial
statements of the Parent Guarantor and the Consolidated financial statements of
each Borrower.
"CONTINGENT OBLIGATION" means, with respect to any Person, any Obligation
or arrangement of such Person to guarantee or intended to guarantee any Debt,
leases, dividends or other payment Obligations ("PRIMARY OBLIGATIONS") of any
other Person (the "PRIMARY OBLIGOR") in any manner, whether directly or
indirectly, including, without limitation, (a) the direct or indirect guarantee,
endorsement (other than for collection or deposit in the ordinary course of
business), co-making, discounting with recourse or sale with recourse by such
Person of the Obligation of a primary obligor, (b) the Obligation to make
take-or-pay or similar payments, if required, regardless of nonperformance by
any other party or parties to an agreement or (c) any Obligation of such Person,
whether or not contingent, (i) to purchase any such primary obligation or any
property constituting direct or indirect security therefor, (ii) to advance or
supply funds (A) for the purchase or payment of any such primary obligation or
(B) to maintain working capital or equity capital of the primary obligor or
otherwise to maintain the net worth or solvency of the primary obligor, (iii) to
purchase property, assets, securities or services primarily for the purpose of
assuring the owner of any such primary obligation of the ability of the primary
obligor to make payment of such primary obligation or (iv) otherwise to assure
or hold harmless the holder of such primary obligation against loss in respect
thereof. The amount of any Contingent Obligation shall be deemed to be an amount
equal to the stated or determinable amount of the primary obligation in respect
of which such Contingent Obligation is made (or, if less, the maximum amount of
such primary obligation for which such Person may be liable pursuant to the
terms of the instrument evidencing such Contingent Obligation) or, if not stated
or determinable, the maximum reasonably anticipated liability in respect thereof
(assuming such Person is required to perform thereunder), as determined by such
Person in good faith.
"CONVERSION", "CONVERT" and "CONVERTED" each refer to a conversion of
Advances of one Type into Advances of the other Type pursuant to Section 2.09 or
2.10.
"DEBT" of any Person means, without duplication for purposes of calculating
financial ratios, (a) all indebtedness of such Person for borrowed money, (b)
all Obligations of such Person for the deferred purchase price of property or
services (other than trade payables not overdue by more than 60 days incurred in
the ordinary course of such Person's business), (c) all Obligations of such
Person evidenced by notes, bonds, debentures or other similar instruments, (d)
all Obligations of such Person created or arising under any conditional sale or
other title retention agreement with respect to property acquired by such Person
(even though the rights and remedies of the seller or lender under such
agreement in the event of default are limited to repossession or sale of such
property), (e) all Obligations of such Person as lessee under Capitalized
Leases, (f) all Obligations of such Person under acceptance, letter of credit or
similar facilities, (g) all Obligations of such Person to purchase, redeem,
retire, defease or otherwise make any payment in respect of any capital stock of
or other ownership or profit interest in such
Person or any other Person or any warrants, rights or options to acquire such
capital stock, valued, in the case of Redeemable Preferred Stock, at the greater
of its voluntary or involuntary liquidation preference plus accrued and unpaid
dividends, (h) all Obligations of such Person in respect of Hedge Agreements,
valued at the Agreement Value thereof, (i) all Contingent Obligations of such
Person and (j) all indebtedness and other payment Obligations referred to in
clauses (a) through (i) above of another Person secured by (or for which the
holder of such Debt has an existing right, contingent or otherwise, to be
secured by) any Lien on property (including, without limitation, accounts and
contract rights) owned by such Person, even though such Person has not assumed
or become liable for the payment of such indebtedness or other payment
Obligations.
"DEBT/EBITDA RATIO" means, at any date of determination, the ratio of (a)
the average Consolidated total Debt for Borrowed Money of the Parent Guarantor
and its Subsidiaries as at the end of each week ended within the most recently
ended fiscal quarter of the Parent Guarantor for which financial statements are
required to be delivered to the Lender Parties pursuant to Section 5.03(b) or
(c), as the case may be, to (b) Consolidated EBITDA of the Parent Guarantor and
its Subsidiaries for such fiscal quarter and the immediately preceding three
fiscal quarters.
"DEBT FOR BORROWED MONEY" of any Person means all Debt of the types
described in clauses (a) through (e) of the definition of "Debt" less amounts on
deposit in the Cash Concentration Account.
"DEFAULT" means any Event of Default or any event that would constitute an
Event of Default but for the requirement that notice be given or time elapse or
both.
"DEFAULT TERMINATION NOTICE" has the meaning specified in Section 2.01(c).
"DEFAULTED ADVANCE" means, with respect to any Lender Party at any time,
the portion of any Advance required to be made by such Lender Party to the
Borrowers pursuant to Section 2.01 or 2.02 at or prior to such time which has
not been made by such Lender Party or by the Administrative Agent for the
account of such Lender Party pursuant to Section 2.02(e) as of such time. In the
event that a portion of a Defaulted Advance shall be deemed made pursuant to
Section 2.15(a), the remaining portion of such Defaulted Advance shall be
considered a Defaulted Advance originally required to be made pursuant to
Section 2.01 on the same date as the Defaulted Advance so deemed made in part.
"DEFAULTED AMOUNT" means, with respect to any Lender Party at any time, any
amount required to be paid by such Lender Party to any Agent or any other Lender
Party hereunder or under any other Loan Document at or prior to such time which
has not been so paid as of such time, including, without limitation, any amount
required to be paid by such Lender Party to (a) the Swing Line Bank pursuant to
Section 2.02(b) to purchase a portion of a Swing Line Advance made by the Swing
Line Bank, (b) the Issuing Bank pursuant to Section 2.03(c) to purchase a
portion of a Letter of Credit Advance made by
the Issuing Bank, (c) the Administrative Agent pursuant to Section 2.02(e) to
reimburse the Administrative Agent for the amount of any Advance made by the
Administrative Agent for the account of such Lender Party, (d) any other Lender
Party pursuant to Section 2.13 to purchase any participation in Advances owing
to such other Lender Party and (e) any Agent or the Issuing Bank pursuant to
Section 8.05 to reimburse such Agent or the Issuing Bank for such Lender Party's
ratable share of any amount required to be paid by the Lender Parties to such
Agent or the Issuing Bank as provided therein. In the event that a portion of a
Defaulted Amount shall be deemed paid pursuant to Section 2.15(b), the remaining
portion of such Defaulted Amount shall be considered a Defaulted Amount
originally required to be paid hereunder or under any other Loan Document on the
same date as the Defaulted Amount so deemed paid in part.
"DEFAULTING LENDER" means, at any time, any Lender Party that, at such
time, owes a Defaulted Advance or a Defaulted Amount.
"DISCLOSED LITIGATION" has the meaning specified in Section 3.01(e).
"DOMESTIC LENDING OFFICE" means, with respect to any Lender Party, the
office of such Lender Party specified as its "Domestic Lending Office" opposite
its name on Schedule I hereto or in the Assumption Agreement or the in the
Assignment and Acceptance pursuant to which it became a Lender Party, as the
case may be, or such other office of such Lender Party as such Lender Party may
from time to time specify to the Borrowers and the Administrative Agent.
"DOMESTIC SUBSIDIARY" means any Subsidiary other than a Foreign Subsidiary.
"EBITDA" means, for any period, the sum, determined on a Consolidated
basis, of (a) net income (or net loss), (b) interest expense (including implied
interest expenses incurred under the Receivables Sales Agreement and flooring
subsidies, in each case determined on a basis consistent with past practice),
(c) income tax expense, (d) depreciation expense, (e) amortization expense, (f)
extraordinary, non-recurring, transactional or unusual losses deducted in
calculating net income less extraordinary, non-recurring, transactional or
unusual gains added in calculating net income and (g) any non-cash expenses,
non-cash losses or other non-cash charges resulting from the writedown in the
valuation of any assets in each case of the Parent Guarantor and its
Subsidiaries, determined in accordance with GAAP for such period. The amounts
referred to in clauses (f) and (g) are agreed to be $152,298,000 and $5,411,000
for the second and third quarters of Fiscal Year 1999, respectively.
"ELIGIBLE ASSIGNEE" means (a) with respect to any Facility (other than the
Letter of Credit Facility), (i) a Lender; (ii) an Affiliate of a Lender; (iii) a
commercial bank organized under the laws of the United States, or any State
thereof, and having total assets in excess of $2,000,000,000; (iv) a savings and
loan association or savings bank organized under the laws of the United States,
or any State thereof, and having total assets in excess of $2,000,000,000; (v) a
commercial bank organized under the laws of any
other country that is a member of the OECD or has concluded special lending
arrangements with the International Monetary Fund associated with its General
Arrangements to Borrow or of the Cayman Islands, or a political subdivision of
any such country, and having total assets in excess of $2,000,000,000, so long
as such bank is acting through a branch or agency located in the country in
which it is organized or another country that is described in this clause (v);
(vi) the central bank of any country that is a member of the OECD; (vii) a
finance company or other financial institution or fund (whether a corporation,
partnership, trust or other entity) that is engaged in making, purchasing or
otherwise investing in commercial loans in the ordinary course of business and
having a combined capital and surplus of at least $250,000,000 and (viii) any
other Person approved by the Administrative Agent and, unless a Default has
occurred and is continuing at the time any assignment is effected pursuant to
Section 9.07, the Parent Guarantor, such approval not to be unreasonably
withheld or delayed, and (b) with respect to the Letter of Credit Facility, a
Person that is an Eligible Assignee under subclause (iii) or (v) of clause (a)
of this definition and is approved by the Administrative Agent and, unless a
Default has occurred and is continuing at the time any assignment is effected
pursuant to Section 9.07, the Parent Guarantor, such approval not to be
unreasonably withheld or delayed; PROVIDED, HOWEVER, that neither any Loan Party
nor any Affiliate of a Loan Party shall qualify as an Eligible Assignee under
this definition.
"ELIGIBLE CASH" means only such cash or Cash Equivalents of the Borrowers
as is on deposit in the Cash Concentration Account
"ELIGIBLE COLLATERAL" means, collectively, Eligible Inventory, Eligible
Receivables and Eligible Cash.
"ELIGIBLE INVENTORY" means only such Inventory of the Loan Parties as the
Administrative Agent, in its sole discretion, shall from time to time elect to
consider Eligible Inventory for purposes of this Agreement. The value of such
Inventory shall be determined by the Administrative Agent in its sole discretion
exercised commercially reasonably in accordance with customary business
practices and taking into consideration, among other factors, the lowest of its
cost, its book value determined in accordance with GAAP and its liquidation
value. The following classes of Inventory shall not be Eligible Inventory:
(a) Inventory that is obsolete, unusable or otherwise unavailable for
sale;
(b) Inventory with respect to which the representations and warranties
set forth in the Collateral Documents applicable to Inventory are not true
and correct;
(c) Inventory consisting of promotional, marketing, packaging or
shipping materials and supplies;
(d) Inventory that fails to meet all standards imposed by any
governmental agency, or department or division thereof, having regulatory
authority over such Inventory or its use or sale;
(e) Inventory that is subject to any licensing, patent, royalty,
trademark, trade name or copyright agreement with any third party from whom
any Loan Party has received notice of a dispute in respect of any such
agreement;
(f) Inventory located outside the United States;
(g) Inventory that is not in the possession of or under the sole
control of the Loan Parties; and
(h) Inventory in respect of which the Security Agreement, after giving
effect to the related filings of financing statements that have then been
made, if any, does not or has ceased to create a valid and perfected first
priority lien or security interest in favor of the Collateral Agent for the
benefit of the Secured Parties securing the Secured Obligations.
"ELIGIBLE RECEIVABLES" means only such Receivables of the Loan Parties as
the Administrative Agent, in its sole discretion, shall from time to time elect
to consider Eligible Receivables for purposes of this Agreement. The value of
such Receivables shall be determined by the Administrative Agent in its sole
discretion exercised commercially reasonably in accordance with customary
business practices and taking into consideration, among other factors, their
book value determined in accordance with GAAP. Not withstanding the foregoing,
none of the following classes of Receivables shall be Eligible Receivables:
(a) Receivables that do not arise out of sales of goods or rendering
of services in the ordinary course of the business of the Loan Parties;
(b) Receivables on terms other than those normal or customary in the
business of the Loan Parties;
(c) Receivables owing from any Person that is an Affiliate of any Loan
Party or any of its Subsidiaries;
(d) Receivables more than 90 days past the original invoice date or
more than 60 days past the date due;
(e) Receivables owing from any Person from which an aggregate amount
of more than 50% of the Receivables owing is more than 60 days past due;
(f) Receivables owing from any Person that (i) has disputed liability
for any Receivable owing from such Person or (ii) has otherwise asserted
any claim, demand or liability against any Loan Party or any of its
Subsidiaries, whether by action, suit, counterclaim or otherwise;
(g) Receivables owing from any Person that shall take or be the
subject of any action or proceeding of a type described in Section 6.01(f);
(h) Receivables (i) owing from any Person that is also a supplier to
or creditor of any Loan Party or (ii) representing any manufacturer's or
supplier's credits, discounts, incentive plans or similar arrangements
entitling any Loan Party to discounts on future purchase therefrom;
(i) Receivables arising out of sales to account debtors outside the
United States;
(j) Receivables arising out of sales on a ▇▇▇▇-and-hold, guaranteed
sale, sale-or-return, sale on approval or consignment basis or subject to
any right of return, set-off or charge-back;
(k) Receivables owing from an account debtor that is an agency,
department or instrumentality of the United States or any State thereof
unless the applicable Loan Party shall have satisfied the requirements of
the Assignment of Claims Act of 1940, as amended, and any similar State
legislation and the Administrative Agent is satisfied as to the absence of
set-offs, counterclaims and other defenses on the part of such account
debtor;
(l) Receivables the full and timely payment of which the
Administrative Agent in its sole discretion believes to be doubtful; and
(m) Receivables in respect of which the Security Agreement, after
giving effect to the related filings of financing statements that have then
been made, if any, does not or has ceased to create a valid and perfected
first priority lien or security interest in favor of the Collateral Agent
for the benefit of the Secured Parties securing the Secured Obligations.
"ENVIRONMENTAL ACTION" means any action, suit, demand, demand letter,
claim, notice of non-compliance or violation, notice of liability or potential
liability, investigation, proceeding, consent order or consent agreement
relating in any way to any Environmental Law, any Environmental Permit or
Hazardous Material or arising from alleged injury or threat to health, safety or
the environment, including, without limitation, (a) by any governmental or
regulatory authority for enforcement, cleanup, removal, response, remedial or
other actions or damages and (b) by any governmental or regulatory authority or
third party for damages, contribution, indemnification, cost recovery,
compensation or injunctive relief.
"ENVIRONMENTAL LAW" means any federal, state, local or foreign statute,
law, ordinance, rule, regulation, code, order, writ, judgment, injunction,
decree or judicial or agency interpretation, policy or guidance relating to
pollution or protection of the environment, health, safety or natural resources,
including, without limitation, those relating to the use, handling,
transportation, treatment, storage, disposal, release or discharge of Hazardous
Materials.
"ENVIRONMENTAL PERMIT" means any permit, approval, identification number,
license or other authorization required under any Environmental Law.
"EQUIPMENT" means all Equipment referred to in Section 1(a) of the Security
Agreement.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended from time to time, and the regulations promulgated and rulings issued
thereunder.
"ERISA AFFILIATE" means any Person that for purposes of Title IV of ERISA
is a member of the controlled group of any Loan Party, or under common control
with any Loan Party, within the meaning of Section 414 of the Internal Revenue
Code.
"ERISA EVENT" means (a)(i) the occurrence of a reportable event, within the
meaning of Section 4043 of ERISA, with respect to any Plan unless the 30-day
notice requirement with respect to such event has been waived by the PBGC or
(ii) the requirements of Section 4043(b) of ERISA apply with respect to a
contributing sponsor, as defined in Section 4001(a)(13) of ERISA, of a Plan, and
an event described in paragraph (9), (10), (11), (12) or (13) of Section 4043(c)
of ERISA is reasonably expected to occur with respect to such Plan within the
following 30 days; (b) the application for a minimum funding waiver with respect
to a Plan; (c) the provision by the administrator of any Plan of a notice of
intent to terminate such Plan, pursuant to Section 4041(a)(2) of ERISA
(including any such notice with respect to a plan amendment referred to in
Section 4041(e) of ERISA); (d) the cessation of operations at a facility of any
Loan Party or any ERISA Affiliate in the circumstances described in Section
4062(e) of ERISA; (e) the withdrawal by any Loan Party or any ERISA Affiliate
from a Multiple Employer Plan during a plan year for which it was a substantial
employer, as defined in Section 4001(a)(2) of ERISA; (f) the conditions for
imposition of a lien under Section 302(f) of ERISA shall have been met with
respect to any Plan; (g) the adoption of an amendment to a Plan requiring the
provision of security to such Plan pursuant to Section 307 of ERISA; or (h) the
institution by the PBGC of proceedings to terminate a Plan pursuant to Section
4042 of ERISA, or the occurrence of any event or condition described in Section
4042 of ERISA that constitutes grounds for the termination of, or the
appointment of a trustee to administer, such Plan.
"EUROCURRENCY LIABILITIES" has the meaning specified in Regulation D of the
Board of Governors of the Federal Reserve System, as in effect from time to
time.
"EURODOLLAR LENDING OFFICE" means, with respect to any Lender Party, the
office of such Lender Party specified as its "Eurodollar Lending Office"
opposite its name on Schedule I hereto or in the Assumption Agreement or the in
the Assignment and Acceptance pursuant to which it became a Lender Party (or, if
no such office is specified, its Domestic Lending Office), or such other office
of such Lender Party as such Lender Party may from time to time specify to the
Borrowers and the Administrative Agent.
"EURODOLLAR RATE" means, for any Interest Period for all Eurodollar Rate
Advances comprising part of the same Borrowing, an interest rate per annum equal
to the rate per annum obtained by dividing (a) the rate per annum at which
deposits in U.S. dollars are offered by the principal office of Citibank in
London, England to prime banks in the London interbank market at 11:00 A.M.
(London time) two Business Days before the first day of such Interest Period in
an amount substantially equal to Citibank's Eurodollar Rate Advance comprising
part of such Borrowing to be outstanding during such Interest Period and for a
period equal to such Interest Period by (b) a percentage equal to 100% minus the
Eurodollar Rate Reserve Percentage for such Interest Period.
"EURODOLLAR RATE ADVANCE" means an Advance that bears interest as provided
in Section 2.07(a)(ii).
"EURODOLLAR RATE RESERVE PERCENTAGE" for any Interest Period for all
Eurodollar Rate Advances comprising part of the same Borrowing means the reserve
percentage applicable two Business Days before the first day of such Interest
Period under regulations issued from time to time by the Board of Governors of
the Federal Reserve System (or any successor) for determining the maximum
reserve requirement (including, without limitation, any emergency, supplemental
or other marginal reserve requirement) for a member bank of the Federal Reserve
System in New York City with respect to liabilities or assets consisting of or
including Eurocurrency Liabilities (or with respect to any other category of
liabilities that includes deposits by reference to which the interest rate on
Eurodollar Rate Advances is determined) having a term equal to such Interest
Period.
"EVENTS OF DEFAULT" has the meaning specified in Section 6.01.
"EXISTING DEBT" has the meaning specified in Section 4.01(t) hereof.
"FACILITY" means the Working Capital Facility, the Swing Line Facility or
the Letter of Credit Facility.
"FEDERAL FUNDS RATE" means, for any period, a fluctuating interest rate per
annum equal for each day during such period to the weighted average of the rates
on overnight Federal funds transactions with members of the Federal Reserve
System arranged by
Federal funds brokers, as published for such day (or, if such day is not a
Business Day, for the next preceding Business Day) by the Federal Reserve Bank
of New York, or, if such rate is not so published for any day that is a Business
Day, the average of the quotations for such day for such transactions received
by the Administrative Agent from three Federal funds brokers of recognized
standing selected by it.
"FEE LETTER" means the fee letter dated October 28, 1999 between the Parent
Guarantor and the Administrative Agent, as amended.
"FISCAL YEAR" means a fiscal year of the Parent Guarantor and its
Consolidated Subsidiaries ending on the Sunday nearest to October 31 in any
calendar year.
"FIXED CHARGE COVERAGE RATIO" means, at any date of determination, the
ratio of (a) Consolidated EBITDA minus Capital Expenditures to (b) interest
payable on, and amortization of debt discount in respect of, all Debt for
Borrowed Money (including expenses incurred under the Receivables Sales
Agreements and flooring subsidies, in each case determined on a basis consistent
with past practice), in each case, of or by the Parent Guarantor and its
Subsidiaries during the applicable period most recently ended for which
financial statements are required to be delivered to the Lender Parties pursuant
to Section 5.03(b) or (c), as the case may be.
"FLOOR PLANNING ARRANGEMENTS" means the (i) Agreement for Inventory
Financing dated October 28, 1999 between IBM Credit Corporation, MicroAge
Computer Centers, Inc., MTS Holding Company, MicroAge Technology Services,
L.L.C. and Pinacor, (ii) Agreement for Wholesale Financing dated September 25,
1998 between Finova Capital Corporation and Pinacor, MicroAge Computer Centers,
Inc., and MicroAge, Inc., and (iii) inventory financing arrangement between
Hewlett-Packard Company, MicroAge, Inc., MicroAge Computer Centers, Inc. and
Pinacor for the purchase by MicroAge Computer Centers, Inc. and Pinacor of
inventory and equipment bearing the trademark or tradename of Hewlett-Packard
Company or any of its Subsidiaries or Affiliates or manufactured by or sold by
Hewlett-Packard Company or any of its Subsidiaries or Affiliates; as each of the
foregoing agreements and arrangements may from time to time be amended,
supplemented or otherwise modified as permitted in, and in accordance with, the
terms of this Agreement.
"FLOORING LETTER OF CREDIT" means a Standby Letter of Credit issued to a
creditor under a Floor Planning Arrangement in substantially the form of Exhibit
J hereto.
"FOREIGN SUBSIDIARY" means a Subsidiary organized under the laws of a
jurisdiction other than the United States or any State thereof or the District
of Columbia.
"GAAP" has the meaning specified in Section 1.03.
"GUARANTIES" means the Parent Guaranty and the Subsidiary Guaranty.
"GUARANTORS" means the Parent Guarantor and the Subsidiary Guarantors.
"HAZARDOUS MATERIALS" means (a) petroleum or petroleum products,
by-products or breakdown products, radioactive materials, asbestos-containing
materials, polychlorinated biphenyls and radon gas and (b) any other chemicals,
materials or substances designated, classified or regulated as hazardous or
toxic or as a pollutant or contaminant under any Environmental Law.
"HEDGE AGREEMENTS" means interest rate swap, cap or collar agreements,
interest rate future or option contracts, currency swap agreements, currency
future or option contracts and other hedging agreements.
"HEDGE BANK" means any Lender Party or an Affiliate of a Lender Party in
its capacity as a party to a Secured Hedge Agreement.
"IMMATERIAL SUBSIDIARY" means any Subsidiary of the Parent Guarantor the
total assets of which do not exceed $25,000.
"INCREASE DATE" has the meaning specified in Section 2.17(a).
"INCREASING LENDER" has the meaning specified in Section 2.17(c).
"INDEMNIFIED PARTY" has the meaning specified in Section 9.04(b).
"INFORMATION MEMORANDUM" means the information memorandum dated October 4,
1999 used by the Arranger in connection with the syndication of the Commitments.
"INITIAL EXTENSION OF CREDIT" means the earlier to occur of the initial
Borrowing and the initial issuance of a Letter of Credit hereunder.
"INITIAL ISSUING BANK" has the meaning specified in the recital of parties
to this Agreement.
"INITIAL LENDERS" has the meaning specified in the recital of parties to
this Agreement.
"INSUFFICIENCY" means, with respect to any Plan, the amount, if any, of its
unfunded benefit liabilities, as defined in Section 4001(a)(18) of ERISA.
"INTERCREDITOR AGREEMENT" has the meaning specified in Section 3.01(a)(xi).
"INTEREST PERIOD" means, for each Eurodollar Rate Advance comprising part
of the same Borrowing, the period commencing on the date of such Eurodollar Rate
Advance or the date of the Conversion of any Base Rate Advance into such
Eurodollar Rate Advance, and ending on the last day of the period selected by
the Borrowers pursuant to the provisions below and, thereafter, each subsequent
period commencing on the last day of
the immediately preceding Interest Period and ending on the last day of the
period selected by the Borrowers pursuant to the provisions below. The duration
of each such Interest Period shall be (except as provided for in Section
2.02(c)) one, two, three or six months, as the Borrowers may, upon notice
received by the Administrative Agent not later than 1:00 P.M. (New York City
time) on the third Business Day prior to the first day of such Interest Period,
select; PROVIDED, HOWEVER, that:
(a) the Borrowers may not select any Interest Period that ends after
the Termination Date;
(b) Interest Periods commencing on the same date for Eurodollar Rate
Advances comprising part of the same Borrowing shall be of the same
duration;
(c) whenever the last day of any Interest Period would otherwise occur
on a day other than a Business Day, the last day of such Interest Period
shall be extended to occur on the next succeeding Business Day, PROVIDED,
HOWEVER, that, if such extension would cause the last day of such Interest
Period to occur in the next following calendar month, the last day of such
Interest Period shall occur on the next preceding Business Day; and
(d) whenever the first day of any Interest Period occurs on a day of
an initial calendar month for which there is no numerically corresponding
day in the calendar month that succeeds such initial calendar month by the
number of months equal to the number of months in such Interest Period,
such Interest Period shall end on the last Business Day of such succeeding
calendar month.
"INTERNAL REVENUE CODE" means the Internal Revenue Code of 1986, as amended
from time to time, and the regulations promulgated and rulings issued
thereunder.
"INVENTORY" means all Inventory referred to in Section 1(b) of the Security
Agreement.
"INVESTMENT" in any Person means any loan or advance to such Person, any
purchase or other acquisition of any capital stock or other ownership or profit
interest, warrants, rights, options, obligations or other securities or the
assets comprising a division or a business unit or a substantial part or all of
the business of such Person, any capital contribution to such Person or any
other direct or indirect investment in such Person, including, without
limitation, any acquisition by way of a merger or consolidation and any
arrangement pursuant to which the investor incurs Debt of the types referred to
in clause (i) or (j) of the definition of "DEBT" in respect of such Person.
"ISSUING BANK" means the Initial Issuing Bank and any Eligible Assignee to
which a Letter of Credit Commitment hereunder has been assigned pursuant to
Section 9.07 so long as such Eligible Assignee expressly agrees to perform in
accordance with
their terms all of the obligations that by the terms of this Agreement are
required to be performed by it as an Issuing Bank and notifies the
Administrative Agent of its Applicable Lending Office and the amount of its
Letter of Credit Commitment (which information shall be recorded by the
Administrative Agent in the Register), for so long as such Initial Issuing Bank
or Eligible Assignee, as the case may be, shall have a Letter of Credit
Commitment.
"L/C CASH COLLATERAL ACCOUNT" means the collateral account with Citibank,
N.A., at its office at ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, in the name of
the Collateral Agent and under the sole control and dominion of the Collateral
Agent.
"L/C RELATED DOCUMENTS" has the meaning specified in Section 2.04(c)(ii).
"LENDER PARTY" means any Lender, the Issuing Bank or the Swing Line Bank.
"LENDERS" means the Initial Lenders, each Assuming Lender that shall become
a party hereto pursuant to Section 2.17 and each Person that shall become a
Lender hereunder pursuant to Section 9.07 for so long as such Initial Lender or
Person, as the case may be, shall be a party to this Agreement.
"LETTER OF CREDIT ADVANCE" means an advance made by the Issuing Bank or any
Lender pursuant to Section 2.03(c).
"LETTER OF CREDIT AGREEMENT" has the meaning specified in Section 2.03(a).
"LETTER OF CREDIT COMMITMENT" means, with respect to the Issuing Bank at
any time, the amount set forth opposite the Issuing Bank's name on Schedule I
hereto under the caption "Letter of Credit Commitment" or, if the Issuing Bank
has entered into one or more Assignment and Acceptances, set forth for the
Issuing Bank in the Register maintained by the Administrative Agent pursuant to
Section 9.07(d) as the Issuing Bank's "Letter of Credit Commitment", as such
amount may be reduced at or prior to such time pursuant to Section 2.05.
"LETTER OF CREDIT FACILITY" means, at any time, an amount equal to the
lesser of (a) the amount of the Issuing Bank's Letter of Credit Commitment at
such time and (b) $150,000,000, as such amount may be reduced at or prior to
such time pursuant to Section 2.05.
"LETTERS OF CREDIT" has the meaning specified in Section 2.01(c).
"LIEN" means any lien, security interest or other charge or encumbrance of
any kind, or any other type of preferential arrangement, including, without
limitation, the lien or retained security title of a conditional vendor and any
easement, right of way or other encumbrance on title to real property.
"LOAN DOCUMENTS" means (a) for purposes of this Agreement and the Notes and
any amendment, supplement or modification hereof or thereof, (i) this Agreement,
(ii) the Notes, (iii) the Guaranties, (iv) the Collateral Documents, (v) the Fee
Letter, (vi) each Letter of Credit Agreement and (vii) each Intercreditor
Agreement and (b) for purposes of the Guaranties and the Collateral Documents
and for all other purposes other than for purposes of this Agreement and the
Notes, (i) this Agreement, (ii) the Notes, (iii) the Guaranties, (iv) the
Collateral Documents, (v) the Fee Letter, (vi) each Letter of Credit Agreement,
(vii) each Secured Hedge Agreement and (viii) each Intercreditor Agreement, in
each case as amended.
"LOAN PARTIES" means the Borrowers and the Guarantors.
"LOAN VALUE" means, with respect to any Eligible Collateral, an amount
equal to (a) with respect to Eligible Receivables, up to 85% of the value of
Eligible Receivables; (b) with respect to Eligible Inventory, up to 75% of the
value of Eligible Inventory less than 90 days old plus up to 50% of Eligible
Inventory over 90 days old less a liquidation reserve of $30,000,000; and (c)
with respect to Eligible Cash, up to 99% of the value of Eligible Cash, or, in
each case, such lower percentage of the value of any item of Eligible Collateral
determined by the Administrative Agent in its sole discretion exercised
commercially reasonably in accordance with customary business practice, PROVIDED
that the Administrative Agent shall give five Business Days notice of any change
in the foregoing percentages.
"MARGIN STOCK" has the meaning specified in Regulation U.
"MATERIAL ADVERSE CHANGE" means any material adverse change in the
business, condition (financial or otherwise), operations, performance,
properties or prospects of any of the Parent Guarantor, the Parent Guarantor and
its Subsidiaries taken as a whole, MTS, MTS and its Subsidiaries taken as a
whole, Pinacor or Pinacor and its Subsidiaries taken as a whole.
"MATERIAL ADVERSE EFFECT" means a material adverse effect on (a) the
business, condition (financial or otherwise), operations, performance,
properties or prospects of any of the Parent Guarantor, the Parent Guarantor and
its Subsidiaries taken as a whole, MTS, MTS and its Subsidiaries taken as a
whole, Pinacor or Pinacor and its Subsidiaries taken as a whole, (b) the rights
and remedies of any Agent or any Lender Party under any Transaction Document or
(c) the ability of any Loan Party to perform its Obligations under any
Transaction Document to which it is or is to be a party.
"MORTGAGES" has the meaning specified in Section 3.01(a)(xvii).
"MULTIEMPLOYER PLAN" means a multiemployer plan, as defined in Section
4001(a)(3) of ERISA, to which any Loan Party or any ERISA Affiliate is making or
accruing an obligation to make contributions, or has within any of the preceding
five plan years made or accrued an obligation to make contributions.
"MULTIPLE EMPLOYER PLAN" means a single employer plan, as defined in
Section 4001(a)(15) of ERISA, that (a) is maintained for employees of any Loan
Party or any ERISA Affiliate and at least one Person other than the Loan Parties
and the ERISA Affiliates or (b) was so maintained and in respect of which any
Loan Party or any ERISA Affiliate could have liability under Section 4064 or
4069 of ERISA in the event such plan has been or were to be terminated.
"NET CASH PROCEEDS" means, with respect to any sale, lease, transfer or
other disposition of any asset or the incurrence or issuance of any Debt or the
sale or issuance of capital stock or other ownership or profit interest
(including, without limitation, any capital contribution) or any securities
convertible into or exchangeable for capital stock or other ownership or profit
interest or any warrants, rights, options or other securities to acquire capital
stock or other ownership or profit interest by any Person, the aggregate amount
of cash received from time to time (whether as initial consideration or through
payment or disposition of deferred consideration) by or on behalf of such Person
in connection with such transaction after deducting therefrom only (without
duplication) (a) reasonable and customary closing costs, brokerage commissions,
underwriting fees and discounts, legal fees, finder's fees and other similar
fees and commissions, (b) the amount of taxes payable in connection with or as a
result of such transaction and (c) the amount of any Debt secured by a Lien on
such asset that, by the terms of the agreement or instrument governing such
Debt, is required to be repaid upon such disposition, in each case to the
extent, but only to the extent, that the amounts so deducted are, at the time of
receipt of such cash, actually paid to a Person that is not an Affiliate of such
Person or any Loan Party or any Affiliate of any Loan Party and are properly
attributable to such transaction or to the asset that is the subject thereof;
PROVIDED, HOWEVER, that in the case of taxes that are deductible under clause
(b) above but for the fact that, at the time of receipt of such cash, such taxes
have not been actually paid or are not then payable, such Loan Party or such
Subsidiary may deduct an amount (the "RESERVED AMOUNT") equal to the amount
reserved in accordance with GAAP for such Loan Party's or such Subsidiary's
reasonable estimate of such taxes, other than taxes for which such Loan Party or
such Subsidiary is indemnified, PROVIDED FURTHER, HOWEVER, that, at the time
such taxes are paid, an amount equal to the amount, if any, by which the
Reserved Amount for such taxes exceeds the amount of such taxes actually paid
shall constitute "Net Cash Proceeds" of the type for which such taxes were
reserved for all purposes hereunder.
"NOTE" means a promissory note of the Borrowers payable to the order of any
Lender, in substantially the form of Exhibit A hereto, evidencing the aggregate
indebtedness to such Lender resulting from the Working Capital Advances, Letter
of Credit Advances and Swing Line Advances made by such Lender, as amended.
"NOTICE OF BORROWING" has the meaning specified in Section 2.02(a).
"NOTICE OF ISSUANCE" has the meaning specified in Section 2.03(a).
"NOTICE OF RENEWAL" has the meaning specified in Section 2.01(c).
"NOTICE OF SWING LINE BORROWING" has the meaning specified in Section
2.02(b).
"NOTICE OF TERMINATION" has the meaning specified in Section 2.01(c). "NPL"
means the National Priorities List under CERCLA.
"OBLIGATION" means, with respect to any Person, any payment, performance or
other obligation of such Person of any kind, including, without limitation, any
liability of such Person on any claim, whether or not the right of any creditor
to payment in respect of such claim is reduced to judgment, liquidated,
unliquidated, fixed, contingent, matured, disputed, undisputed, legal,
equitable, secured or unsecured, and whether or not such claim is discharged,
stayed or otherwise affected by any proceeding referred to in Section 6.01(f).
Without limiting the generality of the foregoing, the Obligations of any Loan
Party under the Loan Documents include (a) the obligation to pay principal,
interest, Letter of Credit commissions, charges, expenses, fees, attorneys' fees
and disbursements, indemnities and other amounts payable by such Loan Party
under any Loan Document and (b) the obligation of such Loan Party to reimburse
any amount in respect of any of the foregoing that any Lender Party, in its sole
discretion, may elect to pay or advance on behalf of such Loan Party.
"OECD" means the Organization for Economic Cooperation and Development.
"OPEN YEAR" has the meaning specified in Section 4.01(r)(ii).
"OTHER TAXES" has the meaning specified in Section 2.12(b).
"PARENT GUARANTOR" has the meaning specified in the recital of parties to
this Agreement.
"PARENT GUARANTY" means the guaranty of the Parent Guarantor set forth in
Article VII of this Agreement.
"PBGC" means the Pension Benefit Guaranty Corporation (or any successor).
"PERMITTED LIENS" means such of the following as to which no enforcement,
collection, execution, levy or foreclosure proceeding shall have been commenced:
(a) Liens for taxes, assessments and governmental charges or levies to the
extent not required to be paid under Section 5.01(b); (b) Liens imposed by law,
such as materialmen's, mechanics', carriers', workmen's and repairmen's Liens
and other similar Liens arising in the ordinary course of business securing
obligations that (i) are not overdue for a period of more than 30 days and (ii)
individually or together with all other Permitted Liens outstanding on any date
of determination do not materially adversely affect the use of the property to
which they relate; (c) pledges or deposits to secure obligations under workers'
compensation laws or similar legislation or to secure public or
statutory obligations; and (d) easements, rights of way and other encumbrances
on title to real property that do not render title to the property encumbered
thereby unmarketable or materially adversely affect the use of such property for
its present purposes.
"PERSON" means an individual, partnership, corporation (including a
business trust), limited liability company, joint stock company, trust,
unincorporated association, joint venture or other entity, or a government or
any political subdivision or agency thereof.
"PLAN" means a Single Employer Plan or a Multiple Employer Plan.
"PLEDGED DEBT" has the meaning specified in the Security Agreement.
"PREFERRED STOCK" means, with respect to any corporation, capital stock
issued by such corporation that is entitled to a preference or priority over any
other capital stock issued by such corporation upon any distribution of such
corporation's assets, whether by dividend or upon liquidation.
"PRO RATA SHARE" of any amount means, with respect to any Lender at any
time, the product of such amount TIMES a fraction the numerator of which is the
amount of such Lender's Working Capital Commitment at such time (or, if the
Commitments shall have been terminated pursuant to Section 2.05 or 6.01, such
Lender's Working Capital Commitment as in effect immediately prior to such
termination) and the denominator of which is the Working Capital Facility at
such time (or, if the Commitments shall have been terminated pursuant to Section
2.05 or 6.01, the Working Capital Facility as in effect immediately prior to
such termination).
"RECEIVABLES" means all Receivables referred to in Section 1(c) of the
Security Agreement.
"RECEIVABLES SALES AGREEMENT" means the Purchase Agreement dated as of
April 30, 1997, between MicroAge Computer Centers, Inc., Pinacor and
NationsCredit Commercial Corporation of America dba MicroAge National Credit.
"REDEEMABLE" means, with respect to any capital stock or other ownership or
profit interest, Debt or other right or Obligation, any such right or Obligation
that (a) the issuer has undertaken to redeem at a fixed or determinable date or
dates, whether by operation of a sinking fund or otherwise, or upon the
occurrence of a condition not solely within the control of the issuer or (b) is
redeemable at the option of the holder.
"REGISTER" has the meaning specified in Section 9.07(d).
"REGULATION U" means Regulation U of the Board of Governors of the Federal
Reserve System, as in effect from time to time.
"RELATED DOCUMENTS" means any intercompany notes issued pursuant to Section
5.02(b)(ii), each agreement included in the Floor Planning Arrangements and each
Flooring Letter of Credit.
"REQUIRED LENDERS" means, at any time, Lenders owed or holding at least a
majority in interest of the sum of (a) the aggregate principal amount of the
Advances outstanding at such time and (b) the aggregate Available Amount of all
Letters of Credit outstanding at such time, or, if no such principal amount and
no Letters of Credit are outstanding at such time, Lenders holding at least a
majority in interest of the aggregate of Working Capital Commitments PROVIDED,
HOWEVER, that if any Lender shall be a Defaulting Lender at such time, there
shall be excluded from the determination of Required Lenders at such time (A)
the aggregate principal amount of the Advances owing to such Lender (in its
capacity as a Lender) and outstanding at such time, (B) such Lender's Pro Rata
Share of the aggregate Available Amount of all Letters of Credit outstanding at
such time and (C) the Unused Working Capital Commitment of such Lender at such
time. For purposes of this definition, the aggregate principal amount of Swing
Line Advances owing to the Swing Line Bank and of Letter of Credit Advances
owing to the Issuing Bank and the Available Amount of each Letter of Credit
shall be considered to be owed to the Lenders ratably in accordance with their
respective Working Capital Commitments.
"RESPONSIBLE OFFICER" means any officer of any Loan Party or any of its
Subsidiaries.
"SECURED HEDGE AGREEMENT" means any Hedge Agreement required or permitted
under Article V that is entered into by and between any Loan Party and any Hedge
Bank.
"SECURED OBLIGATIONS" has the meaning specified in the Security Agreement.
"SECURED PARTIES" means the Agents, the Lender Parties and the Hedge Banks.
"SECURITY AGREEMENT" has the meaning specified in Section 3.01(a)(ii).
"SINGLE EMPLOYER PLAN" means a single employer plan, as defined in Section
4001(a)(15) of ERISA, that (a) is maintained for employees of any Loan Party or
any ERISA Affiliate and no Person other than the Loan Parties and the ERISA
Affiliates or (b) was so maintained and in respect of which any Loan Party or
any ERISA Affiliate could have liability under Section 4069 of ERISA in the
event such plan has been or were to be terminated.
"SOLVENT" and "SOLVENCY" mean, with respect to any Person on a particular
date, that on such date (a) the fair value of the property of such Person is
greater than the total amount of liabilities, including, without limitation,
contingent liabilities, of such Person, (b) the present fair salable value of
the assets of such Person is not less than the amount that will be required to
pay the probable liability of such Person on its debts as they become absolute
and matured, (c) such Person does not intend to, and does not believe
that it will, incur debts or liabilities beyond such Person's ability to pay
such debts and liabilities as they mature and (d) such Person is not engaged in
business or a transaction, and is not about to engage in business or a
transaction, for which such Person's property would constitute an unreasonably
small capital. The amount of contingent liabilities at any time shall be
computed as the amount that, in the 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.
"STANDBY LETTER OF CREDIT" means any Letter of Credit issued under the
Letter of Credit Facility, other than a Trade Letter of Credit.
"SUBSIDIARY" of any Person means any corporation, partnership, joint
venture, limited liability company, trust or estate of which (or in which) more
than 50% of (a) the issued and outstanding capital stock having ordinary 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,
joint venture or limited liability company or (c) the beneficial interest in
such trust or estate is at the time directly or indirectly owned or controlled
by such Person, by such Person and one or more of its other Subsidiaries or by
one or more of such Person's other Subsidiaries.
"SUBSIDIARY GUARANTORS" means all Subsidiaries of the Parent Guarantor and
each other Subsidiary of any of them that shall be required to execute and
deliver a guaranty pursuant to Section 5.01(j) or Section 5.01(k).
"SUBSIDIARY GUARANTY" means a guaranty in substantially the form of Exhibit
E, together with each other guaranty delivered pursuant to Section 5.01(j), in
each case as amended, amended and restated, supplemented or otherwise modified
from time to time in accordance with its terms.
"SURVIVING DEBT" has the meaning specified in Section 3.01(c).
"SWING LINE ADVANCE" means an advance made by (a) the Swing Line Bank
pursuant to Section 2.01(b) or (b) any Lender pursuant to Section 2.02(b).
"SWING LINE BANK" means Citibank.
"SWING LINE BORROWING" means a borrowing consisting of a Swing Line Advance
made by the Swing Line Bank pursuant to Section 2.01(b) or the Lenders pursuant
to Section 2.02(b).
"SWING LINE FACILITY" has the meaning specified in Section 2.01(b).
"TAX CERTIFICATE" has the meaning specified in Section 5.03(k)
"TAXES" has the meaning specified in Section 2.12(a).
"TERMINATION DATE" means the earlier of October 31, 2002 and the date of
termination in whole of the Working Capital Commitments and the Letter of Credit
Commitment pursuant to Section 2.05 or 6.01.
"TRADE LETTER OF CREDIT" means any Letter of Credit that is issued under
the Letter of Credit Facility for the benefit of a supplier of Inventory to the
Borrowers or any of their respective Subsidiaries to effect payment for such
Inventory, the conditions to drawing under which include the presentation to the
Issuing Bank of negotiable bills of lading, invoices and related documents
sufficient, in the judgment of the Issuing Bank, to create a valid and perfected
lien on or security interest in such Inventory, bills of lading, invoices and
related documents in favor of the Issuing Bank.
"TRANSACTION DOCUMENTS" means, collectively, the Loan Documents and the
Related Documents.
"TYPE" refers to the distinction between Advances bearing interest at the
Base Rate and Advances bearing interest at the Eurodollar Rate.
"UNUSED WORKING CAPITAL COMMITMENT" means, with respect to any Lender at
any time, (a) such Lender's Working Capital Commitment at such time MINUS (b)
the sum of (i) the aggregate principal amount of all Working Capital Advances,
Swing Line Advances and Letter of Credit Advances made by such Lender (in its
capacity as a Lender) and outstanding at such time PLUS (ii) such Lender's Pro
Rata Share of (A) the aggregate Available Amount of all Letters of Credit
outstanding at such time, (B) the aggregate principal amount of all Letter of
Credit Advances made by the Issuing Bank pursuant to Section 2.03(c) and
outstanding at such time other than any such Letter of Credit Advance which, at
or prior to such time, has been assigned in part to such Lender pursuant to
Section 2.03(c) and (C) the aggregate principal amount of all Swing Line
Advances made by the Swing Line Bank pursuant to Section 2.01(b) and outstanding
at such time other than any such Swing Line Advance which, at or prior to such
time, has been assigned in part to such Lender pursuant to Section 2.02(b).
"VOTING STOCK" means capital stock issued by a corporation, or equivalent
interests in any other Person, the holders of which are ordinarily, in the
absence of contingencies, entitled to vote for the election of directors (or
persons performing similar functions) of such Person, even if the right so to
vote has been suspended by the happening of such a contingency.
"WELFARE PLAN" means a welfare plan, as defined in Section 3(1) of ERISA,
that is maintained for employees of any Loan Party or in respect of which any
Loan Party could have liability.
"WITHDRAWAL LIABILITY" has the meaning specified in Part I of Subtitle E of
Title IV of ERISA.
"WORKING CAPITAL ADVANCE" has the meaning specified in Section 2.01(a).
"WORKING CAPITAL BORROWING" means a borrowing consisting of simultaneous
Working Capital Advances of the same Type made by the Lenders.
"WORKING CAPITAL COMMITMENT" means, with respect to any Lender at any time,
(a) the amount set forth opposite such Lender's name on Schedule I hereto under
the caption "Working Capital Commitment", (b) if such Lender has become a Lender
hereunder pursuant to an Assumption Agreement, the amount set forth in such
Assumption Agreement or (c) if such Lender has entered into one or more
Assignment and Acceptances, set forth for such Lender in the Register maintained
by the Administrative Agent pursuant to Section 9.07(d) as such Lender's
"Working Capital Commitment", as such amount may be reduced at or prior to such
time pursuant to Section 2.05 or increased pursuant to Section 2.17.
"WORKING CAPITAL FACILITY" means, at any time, the aggregate amount of the
Lenders' Working Capital Commitments at such time.
SECTION 1.02. COMPUTATION OF TIME PERIODS; OTHER DEFINITIONAL PROVISIONS.
In this Agreement and the other Loan Documents in the computation of periods of
time from a specified date to a later specified date, the word "FROM" means
"from and including" and the words "TO" and "UNTIL" each mean "to but
excluding". References in the Loan Documents to any agreement or contract "AS
AMENDED" shall mean and be a reference to such agreement or contract as amended,
amended and restated, supplemented or otherwise modified from time to time in
accordance with its terms.
SECTION 1.03. ACCOUNTING TERMS. All accounting terms not specifically
defined herein shall be construed in accordance with generally accepted
accounting principles consistent with those applied in the preparation of the
financial statements referred to in Section 4.01(g) ("GAAP").
ARTICLE II
AMOUNTS AND TERMS OF THE ADVANCES
AND THE LETTERS OF CREDIT
SECTION 2.01. THE ADVANCES AND THE LETTERS OF CREDIT. (a) THE WORKING
CAPITAL ADVANCES. Each Lender severally agrees, on the terms and conditions
hereinafter set forth, to make advances (each a "WORKING CAPITAL ADVANCE") to
the Borrowers jointly from time to time on any Business Day during the period
from the date hereof until the Termination Date in an amount for each such
Advance not to exceed such Lender's Unused Working Capital Commitment at such
time. Each Working Capital Borrowing shall be in an aggregate amount of
$5,000,000 or an integral multiple of $1,000,000 in excess thereof and shall
consist of Working Capital Advances made simultaneously by the Lenders ratably
according to their Working Capital Commitments. Within the limits of each
Lender's Unused Working Capital Commitment in effect from time to time, the
Borrowers may borrow under this Section 2.01(a), prepay pursuant to Section
2.06(a) and reborrow under this Section 2.01(a).
(b) THE SWING LINE ADVANCES. The Borrowers may jointly request the Swing
Line Bank to make, and the Swing Line Bank may, if in its sole discretion it
elects to do so, make, on the terms and conditions hereinafter set forth, Swing
Line Advances to the Borrowers jointly from time to time on any Business Day
during the period from the date hereof until the Termination Date (i) in an
aggregate amount not to exceed at any time outstanding $50,000,000 (the "SWING
LINE FACILITY") and (ii) in an amount for each such Swing Line Borrowing not to
exceed the aggregate of the Unused Working Capital Commitments of the Lenders at
such time. No Swing Line Advance shall be used for the purpose of funding the
payment of principal of any other Swing Line Advance. Each Swing Line Borrowing
shall be in an amount of $1,000,000 or an integral multiple of $250,000 in
excess thereof and shall be made as a Base Rate Advance. Within the limits of
the Swing Line Facility and within the limits referred to in clause (ii) above,
so long as the Swing Line Bank, in its sole discretion, elects to make Swing
Line Advances, the Borrowers may borrow under this Section 2.01(b), repay
pursuant to Section 2.04(b) or prepay pursuant to Section 2.06(a) and reborrow
under this Section 2.01(b).
(c) LETTERS OF CREDIT. The Issuing Bank agrees, on the terms and conditions
hereinafter set forth, to issue letters of credit (the "LETTERS OF CREDIT") for
the joint account of the Borrowers from time to time on any Business Day during
the period from the date hereof until 60 days before the Termination Date in an
aggregate Available Amount (i) for all Letters of Credit at any time not to
exceed at any time the lesser of (x) the Letter of Credit Facility at such time
and (y) the Issuing Bank's Letter of Credit Commitment at such time and (ii) for
each such Letter of Credit not to exceed the Unused Working Capital Commitments
of the Lenders at such time. No Letter of Credit (other than a Flooring Letter
of Credit) shall have an expiration date (including all rights of the Borrowers
or the beneficiary to require renewal) later than the earlier of 60 days before
the Termination Date (or, in the case of a Flooring Letter of Credit, later than
five days before the Termination Date) and (A) in the case of a Standby Letter
of Credit (other than a Flooring Letter of Credit), six months after the date of
issuance thereof, but may by its terms be
renewable annually upon notice (a "NOTICE OF RENEWAL") given to the Issuing Bank
and the Administrative Agent on or prior to any date for notice of renewal set
forth in such Letter of Credit but in any event at least three Business Days
prior to the date of the proposed renewal of such Standby Letter of Credit and
upon fulfillment of the applicable conditions set forth in Article III unless
the Issuing Bank has notified the Borrowers (with a copy to the Administrative
Agent) on or prior to the date for notice of termination set forth in such
Letter of Credit but in any event at least 30 Business Days prior to the date of
automatic renewal of its election not to renew such Standby Letter of Credit (a
"NOTICE OF TERMINATION") and (B) in the case of a Trade Letter of Credit, 60
days after the date of issuance thereof; PROVIDED that the terms of each Standby
Letter of Credit that is automatically renewable annually shall (x) require the
Issuing Bank that issued such Standby Letter of Credit to give the beneficiary
named in such Standby Letter of Credit notice of any Notice of Termination, (y)
permit such beneficiary, upon receipt of such notice, to draw under such Standby
Letter of Credit prior to the date such Standby Letter of Credit otherwise would
have been automatically renewed and (z) not permit the expiration date (after
giving effect to any renewal) of such Standby Letter of Credit in any event to
be extended to a date later than 60 days before the Termination Date. If either
a Notice of Renewal is not given by the Borrowers or a Notice of Termination is
given by the Issuing Bank pursuant to the immediately preceding sentence, such
Standby Letter of Credit shall expire on the date on which it otherwise would
have been automatically renewed; PROVIDED, HOWEVER, that even in the absence of
receipt of a Notice of Renewal the Issuing Bank may in its discretion, unless
instructed to the contrary by the Administrative Agent or the Borrowers, deem
that a Notice of Renewal had been timely delivered and in such case, a Notice of
Renewal shall be deemed to have been so delivered for all purposes under this
Agreement. Each Standby Letter of Credit shall contain a provision authorizing
the Issuing Bank to deliver to the beneficiary of such Letter of Credit, upon
the occurrence and during the continuance of an Event of Default, a notice (a
"DEFAULT TERMINATION NOTICE") terminating such Letter of Credit and giving such
beneficiary 15 days to draw such Letter of Credit. Within the limits of the
Letter of Credit Facility, and subject to the limits referred to above, the
Borrowers may request the issuance of Letters of Credit under this Section
2.01(c), repay any Letter of Credit Advances resulting from drawings thereunder
pursuant to Section 2.03(c) and request the issuance of additional Letters of
Credit under this Section 2.01(c).
SECTION 2.02. MAKING THE ADVANCES. (a) Except as otherwise provided in
Section 2.02(b) or 2.03, each Borrowing shall be made on notice, given not later
than 1:00 P.M. (New York City time) on the third Business Day prior to the date
of the proposed Borrowing in the case of a Borrowing consisting of Eurodollar
Rate Advances, or not later than 12:00 noon (New York City time) on the date of
the proposed Borrowing in the case of a Borrowing consisting of Base Rate
Advances, by the Borrowers jointly to the Administrative Agent, which shall give
to each Lender prompt notice thereof by telex or telecopier. Each such notice of
a Borrowing (a "NOTICE OF BORROWING") shall be by telephone, confirmed
immediately in writing, or telex or telecopier, in substantially the form of
Exhibit B hereto, specifying therein the requested (i) date of such Borrowing,
(ii) Facility under which such Borrowing is to be made, (iii) Type of Advances
comprising such Borrowing, (iv) aggregate amount of such Borrowing and (v) in
the case of a Borrowing consisting of Eurodollar Rate Advances, initial Interest
Period for each such Advance. Each Lender shall, before 2:00 P.M. (New York City
time) on the date
of such Borrowing, make available for the account of its Applicable Lending
Office to the Administrative Agent at the Administrative Agent's Account, in
same day funds, such Lender's ratable portion of such Borrowing in accordance
with the respective Commitments under the applicable Facility of such Lender and
the other Lenders. After the Administrative Agent's receipt of such funds and
upon fulfillment of the applicable conditions set forth in Article III, the
Administrative Agent will make such funds available to the Borrowers by
crediting the Borrowers' Account; PROVIDED, HOWEVER, that, in the case of any
Working Capital Borrowing, the Administrative Agent shall first make a portion
of such funds equal to the aggregate principal amount of any Swing Line Advances
and Letter of Credit Advances made by the Swing Line Bank or the Issuing Bank,
as the case may be, and by any other Lender and outstanding on the date of such
Working Capital Borrowing, plus interest accrued and unpaid thereon to and as of
such date, available to the Swing Line Bank or the Issuing Bank, as the case may
be, and such other Lenders for repayment of such Swing Line Advances and Letter
of Credit Advances.
(b) Each Swing Line Borrowing shall be made on notice, given not later than
1:00 P.M. (New York City time) on the date of the proposed Swing Line Borrowing,
by the Borrowers jointly to the Swing Line Bank and the Administrative Agent.
Each such notice of a Swing Line Borrowing (a "NOTICE OF SWING LINE BORROWING")
shall be by telephone, confirmed immediately in writing, or telex or telecopier,
specifying therein the requested (i) date of such Borrowing, (ii) amount of such
Borrowing and (iii) maturity of such Borrowing (which maturity shall be no later
than the seventh day after the requested date of such Borrowing). If, in its
sole discretion, it elects to make the requested Swing Line Advance, the Swing
Line Bank will make the amount thereof available to the Administrative Agent at
the Administrative Agent's Account, in same day funds. After the Administrative
Agent's receipt of such funds and upon fulfillment of the applicable conditions
set forth in Article III, the Administrative Agent will make such funds
available to the Borrowers by crediting the Borrowers' Account. Upon written
demand by the Swing Line Bank, with a copy of such demand to the Administrative
Agent, each other Lender shall purchase from the Swing Line Bank, and the Swing
Line Bank shall sell and assign to each such other Lender, such other Lender's
Pro Rata Share of such outstanding Swing Line Advance as of the date of such
demand, by making available for the account of its Applicable Lending Office to
the Administrative Agent for the account of the Swing Line Bank, by deposit to
the Administrative Agent's Account, in same day funds, an amount equal to the
portion of the outstanding principal amount of such Swing Line Advance to be
purchased by such Lender. Each Borrower hereby agrees to each such sale and
assignment. Each Lender agrees to purchase its Pro Rata Share of an outstanding
Swing Line Advance on (i) the Business Day on which demand therefor is made by
the Swing Line Bank, PROVIDED that notice of such demand is given not later than
1:00 P.M. (New York City time) on such Business Day or (ii) the first Business
Day next succeeding such demand if notice of such demand is given after such
time. Upon any such assignment by the Swing Line Bank to any other Lender of a
portion of a Swing Line Advance, the Swing Line Bank represents and warrants to
such other Lender that the Swing Line Bank is the legal and beneficial owner of
such interest being assigned by it, but makes no other representation or
warranty and assumes no responsibility with respect to such Swing Line Advance,
the Loan Documents or any Loan Party. If and to the extent that any Lender shall
not have so made the amount of such Swing Line Advance available to the
Administrative Agent, such Lender agrees to pay to the Administrative Agent
forthwith on demand such amount
together with interest thereon, for each day from the date of demand by the
Swing Line Bank until the date such amount is paid to the Administrative Agent,
at the Federal Funds Rate. If such Lender shall pay to the Administrative Agent
such amount for the account of the Swing Line Bank on any Business Day, such
amount so paid in respect of principal shall constitute a Swing Line Advance
made by such Lender on such Business Day for purposes of this Agreement, and the
outstanding principal amount of the Swing Line Advance made by the Swing Line
Bank shall be reduced by such amount on such Business Day.
(c) Anything in subsection (a) above to the contrary notwithstanding, (i)
except as provided below, the Borrowers may not select Eurodollar Rate Advances
for the initial Borrowing hereunder and for the period from the date hereof to
March 31, 2000 (or such earlier date as shall be specified in its sole
discretion by the Administrative Agent in a written notice to the Borrowers and
the Lenders) or for any Borrowing if the aggregate amount of such Borrowing is
less than $10,000,000 or if the obligation of the Lenders to make Eurodollar
Rate Advances shall then be suspended pursuant to Section 2.09 or 2.10 and (ii)
Eurodollar Rate Advances may not be outstanding as part of more than ten
separate Borrowings; PROVIDED, HOWEVER, the Borrowers may select Eurodollar Rate
Advances for the period from the Initial Extension of Credit through December
31, 1999 if the duration of the Interest Period for such Eurodollar Rate Advance
is one or two weeks and for the period from December 31, 1999 through March 31,
2000 if the duration of the Interest Period for such Eurodollar Rate Advance is
one week, two weeks or one month.
(d) Each Notice of Borrowing and Notice of Swing Line Borrowing shall be
irrevocable and binding on the Borrowers. In the case of any Borrowing that the
related Notice of Borrowing specifies is to be comprised of Eurodollar Rate
Advances, the Borrowers shall indemnify each Lender against any loss, cost or
expense incurred by such Lender as a result of any failure to fulfill on or
before the date specified in such Notice of Borrowing for such Borrowing the
applicable conditions set forth in Article III, including, without limitation,
any loss, cost or expense incurred by reason of the liquidation or reemployment
of deposits or other funds acquired by such Lender to fund the Advance to be
made by such Lender as part of such Borrowing when such Advance, as a result of
such failure, is not made on such date.
(e) Unless the Administrative Agent shall have received notice from a
Lender prior to the date of any Borrowing under a Facility under which such
Lender has a Commitment that such Lender will not make available to the
Administrative Agent such Lender's ratable portion of such Borrowing, the
Administrative Agent may assume that such Lender has made such portion available
to the Administrative Agent on the date of such Borrowing in accordance with
subsection (a) of this Section 2.02 and the Administrative Agent may, in
reliance upon such assumption, make available to the Borrowers on such date a
corresponding amount. If and to the extent that such Lender shall not have so
made such ratable portion available to the Administrative Agent, such Lender and
the Borrowers severally agree to repay or pay to the Administrative Agent
forthwith on demand such corresponding amount and to pay interest thereon, for
each day from the date such amount is made available to the Borrowers until the
date such amount is repaid or paid to the Administrative Agent, at (i) in the
case of the Borrowers, the interest rate applicable at such time under Section
2.07 to Advances comprising such Borrowing
and (ii) in the case of such Lender, the Federal Funds Rate. If such Lender
shall pay to the Administrative Agent such corresponding amount, such amount so
paid shall constitute such Lender's Advance as part of such Borrowing for all
purposes.
(f) The failure of any Lender to make the Advance to be made by it as part
of any Borrowing shall not relieve any other Lender of its obligation, if any,
hereunder to make its Advance on the date of such Borrowing, but no Lender shall
be responsible for the failure of any other Lender to make the Advance to be
made by such other Lender on the date of any Borrowing.
SECTION 2.03. ISSUANCE OF AND DRAWINGS AND REIMBURSEMENT UNDER LETTERS OF
CREDIT. (a) REQUEST FOR ISSUANCE. (i) Each Letter of Credit other than a
Flooring Letter of Credit shall be issued upon notice, given not later than 1:00
P.M. (New York City time) on the tenth Business Day prior to the date of the
proposed issuance of such Letter of Credit, by the Borrowers jointly to the
Issuing Bank, which shall give to the Administrative Agent and each Lender
prompt notice thereof by telex or telecopier. Each such notice of issuance of a
Letter of Credit other than a Flooring Letter of Credit (a "NOTICE OF ISSUANCE")
shall be by telephone, confirmed immediately in writing, or telex or telecopier,
specifying therein the requested (A) date of such issuance (which shall be a
Business Day), (B) Available 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 shall be accompanied
by such application and agreement for letter of credit as the Issuing Bank may
specify to the Borrowers for use in connection with such requested Letter of
Credit (a "LETTER OF CREDIT AGREEMENT"). If (x) the requested form of such
Letter of Credit is acceptable to the Issuing Bank in its sole discretion and
(y) it has not received notice of objection to such issuance from the Required
Lenders, the Issuing Bank will, upon fulfillment of the applicable conditions
set forth in Article III, make such Letter of Credit available to the Borrowers
at its office referred to in Section 9.02 or as otherwise agreed with the
Borrowers in connection with such issuance. In the event and to the extent that
the provisions of any Letter of Credit Agreement shall conflict with this
Agreement, the provisions of this Agreement shall govern.
(ii) Each Flooring Letter of Credit shall be issued upon notice, given not
later than 1:00 P.M. (New York City time) on the second Business Day prior to
the date of the proposed issuance of such Letter of Credit, by the Borrowers to
the Issuing Bank, which shall give to the Administrative Agent and each Lender
prompt notice thereof by telex or telecopier. Each Notice of Issuance for a
Flooring Letter of Credit shall be by telephone, confirmed immediately in
writing, or telex or telecopier, specifying therein the requested (A) date of
such issuance (which shall be a Business Day), (B) initial Available Amount of
such Letter of Credit, (C) expiration date of such Letter of Credit and (D) name
and address of the beneficiary of such Letter of Credit, which shall be a party
to a Floor Planning Arrangement and to an Intercreditor Agreement. Each Flooring
Letter of Credit shall be substantially in the form of Exhibit J hereto and
shall provide for a variable Available Amount to be determined by reference to a
certificate to be delivered by the Parent Guarantor to the Administrative Agent
and the Issuing Bank within two days after the end of each week. If it has not
received notice of objection to such issuance from the Required Lenders, the
Issuing Bank will, upon fulfillment of the applicable conditions
set forth in Article III, make such Flooring Letter of Credit available to the
Borrowers at its office referred to in Section 9.02 or as otherwise agreed with
the Borrowers in connection with such issuance.
(b) LETTER OF CREDIT REPORTS. The Issuing Bank shall furnish (A) to the
Administrative Agent on the first Business Day of each week a written report
summarizing issuance and expiration dates of Letters of Credit issued during the
previous week, drawings during such week under all Letters of Credit and the
aggregate Available Amount of all Letters of Credit outstanding during such
week, (B) to each Lender on the first Business Day of each month a written
report summarizing issuance and expiration dates of Letters of Credit issued
during the preceding month and drawings during such month under all Letters of
Credit and (C) to the Administrative Agent and each Lender on the first Business
Day of each calendar quarter a written report setting forth the average daily
aggregate Available Amount during the preceding calendar quarter of all Letters
of Credit.
(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 Letter of Credit Advance, which
shall be a Base Rate Advance, in the amount of such draft. Upon written demand
by the Issuing Bank, with a copy of such demand to the Administrative Agent,
each Lender shall purchase from the Issuing Bank, and the Issuing Bank shall
sell and assign to each such Lender, such Lender's Pro Rata Share of such
outstanding Letter of Credit Advance as of the date of such purchase, by making
available for the account of its Applicable Lending Office to the Administrative
Agent for the account of the Issuing Bank, by deposit to the Administrative
Agent's Account, in same day funds, an amount equal to the portion of the
outstanding principal amount of such Letter of Credit Advance to be purchased by
such Lender. Promptly after receipt thereof, the Administrative Agent shall
transfer such funds to the Issuing Bank. Each Borrower hereby agrees to each
such sale and assignment. Each Lender agrees to purchase its Pro Rata Share of
an outstanding Letter of Credit Advance on (i) the Business Day on which demand
therefor is made by the Issuing Bank, PROVIDED that notice of such demand is
given not later than 1:00 P.M. (New York City time) on such Business Day, or
(ii) the first Business Day next succeeding such demand if notice of such demand
is given after such time. Upon any such assignment by the Issuing Bank to any
Lender of a portion of a Letter of Credit Advance, the Issuing Bank represents
and warrants to such other Lender that the Issuing Bank is the legal and
beneficial owner of such interest being assigned by it, free and clear of any
liens, but makes no other representation or warranty and assumes no
responsibility with respect to such Letter of Credit Advance, the Loan Documents
or any Loan Party. If and to the extent that any Lender shall not have so made
the amount of such Letter of Credit Advance available to the Administrative
Agent, such Lender agrees to pay to the Administrative Agent forthwith on demand
such amount together with interest thereon, for each day from the date of demand
by the Issuing Bank until the date such amount is paid to the Administrative
Agent, at the Federal Funds Rate for its account or the account of the Issuing
Bank, as applicable. If such Lender shall pay to the Administrative Agent such
amount for the account of the Issuing Bank on any Business Day, such amount so
paid in respect of principal shall constitute a Letter of Credit Advance made by
such Lender on such Business Day for purposes of this Agreement, and the
outstanding principal
amount of the Letter of Credit Advance made by the Issuing Bank shall be reduced
by such amount on such Business Day.
(d) FAILURE TO MAKE LETTER OF CREDIT ADVANCES. The failure of any Lender to
make the Letter of Credit Advance to be made by it on the date specified in
Section 2.03(c) shall not relieve any other Lender of its obligation hereunder
to make its Letter of Credit Advance on such date, but no Lender shall be
responsible for the failure of any other Lender to make the Letter of Credit
Advance to be made by such other Lender on such date.
SECTION 2.04. REPAYMENT OF ADVANCES. (a) WORKING CAPITAL ADVANCES. The
Borrowers shall repay to the Administrative Agent for the ratable account of the
Lenders on the Termination Date the aggregate principal amount of the Working
Capital Advances then outstanding.
(b) SWING LINE ADVANCES. The Borrowers shall repay to the Administrative
Agent for the account of the Swing Line Bank and each other Lender that has made
a Swing Line Advance the outstanding principal amount of each Swing Line Advance
by each of them on the earlier of the maturity date specified in the applicable
Notice of Swing Line Borrowing (which maturity shall be no later than the
seventh day after the requested date of such Borrowing) and the Termination
Date.
(c) LETTER OF CREDIT ADVANCES. (i) The Borrowers shall repay to the
Administrative Agent for the account of the Issuing Bank and each other Lender
that has made a Letter of Credit Advance on the earlier of demand and the
Termination Date the outstanding principal amount of each Letter of Credit
Advance made by each of them.
(ii) The Obligations of the Borrowers under this Agreement, any Letter
of Credit Agreement and any other agreement or instrument relating to any Letter
of Credit 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 (it being understood that any such
payment by the Borrowers is without prejudice to, and does not constitute a
waiver of, any rights the Borrowers might have or might acquire as a result of
the payment by the Issuing Bank of any draft or the reimbursement by the
Borrowers thereof):
(A) any lack of validity or enforceability of any Loan Document,
any Letter of Credit Agreement, any Letter of Credit or any other
agreement or instrument relating thereto (all of the foregoing being,
collectively, the "L/C RELATED DOCUMENTS");
(B) 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 Borrowers in
respect of any L/C Related Document or any other amendment or waiver
of or any consent to departure from all or any of the L/C Related
Documents;
(C) the existence of any claim, set-off, defense or other right
that the Borrowers 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 or any other Person,
whether in connection with the transactions contemplated by the L/C
Related Documents or any unrelated transaction;
(D) 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;
(E) payment by the Issuing Bank under a Letter of Credit against
presentation of a draft or certificate that does not strictly comply
with the terms of such Letter of Credit;
(F) any exchange, release or non-perfection of any Collateral or
other collateral, or any release or amendment or waiver of or consent
to departure from the Guaranties or any other guarantee, for all or
any of the Obligations of the Borrowers in respect of the L/C Related
Documents; or
(G) 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 Borrowers, any Guarantor or any
other guarantor.
SECTION 2.05. TERMINATION OR REDUCTION OF THE COMMITMENTS. (a) OPTIONAL.
The Borrowers may, upon at least five Business Days' notice to the
Administrative Agent, terminate in whole or reduce in part the unused portions
of the Letter of Credit Facility and the Unused Working Capital Commitments;
PROVIDED, HOWEVER, that each partial reduction of a Facility (i) shall be in an
aggregate amount of $5,000,000 or an integral multiple of $1,000,000 in excess
thereof and (ii) shall be made ratably among the Lenders in accordance with
their Commitments with respect to such Facility.
(b) MANDATORY. (i) The Letter of Credit Facility shall be permanently
reduced from time to time on the date of each reduction in the Working Capital
Facility by the amount, if any, by which the amount of the Letter of Credit
Facility exceeds the Working Capital Facility after giving effect to such
reduction of the Working Capital Facility.
(ii) The Swing Line Facility shall be permanently reduced from time to
time on the date of each reduction in the Working Capital Facility by the
amount, if any, by which the amount of the Swing Line Facility exceeds the
Working Capital Facility after giving effect to such reduction of the Working
Capital Facility.
SECTION 2.06. PREPAYMENTS. (a) OPTIONAL. The Borrowers may, upon at least
one Business Day's notice in the case of Base Rate Advances and three Business
Days' notice in the case of Eurodollar Rate Advances, in each case to the
Administrative Agent stating the proposed date and aggregate principal amount of
the prepayment, and if such notice is given the Borrowers shall, prepay the
outstanding aggregate principal amount of the Advances comprising
part of the same Borrowing in whole or ratably in part, together with accrued
interest to the date of such prepayment on the aggregate principal amount
prepaid; PROVIDED, HOWEVER, that (x) each partial prepayment shall be in an
aggregate principal amount of $5,000,000 or an integral multiple of $1,000,000
in excess thereof and (y) if any prepayment of a Eurodollar Rate Advance is made
on a date other than the last day of an Interest Period for such Advance, the
Borrowers shall also pay any amounts owing pursuant to Section 9.04(c).
(b) MANDATORY. (i) The Borrowers shall, on the date of receipt of the Net
Cash Proceeds by any Loan Party or any of its Subsidiaries from (A) the sale,
lease, transfer or other disposition of any assets of any Loan Party or any of
its Subsidiaries (other than any sale, lease, transfer or other disposition of
assets pursuant to clause (i) or (ii) of Section 5.02(e)), (B) the incurrence or
issuance by any Loan Party or any of its Subsidiaries of any Debt (other than
Debt incurred or issued pursuant to Section 5.02(b)) and (C) the sale or
issuance by any Loan Party or any of its Subsidiaries of any capital stock or
other ownership or profit interest (including, without limitation, any capital
contribution), any securities convertible into or exchangeable for capital stock
or other ownership or profit interest or any warrants, rights or options to
acquire capital stock or other ownership or profit interest, prepay an aggregate
principal amount of the Advances comprising part of the same Borrowings equal to
the amount of such Net Cash Proceeds. Each such prepayment shall be applied as
set forth in clause (iv) below.
(ii) The Borrowers shall, on each Business Day, prepay an aggregate
principal amount of the Working Capital Advances comprising part of the same
Borrowings, the Letter of Credit Advances and the Swing Line Advances equal to
the amount by which (A) the sum of the aggregate principal amount of (x) the
Working Capital Advances, (y) the Letter of Credit Advances and (z) the Swing
Line Advances then outstanding plus the aggregate Available Amount of all
Letters of Credit then outstanding exceeds (B) the lesser of (x) the Working
Capital Facility and (y) the Loan Value of Eligible Collateral on such Business
Day MINUS $20,000,000.
(iii) The Borrowers shall, on each Business Day, pay to the
Administrative Agent for deposit in the L/C Cash Collateral Account an amount
sufficient to cause the aggregate amount on deposit in such Account to equal the
amount by which the aggregate Available Amount of all Letters of Credit then
outstanding exceeds the Letter of Credit Facility on such Business Day.
(iv) Prepayments of the Working Capital Facility made pursuant to
clause (i) and (ii) above shall be FIRST applied to prepay Letter of Credit
Advances then outstanding until such Advances are paid in full, SECOND applied
to prepay Swing Line Advances then outstanding until such Advances are paid in
full and THIRD applied to prepay Working Capital Advances then outstanding
comprising part of the same Borrowings until such Advances are paid in full.
(vi) All prepayments under this subsection (b) shall be made together
with accrued interest to the date of such prepayment on the principal amount
prepaid.
SECTION 2.07. INTEREST. (a) SCHEDULED INTEREST. The Borrowers shall pay
interest on the unpaid principal amount of each Advance owing to each Lender
from the date of such Advance until such principal amount shall be paid in full,
at the following rates per annum:
(i) BASE RATE ADVANCES. During such periods as such Advance is a Base
Rate Advance, a rate per annum equal at all times to the sum of (A) the Base
Rate in effect from time to time PLUS (B) the Applicable Margin in effect from
time to time, payable in arrears quarterly on the last day of each March, June,
September and December during such periods and on the date such Base Rate
Advance shall be Converted or paid in full.
(ii) EURODOLLAR RATE ADVANCES. During such periods as such Advance is
a Eurodollar Rate Advance, a rate per annum equal at all times during each
Interest Period for such Advance to the sum of (A) the Eurodollar Rate for such
Interest Period for such Advance PLUS (B) the Applicable Margin in effect from
time to time, payable in arrears on the last day of such Interest Period and, if
such Interest Period has a duration of more than three months, on each day that
occurs during such Interest Period every three months from the first day of such
Interest Period and on the date such Eurodollar Rate Advance shall be Converted
or paid in full.
(b) DEFAULT INTEREST. Upon the occurrence and during the continuance of an
Event of Default, the Borrowers shall pay interest on (i) the unpaid principal
amount of each Advance owing to each Lender, payable in arrears on the dates
referred to in clause (a)(i) or (a)(ii) above and on demand, at a rate per annum
equal at all times to 2% per annum above the rate per annum required to be paid
on such Advance pursuant to clause (a)(i) or (a)(ii) above and (ii) to the
fullest extent permitted by law, the amount of any interest, fee or other amount
payable under the Loan Documents that is not paid when due, from the date such
amount shall be due until such amount shall be paid in full, payable in arrears
on the date such amount shall be paid in full and on demand, at a rate per annum
equal at all times to 2% per annum above the rate per annum required to be paid,
in the case of interest, on the Type of Advance on which such interest has
accrued pursuant to clause (a)(i) or (a)(ii) above and, in all other cases, on
Base Rate Advances pursuant to clause (a)(i) above.
(c) NOTICE OF INTEREST RATE. Promptly after receipt of a Notice of
Borrowing pursuant to Section 2.02(a), a notice of Conversion pursuant to
Section 2.09 or a notice of selection of an Interest Period pursuant to the
terms of the definition of "Interest Period", the Administrative Agent shall
give notice to the Borrowers and each Lender of the applicable Interest Period
and the applicable interest rate determined by the Administrative Agent for
purposes of clause (a)(i) or (a)(ii) above.
SECTION 2.08. FEES. (a) COMMITMENT FEE. The Borrowers jointly and severally
agree to pay to the Administrative Agent for the account of the Lenders a
commitment fee, from the date hereof in the case of each Initial Lender and from
the effective date specified in the Assumption Agreement or in the Assignment
and Acceptance pursuant to which it became a Lender in the case of each other
Lender until the Termination Date, payable in arrears on the date of the initial
Borrowing hereunder, thereafter quarterly on the last day of each March, June,
September and December, commencing December 31, 1999, and on the Termination
Date, at the rate equal to the Applicable Percentage from time to time on the
average daily Unused Working Capital Commitment of such Lender PLUS its Pro Rata
Share of the average daily outstanding Swing Line Advances during such quarter
other than any such Swing Line Advances which have been assigned in part to such
Lender pursuant to Section 2.03(c); PROVIDED, HOWEVER, that no commitment fee
shall accrue on any of the Commitments of a Defaulting Lender so long as such
Lender shall be a Defaulting Lender.
(b) LETTER OF CREDIT FEES, ETC. (i) The Borrowers jointly and severally
agree to pay to the Administrative Agent for the account of each Lender a
commission, payable in arrears quarterly on the last day of each March, June,
September and December, commencing December 31, 1999, and on the Termination
Date, on such Lender's Pro Rata Share of the average daily aggregate Available
Amount during such quarter of Letters of Credit outstanding from time to time at
the rate equal to the Applicable Letter of Credit Fee from time to time.
(ii) The Borrowers shall pay to the Issuing Bank, for its own account
a fronting fee, payable in arrears quarterly on the last day of each March,
June, September and December, commencing December 31, 1999, and on the
Termination Date, on the average daily aggregate Available Amount during such
quarter of Letters of Credit outstanding from time to time at the rate of 0.375%
per annum.
(c) AGENTS' FEES. The Borrowers jointly and severally agree pay to each
Agent for its own account such fees as may from time to time be agreed in
writing between the Parent Guarantor and such Agent.
SECTION 2.09. CONVERSION OF ADVANCES. (a) OPTIONAL. The Borrowers may on
any Business Day, upon notice given to the Administrative Agent not later than
1:00 P.M. (New York City time) on the third Business Day prior to the date of
the proposed Conversion and subject to the provisions of Sections 2.07 and 2.10,
Convert all or any portion of the Advances of one Type comprising the same
Borrowing into Advances of the other Type; PROVIDED, HOWEVER, that any
Conversion of Eurodollar Rate Advances into Base Rate Advances shall be made
only on the last day of an Interest Period for such Eurodollar Rate Advances,
any Conversion of Base Rate Advances into Eurodollar Rate Advances shall be in
an amount not less than the minimum amount specified in Section 2.02(c), no
Conversion of any Advances shall result in more separate Borrowings than
permitted under Section 2.02(c) and each Conversion of Advances comprising part
of the same Borrowing under any Facility shall be made ratably among the Lenders
in accordance with their Commitments under such Facility. Each such notice of
Conversion shall, within the restrictions specified above, specify (i) the date
of such Conversion, (ii) the Advances to be Converted and (iii) if such
Conversion is into Eurodollar Rate Advances, the duration of the initial
Interest Period for such Advances. Each notice of Conversion shall be
irrevocable and binding on the Borrowers.
(b) MANDATORY. (i) On the date on which the aggregate unpaid principal
amount of Eurodollar Rate Advances comprising any Borrowing shall be reduced, by
payment or prepayment or otherwise, to less than $10,000,000, such Advances
shall automatically Convert into Base Rate Advances.
(ii) If the Borrowers shall fail to select the duration of any
Interest Period for any Eurodollar Rate Advances in accordance with the
provisions contained in the definition of "Interest Period" in Section 1.01, the
Administrative Agent will forthwith so notify the Borrowers and the Lenders,
whereupon each such Eurodollar Rate Advance will automatically, on the last day
of the then existing Interest Period therefor, Convert into a Base Rate Advance.
(iii) Upon the occurrence and during the continuance of any Event of
Default, (x) each Eurodollar Rate Advance will automatically, on the last day of
the then existing Interest Period therefor, Convert into a Base Rate Advance and
(y) the obligation of the Lenders to make, or to Convert Advances into,
Eurodollar Rate Advances shall be suspended.
SECTION 2.10. INCREASED COSTS, ETC. (a) If, due to either (i) the
introduction of or any change in or in the interpretation of any law or
regulation or (ii) the compliance with any guideline or request from any central
bank or other governmental authority (whether or not having the force of law),
there shall be any increase in the cost to any Lender Party of agreeing to make
or of making, funding or maintaining Eurodollar Rate Advances or of agreeing to
issue or of issuing or maintaining or participating in Letters of Credit or of
agreeing to make or of making or maintaining Letter of Credit Advances
(excluding, for purposes of this Section 2.10, any such increased costs
resulting from (x) Taxes or Other Taxes (as to which Section 2.12 shall govern)
and (y) changes in the basis of taxation of overall net income or overall gross
income by the United States or by the foreign jurisdiction or state under the
laws of which such Lender Party is organized or has its Applicable Lending
Office or any political subdivision thereof), then the Borrowers jointly and
severally agree from time to time, upon demand by such Lender Party (with a copy
of such demand to the Administrative Agent), to pay to the Administrative Agent
for the account of such Lender Party additional amounts sufficient to compensate
such Lender Party for such increased cost. A certificate as to the amount of
such increased cost, submitted to the Borrowers by such Lender Party, shall be
conclusive and binding for all purposes, absent manifest error.
(b) If, due to either (i) the introduction of or any change in or in the
interpretation of any law or regulation or (ii) the compliance with any
guideline or request from any central bank or other governmental authority
(whether or not having the force of law), there shall be any increase in the
amount of capital required or expected to be maintained by any Lender Party or
any corporation controlling such Lender Party as a result of or based upon the
existence of such Lender Party's commitment to lend or to issue or participate
in Letters of Credit hereunder and other commitments of such type or the
issuance or maintenance of or participation in the Letters of Credit (or similar
contingent obligations), then, upon demand by such Lender Party (with a copy of
such demand to the Administrative Agent), the Borrowers jointly and severally
agree to pay to the Administrative Agent for the account of such Lender Party,
from time to time as specified by such Lender Party, additional amounts
sufficient to compensate such Lender Party in the light of such circumstances,
to the extent that such Lender Party reasonably determines such increase in
capital to be allocable to the existence of such Lender Party's commitment to
lend or to issue or participate in Letters of Credit hereunder or to the
issuance or maintenance of or participation in any Letters of Credit. A
certificate as to such amounts
submitted to the Borrowers by such Lender Party shall be conclusive and binding
for all purposes, absent manifest error.
(c) If, with respect to any Eurodollar Rate Advances, the Required Lenders
notify the Administrative Agent that the Eurodollar Rate for any Interest Period
for such Advances will not adequately reflect the cost to such Lenders of
making, funding or maintaining their Eurodollar Rate Advances for such Interest
Period, the Administrative Agent shall forthwith so notify the Borrowers and the
Lenders, whereupon (i) each such Eurodollar Rate Advance will automatically, on
the last day of the then existing Interest Period therefor, Convert into a Base
Rate Advance and (ii) the obligation of the Lenders to make, or to Convert
Advances into, Eurodollar Rate Advances shall be suspended until the
Administrative Agent shall notify the Borrowers that such Lenders have
determined that the circumstances causing such suspension no longer exist.
(d) Notwithstanding any other provision of this Agreement, if the
introduction of or any change in or in the interpretation of any law or
regulation shall make it unlawful, or any central bank or other governmental
authority shall assert that it is unlawful, for any Lender or its Eurodollar
Lending Office to perform its obligations hereunder to make Eurodollar Rate
Advances or to continue to fund or maintain Eurodollar Rate Advances hereunder,
then, on notice thereof and demand therefor by such Lender to the Borrowers
through the Administrative Agent, (i) each Eurodollar Rate Advance will
automatically, on the last day of the then existing Interest Period therefor or,
if required by applicable law, immediately, Convert into a Base Rate Advance and
(ii) the obligation of the Lenders to make, or to Convert Advances into,
Eurodollar Rate Advances shall be suspended until the Administrative Agent shall
notify the Borrowers that such Lender has determined that the circumstances
causing such suspension no longer exist.
SECTION 2.11. PAYMENTS AND COMPUTATIONS. (a) The Borrowers shall make each
payment hereunder and under the Notes, irrespective of any right of counterclaim
or set-off (except as otherwise provided in Section 2.15), not later than 1:00
P.M. (New York City time) on the day when due in U.S. dollars to the
Administrative Agent at the Administrative Agent's Account in same day funds,
with payments being received by the Administrative Agent after such time being
deemed to have been received on the next succeeding Business Day. The
Administrative Agent will promptly thereafter cause like funds to be distributed
(i) if such payment by the Borrowers is in respect of principal, interest,
commitment fees or any other Obligation then payable hereunder and under the
Notes to more than one Lender Party, to such Lender Parties for the account of
their respective Applicable Lending Offices ratably in accordance with the
amounts of such respective Obligations then payable to such Lender Parties and
(ii) if such payment by the Borrowers is in respect of any Obligation then
payable hereunder to one Lender Party, to such Lender Party for the account of
its Applicable Lending Office, in each case to be applied in accordance with the
terms of this Agreement. Upon any Assuming Lender becoming a Lender hereunder as
a result of a Commitment Increase pursuant to Section 2.17, and upon the Agent's
receipt of such Lender's Assumption Agreement and recording of the information
contained therein in the Register, from and after the applicable Increase Date,
the Agent shall make all payments hereunder and under any Notes issued in
connection therewith in respect of the interest assumed thereby to the Assuming
Lender. Upon its acceptance of an
Assignment and Acceptance and recording of the information contained therein in
the Register pursuant to Section 9.07(d), from and after the effective date of
such Assignment and Acceptance, the Administrative Agent shall make all payments
hereunder and under the Notes in respect of the interest assigned thereby to the
Lender Party assignee thereunder, and the parties to such Assignment and
Acceptance shall make all appropriate adjustments in such payments for periods
prior to such effective date directly between themselves.
(b) All computations of interest, fees and Letter of Credit commissions
shall be made by the Administrative Agent on the basis of a year of 360 days, in
each case for the actual number of days (including the first day but excluding
the last day) occurring in the period for which such interest, fees or
commissions are payable. Each determination by the Administrative Agent of an
interest rate, fee or commission hereunder shall be conclusive and binding for
all purposes, absent manifest error.
(c) Whenever any payment hereunder or under the Notes shall be stated to be
due on a day other than a Business Day, such payment shall be made on the next
succeeding Business Day, and such extension of time shall in such case be
included in the computation of payment of interest or commitment fee, as the
case may be; PROVIDED, HOWEVER, that, if such extension would cause payment of
interest on or principal of Eurodollar Rate Advances to be made in the next
following calendar month, such payment shall be made on the next preceding
Business Day.
(d) Unless the Administrative Agent shall have received notice from the
Borrowers prior to the date on which any payment is due to any Lender Party
hereunder that the Borrowers will not make such payment in full, the
Administrative Agent may assume that the Borrowers have made such payment in
full to the Administrative Agent on such date and the Administrative Agent may,
in reliance upon such assumption, cause to be distributed to each such Lender
Party on such due date an amount equal to the amount then due such Lender Party.
If and to the extent the Borrowers shall not have so made such payment in full
to the Administrative Agent, each such Lender Party shall repay to the
Administrative Agent forthwith on demand such amount distributed to such Lender
Party together with interest thereon, for each day from the date such amount is
distributed to such Lender Party until the date such Lender Party repays such
amount to the Administrative Agent, at the Federal Funds Rate.
SECTION 2.12. TAXES. (a) Any and all payments by the Borrowers hereunder or
under the Notes shall be made, in accordance with Section 2.11, free and clear
of and without deduction for any and all present or future taxes, levies,
imposts, deductions, charges or withholdings, and all liabilities with respect
thereto, EXCLUDING, in the case of each Lender Party and each Agent, taxes that
are imposed on its overall net income by the United States and taxes that are
imposed on its overall net income (and franchise taxes imposed in lieu thereof)
by the state or foreign jurisdiction under the laws of which such Lender Party
or such Agent, as the case may be, is organized or any political subdivision
thereof and, in the case of each Lender Party, taxes that are imposed on its
overall net income (and franchise taxes imposed in lieu thereof) by the state or
foreign jurisdiction of such Lender Party's Applicable Lending Office or any
political subdivision thereof (all such non-excluded taxes, levies, imposts,
deductions, charges,
withholdings and liabilities in respect of payments hereunder or under the Notes
being hereinafter referred to as "TAXES"). If the Borrowers shall be required by
law to deduct any Taxes from or in respect of any sum payable hereunder or under
any Note to any Lender Party or any Agent, (i) the sum payable by the Borrowers
shall be increased as may be necessary so that after the Borrowers and the
Administrative Agent have made all required deductions (including deductions
applicable to additional sums payable under this Section 2.12) such Lender Party
or such Agent, as the case may be, receives an amount equal to the sum it would
have received had no such deductions been made, (ii) the Borrowers shall make
all such deductions and (iii) the Borrowers shall pay the full amount deducted
to the relevant taxation authority or other authority in accordance with
applicable law.
(b) In addition, the Borrowers shall pay any present or future stamp,
documentary, excise, property or similar taxes, charges or levies that arise
from any payment made by the Borrowers hereunder or under the Notes or from the
execution, delivery or registration of, performance under, or otherwise with
respect to, this Agreement or the Notes (hereinafter referred to as "OTHER
TAXES").
(c) The Borrowers jointly and severally agree to indemnify each Lender
Party and each Agent for and hold them harmless against the full amount of Taxes
and Other Taxes, and for the full amount of taxes of any kind imposed by any
jurisdiction on amounts payable under this Section 2.12, imposed on or paid by
such Lender Party or such Agent (as the case may be) and any liability
(including penalties, additions to tax, interest and expenses) arising therefrom
or with respect thereto. This indemnification shall be made within 30 days from
the date such Lender Party or such Agent (as the case may be) makes written
demand therefor.
(d) Within 30 days after the date of any payment of Taxes, the Borrowers
shall furnish to the Administrative Agent, at its address referred to in Section
9.02, the original or a certified copy of a receipt evidencing such payment. In
the case of any payment hereunder or under the Notes by or on behalf of the
Borrowers through an account or branch outside the United States or by or on
behalf of the Borrowers by a payor that is not a United States person, if the
Borrowers determine that no Taxes are payable in respect thereof, the Borrowers
shall furnish, or shall cause such payor to furnish, to the Administrative
Agent, at such address, an opinion of counsel acceptable to the Administrative
Agent stating that such payment is exempt from Taxes. For purposes of
subsections (d) and (e) of this Section 2.12, the terms "UNITED STATES" and
"UNITED STATES PERSON" shall have the meanings specified in Section 7701 of the
Internal Revenue Code.
(e) Each Lender Party organized under the laws of a jurisdiction outside
the United States shall, on or prior to the date of its execution and delivery
of this Agreement in the case of each Initial Lender or Initial Issuing Bank, as
the case may be, and on the date of the Assignment and Acceptance pursuant to
which it becomes a Lender Party in the case of each other Lender Party, and from
time to time thereafter as requested in writing by the Borrowers (but only so
long thereafter as such Lender Party remains lawfully able to do so), provide
each of the Administrative Agent and the Borrowers with two original Internal
Revenue Service forms 1001 or 4224, as appropriate, or any successor or other
form prescribed by the Internal Revenue Service, certifying that such Lender
Party is exempt from or entitled to a reduced rate of
United States withholding tax on payments pursuant to this Agreement or the
Notes. If the forms provided by a Lender Party at the time such Lender Party
first becomes a party to this Agreement indicate a United States interest
withholding tax rate in excess of zero, withholding tax at such rate shall be
considered excluded from Taxes unless and until such Lender Party provides the
appropriate forms certifying that a lesser rate applies, whereupon withholding
tax at such lesser rate only shall be considered excluded from Taxes for periods
governed by such forms; PROVIDED, HOWEVER, that if, at the effective date of the
Assignment and Acceptance pursuant to which a Lender Party becomes a party to
this Agreement, the Lender Party assignor was entitled to payments under
subsection (a) of this Section 2.12 in respect of United States withholding tax
with respect to interest paid at such date, then, to such extent, the term Taxes
shall include (in addition to withholding taxes that may be imposed in the
future or other amounts otherwise includable in Taxes) United States withholding
tax, if any, applicable with respect to the Lender Party assignee on such date.
If any form or document referred to in this subsection (e) requires the
disclosure of information, other than information necessary to compute the tax
payable and information required on the date hereof by Internal Revenue Service
form 1001 or 4224, that the Lender Party reasonably considers to be
confidential, the Lender Party shall give notice thereof to the Borrowers and
shall not be obligated to include in such form or document such confidential
information.
(f) For any period with respect to which a Lender Party has failed to
provide the Borrowers with the appropriate form described in subsection (e)
above (OTHER THAN if such failure is due to a change in law occurring after the
date on which a form originally was required to be provided or if such form
otherwise is not required under subsection (e) above), such Lender Party shall
not be entitled to indemnification under subsection (a) or (c) of this Section
2.12 with respect to Taxes imposed by the United States by reason of such
failure; PROVIDED, HOWEVER, that should a Lender Party become subject to Taxes
because of its failure to deliver a form required hereunder, the Borrowers shall
take such steps as such Lender Party shall reasonably request to assist such
Lender Party to recover such Taxes.
SECTION 2.13. SHARING OF PAYMENTS, ETC. If any Lender Party shall obtain at
any time any payment (whether voluntary, involuntary, through the exercise of
any right of set-off, or otherwise, other than as a result of an assignment
pursuant to Section 9.07) (a) on account of Obligations due and payable to such
Lender Party hereunder and under the Notes at such time in excess of its ratable
share (according to the proportion of (i) the amount of such Obligations due and
payable to such Lender Party at such time to (ii) the aggregate amount of the
Obligations due and payable to all Lender Parties hereunder and under the Notes
at such time) of payments on account of the Obligations due and payable to all
Lender Parties hereunder and under the Notes at such time obtained by all the
Lender Parties at such time or (b) on account of Obligations owing (but not due
and payable) to such Lender Party hereunder and under the Notes at such time in
excess of its ratable share (according to the proportion of (i) the amount of
such Obligations owing to such Lender Party at such time to (ii) the aggregate
amount of the Obligations owing (but not due and payable) to all Lender Parties
hereunder and under the Notes at such time) of payments on account of the
Obligations owing (but not due and payable) to all Lender Parties hereunder and
under the Notes at such time obtained by all of the Lender Parties at such time,
such Lender Party shall forthwith purchase from the other Lender Parties such
interests or participating interests in the Obligations due and payable or owing
to them, as the case may be, as shall be necessary to cause such purchasing
Lender Party to share the excess payment ratably with each of them; PROVIDED,
HOWEVER, that if all or any portion of such excess payment is thereafter
recovered from such purchasing Lender Party, such purchase from each other
Lender Party shall be rescinded and such other Lender Party shall repay to the
purchasing Lender Party the purchase price to the extent of such Lender Party's
ratable share (according to the proportion of (i) the purchase price paid to
such Lender Party to (ii) the aggregate purchase price paid to all Lender
Parties) of such recovery together with an amount equal to such Lender Party's
ratable share (according to the proportion of (i) the amount of such other
Lender Party's required repayment to (ii) the total amount so recovered from the
purchasing Lender Party) of any interest or other amount paid or payable by the
purchasing Lender Party in respect of the total amount so recovered. Each
Borrower agrees that any Lender Party so purchasing a participation from another
Lender Party pursuant to this Section 2.13 may, to the fullest extent permitted
by law, exercise all its rights of payment (including the right of set-off) with
respect to such participation as fully as if such Lender Party were the direct
creditor of the Borrowers in the amount of such participation.
SECTION 2.14. USE OF PROCEEDS. The proceeds of the Advances and issuances
of Letters of Credit shall be available (and each Borrowers agrees that it shall
use such proceeds and Letters of Credit) solely to pay transaction fees and
expenses, refinance certain Existing Debt, provide working capital for the
Borrowers and their respective Subsidiaries and for general business purposes.
SECTION 2.15. DEFAULTING LENDERS. (a) In the event that, at any one time,
(i) any Lender Party shall be a Defaulting Lender, (ii) such Defaulting Lender
shall owe a Defaulted Advance to the Borrowers and (iii) the Borrowers shall be
required to make any payment hereunder or under any other Loan Document to or
for the account of such Defaulting Lender, then the Borrowers may, so long as no
Default shall occur or be continuing at such time and to the fullest extent
permitted by applicable law, set off and otherwise apply the Obligation of the
Borrowers to make such payment to or for the account of such Defaulting Lender
against the obligation of such Defaulting Lender to make such Defaulted Advance.
In the event that, on any date, the Borrowers shall so set off and otherwise
apply its obligation to make any such payment against the obligation of such
Defaulting Lender to make any such Defaulted Advance on or prior to such date,
the amount so set off and otherwise applied by the Borrowers shall constitute
for all purposes of this Agreement and the other Loan Documents an Advance by
such Defaulting Lender made on the date of such setoff under the Facility
pursuant to which such Defaulted Advance was originally required to have been
made pursuant to Section 2.01. Such Advance shall be considered, for all
purposes of this Agreement, to comprise part of the Borrowing in connection with
which such Defaulted Advance was originally required to have been made pursuant
to Section 2.01, even if the other Advances comprising such Borrowing shall be
Eurodollar Rate Advances on the date such Advance is deemed to be made pursuant
to this subsection (a). The Borrowers shall notify the Administrative Agent at
any time the Borrowers exercises its right of set-off pursuant to this
subsection (a) and shall set forth in such notice (A) the name of the Defaulting
Lender and the Defaulted Advance required to be made by such Defaulting Lender
and (B) the amount set off and otherwise applied in respect of such Defaulted
Advance pursuant to this subsection (a). Any portion of such payment otherwise
required to be made by the Borrowers to or for the account of such Defaulting
Lender which is paid by the Borrowers, after giving effect to the amount set off
and otherwise applied by the Borrowers pursuant to this subsection (a), shall be
applied by the Administrative Agent as specified in subsection (b) or (c) of
this Section 2.15.
(b) In the event that, at any one time, (i) any Lender Party shall be a
Defaulting Lender, (ii) such Defaulting Lender shall owe a Defaulted Amount to
any Agent or any of the other Lender Parties and (iii) the Borrowers shall make
any payment hereunder or under any other Loan Document to the Administrative
Agent for the account of such Defaulting Lender, then the Administrative Agent
may, on its behalf or on behalf of such other Agents or such other Lender
Parties and to the fullest extent permitted by applicable law, apply at such
time the amount so paid by the Borrowers to or for the account of such
Defaulting Lender to the payment of each such Defaulted Amount to the extent
required to pay such Defaulted Amount. In the event that the Administrative
Agent shall so apply any such amount to the payment of any such Defaulted Amount
on any date, the amount so applied by the Administrative Agent shall constitute
for all purposes of this Agreement and the other Loan Documents payment, to such
extent, of such Defaulted Amount on such date. Any such amount so applied by the
Administrative Agent shall be retained by the Administrative Agent or
distributed by the Administrative Agent to such other Agents or such other
Lender Parties, ratably in accordance with the respective portions of such
Defaulted Amounts payable at such time to the Administrative Agent, such other
Agents and such other Lender Parties and, if the amount of such payment made by
the Borrowers shall at such time be insufficient to pay all Defaulted Amounts
owing at such time to the Administrative Agent, such other Agents and such other
Lender Parties, in the following order of priority:
(i) FIRST, to the Agents for any Defaulted Amounts then owing to
them, in their capacities as such, ratably in accordance with such
respective Defaulted Amounts then owing to the Agents;
(ii) SECOND, to the Issuing Bank and the Swing Line Bank for any
Defaulted Amounts then owing to them, in their capacities as such,
ratably in accordance with such respective Defaulted Amounts then
owing to the Issuing Bank and the Swing Line Bank; and
(iii) THIRD, to any other Lender Parties for any Defaulted
Amounts then owing to such other Lender Parties, ratably in accordance
with such respective Defaulted Amounts then owing to such other Lender
Parties.
Any portion of such amount paid by the Borrowers for the account of such
Defaulting Lender remaining, after giving effect to the amount applied by the
Administrative Agent pursuant to this subsection (b), shall be applied by the
Administrative Agent as specified in subsection (c) of this Section 2.15.
(c) In the event that, at any one time, (i) any Lender Party shall be a
Defaulting Lender, (ii) such Defaulting Lender shall not owe a Defaulted Advance
or a Defaulted Amount and (iii) the Borrowers, any Agent or any other Lender
Party shall be required to pay or distribute any amount hereunder or under any
other Loan Document to or for the account of such Defaulting Lender, then the
Borrowers or such Agent or such other Lender Party shall pay such amount to the
Administrative Agent to be held by the Administrative Agent, to the fullest
extent permitted by applicable law, in escrow or the Administrative Agent shall,
to the fullest extent permitted by applicable law, hold in escrow such amount
otherwise held by it. Any funds held by the Administrative Agent in escrow under
this subsection (c) shall be deposited by the Administrative Agent in an account
with Citibank, in the name and under the control of the Administrative Agent,
but subject to the provisions of this subsection (c). The terms applicable to
such account, including the rate of interest payable with respect to the credit
balance of such account from time to time, shall be Citibank's standard terms
applicable to escrow accounts maintained with it. Any interest credited to such
account from time to time shall be held by the Administrative Agent in escrow
under, and applied by the Administrative Agent from time to time in accordance
with the provisions of, this subsection (c). The Administrative Agent shall, to
the fullest extent permitted by applicable law, apply all funds so held in
escrow from time to time to the extent necessary to make any Advances required
to be made by such Defaulting Lender and to pay any amount payable by such
Defaulting Lender hereunder and under the other Loan Documents to the
Administrative Agent or any other Lender Party, as and when such Advances or
amounts are required to be made or paid and, if the amount so held in escrow
shall at any time be insufficient to make and pay all such Advances and amounts
required to be made or paid at such time, in the following order of priority:
(i) FIRST, to the Agents for any amounts then due and payable by
such Defaulting Lender to them hereunder, in their capacities as such,
ratably in accordance with such amounts then due and payable to the
Agents;
(ii) SECOND, to the Issuing Bank and the Swing Line Bank for any
amounts then due and payable to them hereunder, in their capacities as
such, by such Defaulting Lender, ratably in accordance with such
amounts then due and payable to the Issuing Bank and the Swing Line
Bank;
(iii) THIRD, to any other Lender Parties for any amount then due
and payable by such Defaulting Lender to such other Lender Parties
hereunder, ratably in accordance with such respective amounts then due
and payable to such other Lender Parties; and
(iv) FOURTH, to the Borrowers for any Advance then required to be
made by such Defaulting Lender to the Borrowers pursuant to a
Commitment of such Defaulting Lender.
In the event that any Lender Party that is a Defaulting Lender shall, at any
time, cease to be a Defaulting Lender, any funds held by the Administrative
Agent in escrow at such time with respect to such Lender Party shall be
distributed by the Administrative Agent to such Lender Party and applied by such
Lender Party to the Obligations owing to such Lender Party at such
time under this Agreement and the other Loan Documents ratably in accordance
with the respective amounts of such Obligations outstanding at such time.
(d) The rights and remedies against a Defaulting Lender under this Section
2.15 are in addition to other rights and remedies that the Borrowers may have
against such Defaulting Lender with respect to any Defaulted Advance and that
any Agent or any Lender Party may have against such Defaulting Lender with
respect to any Defaulted Amount.
SECTION 2.16. EVIDENCE OF DEBT. (a) Each Lender Party shall maintain in
accordance with its usual practice an account or accounts evidencing the
indebtedness of the Borrowers to such Lender Party resulting from each Advance
owing to such Lender Party from time to time, including the amounts of principal
and interest payable and paid to such Lender Party from time to time hereunder.
Each Borrower agrees that upon notice by any Lender Party to the Borrowers (with
a copy of such notice to the Administrative Agent) to the effect that a
promissory note or other evidence of indebtedness is required or appropriate in
order for such Lender Party to evidence (whether for purposes of pledge,
enforcement or otherwise) the Advances owing to, or to be made by, such Lender
Party, the Borrowers shall promptly execute and deliver to such Lender Party,
with a copy to the Administrative Agent, a Note in substantially the form of
Exhibit A hereto, payable to the order of such Lender Party in a principal
amount equal to the Working Capital Commitment of such Lender Party. All
references to Notes in the Loan Documents shall mean Notes, if any, to the
extent issued hereunder. (b) The Register maintained by the Administrative Agent
pursuant to Section 9.07(d) shall include a control account, and a subsidiary
account for each Lender Party, in which accounts (taken together) shall be
recorded (i) the date and amount of each Borrowing made hereunder, the Type of
Advances comprising such Borrowing and, if appropriate, the Interest Period
applicable thereto, (ii) the terms of each Assumption Agreement and Assignment
and Acceptance delivered to and accepted by it, (iii) the amount of any
principal or interest due and payable or to become due and payable from the
Borrowers to each Lender Party hereunder, and (iv) the amount of any sum
received by the Administrative Agent from the Borrowers hereunder and each
Lender Party's share thereof.
(c) Entries made in good faith by the Administrative Agent in the Register
pursuant to subsection (b) above, and by each Lender Party in its account or
accounts pursuant to subsection (a) above, shall be PRIMA FACIE evidence of the
amount of principal and interest due and payable or to become due and payable
from the Borrowers to, in the case of the Register, each Lender Party and, in
the case of such account or accounts, such Lender Party, under this Agreement,
absent manifest error; PROVIDED, HOWEVER, that the failure of the Administrative
Agent or such Lender Party to make an entry, or any finding that an entry is
incorrect, in the Register or such account or accounts shall not limit or
otherwise affect the obligations of the Borrowers under this Agreement.
SECTION 2.17. INCREASE IN THE AGGREGATE WORKING CAPITAL COMMITMENTS. (a)
The Borrowers may, at any time prior to the Termination Date, with the consent
of the Administrative Agent (not to be unreasonably withheld), request that the
aggregate amount of the Working Capital Commitments be increased by an amount of
$5,000,000 or an integral multiple
of $1,000,000 in excess thereof (each a "COMMITMENT INCREASE") to be effective
as of a date that is at least 90 days prior to the scheduled Termination Date
then in effect (the "INCREASE DATE") as specified in the related notice to the
Administrative Agent; PROVIDED, HOWEVER that (i) in no event shall the aggregate
amount of the Commitment Increases exceed $50,000,000 and (ii) on the date of
any request by the Borrowers for a Commitment Increase and on the related
Increase Date, the applicable conditions set forth in Article III shall be
satisfied.
(b) The Administrative Agent shall promptly notify such Eligible Assignees
as it shall identify of a request by the Borrowers for a Commitment Increase,
which notice shall include (i) the proposed amount of such requested Commitment
Increase, (ii) the proposed Increase Date and (iii) the date by which Lenders
wishing to participate in the Commitment Increase must commit to an increase in
the amount of their respective Working Capital Commitments (the "COMMITMENT
DATE"). The requested Commitment Increase shall be allocated among the Eligible
Assignees willing to participate therein in such amounts as are agreed between
the Borrowers and the Administrative Agent.
(c) Promptly following each Commitment Date, the Administrative Agent shall
notify the Borrowers as to the amount, if any, by which the Eligible Assignees
are willing to participate in the requested Commitment Increase; PROVIDED,
HOWEVER, that the Working Capital Commitment of each such Eligible Assignee
shall be in an amount of $5,000,000 or an integral multiple of $1,000,000 in
excess thereof.
(d) On each Increase Date, each Eligible Assignee that is not prior to such
date a Lender hereunder and accepts an offer to participate in a requested
Commitment Increase in accordance with Section 2.17(c) (each such Eligible
Assignee, an "ASSUMING LENDER") shall become a Lender party to this Agreement as
of such Increase Date and the Working Capital Commitment of each Eligible
Assignee that prior to such date is a and accepts an offer to participate in
such a requested Commitment Increase (an "INCREASING LENDER") shall be so
increased (or established) by such amount as of such Increase Date; PROVIDED,
HOWEVER, that the Administrative Agent shall have received on or before such
Increase Date the following, each dated such date:
(i) (A) certified copies of resolutions of the Board of Directors
of each of the Borrowers or the Executive Committee of such Board
approving the Commitment Increase and the corresponding modifications
to this Agreement, (B) a consent executed by each Guarantor approving
the Commitment Increase and the corresponding modifications to this
Agreement and (C) an opinion of counsel for the Borrowers (which may
be in-house counsel), in substantially the form of Exhibit G hereto;
(ii) an assumption agreement from each Assuming Lender, if any,
in form and substance satisfactory to the Borrowers and the
Administrative Agent (each an "ASSUMPTION AGREEMENT"), duly executed
by such Eligible Assignee, the Administrative Agent and the Borrowers;
and
(iii) confirmation from each Increasing Lender of the increase in
the amount of its Working Capital Commitment in a writing satisfactory
to the Borrowers and the Administrative Agent.
On each Increase Date, upon fulfillment of the conditions set forth in the
immediately preceding sentence of this Section 2.17(d), the Administrative Agent
shall notify the Lenders (including, without limitation, each Assuming Lender)
and the Borrowers, on or before 1:00 P.M. (New York City time), by telecopier or
telex, of the occurrence of the Commitment Increase to be effected on such
Increase Date and shall record in the Register the relevant information with
respect to each Increasing Lender and each Assuming Lender on such date.
ARTICLE III
CONDITIONS OF LENDING AND
ISSUANCES OF LETTERS OF CREDIT
SECTION 3.01. CONDITIONS PRECEDENT TO INITIAL EXTENSION OF CREDIT. The
obligation of each Lender to make an Advance or of the Issuing Bank to issue a
Letter of Credit on the occasion of the Initial Extension of Credit hereunder is
subject to the satisfaction of the following conditions precedent before or
concurrently with the Initial Extension of Credit:
(a) The Administrative Agent shall have received on or before the day
of the Initial Extension of Credit the following, each dated such day
(unless otherwise specified), in form and substance satisfactory to the
Administrative Agent (unless otherwise specified) and (except for the
Notes) in sufficient copies for each Lender Party:
(i) The Notes payable to the order of the Lenders to the extent
requested in accordance with Section 2.16.
(ii) A security agreement in substantially the form of Exhibit D
hereto (together with each other security agreement and security
agreement supplement delivered pursuant to Section 5.01(j), in each
case as amended, the "SECURITY AGREEMENT"), duly executed by each Loan
Party, together with:
(A) certificates representing the Pledged Shares referred to
therein accompanied by undated stock powers executed in blank and
instruments evidencing the Pledged Debt indorsed in blank,
(B) acknowledgment copies of proper financing statements,
duly filed on or before the day of the Initial Extension of
Credit under the Uniform Commercial Code of all jurisdictions
that the Administrative Agent may deem necessary or desirable in
order to perfect and protect the first priority liens and
security interests created under the
Security Agreement, covering the Collateral described in the
Security Agreement,
(C) completed requests for information, dated on or before
the date of the Initial Extension of Credit, listing the
financing statements referred to in clause (B) above and all
other effective financing statements filed in the jurisdictions
referred to in clause (B) above that name any Loan Party as
debtor, together with copies of such other financing statements,
(D) evidence of the completion of all other recordings and
filings of or with respect to the Security Agreement that the
Administrative Agent may deem necessary or desirable in order to
perfect and protect the Liens created thereby,
(E) evidence of the insurance required by the terms of the
Security Agreement,
(F) copies of the Assigned Agreements referred to in the
Security Agreement, together with a consent to such assignment,
in substantially the form of Exhibit B to the Security Agreement,
duly executed by each party to such Assigned Agreements other
than the Loan Parties,
(G) the Pledged Account Letters referred to in the Security
Agreement, duly executed by each Pledged Account Bank referred to
in the Security Agreement, and
(H) evidence that all other action that the Administrative
Agent may deem necessary or desirable in order to perfect and
protect the first priority liens and security interests created
under the Security Agreement has been taken (including, without
limitation, receipt of duly executed payoff letters, UCC-3
termination statements and landlords' and bailees' waiver and
consent agreements).
(iii) A guaranty in substantially the form of Exhibit E hereto
(together with each other guaranty and guaranty supplement delivered
pursuant to Section 5.01(j), in each case as amended, the "SUBSIDIARY
GUARANTY"), duly executed by each Subsidiary Guarantor.
(iv) Certified copies of the resolutions of the Board of
Directors of each Loan Party approving the transactions contemplated
by the Transaction Documents and each Transaction Document to which it
is or is to be a party, and of all documents evidencing other
necessary corporate or other action and governmental and other third
party approvals and consents, if any, with respect to
the transactions contemplated by the Transaction Documents and each
Transaction Document to which it is or is to be a party.
(v) A copy of a certificate of the Secretary of State of the
jurisdiction of organization of each Loan Party (other than any Loan
Party that is an Immaterial Subsidiary or Foreign Subsidiary), dated
reasonably near the date of the Initial Extension of Credit,
certifying (A) as to a true and correct copy of the charter of such
Loan Party and each amendment thereto on file in his office and (B)
that (1) such amendments are the only amendments to such Loan Party's
charter on file in his office, (2) such Loan Party has paid all
franchise taxes to the date of such certificate and (C) such Loan
Party is duly organized and in good standing or presently subsisting
under the laws of the State of the jurisdiction of its organization.
(vi) A copy of a certificate of the Secretary of State of the
jurisdiction of organization of each Loan Party (other than any Loan
Party that is an Immaterial Subsidiary or Foreign Subsidiary), dated
reasonably near the date of the Initial Extension of Credit, stating
that such Loan Party is duly qualified and in good standing in such
State and has filed all annual reports required to be filed to the
date of such certificate.
(vii) A certificate of each Loan Party, signed on behalf of such
Loan Party by its President or a Vice President and its Secretary or
any Assistant Secretary, dated the date of the Initial Extension of
Credit (the statements made in which certificate shall be true on and
as of the date of the Initial Extension of Credit), certifying as to
(A) the absence of any amendments to the charter of such Loan Party
since the date of the Secretary of State's certificate referred to in
Section 3.01(a)(v), (B) a true and correct copy of the bylaws of such
Loan Party as in effect on the date on which the resolutions referred
to in Section 3.01(a)(iv) were adopted and on the date of the Initial
Extension of Credit, (C) the due incorporation and good standing or
valid existence of such Loan Party under the laws of the jurisdiction
of its organization, and the absence of any proceeding for the
dissolution or liquidation of such Loan Party (D) the truth of the
representations and warranties contained in the Loan Documents as
though made on and as of the date of the Initial Extension of Credit
and (E) the absence of any event occurring and continuing, or
resulting from the Initial Extension of Credit, that constitutes a
Default.
(viii) A certificate of the Secretary or an Assistant Secretary
of each Loan Party certifying the names and true signatures of the
officers of such Loan Party authorized to sign each Transaction
Document to which it is or is to be a party and the other documents to
be delivered hereunder and thereunder.
(ix) Certified copies of each of the Related Documents, duly
executed by the parties thereto and in form and substance satisfactory
to the
Lender Parties, together with all agreements, instruments and other
documents delivered in connection therewith as the Administrative
Agent shall request.
(x) Certificates in substantially the form of Exhibit F hereto
attesting to the Solvency of each Loan Party after giving effect to
the transactions contemplated by the Transaction Documents, from its
chief financial officer.
(xi) An Intercreditor Agreement, in form and substance
satisfactory to the Lender Parties (as amended, to the extent
permitted under the Loan Documents, or replaced in accordance with
Section 5.02(b)(iii)(I) the "INTERCREDITOR AGREEMENT"), among the
Collateral Agent, the applicable Borrower and each respective secured
creditor of such Borrower, duly executed by each such secured creditor
of such Borrower and such Borrower.
(xii) Such financial, business and other information regarding
each Loan Party and its Subsidiaries as the Lender Parties shall have
requested, including, without limitation, information as to possible
contingent liabilities, tax matters, environmental matters,
obligations under Plans, Multiemployer Plans and Welfare Plans,
collective bargaining agreements and other arrangements with
employees, audited annual financial statements dated November 1, 1998,
interim financial statements dated the end of the most recent fiscal
quarter for which financial statements are available (or, in the event
the Lender Parties' due diligence review reveals material changes
since such financial statements, as of a later date within 45 days of
the day of the Initial Extension of Credit), pro forma financial
statements as to the Parent Guarantor and forecasts prepared by
management of the Parent Guarantor, in form and substance satisfactory
to the Lender Parties, of balance sheets, income statements and cash
flow statements on a monthly basis for the first year following the
day of the Initial Extension of Credit and on an annual basis for each
year thereafter until the Termination Date.
(xiii) A letter, in form and substance satisfactory to the
Administrative Agent, from the Parent Guarantor to
PricewaterhouseCoopers LLC, its independent certified public
accountants, advising such accountants that the Agents and the Lender
Parties have been authorized to exercise all rights of the Parent
Guarantor to require such accountants to disclose any and all
financial statements and any other information of any kind that they
may have with respect to the Parent Guarantor and its Subsidiaries and
directing such accountants to comply with any reasonable request of
any Agent or any Lender Party for such information.
(xiv) Evidence of insurance naming the Collateral Agent as
additional insured and loss payee with such responsible and reputable
insurance companies or associations, and in such amounts and covering
such risks, as is satisfactory to the Lender Parties, including,
without limitation, business interruption insurance.
(xv) Certified copies of each employment agreement and other
compensation arrangement with each executive officer of any Loan Party
or any of its Subsidiaries.
(xvi) A Notice of Borrowing or Notice of Issuance, as applicable,
and a Borrowing Base Certificate relating to the Initial Extension of
Credit.
(xvii) Deeds of trust, trust deeds and mortgages in substantially
the form of Exhibit E hereto and covering the properties listed on
Schedule 4.01(t) (together with each other mortgage delivered pursuant
to Section 5.01(j), in each case as amended, amended and restated,
supplemented or otherwise modified from time to time in accordance
with their terms, the "MORTGAGES"), duly executed by the appropriate
Loan Party, together with evidence that all action that the
Administrative Agent may deem necessary or desirable in order to
create valid first and subsisting Liens on the property described in
the Mortgages has been taken.
(xviii) A favorable opinion of ▇▇▇▇▇ & ▇▇▇▇▇▇, counsel for the
Loan Parties, in substantially the form of Exhibit G hereto and as to
such other matters as any Lender Party through the Administrative
Agent may reasonably request.
(xix) A favorable opinion of Lionel, ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇▇ & Ingersoll, Schumaker, Loop and ▇▇▇▇▇▇▇▇, LLP,
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇, P.C., local counsel to the Lender Parties
in Nevada, New Jersey, Ohio and Texas, respectively, in substantially
the form of Exhibit H hereto and as to such other matters as any
Lender Party through the Administrative Agent may reasonably request.
(b) The Lender Parties shall be satisfied with the legal structure and
capitalization of each Loan Party and each of its Subsidiaries the capital
stock of which Subsidiaries is being pledged pursuant to the Loan
Documents, including the terms and conditions of the charter, bylaws and
each class of capital stock or other equity interest of each Loan Party and
each such Subsidiary and of each agreement or instrument relating to such
structure or capitalization.
(c) The Lender Parties shall be satisfied that all Existing Debt,
other than the Debt identified on Schedule 4.01(u) hereto (the "SURVIVING
DEBT"), has been prepaid, redeemed or defeased in full or otherwise
satisfied and extinguished and that all such Surviving Debt shall be on
terms and conditions satisfactory to the Lender Parties.
(d) Before giving effect to the transactions contemplated by the
Transaction Documents and except as disclosed in the Parent Guarantor's
quarterly report on Form 10-Q for the quarter ended August 1, 1999 or
otherwise disclosed to the Lender Parties in
writing prior to the date hereof, there shall have occurred no Material
Adverse Change since November 1, 1998.
(e) There shall exist no action, suit, investigation, litigation or
proceeding affecting any Loan Party or any of its Subsidiaries pending or
threatened before any court, governmental agency or arbitrator that (i)
would be reasonably likely to have a Material Adverse Effect other than the
matters described on Schedule 4.01(f) hereto (the "DISCLOSED LITIGATION")
or (ii) purports to affect the legality, validity or enforceability of any
Transaction Document or the consummation of the or the other transactions
contemplated by the Transaction Documents, and there shall have been no
adverse change in the status, or financial effect on any Loan Party or any
of its Subsidiaries, of the Disclosed Litigation from that described on
Schedule 4.01(f) hereto.
(f) All governmental and third party consents and approvals necessary
in connection with the transactions contemplated by the Transaction
Documents shall have been obtained (without the imposition of any
conditions that are not acceptable to the Lender Parties) and shall remain
in effect; and no law or regulation shall be applicable in the judgment of
the Lender Parties, in each case that restrains, prevents or imposes
materially adverse conditions upon the transactions contemplated by the
Transaction Documents or the rights of the Loan Parties or their
Subsidiaries freely to transfer or otherwise dispose of, or to create any
Lien on, any properties now owned or hereafter acquired by any of them.
(g) The Lender Parties shall have completed a due diligence
investigation of the Parent Guarantor and its Subsidiaries in scope, and
with results, satisfactory to the Lender Parties, and nothing shall have
come to the attention of the Lender Parties during the course of such due
diligence investigation to lead them to believe that the Information
Memorandum was or has become misleading, incorrect or incomplete in any
material respect; without limiting the generality of the foregoing, the
Lender Parties shall have been given such access to the management,
records, books of account, contracts and properties of the Parent Guarantor
and its Subsidiaries as they shall have requested.
(h) The Borrowers shall have paid all accrued fees of the Agents and
the Lender Parties and all reasonable accrued expenses of the Agents
(including the reasonable accrued fees and expenses of counsel to the
Administrative Agent and local counsel to the Lender Parties).
(i) The Lender Parties shall be satisfied with the Parent Guarantor's
and each Borrower's management.
(j) The Borrowers shall have entered into one or more committed
inbound inventory flooring arrangements for an amount not less than
$250,000,000 and for a term ending no earlier than the Termination Date and
with terms and conditions satisfactory to the Lender Parties, and the
Lender Parties shall be satisfied with the terms and conditions of each
other inbound inventory flooring arrangement to which any Loan Party is a
party.
SECTION 3.02. CONDITIONS PRECEDENT TO EACH BORROWING, INCREASE DATE,
ISSUANCE AND INCREASE OF AVAILABLE AMOUNT. The obligation of each Lender to make
an Advance (other than a Letter of Credit Advance made by the Issuing Bank or a
Lender pursuant to Section 2.03(c) and a Swing Line Advance made by a Lender
pursuant to Section 2.02(b)) on the occasion of each Borrowing (including the
initial Borrowing) and the obligation of the Issuing Bank to issue a Letter of
Credit (including the initial issuance), renew a Letter of Credit or increase
the Available Amount of a Flooring Letter of Credit, the right of the Borrowers
to request a Swing Line Borrowing and each Commitment Increase shall be subject
to the further conditions precedent that on the date of such Borrowing,
issuance, renewal or increase (a) the following statements shall be true (and
each of the giving of the applicable Notice of Borrowing, Notice of Swing Line
Borrowing, Notice of Issuance, Notice of Renewal, request for increase in
Available Amount or request for Commitment Increase and the acceptance by the
Borrowers of the proceeds of such Borrowing or of such Letter of Credit or the
renewal of such Letter of Credit shall constitute a representation and warranty
by the Borrowers that both on the date of such notice and on the date of such
Borrowing, issuance, renewal or increase or such Increase Date such statements
are true):
(i) the representations and warranties contained in each Loan
Document are correct on and as of such date, before and after giving
effect to such Borrowing, issuance, renewal or increase and to the
application of the proceeds therefrom, as though made on and as of
such date other than any such representations or warranties that, by
their terms, refer to a specific date other than the date of such
Borrowing, issuance, renewal or increase, in which case as of such
specific date;
(ii) no Default has occurred and is continuing, or would result
from such Borrowing, issuance, renewal or increase or from the
application of the proceeds therefrom; and
(iii) for each Working Capital Advance or Swing Line Advance made
by the Swing Line Bank or issuance or renewal of any Letter of Credit
or increase in the Available Amount of a Flooring Letter of Credit,
(A) the sum of the Loan Values of the Eligible Collateral MINUS
$20,000,000 exceeds (B) the aggregate principal amount of the Working
Capital Advances PLUS Swing Line Advances PLUS Letter of Credit
Advances to be outstanding PLUS the aggregate Available Amount of all
Letters of Credit to be outstanding after giving effect to such
Advance, issuance, renewal or increase, respectively;
and (b) the Administrative Agent shall have received such other approvals,
opinions or documents as any Lender Party through the Administrative Agent may
reasonably request.
SECTION 3.03. DETERMINATIONS UNDER SECTION 3.01. For purposes of
determining compliance with the conditions specified in Section 3.01, each
Lender Party shall be deemed to have consented to, approved or accepted or to be
satisfied with each document or other matter required thereunder to be consented
to or approved by or acceptable or satisfactory to the Lender Parties unless an
officer of the Administrative Agent responsible for
the transactions contemplated by the Loan Documents shall have received notice
from such Lender Party prior to the Initial Extension of Credit specifying its
objection thereto and if the Initial Extension of Credit consists of a
Borrowing, such Lender Party shall not have made available to the Administrative
Agent such Lender Party's ratable portion of such Borrowing.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
SECTION 4.01. REPRESENTATIONS AND WARRANTIES OF THE BORROWERS AND THE
PARENT GUARANTOR. Each Borrower and the Parent Guarantor represents and warrants
as follows:
(a) Each Loan Party and each of its Subsidiaries (i) is duly
organized, validly existing and in good standing under the laws of the
jurisdiction of its organization, (ii) is duly qualified as a foreign
corporation, foreign limited liability company or foreign limited
partnership, as the case may be, and in good standing in each other
jurisdiction in which it owns or leases property or in which the conduct of
its business requires it to so qualify or be licensed and (iii) has all
requisite power and authority (including, without limitation, all
governmental licenses, permits and other approvals) to own or lease and
operate its properties and to carry on its business as now conducted and as
proposed to be conducted.
(b) Set forth on Schedule 4.01(b) hereto is a complete and accurate
list of all Subsidiaries of each Loan Party, showing as of the date hereof
(as to each such Subsidiary) the jurisdiction of its organization, the
number of shares of each class of capital stock authorized, and the number
outstanding, on the date hereof and the percentage of the outstanding
shares of each such class owned (directly or indirectly) by such Loan Party
and the number of shares covered by all outstanding options, warrants,
rights of conversion or purchase and similar rights at the date hereof. All
of the outstanding capital stock of all of each Loan Party's Subsidiaries
has been validly issued, is fully paid and non-assessable and is owned by
such Loan Party or one or more of its Subsidiaries free and clear of all
Liens, except those created under the Collateral Documents.
(c) The execution, delivery and performance by each Loan Party of each
Transaction Document to which it is or is to be a party, and the
consummation of the transactions contemplated by the Transaction Documents,
are within such Loan Party's powers, have been duly authorized by all
necessary corporate or other action, and do not (i) contravene such Loan
Party's charter or bylaws, (ii) violate any law, rule, regulation
(including, without limitation, Regulation X of the Board of Governors of
the Federal Reserve System), order, writ, judgment, injunction, decree,
determination or award, (iii) conflict with or result in the breach of, or
constitute a default or require any payment to be made under, any contract,
loan agreement, indenture, mortgage, deed of trust, lease or other
instrument binding on or affecting any Loan Party, any of its Subsidiaries
or any of their properties or (iv) except for the Liens created under the
Loan Documents, result
in or require the creation or imposition of any Lien upon or with respect
to any of the properties of any Loan Party or any of its Subsidiaries. No
Loan Party or any of its Subsidiaries is in violation of any such law,
rule, regulation, order, writ, judgment, injunction, decree, determination
or award or in breach of any such contract, loan agreement, indenture,
mortgage, deed of trust, lease or other instrument, the violation or breach
of which could be reasonably likely to have a Material Adverse Effect.
(d) No authorization or approval or other action by, and no notice to
or filing with, any governmental authority or regulatory body or any other
third party is required for (i) the due execution, delivery, recordation,
filing or performance by any Loan Party of any Transaction Document to
which it is or is to be a party, or for the consummation of the
transactions contemplated by the Transaction Documents, (ii) the grant by
any Loan Party of the Liens granted by it pursuant to the Collateral
Documents, (iii) the perfection or maintenance of the Liens created under
the Collateral Documents (including the first priority nature thereof) or
(iv) the exercise by any Agent or any Lender Party of its rights under the
Loan Documents or the remedies in respect of the Collateral pursuant to the
Collateral Documents, except for the authorizations, approvals, actions,
notices and filings listed on Schedule 4.01(d) hereto, all of which have
been duly obtained, taken, given or made and are in full force and effect.
(e) This Agreement has been, and each other Transaction Document when
delivered hereunder will have been, duly executed and delivered by each
Loan Party party thereto. This Agreement is, and each other Transaction
Document when delivered hereunder will be, the legal, valid and binding
obligation of each Loan Party party thereto, enforceable against such Loan
Party in accordance with its terms, except as such enforceability may be
limited by the effect of any applicable bankruptcy, insolvency,
reorganization, moratorium or similar law affecting creditors' rights
generally.
(f) There is no action, suit, investigation, litigation or proceeding
affecting any Loan Party or any of its Subsidiaries, including any
Environmental Action, pending or threatened before any court, governmental
agency or arbitrator that (i) would be reasonably likely to have a Material
Adverse Effect (other than the Disclosed Litigation) or (ii) purports to
affect the legality, validity or enforceability of any Transaction Document
or the consummation of the transactions contemplated by the Transaction
Documents, and there has been no adverse change in the status, or financial
effect on any Loan Party or any of its Subsidiaries, of the Disclosed
Litigation from that described on Schedule 4.01(f) hereto.
(g) The Consolidated balance sheets of the Parent Guarantor and its
Subsidiaries as at November 1, 1998, and the related Consolidated
statements of income and Consolidated statement of cash flows of the Parent
Guarantor and its Subsidiaries for the fiscal year then ended, accompanied
by an unqualified opinion of PricewaterhouseCoopers LLC, independent public
accountants, and the Consolidated and Consolidating balance sheets of the
Parent Guarantor and its Subsidiaries as at August 1, 1999, and the related
Consolidated and Consolidating statements of income and
Consolidated statement of cash flows of the Parent Guarantor and its
Subsidiaries for the nine months then ended, duly certified by the chief
financial officer of the Parent Guarantor, copies of which have been
furnished to each Lender Party, fairly present, subject, in the case of
said balance sheet as at August 1, 1999, and said statements of income and
cash flows for the nine months then ended, to year-end audit adjustments,
the Consolidated and Consolidating financial condition of the Parent
Guarantor and its Subsidiaries as at such dates and the Consolidated and
Consolidating results of operations of the Parent Guarantor and its
Subsidiaries for the periods ended on such dates, all in accordance with
generally accepted accounting principles applied on a consistent basis,
and, except as disclosed in the Parent Guarantor's quarterly report on Form
10-Q for the quarter ended August 1, 1999 or otherwise disclosed to the
Lender Parties in writing prior to the date hereof, since November 1, 1998,
there has been no Material Adverse Change.
(h) The Consolidated and Consolidating pro forma balance sheets of the
Parent Guarantor and its Subsidiaries as at September 30, 1999, and the
related Consolidated and Consolidating pro forma statements of income and
cash flows of the Parent Guarantor and its Subsidiaries for the eleven
months then ended, certified by the chief financial officer of the Parent
Guarantor, copies of which have been furnished to each Lender Party, fairly
present the Consolidated and Consolidating pro forma financial condition of
the Parent Guarantor and its Subsidiaries as at such date and the
Consolidated and Consolidating pro forma results of operations of the
Parent Guarantor and its Subsidiaries for the period ended on such date, in
each case giving effect to the transactions contemplated by the Transaction
Documents, all in accordance with GAAP.
(i) The Consolidated and Consolidating forecasted balance sheets,
statements of income and statements of cash flows of the Parent Guarantor
and its Subsidiaries delivered to the Lender Parties pursuant to Section
3.01(a)(xvi) or 5.03 were prepared in good faith on the basis of the
assumptions stated therein, which assumptions were fair in light of the
conditions existing at the time of delivery of such forecasts, and
represented, at the time of delivery, the Parent Guarantor best estimate of
its future financial performance.
(j) Neither the Information Memorandum nor any other information,
exhibit or report furnished by or on behalf of any Loan Party to any Agent
or any Lender Party in connection with the negotiation and syndication of
the Loan Documents or pursuant to the terms of the Loan Documents contained
any untrue statement of a material fact or omitted to state a material fact
necessary to make the statements made therein not misleading.
(k) No Loan Party is engaged in the business of extending credit for
the purpose of purchasing or carrying Margin Stock, and no proceeds of any
Advance or drawings under any Letter of Credit will be used to purchase or
carry any Margin Stock or to extend credit to others for the purpose of
purchasing or carrying any Margin Stock.
(l) Neither any Loan Party nor any of its Subsidiaries is an
"investment company," or an "affiliated person" of, or "promoter" or
"principal underwriter" for, an "investment company," as such terms are
defined in the Investment Company Act of 1940, as amended. Neither any Loan
Party nor any of its Subsidiaries is a "holding company", or a "subsidiary
company" of a "holding company", or an "affiliate" of a "holding company"
or of a "subsidiary company" or a "holding company", as such terms are
defined int he Public Utility Holding Company Act of 1935, as amended.
Neither the making of any Advances, nor the issuance of any Letters of
Credit, nor the application of the proceeds or repayment thereof by the
Borrowers, nor the consummation of the other transactions contemplated by
the Transaction Documents, will violate any provision of any such Act or
any rule, regulation or order of the Securities and Exchange Commission
thereunder.
(m) Neither any Loan Party nor any of its Subsidiaries is a party to
any indenture, loan or credit agreement or any lease or other agreement or
instrument or subject to any charter or corporate restriction that would be
reasonably likely to have a Material Adverse Effect.
(n) All filings and other actions necessary or desirable to perfect
and protect the security interest in the Collateral created under the
Collateral Documents have been duly made or taken and are in full force and
effect, and the Collateral Documents create in favor of the Collateral
Agent for the benefit of the Secured Parties a valid and, together with
such filings and other actions, perfected first priority security interest
in the Collateral, securing the payment of the Secured Obligations, and all
filings and other actions necessary or desirable to perfect and protect
such security interest have been duly taken. The Loan Parties are the legal
and beneficial owners of the Collateral free and clear of any Lien, except
for the liens and security interests created or permitted under the Loan
Documents.
(o) Each Loan Party (other than each Loan Party that is an Immaterial
Subsidiary) is, individually and together with its Subsidiaries, Solvent.
(p) (i) No ERISA Event has occurred or is reasonably expected to occur
with respect to any Plan.
(ii) Neither any Loan Party nor any ERISA Affiliate has incurred
or is reasonably expected to incur any Withdrawal Liability to any
Multiemployer Plan.
(iii) Neither any Loan Party nor any ERISA Affiliate has been
notified by the sponsor of a Multiemployer Plan that such
Multiemployer Plan is in reorganization or has been terminated, within
the meaning of Title IV of ERISA, and no such Multiemployer Plan is
reasonably expected to be in reorganization or to be terminated,
within the meaning of Title IV of ERISA.
(iv) Schedule B (Actuarial Information) to the most recent annual
report (Form 5500 Series) for each Plan, copies of which have been
filed with the Internal Revenue Service and furnished to the Lender
Parties, is complete and accurate and fairly presents the funding
status of such Plan, and since the date of such Schedule B there has
been no material adverse change in such funding status.
(q) (i) The operations and properties of each Loan Party and each of
its Subsidiaries comply in all material respects with all applicable
Environmental Laws and Environmental Permits, all past non-compliance with
such Environmental Laws and Environmental Permits has been resolved without
ongoing obligations or costs, and no circumstances exist that would be
reasonably likely to (A) form the basis of an Environmental Action against
any Loan Party or any of its Subsidiaries or any of their properties that
could have a Material Adverse Effect or (B) cause any such property to be
subject to any restrictions on ownership, occupancy, use or transferability
under any Environmental Law.
(ii) To the best of the Borrowers' knowledge, none of the
properties currently or formerly owned or operated by any Loan Party
or any of its Subsidiaries is listed or proposed for listing on the
NPL or on the CERCLIS or any analogous foreign, state or local list or
is adjacent to any such property; there are no and never have been any
underground or aboveground storage tanks or any surface impoundments,
septic tanks, pits, sumps or lagoons in which Hazardous Materials are
being or have been treated, stored or disposed on any property
currently owned or operated by any Loan Party or any of its
Subsidiaries or, to the best of its knowledge, on any property
formerly owned or operated by any Loan Party or any of its
Subsidiaries; there is no asbestos or asbestos-containing material on
any property currently owned or operated by any Loan Party or any of
its Subsidiaries; and to the best of the Borrowers' knowledge,
Hazardous Materials have not been released, discharged or disposed of
on any property currently or formerly owned or operated by any Loan
Party or any of its Subsidiaries in violation of Environmental Laws.
(iii) Neither any Loan Party nor any of its Subsidiaries is
undertaking, and has not completed, either individually or together
with other potentially responsible parties, any investigation or
assessment or remedial or response action relating to any actual or
threatened release, discharge or disposal of Hazardous Materials in
violation of Environmental Laws at any site, location or operation,
either voluntarily or pursuant to the order of any governmental or
regulatory authority or the requirements of any Environmental Law; and
all Hazardous Materials generated, used, treated, handled or stored
at, or transported to or from, any property currently or formerly
owned or operated by any Loan Party or any of its Subsidiaries have
been disposed of in a manner not reasonably expected to result in
material liability to any Loan Party or any of its Subsidiaries.
(r) (i) Each Loan Party and each of its Subsidiaries and Affiliates
has filed, has caused to be filed or has been included in all tax returns
(Federal, state, local and
foreign) required to be filed and has paid all taxes shown thereon to be
due, together with applicable interest and penalties.
(ii) Set forth on Schedule 4.01(r) hereto is a complete and
accurate list, as of the date hereof, of each taxable year of each
Loan Party and each of its Subsidiaries and Affiliates for which
Federal income tax returns have been filed and for which the
expiration of the applicable statute of limitations for assessment or
collection has not occurred by reason of extension or otherwise (an
"OPEN YEAR").
(iii) The aggregate unpaid amount, as of the date hereof, of
adjustments to the Federal income tax liability of each Loan Party and
each of its Subsidiaries and Affiliates proposed by the Internal
Revenue Service with respect to Open Years does not exceed $7,500,000.
No issues have been raised by the Internal Revenue Service in respect
of Open Years that, in the aggregate, would be reasonably likely to
have a Material Adverse Effect.
(iv) The aggregate unpaid amount, as of the date hereof, of
adjustments to the state, local and foreign tax liability of each Loan
Party and its Subsidiaries and Affiliates proposed by all state, local
and foreign taxing authorities (other than amounts arising from
adjustments to Federal income tax returns) does not exceed $7,500,000.
No issues have been raised by such taxing authorities that, in the
aggregate, would be reasonably likely to have a Material Adverse
Effect.
(s) Neither the business nor the properties of any Loan Party or any
of its Subsidiaries are affected by any fire, explosion, accident, strike,
lockout or other labor dispute, drought, storm, hail, earthquake, embargo,
act of God or of the public enemy or other casualty (whether or not covered
by insurance) that would be reasonably likely to have a Material Adverse
Effect.
(t) Set forth on Schedule 4.01(t) hereto is a complete and accurate
list of all Existing Debt (other than Surviving Debt), showing as of the
date hereof the principal amount outstanding thereunder.
(u) Set forth on Schedule 4.01(u) hereto is a complete and accurate
list of all Surviving Debt, showing as of the date hereof the principal
amount outstanding or, in the case of a revolving credit facility, the
aggregate amount of the commitments thereunder, the maturity date thereof
and the amortization schedule therefor.
(v) Set forth on Schedule 4.01(v) hereto is a complete and accurate
list of all real property owned by any Loan Party or any of its
Subsidiaries, showing as of the date hereof the street address, county or
other relevant jurisdiction, state, record owner and book and estimated
fair value thereof. Each Loan Party or such Subsidiary has good, marketable
and insurable fee simple title to such real property, free and clear of all
Liens, other than Liens created or permitted by the Loan Documents.
(w) Set forth on Schedule 4.01(w) hereto is a complete and accurate
list of all leases of real property under which any Loan Party or any of
its Subsidiaries is the lessee, showing as of the date hereof the street
address, county or other relevant jurisdiction, state, lessor, lessee,
expiration date and annual rental cost thereof. Each such lease is the
legal, valid and binding obligation of the lessor thereof, enforceable in
accordance with its terms.
(x) Set forth on Schedule 4.01(x) hereto is a complete and accurate
list of all Investments held by any Loan Party or any of its Subsidiaries
on the date hereof, showing as of the date hereof the amount, obligor or
issuer and maturity, if any, thereof.
(y) Set forth on Schedule 4.01(y) hereto is a complete and accurate
list of all patents, trademarks, trade names, service marks and copyrights,
and all applications therefor and licenses thereof, of each Loan Party or
any of its Subsidiaries, showing as of the date hereof the jurisdiction in
which registered, the registration number, the date of registration and the
expiration date.
(z) The Parent Guarantor has (i) initiated a review and assessment of
all material business areas within its and each of its Subsidiaries'
business and operations (including those affected by suppliers, vendors and
customers) that could be adversely affected by the risk that computer
applications used by the Parent Guarantor or any of its Subsidiaries (or
suppliers, vendors and customers) may be unable to recognize and perform
properly date-sensitive functions involving certain dates prior to and any
date after December 31, 1999 (the "YEAR 2000 PROBLEM"), (ii) developed a
plan and timetable for addressing the Year 2000 Problem on a timely basis
and (iii) to date, implemented that plan in accordance with such timetable.
Based on the foregoing, the Parent Guarantor believes that all computer
applications (including those of its suppliers, vendors and customers) that
are material to its or any of its Subsidiaries' business and operations are
reasonably expected on a timely basis to be able to perform properly
date-sensitive functions for all dates before and after January 1, 2000
("YEAR 2000 COMPLIANT"), except to the extent that a failure to do so could
not reasonably be expected to have a Material Adverse Effect.
(aa) The Parent Guarantor has, independently and without reliance upon
the Administrative Agent or any Lender Party and based on such documents
and information as it has deemed appropriate, made its own credit analysis
and decision to enter into the Parent Guaranty and each other Loan Document
to which it is or is to be a party, and the Parent Guarantor has
established adequate means of obtaining from each Loan Party on a
continuing basis information pertaining to, and is now and on a continuing
basis will be completely familiar with, the business, condition (financial
or otherwise), operations, performance, properties and prospects of such
Loan Party.
ARTICLE V
COVENANTS OF THE BORROWERS AND THE PARENT GUARANTOR
SECTION 5.01. AFFIRMATIVE COVENANTS. So long as any Advance or any other
Obligation of any Loan Party under any Loan Document shall remain unpaid, any
Letter of Credit shall be outstanding or any Lender Party shall have any
Commitment hereunder, each Borrower and the Parent Guarantor will:
(a) COMPLIANCE WITH LAWS, ETC. Comply, and cause each of its
Subsidiaries to comply, in all material respects, with all applicable laws,
rules, regulations and orders, such compliance to include, without
limitation, compliance with ERISA and the Racketeer Influenced and Corrupt
Organizations Chapter of the Organized Crime Control Act of 1970.
(b) PAYMENT OF TAXES, ETC. Pay and discharge, and cause each of its
Subsidiaries to pay and discharge, before the same shall become delinquent,
(i) all taxes, assessments and governmental charges or levies imposed upon
it or upon its property and (ii) all lawful claims that, if unpaid, might
by law become a Lien upon its property; PROVIDED, HOWEVER, that neither the
Parent Guarantor nor any of its Subsidiaries shall be required to pay or
discharge any such tax, assessment, charge or claim that is being contested
in good faith and by proper proceedings and as to which appropriate
reserves are being maintained, unless and until any Lien resulting
therefrom attaches to its property and becomes enforceable against its
other creditors.
(c) COMPLIANCE WITH ENVIRONMENTAL LAWS. Comply, and cause each of its
Subsidiaries and all lessees and other Persons operating or occupying its
properties to comply, in all material respects, with all applicable
Environmental Laws and Environmental Permits; obtain and renew and cause
each of its Subsidiaries to obtain and renew all Environmental Permits
necessary for its operations and properties; and conduct, and cause each of
its Subsidiaries to conduct, any investigation, study, sampling and
testing, and undertake any cleanup, removal, remedial or other action
necessary to remove, mitigate and clean up all Hazardous Materials from any
of its properties, in accordance with the requirements of all Environmental
Laws; PROVIDED, HOWEVER, that neither the Parent Guarantor nor any of its
Subsidiaries shall be required to undertake any such cleanup, removal,
remedial or other action to the extent that its obligation to do so is
being contested in good faith and by proper proceedings and appropriate
reserves are being maintained with respect to such circumstances.
(d) MAINTENANCE OF INSURANCE. Maintain, and cause each of its
Subsidiaries to maintain, insurance with responsible and reputable
insurance companies or associations in such amounts and covering such risks
as is usually carried by companies engaged in similar businesses and owning
similar properties in the same general areas in which the Parent Guarantor
or such Subsidiary operates.
(e) PRESERVATION OF LEGAL EXISTENCE, ETC. Preserve and maintain, and
cause each of its Subsidiaries to preserve and maintain, its existence,
legal structure, legal name, rights (charter and statutory), permits,
licenses, approvals, privileges and franchises; PROVIDED, HOWEVER, that the
Parent Guarantor and its Subsidiaries may consummate any merger or
consolidation permitted under Section 5.02(d) and PROVIDED FURTHER that
neither the Parent Guarantor nor any of its Subsidiaries shall be required
to preserve any right, permit, license, approval, privilege or franchise if
the Board of Directors of the Parent Guarantor or such Subsidiary shall
determine that the preservation thereof is no longer desirable in the
conduct of the business of the Parent Guarantor or such Subsidiary, as the
case may be, and that the loss thereof is not disadvantageous in any
material respect to the Parent Guarantor, such Subsidiary or the Lender
Parties.
(f) VISITATION RIGHTS. At any reasonable time and from time to time
and after providing at least two Business Days prior written notice if no
Default shall have occurred and be continuing, permit any of the Agents or
any of the Lender Parties or any agents or representatives thereof, to
examine and make copies of and abstracts from the records and books of
account of, and visit the properties of, the Parent Guarantor and any of
its Subsidiaries, and to discuss the affairs, finances and accounts of the
Parent Guarantor and any of its Subsidiaries with any of their officers or
directors and with their independent certified public accountants.
(g) KEEPING OF BOOKS. Keep, and cause each of its Subsidiaries to
keep, proper books of record and account, in which full and correct entries
shall be made of all financial transactions and the assets and business of
the Parent Guarantor and each such Subsidiary in accordance with generally
accepted accounting principles in effect from time to time.
(h) MAINTENANCE OF PROPERTIES, ETC. Maintain and preserve, and cause
each of its Subsidiaries to maintain and preserve, all of its properties
that are used or useful in the conduct of its business in good working
order and condition, ordinary wear and tear excepted.
(i) TRANSACTIONS WITH AFFILIATES. Conduct, and cause each of its
Subsidiaries to conduct, all transactions otherwise permitted under the
Loan Documents with any of their Affiliates on terms that are fair and
reasonable and no less favorable to the Parent Guarantor or such Subsidiary
than it would obtain in a comparable arm's-length transaction with a Person
not an Affiliate.
(j) COVENANT TO GUARANTEE OBLIGATIONS AND GIVE SECURITY. Upon (x) the
request of the Collateral Agent following the occurrence and during the
continuance of a Default, (y) the formation or acquisition of any new
direct or indirect Subsidiaries by any Loan Party or (z) the acquisition of
any property by any Loan Party, and such property, in the judgment of the
Collateral Agent, shall not already be subject to a perfected first
priority security interest in favor of the Collateral Agent for the benefit
of the Secured Parties, then the Borrowers shall, in each case at the
Borrowers' expense:
(i) in connection with the formation or acquisition of a
Subsidiary, within 10 days after such formation or acquisition, cause
each such Subsidiary, and cause each direct and indirect parent of
such Subsidiary (if it has not already done so), to duly execute and
deliver to the Collateral Agent a guaranty or guaranty supplement, in
form and substance satisfactory to the Collateral Agent, guaranteeing
the other Loan Parties' obligations under the Loan Documents,
(ii) within 10 days after such request, formation or acquisition,
furnish to the Collateral Agent a description of the real and personal
properties of the Loan Parties and their respective Subsidiaries in
detail satisfactory to the Agent,
(iii) within 15 days after such request, formation or
acquisition, duly execute and deliver, and cause each such Subsidiary
and each direct and indirect parent of such Subsidiary (if it has not
already done so) to duly execute and deliver, to the Collateral Agent
mortgages, pledges, assignments, security agreement supplements and
other security agreements, as specified by and in form and substance
satisfactory to the Collateral Agent, securing payment of all the
Obligations of the applicable Loan Party, such Subsidiary or such
parent, as the case may be, under the Loan Documents and constituting
Liens on all such properties,
(iv) within 30 days after such request, formation or acquisition,
take, and cause such Subsidiary or such parent to take, whatever
action (including, without limitation, the recording of mortgages, the
filing of Uniform Commercial Code financing statements and the giving
of notices) may be necessary or advisable in the opinion of the
Collateral Agent to vest in the Collateral Agent (or in any
representative of the Collateral Agent designated by it) valid and
subsisting Liens on the properties purported to be subject to the
mortgages, pledges, assignments, security agreement supplements and
security agreements delivered pursuant to this Section 5.01(j),
enforceable against all third parties in accordance with their terms,
(v) within 60 days after such request, formation or acquisition,
deliver to the Collateral Agent, upon the request of the Collateral
Agent in its sole discretion, a signed copy of a favorable opinion,
addressed to the Collateral Agent and the other Secured Parties, of
counsel for the Loan Parties acceptable to the Collateral Agent as to
the matters contained in clauses (i), (iii) and (iv) above, as to such
guaranties, guaranty supplements, pledges, assignments, security
agreement supplements and security agreements being legal, valid and
binding obligations of each Loan Party thereto enforceable in
accordance with their terms and as to such other matters as the
Collateral Agent may reasonably request,
(vi) as promptly as practicable after such request, formation or
acquisition, deliver, upon the request of the Collateral Agent in its
sole discretion, to the Collateral Agent with respect to each parcel
of real property owned or held by the entity that is the subject of
such request, formation or acquisition title reports, surveys and
engineering, soils and other reports, and environmental assessment
reports, each in scope, form and substance satisfactory to the
Collateral Agent, PROVIDED, HOWEVER, that to the extent that any Loan
Party or any of its Subsidiaries shall have otherwise received any of
the foregoing items with respect to such real property, such items
shall, promptly after the receipt thereof, be delivered to the
Collateral Agent,
(vii) upon the occurrence and during the continuance of a
Default, promptly cause to be deposited any and all cash dividends
paid or payable to it or any of its Subsidiaries from any of its
Subsidiaries from time to time into the Cash Collateral Account, and
with respect to all other dividends paid or payable to it or any of
its Subsidiaries from time to time, promptly execute and deliver, or
cause such Subsidiary to promptly execute and deliver, as the case may
be, any and all further instruments and take or cause such Subsidiary
to take, as the case may be, all such other action as the Collateral
Agent may deem necessary or desirable in order to obtain and maintain
from and after the time such dividend is paid or payable a perfected,
first priority lien on and security interest in such dividends, and
(viii) at any time and from time to time, promptly execute and
deliver any and all further instruments and documents and take all
such other action as the Collateral Agent may deem necessary or
desirable in obtaining the full benefits of, or in perfecting and
preserving the Liens of, such guaranties, mortgages, pledges,
assignments, security agreement supplements and security agreements.
(k) FURTHER ASSURANCES. (i) Promptly upon request by any Agent, or any
Lender Party through the Administrative Agent, correct, and cause each of
its Subsidiaries promptly to correct, any material defect or error that may
be discovered in any Loan Document or in the execution, acknowledgment,
filing or recordation thereof, and
(ii) Promptly upon request by any Agent, or any Lender Party
through the Administrative Agent, do, execute, acknowledge, deliver,
record, re-record, file, re-file, register and re-register any and all
such further acts, deeds, conveyances, pledge agreements, assignments,
financing statements and continuations thereof, termination
statements, notices of assignment, transfers, certificates, assurances
and other instruments as any Agent, or any Lender Party through the
Administrative Agent, may reasonably require from time to time in
order to (A) carry out more effectively the purposes of the Loan
Documents, (B) to the fullest extent permitted by applicable law,
subject any Loan Party's or any of its Subsidiaries' properties,
assets, rights or interests to the Liens now or hereafter intended to
be covered by any of the Collateral Documents, (C) perfect and
maintain the validity, effectiveness and priority of any of the
Collateral Documents and any of the Liens intended to be created
thereunder and (D) assure, convey, grant, assign, transfer, preserve,
protect and confirm more effectively unto the Secured Parties the
rights granted or now or hereafter intended to be granted to the
Secured Parties under any Loan Document or under any other instrument
executed in connection with any Loan Document to which any Loan Party
or any of its Subsidiaries is or is to be a party, and cause each of
its Subsidiaries to do so.
(l) PERFORMANCE OF RELATED DOCUMENTS. Perform and observe, and cause
each of its Subsidiaries to perform and observe, all of the terms and
provisions of each Related Document to be performed or observed by it,
maintain each such Related Document in full force and effect, enforce such
Related Document in accordance with its terms, take all such action to such
end as may be from time to time requested by the Administrative Agent and,
upon request of the Administrative Agent, make to each other party to each
such Related Document such demands and requests for information and reports
or for action as any Loan Party or any of its Subsidiaries is entitled to
make under such Related Document.
(m) COMPLIANCE WITH TERMS OF LEASEHOLDS. Make all payments and
otherwise perform all obligations in respect of all leases of real property
to which the Parent Guarantor or any of its Subsidiaries is a party, keep
such leases in full force and effect and not allow such leases to lapse or
be terminated or any rights to renew such leases to be forfeited or
cancelled, notify the Administrative Agent of any default by any party with
respect to such leases and cooperate with the Administrative Agent in all
respects to cure any such default, and cause each of its Subsidiaries to do
so.
(n) CASH CONCENTRATION ACCOUNT; L/C CASH COLLATERAL ACCOUNT. (i)
Maintain, and cause each of its Subsidiaries to maintain, main cash
concentration with Citibank and lockbox accounts into which all proceeds of
Collateral are paid with one or more banks acceptable to the Collateral
Agent that have accepted the assignment of such accounts to the Collateral
Agent for the benefit of the Secured Parties pursuant to the Security
Agreement.
(ii) Establish and maintain a L/C Cash Collateral Account upon
the Collateral Agent's request.
(o) INTEREST RATE HEDGING. Enter into prior to April 1, 2000, and
maintain at all times thereafter, interest rate Hedge Agreements with
Persons acceptable to the Administrative Agent, covering a notional amount
of not less than $100,000,000 and providing for such Persons to make
payments thereunder for a period of no less than three years to the extent
of increases in interest rates greater than 3% above the weighted average
Eurodollar Rate on the date hereof.
(p) CONDITIONS SUBSEQUENT.
(i) Use its best efforts promptly to deliver to the
Administrative Agent within 60 days after the Initial Extension of
Credit, in form and substance satisfactory to the Administrative
Agent, landlord consents and bailee letters from such Persons as the
Administrative Agent may request, providing the Administrative Agent
with the right to receive notice of default under the applicable
lease, the right to repossess such Inventory at any time, and such
other rights as may be reasonably acceptable to the Administrative
Agent; and
(ii) within 30 days after the Initial Extension of Credit,
evidence that counterparts of the Mortgages have been duly recorded in
all filing or recording offices that the Administrative Agent may deem
necessary or desirable in order to create a valid first and subsisting
Lien on the property described therein in favor of the Secured Parties
and that all filing and recording taxes and fees have been paid.
SECTION 5.02. NEGATIVE COVENANTS. So long as any Advance or any other
Obligation of any Loan Party under any Loan Document shall remain unpaid, any
Letter of Credit shall be outstanding or any Lender Party shall have any
Commitment hereunder, neither any Borrower nor the Parent Guarantor will, at any
time:
(a) LIENS, ETC. Create, incur, assume or suffer to exist, or permit
any of its Subsidiaries to create, incur, assume or suffer to exist, any
Lien on or with respect to any of its properties of any character
(including, without limitation, accounts) whether now owned or hereafter
acquired, or sign or file or suffer to exist, or permit any of its
Subsidiaries to sign or file or suffer to exist, under the Uniform
Commercial Code of any jurisdiction, a financing statement that names the
Parent Guarantor or any of its Subsidiaries as debtor, or sign or suffer to
exist, or permit any of its Subsidiaries to sign or suffer to exist, any
security agreement authorizing any secured party thereunder to file such
financing statement, or assign, or permit any of its Subsidiaries to
assign, any accounts or other right to receive income, except:
(i) Liens created under the Loan Documents;
(ii) Permitted Liens;
(iii) Liens existing on the date hereof and described on Schedule
5.02(a) hereto;
(iv) Liens arising in connection with Capitalized Leases
permitted under Section 5.02(b)(iii)(B); PROVIDED that no such Lien
shall extend to or cover any Collateral or assets other than the
assets subject to such Capitalized Leases;
(v) Liens arising in connection with Floor Planning Arrangements;
(vi) Liens securing Debt permitted under Section 5.02(b)(iii)(E);
and
(vii) Liens securing Debt permitted under Section
5.02(b)(iii)(H).
(b) DEBT. Create, incur, assume or suffer to exist, or permit any of
its Subsidiaries to create, incur, assume or suffer to exist, any Debt,
except:
(i) in the case of the Borrowers, Debt in respect of Hedge
Agreements designed to hedge against fluctuations in interest rates
incurred in the ordinary course of business and consistent with
prudent business practice with the aggregate Agreement Value thereof
not to exceed $10,000,000 at any time outstanding;
(ii) in the case of any Subsidiary of any Borrower, Debt owed to
such Borrower or to a wholly owned Subsidiary of such Borrower,
PROVIDED that, in each case, such Debt (x) shall constitute Pledged
Debt, (y) shall be on terms acceptable to the Administrative Agent and
(z) shall be evidenced by promissory notes in form and substance
satisfactory to the Administrative Agent and such promissory notes
shall be pledged as security for the Obligations under the Loan
Documents of the holder thereof and delivered to the Collateral Agent
pursuant to the terms of the Security Agreement; and
(iii) in the case of the Loan Parties,
(A) Debt under the Loan Documents,
(B) Capitalized Leases not to exceed in the aggregate
$25,000,000 at any time outstanding,
(D) the Surviving Debt,
(E) Debt secured by a mortgage on the real property located
at ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇▇, ▇▇▇▇▇▇▇ in an aggregate principal
amount not to exceed $15,000,000,
(F) indorsement of negotiable instruments for deposit or
collection or similar transactions in the ordinary course of
business,
(G) Debt under the Floor Planning Arrangements,
(H) Debt under inventory flooring arrangements provided by a
manufacturer of computer equipment, secured by inventory and
equipment bearing the trademark or tradename of such
manufacturer, provided that
(x) such manufacturer has entered into an intercreditor agreement
with the Administrative Agent in substantially the form of
Exhibit K hereto and (y) the aggregate principal amount of such
Debt shall not exceed $100,000,000; and
(I) Debt extending the maturity of , or refunding or
refinancing, in whole or in part, Debt described in clauses (D)
and (G) (other than the Floor Planning Arrangement to which IBM
Credit Corporation is a party) above, PROVIDED that (1) the terms
of any such extending, refunding or refinancing Debt, and of any
agreement entered into and of any instrument issued in connection
therewith, are otherwise permitted by the Loan Documents, (2) the
terms relating to principal amount, amortization, maturity,
collateral (if any) and subordination (if any), and other
material terms taken as a whole, of any such extending, refunding
or refinancing Debt, and of any agreement entered into and of any
instrument issued in connection therewith, are no less favorable
in any material respect to the Loan Parties or the Lender Parties
than the terms of any agreement or instrument governing the Debt
being extended, refunded or refinanced and the interest rate
applicable to such extending refunding or refinancing Debt does
not exceed the then applicable market interest rate, (3) in the
case of any Surviving Debt, the principal amount of such
Surviving Debt shall not be increased above the principal amount
thereof outstanding immediately prior to such extension,
refunding or refinancing and (4) in the case of any Floor
Planning Arrangement, the creditors thereof shall have entered
into Intercreditor Agreements with the Collateral Agent and the
applicable Borrower that are no less favorable in any material
respect to the Loan Parties or the Lender Parties than the terms
of the Intercreditor Agreement entered into with the creditor of
such Floor Planning Arrangement being extended, refunded or
refinanced.
(c) CHANGE IN NATURE OF BUSINESS. Make, or permit any of its
Subsidiaries to make, any material change in the nature of its business as
carried on at the date hereof.
(d) MERGERS, ETC. Merge into or consolidate with any Person or permit
any Person to merge into it, or permit any of its Subsidiaries to do so,
except that any Subsidiary of any Borrower may merge into or consolidate
with any other Subsidiary of such Borrower, PROVIDED that, in the case of
any such merger or consolidation, the Person formed by such merger or
consolidation shall be a wholly owned Subsidiary of such Borrower;
PROVIDED, HOWEVER, that in each case, immediately after giving effect
thereto, no event shall occur and be continuing that constitutes a Default
and, in the case of any such merger to which any Borrower is a party, such
Borrower is the surviving corporation.
(e) SALES, ETC., OF ASSETS. Sell, lease, transfer or otherwise dispose
of, or permit any of its Subsidiaries to sell, lease, transfer or otherwise
dispose of, any assets, or
grant any option or other right to purchase, lease or otherwise acquire any
assets other than Inventory to be sold in the ordinary course of its
business, except:
(i) sales of Inventory in the ordinary course of its business;
(ii) sales of Receivables in the ordinary course of its business
pursuant to the Receivables Sales Agreement;
(iii) sales of assets for cash and for fair value in an aggregate
amount not to exceed $10,000,000 in any Fiscal Year; and
(iv) the sale of any real property listed on Schedule 4.01(v) for
cash and for fair value in a sale-leaseback transaction or otherwise;
PROVIDED that in the case of sales of assets pursuant to clauses (iii)
and (iv) above, the Borrowers shall, on the date of receipt by any Loan
Party or any of its Subsidiaries of the Net Cash Proceeds from such
sale, prepay the Advances pursuant to, and in the amount and order of
priority set forth in, Section 2.06(b)(i), as specified therein.
(f) INVESTMENTS IN OTHER PERSONS. Make or hold, or permit any of its
Subsidiaries to make or hold, any Investment in any Person, except,
(i) Investments by the Parent Guarantor and its Subsidiaries in
their Subsidiaries outstanding on the date hereof;
(ii) loans and advances to employees in the ordinary course of
the business of the Parent Guarantor and its Subsidiaries as presently
conducted in an aggregate principal amount not to exceed $500,000 at
any time outstanding;
(iii) Investments by the Parent Guarantor and its Subsidiaries in
Cash Equivalents in an aggregate principal amount not to exceed
$5,000,000 at any time outstanding;
(iv) Investments existing on the date hereof and described on
Schedule 4.01(x) hereto;
(v) Investments by the Borrowers in Hedge Agreements permitted
under Section 5.02(b)(i)(A);
(vi) Investments consisting of intercompany Debt permitted under
Section 5.02(b)(ii); and
(vii) Investments in Subsidiaries not existing on the date hereof
that are formed with an initial capitalization of $1,000,000 or less,
PROVIDED that the
aggregate Investments permitted under this clause (vii) shall not
exceed $5,000,000 in any Fiscal Year.
(g) RESTRICTED PAYMENTS. Declare or pay any dividends, purchase,
redeem, retire, defease or otherwise acquire for value any of its capital
stock or any warrants, rights or options to acquire such capital stock, now
or hereafter outstanding, return any capital to its stockholders as such,
make any distribution of assets, capital stock, warrants, rights, options,
obligations or securities to its stockholders as such or issue or sell any
capital stock or any warrants, rights or options to acquire such capital
stock, or permit any of its Subsidiaries to do any of the foregoing or
permit any of its Subsidiaries to purchase, redeem, retire, defease or
otherwise acquire for value any capital stock of the Parent Guarantor or
any warrants, rights or options to acquire such capital stock or to issue
or sell any capital stock or any warrants, rights or options to acquire
such capital stock, except that, so long as no Default shall have occurred
and be continuing at the time of any action described in clause (i) or (ii)
below or would result therefrom:
(i) the Parent Guarantor may (A) declare and pay dividends and
distributions payable only in common stock of the Parent Guarantor and
(B) except to the extent the Net Cash Proceeds thereof are required to
be applied to the prepayment of the Advances pursuant to Section
2.06(b), purchase, redeem, retire, defease or otherwise acquire shares
of its capital stock with the proceeds received contemporaneously from
the issue of new shares of its capital stock with equal or inferior
voting powers, designations, preferences and rights,
(ii) any Subsidiary of any Borrower may (A) declare and pay cash
dividends to such Borrower and (B) declare and pay cash dividends to
any other Loan Party of which it is a Subsidiary, (iii) the Borrowers
may pay cash dividends or otherwise transfer funds to the Parent
Guarantor or MicroAge Computer Centers, Inc. for operating expenses
incurred in the normal course of business by the Parent Guarantor or
MicroAge Computer Centers, Inc. or paid by the Parent Guarantor or
MicroAge Computer Centers, Inc. on behalf of the Borrowers. Such
expenses include all payroll and benefits costs for all Subsidiaries
of the Parent Guarantor, telephone, travel, rent and other occupancy
costs, professional expenses, including consulting, audit, accounting
and legal expenses, corporate insurance expenses, data processing
costs and other operating expenses.
(iv) the Parent Guarantor and the Borrowers may issue stock
options to the directors and employees of such Loan Party.
(h) AMENDMENTS OF CONSTITUTIVE DOCUMENTS. Amend, or permit any of its
Subsidiaries to amend, its certificate of incorporation or bylaws or other
constitutive documents in any material respect.
(i) ACCOUNTING CHANGES. Make or permit, or permit any of its
Subsidiaries to make or permit, any change in (i) accounting policies or
reporting practices, except as required by generally accepted accounting
principles or (ii) Fiscal Year.
(j) PREPAYMENTS, ETC., OF DEBT. Prepay, redeem, purchase, defease or
otherwise satisfy prior to the scheduled maturity thereof in any manner, or
make any payment in violation of any subordination terms of, any Debt,
except (i) the prepayment of the Advances in accordance with the terms of
this Agreement and (ii) regularly scheduled or required repayments or
redemptions of Surviving Debt, or amend, modify or change in any manner any
term or condition of any Surviving Debt, or permit any of its Subsidiaries
to do any of the foregoing other than to prepay any Debt payable to any
Borrower.
(k) AMENDMENT, ETC., OF RELATED DOCUMENTS. Cancel or terminate any
Related Document or consent to or accept any cancellation or termination
thereof, amend, modify or change in any manner any term or condition of any
Related Document or give any consent, waiver or approval thereunder, waive
any default under or any breach of any term or condition of any Related
Document, agree in any manner to any other amendment, modification or
change of any term or condition of any Related Document or take any other
action in connection with any Related Document that would impair the value
of the interest or rights of any Loan Party thereunder or that would impair
the rights or interests of any Agent or any Lender Party, or otherwise
amend Sections 2.1, 9.2 or 10 of the Agreement for Inventory Financing
dated as of October 28, 1999 between IBM Credit Corporation, MTS Holding
Company, MicroAge Computer Centers, Inc., MicroAge Technology Services,
L.L.C. and Pinacor, or Section I(A) or (B) of Attachment A thereto , or
permit any of its Subsidiaries to do any of the foregoing.
(m) NEGATIVE PLEDGE. Enter into or suffer to exist, or permit any of
its Subsidiaries to enter into or suffer to exist, any agreement
prohibiting or conditioning the creation or assumption of any Lien upon any
of its property or assets except (i) in favor of the Secured Parties or
(ii) in connection with (A) any Surviving Debt and (B) any Capitalized
Lease permitted by Section 5.02(b)(iii)(C) solely to the extent that such
Capitalized Lease prohibits a Lien on the property subject thereto.
(n) PARTNERSHIPS, ETC. Become a general partner in any general or
limited partnership or joint venture, or permit any of its Subsidiaries to
do so, other than any Subsidiary the sole assets of which consist of its
interest in such partnership or joint venture.
(o) SPECULATIVE TRANSACTIONS. Engage, or permit any of its
Subsidiaries to engage, in any transaction involving commodity options or
futures contracts or any similar speculative transactions.
(p) CAPITAL EXPENDITURES. Make, or permit any of its Subsidiaries to
make, any Capital Expenditures
that would cause the aggregate of all such Capital Expenditures made by the
Parent Guarantor and its Subsidiaries in any period set forth below to
exceed the amount set forth below for such period:
Period Amount
------ ------
Fiscal Quarter ended January 31, 2000 $ 7,400,000
Two Fiscal Quarters ended April 30, 2000 $14,800,000
Three Fiscal Quarters ended July 31, 2000 $22,200,000
Four Fiscal Quarters ended October 31, 2000 $29,600,000
Fiscal Quarter ended January 31, 2001 $ 9,300,000
Two Fiscal Quarters ended April 30, 2001 $18,600,000
Three Fiscal Quarters ended July 31, 2001 $27,900,000
Four Fiscal Quarters ended October 31, 2001 $36,200,000
Fiscal Quarter ended January 31, 2002 $11,300,000
Two Fiscal Quarters ended April 30, 2002 $22,600,000
Three Fiscal Quarters ended July 31, 2002 $33,900,000
Four Fiscal Quarters ended October 31, 2002 $45,200,000
(q) FORMATION OF SUBSIDIARIES. Organize or invest, or permit any
Subsidiary to organize or invest, in any new Subsidiary other than as
permitted by Section 5.02(f) (vii).
(r) LIMITATION ON PAYMENT RESTRICTIONS. Enter into or suffer to exist,
or permit any Subsidiary to enter into or suffer to exist, any agreement
limiting the ability of any of its Subsidiaries to declare or pay dividends
or other distributions in respect of its capital stock or make loans or
advances to, or otherwise transfer assets to or invest in, the Parent
Guarantor or any Subsidiary of the Parent Guarantor (whether through a
covenant restricting dividends, loans, asset transfers or investments, a
financial covenant or otherwise), except the Loan Documents.
SECTION 5.03. REPORTING REQUIREMENTS. So long as any Advance or any other
Obligation of any Loan Party under any Loan Document shall remain unpaid, any
Letter of Credit shall be outstanding or any Lender Party shall have any
Commitment hereunder, the Parent Guarantor will furnish to the Agents and the
Lender Parties:
(a) DEFAULT NOTICE. As soon as possible and in any event within two
days after the occurrence of each Default or any event, development or
occurrence reasonably likely to have a Material Adverse Effect continuing
on the date of such statement, a statement of the chief financial officer
of the Parent Guarantor setting forth details of such Default and the
action that the Parent Guarantor has taken and proposes to take with
respect thereto.
(b) ANNUAL FINANCIALS. As soon as available and in any event within 90
days after the end of each Fiscal Year, a copy of the annual audit report
for such year for the Parent Guarantor and its Subsidiaries, including
therein Consolidated balance sheets of the Parent Guarantor and its
Subsidiaries as of the end of such Fiscal Year and Consolidated statements
of income and a Consolidated statement of cash flows of the
Parent Guarantor and its Subsidiaries for such Fiscal Year, in each case
accompanied by an opinion acceptable to the Required Lenders of
PricewaterhouseCoopers LLC or other independent public accountants of
recognized standing acceptable to the Required Lenders, together with (i) a
certificate of such accounting firm to the Lender Parties stating that in
the course of the regular audit of the business of the Parent Guarantor and
its Subsidiaries, which audit was conducted by such accounting firm in
accordance with generally accepted auditing standards, such accounting firm
has obtained no knowledge that a Default has occurred and is continuing, or
if, in the opinion of such accounting firm, a Default has occurred and is
continuing, a statement as to the nature thereof, (ii) a schedule in form
satisfactory to the Administrative Agent of the computations used by such
accountants in determining, as of the end of such Fiscal Year, compliance
with the covenants contained in Section 5.04, PROVIDED that in the event of
any change in GAAP used in the preparation of such financial statements,
the Parent Guarantor shall also provide, if necessary for the determination
of compliance with Section 5.04, a statement of reconciliation conforming
such financial statements to GAAP, (iii) Consolidating balance sheets of
the Parent Guarantor and the Borrowers as of the end of such Fiscal Year
and Consolidating statements of income and cash flows of the Parent
Guarantor and the Borrowers for such Fiscal Year, all in reasonable detail
and duly certified by the chief financial officer of the Parent Guarantor
as having been prepared in accordance with GAAP and (iv) a certificate of
the chief financial officer of the Parent Guarantor stating that no Default
has occurred and is continuing or, if a default has occurred and is
continuing, a statement as to the nature thereof and the action that the
Parent Guarantor has taken and proposes to take with respect thereto.
(c) QUARTERLY FINANCIALS. As soon as available and in any event within
45 days after the end of each of the first three quarters of each Fiscal
Year, Consolidated and Consolidating balance sheets of the Parent Guarantor
and its Subsidiaries as of the end of such quarter and Consolidated and
Consolidating statements of income and a Consolidated statement of cash
flows of the Parent Guarantor and its Subsidiaries for the period
commencing at the end of the previous fiscal quarter and ending with the
end of such fiscal quarter and Consolidated and Consolidating statements of
income and a Consolidated statement of cash flows of the Parent Guarantor
and its Subsidiaries for the period commencing at the end of the previous
Fiscal Year and ending with the end of such quarter, setting forth in each
case in comparative form the corresponding figures for the corresponding
period of the preceding Fiscal Year, all in reasonable detail and duly
certified (subject to year-end audit adjustments) by the chief financial
officer of the Parent Guarantor as having been prepared in accordance with
GAAP, together with (i) a certificate of said officer stating that no
Default has occurred and is continuing or, if a Default has occurred and is
continuing, a statement as to the nature thereof and the action that the
Parent Guarantor has taken and proposes to take with respect thereto and
(ii) a schedule in form satisfactory to the Administrative Agent of the
computations used by the Parent Guarantor in determining compliance with
the covenants contained in Section 5.04, PROVIDED that in the event of any
change in GAAP used in the preparation of such financial statements, the
Parent Guarantor shall also provide, if necessary for the
determination of compliance with Section 5.04, a statement of
reconciliation conforming such financial statements to GAAP.
(d) MONTHLY FINANCIALS. As soon as available and in any event within
30 days after the end of each month, a Consolidated balance sheet of the
Parent Guarantor and its Subsidiaries as of the end of such month and
Consolidated and Consolidating statements of income and a Consolidated
statement of cash flows of the Parent Guarantor and its Subsidiaries for
the period commencing at the end of the previous month and ending with the
end of such month and Consolidated and Consolidating statements of income
and a Consolidated statement of cash flows of the Parent Guarantor and its
Subsidiaries for the period commencing at the end of the previous Fiscal
Year and ending with the end of such month, setting forth in each case in
comparative form the corresponding figures for the corresponding month of
the preceding Fiscal Year, all in reasonable detail and duly certified by
the chief financial officer or controller of the Parent Guarantor.
(e) ANNUAL FORECASTS. As soon as available and in any event no later
than 45 days after the end of each Fiscal Year, forecasts prepared by
management of the Parent Guarantor, in form satisfactory to the
Administrative Agent, of balance sheets, income statements and cash flow
statements on a monthly basis for the Fiscal Year following such Fiscal
Year and on an annual basis for each Fiscal Year thereafter until the
Termination Date.
(f) LITIGATION. Promptly after the commencement thereof, notice of all
actions, suits, investigations, litigation and proceedings before any court
or governmental department, commission, board, bureau, agency or
instrumentality, domestic or foreign, affecting any Loan Party or any of
its Subsidiaries of the type described in Section 4.01(f), and promptly
after the occurrence thereof, notice of any adverse change in the status or
the financial effect on any Loan Party or any of its Subsidiaries of the
Disclosed Litigation from that described on Schedule 4.01(f) hereto.
(g) SECURITIES REPORTS. Promptly after the sending or filing thereof,
copies of all proxy statements, financial statements and reports that any
Loan Party or any of its Subsidiaries sends to its stockholders, and copies
of all regular, periodic and special reports, and all registration
statements, that any Loan Party or any of its Subsidiaries files with the
Securities and Exchange Commission or any governmental authority that may
be substituted therefor, or with any national securities exchange.
(h) CREDITOR REPORTS. Promptly after the furnishing thereof, copies of
any statement or report furnished to any holder of Debt securities of any
Loan Party or of any of its Subsidiaries pursuant to the terms of any
indenture, loan or credit or similar agreement and not otherwise required
to be furnished to the Lender Parties pursuant to any other clause of this
Section 5.03.
(i) AGREEMENT NOTICES. Promptly upon receipt thereof, copies of all
notices, requests and other documents received by any Loan Party or any of
its Subsidiaries under
or pursuant to any Related Document or instrument, indenture, loan or
credit or similar agreement regarding or related to any breach or default
by any party thereto or any other event that could materially impair the
value of the interests or the rights of any Loan Party or otherwise have a
Material Adverse Effect and copies of any amendment, modification or waiver
of any provision of any Related Document or instrument, indenture, loan or
credit or similar agreement and, from time to time upon request by the
Administrative Agent, such information and reports regarding the Related
Documents and such instruments, indentures and loan and credit and similar
agreements as the Administrative Agent may reasonably request.
(j) REVENUE AGENT REPORTS. Within 10 days after receipt, copies of all
Revenue Agent Reports (Internal Revenue Service Form 886), or other written
proposals of the Internal Revenue Service, that propose, determine or
otherwise set forth positive adjustments to the Federal income tax
liability of the affiliated group (within the meaning of Section 1504(a)(1)
of the Internal Revenue Code) of which the Parent Guarantor is a member
aggregating $3,000,000 or more.
(k) TAX CERTIFICATES. Promptly, and in any event within five Business
Days after the due date (with extensions) for filing the final Federal
income tax return in respect of each taxable year, a certificate (a "TAX
Certificate"), signed by the President or the chief financial officer or
controller of the Parent Guarantor, stating that the Parent Guarantor has
paid to the Internal Revenue Service or other taxing authority the full
amount that the Parent Guarantor is required to pay in respect of Federal
income tax for such year.
(l) ERISA. (i) ERISA EVENTS AND ERISA REPORTS. (A) Promptly and in any
event within 10 days after any Loan Party or any ERISA Affiliate knows or
has reason to know that any ERISA Event has occurred, a statement of the
chief financial officer of the Parent Guarantor describing such ERISA Event
and the action, if any, that such Loan Party or such ERISA Affiliate has
taken and proposes to take with respect thereto and (B) on the date any
records, documents or other information must be furnished to the PBGC with
respect to any Plan pursuant to Section 4010 of ERISA, a copy of such
records, documents and information.
(ii) PLAN TERMINATIONS. Promptly and in any event within two
Business Days after receipt thereof by any Loan Party or any ERISA
Affiliate, copies of each notice from the PBGC stating its intention
to terminate any Plan or to have a trustee appointed to administer any
Plan.
(iii) MULTIEMPLOYER PLAN NOTICES. Promptly and in any event
within five Business Days after receipt thereof by any Loan Party or
any ERISA Affiliate from the sponsor of a Multiemployer Plan, copies
of each notice concerning (A) the imposition of Withdrawal Liability
by any such Multiemployer Plan, (B) the reorganization or termination,
within the meaning of Title IV of ERISA, of any such Multiemployer
Plan or
(C) the amount of liability incurred, or that may be incurred, by such
Loan Party or any ERISA Affiliate in connection with any event
described in clause (A) or (B).
(iv) PLAN ANNUAL REPORTS. Promptly and in any event within 30
days after the filing thereof with the Internal Revenue Service,
copies of each Schedule B (Actuarial Information) to the annual report
(Form 5500 Series) with respect to each Plan.
(m) ENVIRONMENTAL CONDITIONS. Promptly after the assertion or
occurrence thereof, notice of any Environmental Action against or of any
noncompliance by any Loan Party or any of its Subsidiaries with any
Environmental Law or Environmental Permit that could reasonably be expected
to have a Material Adverse Effect.
(n) REAL PROPERTY. As soon as available and in any event within 30
days after the end of each Fiscal Year, a report supplementing Schedules
4.01(v) and 4.01(w) hereto, including an identification of all real and
leased property disposed of by the Parent Guarantor or any of its
Subsidiaries during such Fiscal Year, a list and description (including the
street address, county or other relevant jurisdiction, state, record owner,
book value thereof, and in the case of leases of property, lessor, lessee,
expiration date and annual rental cost thereof) of all real property
acquired or leased during such Fiscal Year and a description of such other
changes in the information included in such Schedules as may be necessary
for such Schedules to be accurate and complete.
(o) INSURANCE. As soon as available and in any event within 30 days
after the end of each Fiscal Year, a report summarizing the insurance
coverage (specifying type, amount and carrier) in effect for each Loan
Party and its Subsidiaries and containing such additional information as
any Agent, or any Lender Party through the Administrative Agent, may
reasonably specify.
(p) BORROWING BASE CERTIFICATE. As soon as available and in any event
no later than the close of business on Wednesday of each week, a Borrowing
Base Certificate, as at the end of the immediately preceding Monday of such
week, certified by the chief financial officer, executive vice president,
controller, treasurer or assistant treasurer of the Parent Guarantor.
(q) OTHER INFORMATION. Such other information respecting the business,
condition (financial or otherwise), operations, performance, properties or
prospects of any Loan Party or any of its Subsidiaries as any Agent, or any
Lender Party through the Administrative Agent, may from time to time
reasonably request.
SECTION 5.04. FINANCIAL COVENANTS. So long as any Advance or any other
Obligation of any Loan Party under any Loan Document shall remain unpaid, any
Letter of Credit shall be outstanding or any Lender Party shall have any
Commitment hereunder, the Parent Guarantor will:
(a) DEBT TO EBITDA RATIO. Maintain at all times a Debt/EBITDA Ratio of
not more than the amount set forth below for each period set forth below:
Period Ratio
------ -----
Four Fiscal Quarters ended January 31, 2000 6.70:1.00
Four Fiscal Quarters ended April 30, 2000 5.20:1.00
Four Fiscal Quarters ended July 31, 2000 5.10:1.00
Four Fiscal Quarters ended October 31, 2000 4.60:1.00
Four Fiscal Quarters ended January 31, 2001 3.80:1.00
Four Fiscal Quarters ended April 30, 2001 3.60:1.00
Four Fiscal Quarters ended July 31, 2001 3.40:1.00
Four Fiscal Quarters ended October 31, 2001 3.40:1.00
Four Fiscal Quarters ended January 31, 2002 3.40:1.00
Four Fiscal Quarters ended April 30, 2002 3.40:1.00
Four Fiscal Quarters ended July 31, 2002 3.30:1.00
(b) FIXED CHARGE COVERAGE RATIO. Maintain at all times a Fixed Charge
Coverage Ratio of not less than the ratio set forth below for each period
set forth below:
Period Ratio
------ -----
Fiscal Quarter ended April 30, 2000 1.00:1.00
Two Fiscal Quarters ended July 31, 2000 1.10:1.00
Three Fiscal Quarters ended October 31, 2000 1.20:1.00
Four Fiscal Quarters ended January 31, 2001 1.20:1.00
Four Fiscal Quarters ended April 30, 2001 1.25:1.00
Four Fiscal Quarters ended July 31, 2001 1.25:1.00
Four Fiscal Quarters ended October 31, 2001 1.25:1.00
Four Fiscal Quarters ended January 31, 2002 1.25:1.00
Four Fiscal Quarters ended April 30, 2002 1.25:1.00
Four Fiscal Quarters ended July 31, 2002 1.25:1.00
(c) MINIMUM EBITDA. Maintain at all times EBITDA of the Parent
Guarantor and its Subsidiaries not less than the amount set forth below for
each period set forth below:
Period Amount
------ ------
Fiscal Quarter ended January 31, 2000 $ 7,000,000
Two Fiscal Quarters ended April 30, 2000 $ 26,000,000
Three Fiscal Quarters ended July 31, 2000 $ 47,000,000
Four Fiscal Quarters ended October 31, 2000 $ 70,000,000
Four Fiscal Quarters ended January 31, 2001 $ 85,000,000
Four Fiscal Quarters ended April 30, 2001 $ 90,000,000
Four Fiscal Quarters ended July 31, 2001 $ 95,000,000
Four Fiscal Quarters ended October 31, 2001 $ 95,000,000
Four Fiscal Quarters ended January 31, 2002 $ 95,000,000
Four Fiscal Quarters ended April 30, 2002 $100,000,000
Four Fiscal Quarters ended July 31, 2002 $105,000,000
ARTICLE VI
EVENTS OF DEFAULT
SECTION 6.01. EVENTS OF DEFAULT. If any of the following events ("EVENTS OF
DEFAULT") shall occur and be continuing:
(a) (i) the Borrowers shall fail to pay any principal of any Advance
when the same shall become due and payable or (ii) the Borrowers shall fail
to pay any interest on any Advance, or any Loan Party shall fail to make
any other payment under any Loan Document, in each case under this clause
(ii) within five days after the same becomes due and payable; or
(b) any representation or warranty made by any Loan Party (or any of
its officers) under or in connection with any Loan Document shall prove to
have been incorrect in any material respect when made; or
(c) the Parent Guarantor or any Borrower shall fail to perform or
observe any term, covenant or agreement contained in ▇▇▇▇▇▇▇ ▇.▇▇, ▇.▇▇(▇),
(▇), (▇), (▇), or (o), 5.02, 5.03 or 5.04; or
(d) any Loan Party shall fail to perform or observe any other term,
covenant or agreement contained in any Loan Document on its part to be
performed or observed if such failure shall remain unremedied for 15 days
after the earlier of the date on which
(A) a Responsible Officer becomes aware of such failure or (B) written
notice thereof shall have been given to the Parent Guarantor by any Agent
or any Lender Party; or
(e) any Loan Party or any of its Subsidiaries shall fail to pay any
principal of, premium or interest on or any other amount payable in respect
of any Debt that is outstanding in a principal amount (or, in the case of
any Hedge Agreement, an Agreement Value) of at least $7,500,000 either
individually or in the aggregate (but excluding Debt outstanding hereunder)
of such Loan Party or such Subsidiary (as the case may be), when the same
becomes due and payable (whether by scheduled maturity, required
prepayment, acceleration, demand or otherwise), and such failure shall
continue after the applicable grace period, if any, specified in the
agreement or instrument relating to such Debt; or any other event shall
occur or condition shall exist under any agreement or instrument relating
to any such Debt, if the effect of such event or condition is to
accelerate, or to permit the acceleration of, the maturity of such Debt or
otherwise to cause, or to permit the holder thereof to cause, such Debt to
mature; or any such Debt shall be declared to be due and payable or
required to be prepaid or redeemed (other than by a regularly scheduled
required prepayment or redemption), purchased or defeased, or an offer to
prepay, redeem, purchase or defease such Debt shall be required to be made,
in each case prior to the stated maturity thereof; or
(f) any Loan Party or any of its Subsidiaries (other than such Loan
Party or such Subsidiary that is an Immaterial Subsidiary) shall generally
not pay its debts as such debts become due, or shall admit in writing its
inability to pay its debts generally, or shall make a general assignment
for the benefit of creditors; or any proceeding shall be instituted by or
against any Loan Party or any of its Subsidiaries (other than such Loan
Party or such Subsidiary that is an Immaterial Subsidiary) seeking to
adjudicate it a bankrupt or insolvent, or seeking liquidation, winding up,
reorganization, arrangement, adjustment, protection, relief, or composition
of it or its debts under any law relating to bankruptcy, insolvency or
reorganization or relief of debtors, or seeking the entry of an order for
relief or the appointment of a receiver, trustee, or other similar official
for it or for any substantial part of its property and, in the case of any
such proceeding instituted against it (but not instituted by it) that is
being diligently contested by it in good faith, either such proceeding
shall remain undismissed or unstayed for a period of 30 days or any of the
actions sought in such proceeding (including, without limitation, the entry
of an order for relief against, or the appointment of a receiver, trustee,
custodian or other similar official for, it or any substantial part of its
property) shall occur; or any Loan Party or any of its Subsidiaries (other
than such Loan Party or such Subsidiary that is an Immaterial Subsidiary)
shall take any corporate or other action to authorize any of the actions
set forth above in this subsection (f); or
(g) any judgments or orders, either individually or in the aggregate,
for the payment of money in excess of $7,500,000 shall be rendered against
any Loan Party or any of its Subsidiaries and either (i) enforcement
proceedings shall have been commenced by any creditor upon such judgment or
order or (ii) there shall be any period of 10
consecutive days during which a stay of enforcement of such judgment or
order, by reason of a pending appeal or otherwise, shall not be in effect;
or
(h) any non-monetary judgment or order shall be rendered against any
Loan Party or any of its Subsidiaries that is reasonably likely to have a
Material Adverse Effect, and there shall be any period of 15 consecutive
days during which a stay of enforcement of such judgment or order, by
reason of a pending appeal or otherwise, shall not be in effect; or
(i) any provision of any Loan Document after delivery thereof pursuant
to Section 3.01 or 5.01(j) shall for any reason cease to be valid and
binding on or enforceable against any Loan Party party to it, or any such
Loan Party shall so state in writing; or
(j) any Collateral Document after delivery thereof pursuant to Section
3.01 or 5.01(j) shall for any reason (other than pursuant to the terms
thereof) cease to create a valid and perfected first priority lien on and
security interest in the Collateral purported to be covered thereby; or
(k) ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ shall at any time for any reason cease to be
active in the management of the Parent Guarantor; or
(l) a Change of Control shall occur; or
(m) any ERISA Event shall have occurred with respect to a Plan and the
sum (determined as of the date of occurrence of such ERISA Event) of the
Insufficiency of such Plan and the Insufficiency of any and all other Plans
with respect to which an ERISA Event shall have occurred and then exist (or
the liability of the Loan Parties and the ERISA Affiliates related to such
ERISA Event) exceeds $7,500,000; or
(n) any Loan Party or any ERISA Affiliate shall have been notified by
the sponsor of a Multiemployer Plan that it has incurred Withdrawal
Liability to such Multiemployer Plan in an amount that, when aggregated
with all other amounts required to be paid to Multiemployer Plans by the
Loan Parties and the ERISA Affiliates as Withdrawal Liability (determined
as of the date of such notification), exceeds $7,500,000 or requires
payments exceeding $3,000,000 per annum; or
(o) any Loan Party or any ERISA Affiliate shall have been notified by
the sponsor of a Multiemployer Plan that such Multiemployer Plan is in
reorganization or is being terminated, within the meaning of Title IV of
ERISA, and as a result of such reorganization or termination the aggregate
annual contributions of the Loan Parties and the ERISA Affiliates to all
Multiemployer Plans that are then in reorganization or being terminated
have been or will be increased over the amounts contributed to such
Multiemployer Plans for the plan years of such Multiemployer Plans
immediately preceding the plan year in which such reorganization or
termination occurs by an amount exceeding $7,500,000;
then, and in any such event, the Administrative Agent (i) shall at the request,
or may with the consent, of the Required Lenders, by notice to the Borrowers,
declare the Commitments of each Lender Party and the obligation of each Lender
Party to make Advances (other than Letter of Credit Advances by the Issuing Bank
or a Lender pursuant to Section 2.03(c) and Swing Line Advances by a Lender
pursuant to Section 2.02(b)) and of the Issuing Bank to issue Letters of Credit
to be terminated, whereupon the same shall forthwith terminate, and (ii) shall
at the request, or may with the consent, of the Required Lenders, (A) by notice
to the Borrowers, declare the Notes, all interest thereon and all other amounts
payable under this Agreement and the other Loan Documents to be forthwith due
and payable, whereupon the Notes, all such interest and all such amounts shall
become and be forthwith due and payable, without presentment, demand, protest or
further notice of any kind, all of which are hereby expressly waived by each
Borrower, (B) by notice to each party required under the terms of any agreement
in support of which a Standby Letter of Credit is issued, request that all
Obligations under such agreement be declared to be due and payable and (C) by
notice to the Issuing Bank, direct the Issuing Bank to deliver a Default
Termination Notice to the beneficiary of each Standby Letter of Credit issued by
it, and the Issuing Bank shall deliver such Default Termination Notices;
PROVIDED, HOWEVER, that in the event of an actual or deemed entry of an order
for relief with respect to any Borrower under the Federal Bankruptcy Code, (x)
the Commitments of each Lender Party and the obligation of each Lender Party to
make Advances (other than Letter of Credit Advances by the Issuing Bank or a
Lender pursuant to Section 2.03(c) and Swing Line Advances by a Lender pursuant
to Section 2.02(b)) and of the Issuing Bank to issue Letters of Credit shall
automatically be terminated and (y) the Notes, all such interest and all such
amounts shall automatically become and be due and payable, without presentment,
demand, protest or any notice of any kind, all of which are hereby expressly
waived by each Borrower.
SECTION 6.02. ACTIONS IN RESPECT OF THE LETTERS OF CREDIT UPON DEFAULT. If
any Event of Default shall have occurred and be continuing, the Administrative
Agent may, or shall at the request of the Required Lenders, irrespective of
whether it is taking any of the actions described in Section 6.01 or otherwise,
make demand upon the Borrowers to, and forthwith upon such demand the Borrowers
will, pay to the Collateral Agent on behalf of the Lender Parties in same day
funds at the Collateral Agent's office designated in such demand, for deposit in
the L/C Cash Collateral Account, an amount equal to the aggregate Available
Amount of all Letters of Credit then outstanding. If at any time the
Administrative Agent or the Collateral Agent determines that any funds held in
the L/C Cash Collateral Account are subject to any right or claim of any Person
other than the Agents and the Lender Parties or that the total amount of such
funds is less than the aggregate Available Amount of all Letters of Credit, the
Borrowers will, forthwith upon demand by the Administrative Agent or the
Collateral Agent, pay to the Collateral Agent, as additional funds to be
deposited and held in the L/C Cash Collateral Account, an amount equal to the
excess of (a) such aggregate Available Amount over (b) the total amount of
funds, if any, then held in the L/C Cash Collateral Account that the
Administrative Agent or the Collateral Agent, as the case may be, determines to
be free and clear of any such right and claim. Upon the drawing of any Letter of
Credit for which funds are on deposit in the L/C Cash Collateral Account, such
funds shall be applied to reimburse the Issuing Bank or Lenders, as applicable,
to the extent permitted by applicable law.
ARTICLE VII
PARENT GUARANTY
SECTION 7.01. GUARANTY. (a) The Parent Guarantor hereby unconditionally and
irrevocably guarantees the punctual payment when due, whether at scheduled
maturity or on any date of a required prepayment or by acceleration, demand or
otherwise, of all Obligations of each Loan Party now or hereafter existing under
the Loan Documents, (including, without limitation, any extensions,
modifications, substitutions, amendments or renewals of any or all of the
foregoing Obligations), whether direct or indirect, absolute or contingent, and
whether for principal, interest, fees, expenses or otherwise (such Obligations
being the "GUARANTEED OBLIGATIONS"), and agrees to pay any and all expenses
(including, without limitation, reasonable counsel fees and expenses) incurred
by the Administrative Agent or the Lender Parties in enforcing any rights under
this Guaranty or any other Loan Documents. Without limiting the generality of
the foregoing, the Parent Guarantor's liability shall extend to all amounts that
constitute part of the Guaranteed Obligations and would be owed by each Loan
Party to the Administrative Agent or any Lender Party under or in respect of the
Loan Documents but for the fact that they are unenforceable or not allowable due
to the existence of a bankruptcy, reorganization or similar proceeding involving
any Loan Party.
(b) The Parent Guarantor hereby unconditionally and irrevocably agrees
that in the event any payment shall be required to be made to the
Administrative Agent or any Lender Party under this Guaranty or any other
guaranty, the Parent Guarantor will contribute, to the maximum extent
permitted by law, such amounts to each other guarantor so as to maximize
the aggregate amount paid to the Administrative Agent or any Lender Parties
under or in respect of the Loan Documents.
SECTION 7.02. GUARANTY ABSOLUTE. The Parent Guarantor guarantees that the
Guaranteed Obligations will be paid strictly in accordance with the terms of the
Loan Documents, regardless of any law, regulation or order now or hereafter in
effect in any jurisdiction affecting any of such terms or the rights of the
Administrative Agent, the Administrative Agents or the Lenders with respect
thereto. The Obligations of the Parent Guarantor under this Guaranty are
independent of the Guaranteed Obligations or any other Obligations of any Loan
Party under the Loan Documents, and a separate action or actions may be brought
and prosecuted against the Parent Guarantor to enforce this Guaranty,
irrespective of whether any action is brought against any Borrower or whether
any Borrower is joined in any such action or actions. The liability of the
Parent Guarantor under this Guaranty shall be irrevocable, absolute and
unconditional irrespective of, and the Parent Guarantor hereby irrevocably
waives any defenses it may now or hereinafter have in any way relating to, any
or all of the following:
(a) any lack of validity or enforceability of any Loan Document or any
agreement or instrument relating thereto;
(b) any change in the time, manner or place of payment of, or in any
other term of, all or any of the Guaranteed Obligations or any other
Obligations of any other Loan Party under the Loan Documents, or any other
amendment or waiver of or any consent to departure from any Loan Document,
including, without limitation, any increase in the Guaranteed Obligations
resulting from the extension of additional credit to any Borrower, the
Parent Guarantor or any of their Subsidiaries or otherwise;
(c) any taking, exchange, release or non-perfection of any collateral,
or any taking, release or amendment or waiver of or consent to departure
from any other guaranty, for all or any of the Guaranteed Obligations;
(d) any manner of application of collateral, or proceeds thereof, to
all or any of the Guaranteed Obligations, or any manner of sale or other
disposition of any collateral for all or any of the Guaranteed Obligations
or any other Obligations of any other Loan Party under the Loan Documents
or any other assets of any Borrower, the Parent Guarantor or any of their
Subsidiaries;
(e) any change, restructuring or termination of the corporate or other
legal structure or existence of any Borrower, the Parent Guarantor or any
of their Subsidiaries;
(f) any failure of the Administrative Agent or any Lender Party to
disclose to any Loan Party any information relating to the business,
condition (financial or otherwise), operations, performance, properties or
prospects of any Loan Party now or hereafter known to the Administrative
Agent or any Lender Party (the Parent Guarantor waiving any duty on the
part of the Administrative Agent or any Lender Party to disclose such
information); or
(h) any other circumstance (including, without limitation, any statute
of limitations) or any existence of or reliance on any representation by
the Administrative Agent or any Lender Party that might otherwise
constitute a defense available to, or a discharge of, any Borrower, the
Parent Guarantor or any other guarantor or surety.
This Guaranty shall continue to be effective or be reinstated, as the case may
be, if at any time any payment of any of the Guaranteed Obligations is rescinded
or must otherwise be returned by the Administrative Agent or any Lender Party
upon the insolvency, bankruptcy or reorganization of any Borrower, the Parent
Guarantor or any of their Subsidiaries or otherwise, all as though such payment
had not been made.
SECTION 7.03. WAIVER. (a) The Parent Guarantor hereby unconditionally and
irrevocably waives promptness, diligence, notice of acceptance, presentment,
demand for performance, notice of nonperformance, default, acceleration, protest
or dishonor and any other notice with respect to any of the Guaranteed
Obligations and this Guaranty and any requirement that the Administrative Agent
or any Lender Party protect, secure, perfect or insure any Lien or any property
subject thereto or exhaust any right or take any action against any Loan Party
or any other Person or any Collateral.
(b) The Parent Guarantor hereby unconditionally and irrevocably waives
any right to revoke this Guaranty and acknowledges that this Guaranty is
continuing in nature and applies to all Guaranteed Obligations, whether
existing now or in the future.
(c) The Parent Guarantor hereby unconditionally and irrevocably waives
(i) any defense arising by reason of any claim or defense based upon an
election of remedies by the Administrative Agent or any Lender Party that
in any manner impairs, reduces, releases or otherwise adversely affects the
subrogation, reimbursement, exoneration, contribution or indemnification
rights of the Parent Guarantor or other rights of the Parent Guarantor to
proceed against any of the Loan Parties, any other guarantor or any other
Person or any Collateral and (ii) any defense based on any right of set-off
or counterclaim against or in respect of the Obligations of the Parent
Guarantor hereunder.
(d) The Parent Guarantor acknowledges that the Administrative Agent
may, without notice to or demand upon the Parent Guarantor and without
affecting the liability of the Parent Guarantor under this Guaranty,
foreclose under any mortgage by nonjudicial sale, and the Parent Guarantor
hereby waives any defense to the recovery by the Administrative Agent and
the other Lender Parties against the Parent Guarantor of any deficiency
after such nonjudicial sale and any defense or benefits that may be
afforded by applicable law.
(e) The Parent Guarantor hereby unconditionally and irrevocably waives
any duty on the part of the Administrative Agent or any Lender Party to
disclose to the Parent Guarantor any matter, fact or thing relating to the
business, condition (financial or otherwise), operations, performance,
properties or prospects of any other Loan Party or any of its Subsidiaries
now or hereafter known by the Administrative Agent or any Lender Party.
(f) The Parent Guarantor acknowledges that it will receive substantial
direct and indirect benefits from the financing arrangements contemplated
by the Loan Documents and that the waivers set forth in Section 7.02 and
this Section 7.03 are knowingly made in contemplation of such benefits.
SECTION 7.04. PAYMENTS FREE AND CLEAR OF TAXES, ETC. (a) Any and all
payments made by the Parent Guarantor under or in respect of this Guaranty or
any other Loan Document shall be made, in accordance with Section 2.11, free and
clear of and without deduction for any and all present or future Taxes. If the
Parent Guarantor shall be required by law to deduct any Taxes from or in respect
of any sum payable hereunder to any Lender Party or the Administrative Agent,
(i) the sum payable by the Parent Guarantor by the Parent Guarantor shall be
increased as may be necessary so that after the Parent Guarantor and the
Administrative Agent have made all required deductions (including deductions
applicable to additional sums payable under this Section 7.04) such Lender Party
or the Administrative Agent (as the case may be) receives an amount equal to the
sum it would have received had no such deductions been made, (ii) the Parent
Guarantor shall make such deductions and (iii) the Parent Guarantor shall pay
the full amount deducted to the relevant taxation authority or other authority
in accordance with applicable law.
(b) In addition, the Parent Guarantor agrees to pay any present or
future Other Taxes that arise from any payment made under or in respect of
this Guaranty or any other Loan Document or from the execution, delivery or
registration of, performance under, or otherwise with respect to, this
Guaranty and the other Loan Documents.
(c) The Parent Guarantor will indemnify each Lender Party and the
Agents for the full amount of Taxes or Other Taxes and for the full amount
of taxes of any kind imposed by any jurisdiction on amounts payable under
this Section 7.04, imposed on or paid by such Lender Party or Agent and any
liability (including, without limitation, any Taxes or Other Taxes imposed
by any jurisdiction on amounts payable under this Section) paid by such
Lender Party or any Agent (as the case may be) and any liability (including
penalties, interest and expenses) arising therefrom or with respect
thereto. This indemnification shall be made within 30 days from the date
such Lender Party or such Agent (as the case may be) makes written demand
therefor.
(d) Within 30 days after the date of any payment of Taxes by or on
behalf of the Parent Guarantor, the Parent Guarantor shall furnish to the
Administrative Agent, at its address referred to in Section 9.02, the
original or a certified copy of a receipt evidencing such payment. In the
case of any payment hereunder by or on behalf of the Parent Guarantor
through an account or branch outside the United States or by or on behalf
of the Parent Guarantor by a payor that is not a United States person, if
the Parent Guarantor determines that no Taxes are payable in respect
thereof, the Parent Guarantor shall furnish, or shall cause such payor to
furnish, to the Administrative Agent, at such address, an opinion of
counsel acceptable to the Administrative Agent stating that such payment is
exempt from Taxes. For purposes of subsections (d) and (e) of this Section
5, the terms "UNITED STATES" and "UNITED STATES PERSON" shall have the
meanings specified in Section 7701 of the Internal Revenue Code.
(e) Without prejudice to the survival of any other agreement of the
Parent Guarantor hereunder, the agreements and obligations of the Parent
Guarantor contained in Section 7.01(a) (with respect to enforcement
expenses), the last sentence of Section 7.02 and this Section 7.04 shall
survive the payment in full of the Guaranteed Obligations and all other
amounts payable under this Guaranty.
SECTION 7.05. CONTINUING GUARANTY; ASSIGNMENTS. This Guaranty is a
continuing guaranty and shall (a) remain in full force and effect until the
latest of (i) the cash payment in full of the Guaranteed Obligations and all
other amounts payable under this Guaranty, (ii) the Termination Date and (iii)
the latest date of expiration or termination of all Letters of Credit and all
Secured Hedge Agreements, (b) be binding upon the Parent Guarantor, its
successors and assigns and (c) inure to the benefit of and be enforceable by the
Lender Parties, the Administrative Agent and their successors, transferees and
assigns. Without limiting the generality of the foregoing clause (c), any Lender
Party may assign or otherwise transfer all or any portion of its rights and
obligations hereunder (including, without limitation, all or any portion of its
Commitment, the Advances owing to it and the Note or Notes held by it) to any
other Person, and such other Person shall thereupon become vested with all the
benefits in
respect thereof granted to such Lender herein or otherwise, in each case as
provided in Section 9.07. The Parent Guarantor shall not have the right to
assignment rights hereunder or any interest herein without the prior written
consent of the Administrative Agent.
SECTION 7.06. SUBROGATION. The Parent Guarantor hereby unconditionally and
irrevocably agrees not to exercise any rights that it may now or hereafter
acquire against any Borrower, any Loan Party or any other insider guarantor that
arise from the existence, payment, performance or enforcement of the Parent
Guarantor's Obligations under this Agreement or any other Loan Document,
including, without limitation, any right of subrogation, reimbursement,
exoneration, contribution or indemnification and any right to participate in any
claim or remedy of the Administrative Agent or any Lender Party against any
Borrower or any other insider guarantor or any Collateral, whether or not such
claim, remedy or right arises in equity or under contract, statute or common
law, including, without limitation, the right to take or receive from any
Borrower, any Loan Party or any other insider guarantor, directly or indirectly,
in cash or other property or by set-off or in any other manner, payment or
security on account of such claim, remedy or right, unless and until all of the
Guaranteed Obligations and all other amounts payable under this Guaranty shall
have been paid in full in cash, all Letters of Credit and all Secured Hedge
Agreements shall have expired or been terminated and the Commitments shall have
expired or terminated. If any amount shall be paid to the Parent Guarantor in
violation of the preceding sentence at any time prior to the latest of (a) the
payment in full in cash of the Guaranteed Obligations and all other amounts
payable under this Guaranty, (b) the Termination Date and (c) the latest date of
expiration or termination of all Letters of Credit and all Secured Hedge
Agreements, such amount shall be received and held in trust for the benefit of
the Administrative Agent and the Lender Parties, shall be segregated from other
property and funds of the Parent Guarantor and shall forthwith be paid to the
Administrative Agent in the same form as so received (with any necessary
endorsement or assignment) to be credited and applied to the Guaranteed
Obligations and all other amounts payable under this Guaranty, whether matured
or unmatured, in accordance with the terms of the Loan Documents, or to be held
as Collateral for any Guaranteed Obligations or other amounts payable under this
Guaranty thereafter arising. If (i) the Parent Guarantor shall make payment to
the Administrative Agent or any Lender Party of all or any part of the
Guaranteed Obligations, (ii) all of the Guaranteed Obligations and all other
amounts payable under this Guaranty shall be paid in full in cash, (iii) the
Termination Date shall have occurred and (iv) all Letters of Credit and all
Secured Hedge Agreements shall have been expired or been terminated, the
Administrative Agent and the Lender Parties will, at the Parent Guarantor's
request and expense, execute and deliver to the Parent Guarantor appropriate
documents, without recourse and without representation or warranty, necessary to
evidence the transfer by subrogation to the Parent Guarantor of an interest in
the Guaranteed Obligations resulting from such payment by the Parent Guarantor.
SECTION 7.07. SUBORDINATION. The Parent Guarantor hereby subordinates any
and all debts, liabilities and other Obligations owed to the Parent Guarantor by
each Loan Party (the "SUBORDINATED OBLIGATIONS") to the Guaranteed Obligations
to the extent and in the manner hereinafter set forth in this Section 7.07:
(a) PROHIBITED PAYMENTS, ETC. Except during the continuance of an
Event of Default (including the commencement and continuation of any
proceeding under any Bankruptcy Law relating to any Loan Party), the Parent
Guarantor may receive regularly scheduled payments from any Loan Party on
account of the Subordinated Obligations. After the occurrence and during
the continuance of any Event of Default (including the commencement and
continuation of any proceeding under any Bankruptcy Law relating to any
Loan Party), however, unless the Administrative Agent otherwise agrees, the
Parent Guarantor shall not demand, accept or take any action to collect any
payment on account of the Subordinated Obligations.
(b) PRIOR PAYMENT OF GUARANTEED OBLIGATIONS. In any proceeding under
any Bankruptcy Law relating to any Loan Party, the Parent Guarantor agrees
that the Secured Parties shall be entitled to receive payment in full in
cash of all Guaranteed Obligations (including all interest and expenses
accruing after the commencement of a proceeding under any Bankruptcy Law,
whether or not constituting an allowed claim in such proceeding ("POST
PETITION INTEREST")) before the Parent Guarantor receives payment of any
Subordinated Obligations.
(c) TURN-OVER. After the occurrence and during the continuance of any
Event of Default (including the commencement and continuation of any
proceeding under any Bankruptcy Law relating to any other Loan Party), the
Parent Guarantor shall, if the Administrative Agent so requests, collect,
enforce and receive payments on account of the Subordinated Obligations as
trustee for the Lender Parties and deliver such payments to the
Administrative Agent on account of the Guaranteed Obligations (including
all Post Petition Interest), together with any necessary endorsements or
other instruments of transfer, but without reducing or affecting in any
manner the liability of the Parent Guarantor under the other provisions of
this Guaranty.
(d) ADMINISTRATIVE AGENT AUTHORIZATION. After the occurrence and
during the continuance of any Event of Default (including the commencement
and continuation of any proceeding under any Bankruptcy Law relating to any
other Loan Party), the Administrative Agent is authorized and empowered
(but without any obligation to so do), in its discretion, (i) in the name
of the Parent Guarantor, to collect and enforce, and to submit claims in
respect of, Subordinated Obligations and to apply any amounts received
thereon to the Guaranteed Obligations (including any and all Post Petition
Interest), and (ii) to require the Parent Guarantor (A) to collect and
enforce, and to submit claims in respect of, Subordinated Obligations and
(B) to pay any amounts received on such obligations to the Administrative
Agent for application to the Guaranteed Obligations (including any and all
Post Petition Interest).
ARTICLE VIII
THE AGENTS
SECTION 8.01. AUTHORIZATION AND ACTION. Each Lender Party (in its
capacities as a Lender, the Swing Line Bank (if applicable), the Issuing Bank
(if applicable) and on behalf of itself and its Affiliates as potential Hedge
Banks) hereby appoints and authorizes each Agent to take such action as agent on
its behalf and to exercise such powers and discretion under this Agreement and
the other Loan Documents as are delegated to such Agent by the terms hereof and
thereof, together with such powers and discretion as are reasonably incidental
thereto. As to any matters not expressly provided for by the Loan Documents
(including, without limitation, enforcement or collection of the Notes), no
Agent shall be required to exercise any discretion or take any action, but shall
be required to act or to refrain from acting (and shall be fully protected in so
acting or refraining from acting) upon the instructions of the Required Lenders,
and such instructions shall be binding upon all Lender Parties and all holders
of Notes; PROVIDED, HOWEVER, that no Agent shall be required to take any action
that exposes such Agent to personal liability or that is contrary to this
Agreement or applicable law. Each Agent agrees to give to each Lender Party
prompt notice of each notice given to it by the Parent Guarantor or any Borrower
pursuant to the terms of this Agreement.
SECTION 8.02. AGENTS' RELIANCE, ETC. Neither any Agent nor any of their
respective directors, officers, agents or employees shall be liable for any
action taken or omitted to be taken by it or them under or in connection with
the Loan Documents, except for its or their own gross negligence or willful
misconduct. Without limitation of the generality of the foregoing, each Agent:
(a) may treat the payee of any Note as the holder thereof until, in the case of
the Administrative Agent, the Administrative Agent receives and accepts an
Assumption Agreement entered into by an Assuming Lender as provided in Section
2.17 or an Assignment and Acceptance entered into by the Lender that is the
payee of such Note, as assignor, and an Eligible Assignee, as assignee, or, in
the case of any other Agent, such Agent has received notice from the
Administrative Agent that it has received and accepted such Assignment and
Acceptance, in each case as provided in Section 9.07; (b) may consult with legal
counsel (including counsel for any Loan Party), independent public accountants
and other experts selected by it and shall not be liable for any action taken or
omitted to be taken in good faith by it in accordance with the advice of such
counsel, accountants or experts; (c) makes no warranty or representation to any
Lender Party and shall not be responsible to any Lender Party for any
statements, warranties or representations (whether written or oral) made in or
in connection with the Loan Documents; (d) shall not have any duty to ascertain
or to inquire as to the performance or observance of any of the terms, covenants
or conditions of any Loan Document on the part of any Loan Party or to inspect
the property (including the books and records) of any Loan Party; (e) shall not
be responsible to any Lender Party for the due execution, legality, validity,
enforceability, genuineness, sufficiency or value of, or the perfection or
priority of any lien or security interest created or purported to be created
under or in connection with, any Loan Document or any other instrument or
document furnished pursuant thereto; and (f) shall incur no liability under or
in respect of any Loan Document by acting upon any notice, consent, certificate
or other instrument or writing (which may be by telegram, telecopy or telex)
believed by it to be genuine and signed or sent by the proper party or parties.
SECTION 8.03. CITIBANK AND AFFILIATES. With respect to its Commitments, the
Advances made by it and the Notes issued to it, Citibank shall have the same
rights and powers under the Loan Documents as any other Lender Party and may
exercise the same as though it were not an Agent; and the term "Lender Party" or
"Lender Parties" shall, unless otherwise expressly indicated, include Citibank
in its individual capacities. Citibank and its affiliates may accept deposits
from, lend money to, act as trustee under indentures of, accept investment
banking engagements from and generally engage in any kind of business with, any
Loan Party, any of its Subsidiaries and any Person who may do business with or
own securities of any Loan Party or any such Subsidiary, all as if Citibank were
not an Agent and without any duty to account therefor to the Lender Parties.
SECTION 8.04. LENDER PARTY CREDIT DECISION. Each Lender Party acknowledges
that it has, independently and without reliance upon any Agent or any other
Lender Party and based on the financial statements referred to in Section 4.01
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 Party
also acknowledges that it will, independently and without reliance upon any
Agent or any other Lender Party and based on such documents and information as
it shall deem appropriate at the time, continue to make its own credit decisions
in taking or not taking action under this Agreement.
SECTION 8.05. INDEMNIFICATION. (a) Each Lender Party severally agrees to
indemnify each Agent (to the extent not promptly reimbursed by the Borrowers)
from and against such Lender Party's ratable share (determined as provided
below) of any and all liabilities, obligations, losses, damages, penalties,
actions, judgments, suits, costs, expenses or disbursements of any kind or
nature whatsoever that may be imposed on, incurred by, or asserted against such
Agent in any way relating to or arising out of the Loan Documents or any action
taken or omitted by such Agent under the Loan Documents; PROVIDED, HOWEVER, that
no Lender Party shall be liable for any portion of such liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses or disbursements resulting from such Agent's gross negligence or
willful misconduct as found in a final, non-appealable judgment by a court of
competent jurisdiction. Without limitation of the foregoing, each Lender Party
agrees to reimburse each Agent promptly upon demand for its ratable share of any
costs and expenses (including, without limitation, fees and expenses of counsel)
payable by the Borrowers under Section 9.04, to the extent that such Agent is
not promptly reimbursed for such costs and expenses by the Borrowers.
(b) Each Lender Party severally agrees to indemnify the Issuing Bank
(to the extent not promptly reimbursed by the Borrowers) from and against
such Lender Party's ratable share (determined as provided below) of any and
all liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, costs, expenses or disbursements of any kind or nature
whatsoever that may be imposed on, incurred by, or asserted against the
Issuing Bank in any way relating to or arising out of the Loan Documents or
any action taken or omitted by the Issuing
Bank under the Loan Documents; PROVIDED, HOWEVER, that no Lender Party
shall be liable for any portion of such liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, costs, expenses or
disbursements resulting from the Issuing Bank's gross negligence or willful
misconduct as found in a final, non-appealable judgment by a court of
competent jurisdiction. Without limitation of the foregoing, each Lender
Party agrees to reimburse the Issuing Bank promptly upon demand for its
ratable share of any costs and expenses (including, without limitation,
fees and expenses of counsel) payable by the Borrowers under Section 9.04,
to the extent that the Issuing Bank is not promptly reimbursed for such
costs and expenses by the Borrowers.
(c) For purposes of this Section 8.05, the Lender Parties' respective
ratable shares of any amount shall be determined, at any time, according to
the sum of (i) the aggregate principal amount of the Advances outstanding
at such time and owing to the respective Lender Parties, (ii) their
respective Pro Rata Shares of the aggregate Available Amount of all Letters
of Credit outstanding at such time and (iii) their respective Unused
Working Capital Commitments at such time; PROVIDED that the aggregate
principal amount of Swing Line Advances owing to the Swing Line Bank and of
Letter of Credit Advances owing to the Issuing Bank shall be considered to
be owed to the Lenders ratably in accordance with their respective Working
Capital Commitments. The failure of any Lender Party to reimburse any Agent
or the Issuing Bank, as the case may be, promptly upon demand for its
ratable share of any amount required to be paid by the Lender Parties to
such Agent or the Issuing Bank, as the case may be, as provided herein
shall not relieve any other Lender Party of its obligation hereunder to
reimburse such Agent or the Issuing Bank, as the case may be, for its
ratable share of such amount, but no Lender Party shall be responsible for
the failure of any other Lender Party to reimburse such Agent or the
Issuing Bank, as the case may be, for such other Lender Party's ratable
share of such amount. Without prejudice to the survival of any other
agreement of any Lender Party hereunder, the agreement and obligations of
each Lender Party contained in this Section 8.05 shall survive the payment
in full of principal, interest and all other amounts payable hereunder and
under the other Loan Documents.
SECTION 8.06. SUCCESSOR AGENTS. Any Agent may resign at any time by giving
written notice thereof to the Lender Parties and the Borrowers and may be
removed at any time with or without cause by the Required Lenders. Upon any such
resignation or removal, the Required Lenders shall have the right to appoint a
successor Agent. If no successor Agent shall have been so appointed by the
Required Lenders, and shall have accepted such appointment, within 30 days after
the retiring Agent's giving of notice of resignation or the Required Lenders'
removal of the retiring Agent, then the retiring Agent may, on behalf of the
Lender Parties, appoint a successor Agent, which shall be a commercial bank
organized under the laws of the United States or of any State thereof and having
a combined capital and surplus of at least $250,000,000. Upon the acceptance of
any appointment as Agent hereunder by a successor Agent and, in the case of a
successor Collateral Agent, upon the execution and filing or recording of such
financing statements, or amendments thereto, and such other instruments or
notices, as may be necessary or desirable, or as the Required Lenders may
request, in order to continue the perfection of the Liens granted or purported
to be granted by the Collateral Documents, such successor Agent shall succeed to
and become vested with all the rights, powers, discretion,
privileges and duties of the retiring Agent, and the retiring Agent shall be
discharged from its duties and obligations under the Loan Documents. If within
45 days after written notice is given of the retiring Agent's resignation or
removal under this Section 8.06 no successor Agent shall have been appointed and
shall have accepted such appointment, then on such 45th day (i) the retiring
Agent's resignation or removal shall become effective, (ii) the retiring Agent
shall thereupon be discharged from its duties and obligations under the Loan
Documents and (iii) the Required Lenders shall thereafter perform all duties of
the retiring Agent under the Loan Documents until such time, if any, as the
Required Lenders appoint a successor Agent as provided above. After any retiring
Agent's resignation or removal hereunder as Agent shall have become effective,
the provisions of this Article VII shall inure to its benefit as to any actions
taken or omitted to be taken by it while it was Agent under this Agreement.
SECTION 8.07. OTHER AGENTS. Each Lender Party hereby
acknowledges that neither the Documentation Agent, Syndication Agent nor any
other Lender Party designated as any "Agent" on the signature pages hereof has
any responsibilities or liability hereunder other than in its capacity as a
Lender, the titles Documentation Agent and Syndication Agent being purely
honorary in nature.
ARTICLE IX
MISCELLANEOUS
SECTION 9.01. AMENDMENTS, ETC. (a) No amendment or waiver of any provision
of this Agreement or the Notes or any other Loan Document, nor consent to any
departure by any Loan Party therefrom, shall in any event be effective unless
the same shall be in writing and signed (or, in the case of the Collateral
Documents, consented to) by the Required Lenders, and then such waiver or
consent shall be effective only in the specific instance and for the specific
purpose for which given; PROVIDED, HOWEVER, that (i) no amendment, waiver or
consent shall, unless in writing and signed by all of the Lenders (other than
any Lender Party that is, at such time, a Defaulting Lender), do any of the
following at any time: (A) waive any of the conditions specified in Section 3.01
or, in the case of the Initial Extension of Credit, Section 3.02, (B) change the
number of Lenders or the percentage of (1) the Commitments, (2) the aggregate
unpaid principal amount of the Advances or (3) the aggregate Available Amount of
outstanding Letters of Credit that, in each case, shall be required for the
Lenders or any of them to take any action hereunder, (C) reduce or limit the
obligations of the Parent Guarantor under Section 7.01 or of any Subsidiary
Guarantor under Section 1 of the Subsidiary Guaranty or otherwise limit such
Guarantor's liability with respect to the Obligations owing to the Agents and
the Lender Parties, (D) release all or substantially all of the Collateral in
any transaction or series of related transactions or permit the creation,
incurrence, assumption or existence of any Lien on all or substantially all of
the Collateral in any transaction or series of related transactions to secure
any Obligations other than Obligations owing to the Secured Parties under the
Loan Documents, (E) amend Section 2.13 or this Section 9.01, (F) increase the
Commitments of the Lenders, (G) reduce the principal of, or interest on, the
Notes or any fees or other amounts payable hereunder, (H) postpone any date
scheduled for any payment of principal of, or interest on, the Notes pursuant to
Section 2.04 or 2.07 or any date fixed for payment of any fees or other amounts
payable hereunder, (I) limit the liability of any Loan Party under any of the
Loan Documents or (J) increase the percentages included in clauses (a) or (b) of
the definition of "Loan Value" and (ii) no amendment, waiver or consent shall,
unless in writing and signed by Lenders having 66 2/3% of the Working Capital
Commitments at such time (other than any Lender Party that is, at such time, a
Defaulting Lender), do any of the following at any time: (A) reduce the dollar
amount of the liquidation reserve included in clause (b) of the definition of
"Loan Value", (B) decrease the liquidity reserve set forth on the Borrowing Base
Certificate, (C) reduce the dollar amount set forth in Section 2.06(b)(ii) or
3.02(a)(iii)(A) or (D) waive the condition specified in Section 3.02(a)(iii);
PROVIDED FURTHER that no amendment, waiver or consent shall, unless in writing
and signed by the Swing Line Bank or the Issuing Bank, as the case may be, in
addition to the Lenders required above to take such action, affect the rights or
obligations of the Swing Line Bank or of the Issuing Bank, as the case may be,
under this Agreement; and PROVIDED FURTHER that no amendment, waiver or consent
shall, unless in writing and signed by an Agent in addition to the Lenders
required above to take such action, affect the rights or duties of such Agent
under this Agreement or the other Loan Documents.
(b) If, in connection with any proposed amendment or waiver of any of
the provisions of this Agreement or any other Loan Document as contemplated
by clauses (i) through (ix) of Section 9.01(a) above, the consent of the
Required Lenders is obtained but the consent of one or more of such other
Lenders whose consent is not obtained, then the Administrative Agent shall
have the right to purchase (and such Lender shall sell) the interest of
each such non-consenting Lender, together with accrued and unpaid interest,
and assume each such Lender's Commitment.
SECTION 9.02. NOTICES, ETC. All notices and other communications provided
for hereunder shall be in writing (including telegraphic, telecopy or telex
communication) and mailed, telegraphed, telecopied, telexed or delivered, if to
the Parent Guarantor, the Borrowers or any other Loan Party, at the address or
the Parent Guarantor at ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇,
Attention: Chief Financial Officer, with a copy to Corporate Counsel; if to any
Initial Lender or the Initial Issuing Bank, at its Domestic Lending Office
specified opposite its name on Schedule I hereto; if to any other Lender Party,
at its Domestic Lending Office specified in the Assumption Agreement or the
Assignment and Acceptance pursuant to which it became a Lender Party; if to the
Collateral Agent, at its address at ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇,
Attention: ▇▇▇▇ ▇▇▇▇; and if to the Administrative Agent, at its address at ▇▇▇
▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Attention: ▇▇▇▇ ▇▇▇▇; or, as to the
Parent Guarantor, any Borrower or the Administrative Agent, at such other
address as shall be designated by such party in a written notice to the other
parties and, as to each other party, at such other address as shall be
designated by such party in a written notice to the Borrowers and the
Administrative Agent. All such notices and communications shall, when mailed,
telegraphed, telecopied or telexed, be effective when deposited in the mails,
delivered to the telegraph company, transmitted by telecopier or confirmed by
telex answerback, respectively, except that notices and communications to any
Agent pursuant to Article II, III or VII shall not be effective until received
by such Agent. Delivery by telecopier of an executed counterpart of any
amendment or waiver of any provision of this Agreement or the Notes or of any
Exhibit hereto to be executed and delivered hereunder shall be effective as
delivery of an original executed counterpart thereof.
SECTION 9.03. NO WAIVER; REMEDIES. No failure on the part of any Lender
Party or any Agent to exercise, and no delay in exercising, any right hereunder
or under any Note shall operate as a waiver thereof; nor shall any single or
partial exercise of any such right preclude any other or further exercise
thereof or the exercise of any other right. The remedies herein provided are
cumulative and not exclusive of any remedies provided by law.
SECTION 9.04. COSTS AND EXPENSES. (a) The Borrowers jointly and severally
agree to pay on demand (i) all reasonable costs and expenses of each Agent in
connection with the preparation, execution, delivery, administration,
modification and amendment of the Loan Documents (including, without limitation,
(A) all due diligence, collateral review, syndication, transportation, computer,
duplication, appraisal, audit, insurance, consultant, search, filing and
recording fees and expenses and (B) the reasonable fees and expenses of counsel
for each Agent with respect thereto, with respect to advising such Agent as to
its rights and responsibilities, or the perfection, protection or preservation
of rights or interests, under the Loan Documents, with
respect to negotiations with any Loan Party or with other creditors of any Loan
Party or any of its Subsidiaries arising out of any Default or any events or
circumstances that may give rise to a Default and with respect to presenting
claims in or otherwise participating in or monitoring any bankruptcy, insolvency
or other similar proceeding involving creditors' rights generally and any
proceeding ancillary thereto) and (ii) all costs and expenses of each Agent and
each Lender Party in connection with the enforcement of the Loan Documents,
whether in any action, suit or litigation, any bankruptcy, insolvency or other
similar proceeding affecting creditors' rights generally (including, without
limitation, the reasonable fees and expenses of counsel for the Administrative
Agent and each Lender Party with respect thereto).
(b) The Borrowers jointly and severally agree to indemnify and hold
harmless each Agent, each Lender Party and each of their Affiliates and
their officers, directors, employees, agents and advisors (each, an
"INDEMNIFIED PARTY") from and against any and all claims, damages, losses,
liabilities and expenses (including, without limitation, reasonable fees
and expenses of counsel) that may be incurred by or asserted or awarded
against any Indemnified Party, in each case arising out of or in connection
with or by reason of (including, without limitation, in connection with any
investigation, litigation or proceeding or preparation of a defense in
connection therewith) (i) the Facilities, the actual or proposed use of the
proceeds of the Advances or the Letters of Credit, the Transaction
Documents or any of the transactions contemplated thereby or (ii) the
actual or alleged presence of Hazardous Materials on any property of any
Loan Party or any of its Subsidiaries or any Environmental Action relating
in any way to any Loan Party or any of its Subsidiaries, except to the
extent such claim, damage, loss, liability or expense is found in a final,
non-appealable judgment by a court of competent jurisdiction to have
resulted from such Indemnified Party's gross negligence or willful
misconduct. In the case of an investigation, litigation or other proceeding
to which the indemnity in this Section 9.04(b) applies, such indemnity
shall be effective whether or not such investigation, litigation or
proceeding is brought by any Loan Party, its directors, shareholders or
creditors or an Indemnified Party or any Indemnified Party is otherwise a
party thereto and whether or not the transactions contemplated by the
Transaction Documents are consummated. The Borrowers also agrees not to
assert any claim against any Agent, any Lender Party or any of their
Affiliates, or any of their respective officers, directors, employees,
attorneys and agents, on any theory of liability, for special, indirect,
consequential or punitive damages arising out of or otherwise relating to
the Facilities, the actual or proposed use of the proceeds of the Advances
or the Letters of Credit, the Transaction Documents or any of the
transactions contemplated by the Transaction Documents.
(c) If any payment of principal of, or Conversion of, any Eurodollar
Rate Advance is made by the Borrowers to or for the account of a Lender
Party other than on the last day of the Interest Period for such Advance,
as a result of a payment or Conversion pursuant to Section 2.06, 2.09(b)(i)
or 2.10(d), acceleration of the maturity of the Notes pursuant to Section
6.01 or for any other reason, or if the Borrowers fail to make any payment
or prepayment of an Advance for which a notice of prepayment has been given
or that is otherwise required to be made, whether pursuant to Section 2.04,
2.06 or 6.01 or otherwise, the Borrowers shall, upon demand by such Lender
Party (with a copy of such demand to the Administrative Agent), pay to the
Administrative Agent for the account of such Lender Party any amounts
required to
compensate such Lender Party for any additional losses, costs or expenses
that it may reasonably incur as a result of such payment or such failure to
pay or prepay, as the case may be, including, without limitation, any loss,
cost or expense incurred by reason of the liquidation or reemployment of
deposits or other funds acquired by any Lender Party to fund or maintain
such Advance.
(d) If any Loan Party fails to pay when due any costs, expenses or
other amounts payable by it under any Loan Document, including, without
limitation, fees and expenses of counsel and indemnities, such amount may
be paid on behalf of such Loan Party by the Administrative Agent or any
Lender Party, in its sole discretion.
(e) Without prejudice to the survival of any other agreement of any
Loan Party hereunder or under any other Loan Document, the agreements and
obligations of the Borrowers contained in Sections 2.10 and 2.12 and this
Section 9.04 shall survive the payment in full of principal, interest and
all other amounts payable hereunder and under any of the other Loan
Documents. SECTION 9.05. RIGHT OF SET-OFF. Upon (a) the occurrence and
during the continuance of any Event of Default and (b) the making of the
request or the granting of the consent specified by Section 6.01 to
authorize the Administrative Agent to declare the Notes due and payable
pursuant to the provisions of Section 6.01, each Agent and each Lender
Party and each of their respective Affiliates is hereby authorized at any
time and from time to time, to the fullest extent permitted by law, to set
off and otherwise apply any and all deposits (general or special, time or
demand, provisional or final) at any time held and other indebtedness at
any time owing by such Agent, such Lender Party or such Affiliate to or for
the credit or the account of the Parent Guarantor or any Borrower against
any and all of the Obligations of the Parent Guarantor or the Borrowers now
or hereafter existing under the Loan Documents, irrespective of whether
such Agent or such Lender Party shall have made any demand under this
Agreement or such Note or Notes and although such obligations may be
unmatured. Each Agent and each Lender Party agrees promptly to notify the
Parent Guarantor or the applicable Borrower after any such set-off and
application; PROVIDED, HOWEVER, that the failure to give such notice shall
not affect the validity of such set-off and application. The rights of each
Agent and each Lender Party and their respective Affiliates under this
Section are in addition to other rights and remedies (including, without
limitation, other rights of set-off) that such Agent, such Lender Party and
their respective Affiliates may have.
SECTION 9.06. BINDING EFFECT. This Agreement shall become effective when it
shall have been executed by the Borrowers, the Parent Guarantor and each Agent
and the Administrative Agent shall have been notified by each Initial Lender and
the Initial Issuing Bank that such Initial Lender and the Initial Issuing Bank
has executed it and thereafter shall be binding upon and inure to the benefit of
the Borrowers, the Parent Guarantor, each Agent and each Lender Party and their
respective successors and assigns, except that no Borrower shall have the right
to assign its rights hereunder or any interest herein without the prior written
consent of the Lender Parties.
SECTION 9.07. ASSIGNMENTS AND PARTICIPATIONS. (a) Each Lender may assign to
one or more Eligible Assignees all or a portion of its rights and obligations
under this Agreement (including, without limitation, all or a portion of its
Commitment or Commitments, the Advances owing to it and the Note or Notes held
by it); PROVIDED, HOWEVER, that (i) each such assignment shall be of a uniform,
and not a varying, percentage of all rights and obligations under and in respect
of all of the Facilities, (ii) except in the case of an assignment to a Person
that, immediately prior to such assignment, was a Lender or an assignment of all
of a Lender's rights and obligations under this Agreement, the aggregate amount
of the Commitments being assigned to such Eligible Assignee pursuant to such
assignment (determined as of the date of the Assignment and Acceptance with
respect to such assignment) shall in no event be less than $5,000,000, (iii)
each such assignment shall be to an Eligible Assignee, (iv) no such assignments
shall be permitted without the consent of the Administrative Agent until the
Administrative Agent shall have notified the Lender Parties that syndication of
the Commitments hereunder has been completed, and (v) the parties to each such
assignment shall execute and deliver to the Administrative Agent, for its
acceptance and recording in the Register, an Assignment and Acceptance, together
with any Note or Notes subject to such assignment and a processing and
recordation fee of $3,500.
(b) Upon such execution, delivery, acceptance and recording, from and
after the effective date specified in such Assignment and Acceptance, (x)
the assignee thereunder shall be a party hereto and, to the extent that
rights and obligations hereunder have been assigned to it pursuant to such
Assignment and Acceptance, have the rights and obligations of a Lender or
Issuing Bank, as the case may be, hereunder and (y) the Lender or Issuing
Bank assignor thereunder shall, to the extent that rights and obligations
hereunder have been assigned by it pursuant to such Assignment and
Acceptance, relinquish its rights and be released from its obligations
under this Agreement (and, in the case of an Assignment and Acceptance
covering all of the remaining portion of an assigning Lender's or Issuing
Bank's rights and obligations under this Agreement, such Lender or Issuing
Bank shall cease to be a party hereto).
(c) By executing and delivering an Assignment and Acceptance, each
Lender Party assignor thereunder and each assignee thereunder confirm to
and agree with each other and the other parties thereto and hereto as
follows: (i) other than as provided in such Assignment and Acceptance, such
assigning Lender Party makes no representation or warranty and assumes no
responsibility with respect to any statements, warranties or
representations made in or in connection with any Loan Document or the
execution, legality, validity, enforceability, genuineness, sufficiency or
value of, or the perfection or priority of any lien or security interest
created or purported to be created under or in connection with, any Loan
Document or any other instrument or document furnished pursuant thereto;
(ii) such assigning Lender Party makes no representation or warranty and
assumes no responsibility with respect to the financial condition of any
Loan Party or the performance or observance by any Loan Party of any of its
obligations under any Loan Document or any other instrument or document
furnished pursuant thereto; (iii) such assignee confirms that it has
received a copy of this Agreement, together with copies of the financial
statements referred to in Section 4.01 and such other documents and
information as it has deemed appropriate to make its own credit analysis
and decision to enter into such Assignment and Acceptance; (iv) such
assignee will, independently and without reliance upon
any Agent, such assigning Lender Party or any other Lender Party and based
on such documents and information as it shall deem appropriate at the time,
continue to make its own credit decisions in taking or not taking action
under this Agreement; (v) such assignee confirms that it is an Eligible
Assignee; (vi) such assignee appoints and authorizes each Agent to take
such action as agent on its behalf and to exercise such powers and
discretion under the Loan Documents as are delegated to such Agent by the
terms hereof, together with such powers and discretion as are reasonably
incidental thereto; and (vii) such assignee agrees that it will perform in
accordance with their terms all of the obligations which by the terms of
this Agreement are required to be performed by it as a Lender or Issuing
Bank, as the case may be.
(d) The Administrative Agent shall maintain at its address referred to
in Section 9.02 a copy of each Assumption Agreement and each Assignment and
Acceptance delivered to and accepted by it and a register for the
recordation of the names and addresses of the Lender Parties and the
Commitment under each Facility of, and principal amount of the Advances
owing under each Facility to, each Lender Party from time to time (the
"REGISTER"). The entries in the Register shall be conclusive and binding
for all purposes, absent manifest error, and the Borrowers, the Agents and
the Lender Parties may treat each Person whose name is recorded in the
Register as a Lender Party hereunder for all purposes of this Agreement.
The Register shall be available for inspection by any Borrower or any
Lender Party at any reasonable time and from time to time upon reasonable
prior notice.
(e) Upon its receipt of an Assignment and Acceptance executed by an
assigning Lender Party and an assignee, together with any Note or Notes
subject to such assignment, the Administrative Agent shall, if such
Assignment and Acceptance has been completed and is in substantially the
form of Exhibit C hereto, (i) accept such Assignment and Acceptance, (ii)
record the information contained therein in the Register and (iii) give
prompt notice thereof to the Borrowers and each other Agent. In the case of
any assignment by a Lender, within five Business Days after its receipt of
such notice, the Borrowers, at their own expense, shall execute and deliver
to the Administrative Agent in exchange for the surrendered Note or Notes a
new Note to the order of such Eligible Assignee in an amount equal to the
Commitment assumed by it under each Facility pursuant to such Assignment
and Acceptance and, if any assigning Lender has retained a Commitment
hereunder under such Facility, a new Note to the order of such assigning
Lender in an amount equal to the Commitment retained by it hereunder. Such
new Note or Notes shall be in an aggregate principal amount equal to the
aggregate principal amount of such surrendered Note or Notes, shall be
dated the effective date of such Assignment and Acceptance and shall
otherwise be in substantially the form of Exhibit A hereto.
(f) The Issuing Bank may assign to an Eligible Assignee all of its
rights and obligations under the undrawn portion of its Letter of Credit
Commitment at any time; PROVIDED, HOWEVER, that (i) each such assignment
shall be to an Eligible Assignee and (ii) the parties to each such
assignment shall execute and deliver to the Administrative Agent, for its
acceptance and recording in the Register, an Assignment and Acceptance,
together with a processing and recordation fee of $3,500.
(g) Each Lender Party may sell participations to one or more Persons
(other than any Loan Party or any of its Affiliates) in or to all or a
portion of its rights and obligations under this Agreement (including,
without limitation, all or a portion of its Commitments, the Advances owing
to it and the Note or Notes (if any) held by it); PROVIDED, HOWEVER, that
(i) such Lender Party's obligations under this Agreement (including,
without limitation, its Commitments) shall remain unchanged, (ii) such
Lender Party shall remain solely responsible to the other parties hereto
for the performance of such obligations, (iii) such Lender Party shall
remain the holder of any such Note for all purposes of this Agreement, (iv)
the Borrowers, the Agents and the other Lender Parties shall continue to
deal solely and directly with such Lender Party in connection with such
Lender Party's rights and obligations under this Agreement and (v) no
participant under any such participation shall have any right to approve
any amendment or waiver of any provision of any Loan Document, or any
consent to any departure by any Loan Party therefrom, except to the extent
that such amendment, waiver or consent would reduce the principal of, or
interest on, the Notes or any fees or other amounts payable hereunder, in
each case to the extent subject to such participation, postpone any date
fixed for any payment of principal of, or interest on, the Notes or any
fees or other amounts payable hereunder, in each case to the extent subject
to such participation, or release all or substantially all of the
Collateral.
(h) Any Lender Party may, in connection with any assignment or
participation or proposed assignment or participation pursuant to this
Section 9.07, disclose to the assignee or participant or proposed assignee
or participant, any information relating to the Parent Guarantor or the
Borrowers furnished to such Lender Party by or on behalf of the Borrowers;
PROVIDED, HOWEVER, that, prior to any such disclosure, the assignee or
participant or proposed assignee or participant shall agree to preserve the
confidentiality of any Confidential Information received by it from such
Lender Party.
(i) Notwithstanding any other provision set forth in this Agreement,
any Lender Party may at any time create a security interest in all or any
portion of its rights under this Agreement (including, without limitation,
the Advances owing to it and the Note or Notes held by it) in favor of any
Federal Reserve Bank in accordance with Regulation A of the Board of
Governors of the Federal Reserve System.
SECTION 9.08. EXECUTION IN COUNTERPARTS. This Agreement may be executed in
any number of counterparts and by different parties hereto in separate
counterparts, each of which when so executed shall be deemed to be an original
and all of which taken together shall constitute one and the same agreement.
Manual delivery of an executed counterpart of a signature page to this Agreement
by telecopier shall be effective as delivery of an original executed counterpart
of this Agreement.
SECTION 9.09. NO LIABILITY OF THE ISSUING BANK. The Borrowers assume 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 of its 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; or (d) any
other circumstances whatsoever in making or failing to make payment under any
Letter of Credit, except that the Borrowers shall have a claim against the
Issuing Bank, and the Issuing Bank shall be liable to the Borrowers, to the
extent of any direct, but not consequential, damages suffered by the Borrowers
that the Borrowers prove were caused by (i) the Issuing Bank's willful
misconduct or gross negligence as determined in a final, non-appealable judgment
by a court of competent jurisdiction in determining whether documents presented
under any Letter of Credit comply with the terms of the Letter of Credit or (ii)
the Issuing Bank's willful 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 9.10. RELEASE OF COLLATERAL. Upon the sale, lease, transfer or
other disposition of any item of Collateral of any Loan Party in accordance with
the terms of the Loan Documents, the Collateral Agent will, at the Borrowers'
expense, execute and deliver to such Loan Party such documents as such Loan
Party may reasonably request to evidence the release of such item of Collateral
from the assignment and security interest granted under the Collateral Documents
in accordance with the terms of the Loan Documents.
SECTION 9.11. JURISDICTION, ETC. (a) Each of the parties hereto hereby
irrevocably and unconditionally submits, for itself and its property, to the
nonexclusive jurisdiction of any New York State court or federal court of the
United States of America sitting in New York City, and any appellate court from
any thereof, in any action or proceeding arising out of or relating to this
Agreement or any of the other Loan Documents to which it is a party, or for
recognition or enforcement of any judgment, and each of the parties hereto
hereby irrevocably and unconditionally agrees that all claims in respect of any
such action or proceeding may be heard and determined in any such New York State
court or, to the extent permitted by law, in such federal court. Each of the
parties hereto agrees that a final judgment in any such action or proceeding
shall be conclusive and may be enforced in other jurisdictions by suit on the
judgment or in any other manner provided by law. Nothing in this Agreement shall
affect any right that any party may otherwise have to bring any action or
proceeding relating to this Agreement or any of the other Loan Documents in the
courts of any jurisdiction.
(b) Each of the parties hereto irrevocably and unconditionally waives,
to the fullest extent it may legally and effectively do so, any objection
that it may now or hereafter have to the laying of venue of any suit,
action or proceeding arising out of or relating to this Agreement or any of
the other Loan Documents to which it is a party in any New York State or
federal court. Each of the parties hereto hereby irrevocably waives, to the
fullest extent permitted by law, the defense of an inconvenient forum to
the maintenance of such action or proceeding in any such court.
SECTION 9.12. GOVERNING LAW. This Agreement and the Notes shall be governed
by, and construed in accordance with, the laws of the State of New York.
SECTION 9.13. WAIVER OF JURY TRIAL. Each of the Parent Guarantor, the
Borrowers, the Agents and the Lender Parties irrevocably waives all right to
trial by jury in any action, proceeding or counterclaim (whether based on
contract, tort or otherwise) arising out of or relating to any of the Loan
Documents, the Advances or the actions of any Agent or any Lender Party in the
negotiation, administration, performance or enforcement thereof.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their respective officers thereunto duly authorized, as of the date
first above written.
MICROAGE TECHNOLOGY SERVICES, L.L.C.,
as Borrower
By /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
-------------------------------------
Title: Treasurer
------------------------------
PINACOR, INC.,
as Borrower
By /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
-------------------------------------
Title: Treasurer
------------------------------
MICROAGE, INC.,
as Parent Guarantor
By /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
-------------------------------------
Title: CFO, ExVP & Treasurer
------------------------------
CITIBANK, N.A.,
as Administrative Agent
By /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
-------------------------------------
Title: Vice President
------------------------------
CITIBANK, N.A.,
as Collateral Agent
By /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
-------------------------------------
Title: Vice President
------------------------------
IBM CREDIT CORPORATION,
as Documentation Agent
By /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
-------------------------------------
Title: Manager, Commercial Financing
Solutions Americas
------------------------------
THE CIT GROUP/BUSINESS CREDIT, INC.,
as Syndication Agent
By /s/ ▇. ▇▇▇
-------------------------------------
Title: Vice President
------------------------------
INITIAL LENDERS
CITIBANK, N.A.
By /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
-------------------------------------
Title: Vice President
------------------------------
IBM CREDIT CORPORATION
By /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
-------------------------------------
Title: Manager, Commercial Financing
Solutions Americas
------------------------------
THE CIT GROUP/BUSINESS CREDIT, INC.
By /s/ ▇. ▇▇▇
-------------------------------------
Title: Vice President
------------------------------
FLEET CAPITAL CORPORATION
By /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
-------------------------------------
Title: Senior Vice President
------------------------------
MELLON BANK, N.A.
By /s/ R. Shirinyam
-------------------------------------
Title: Vice President
------------------------------
IBJ WHITEHALL BUSINESS
CREDIT CORPORATION
By /s/
-------------------------------------
Title:
------------------------------
DEBIS FINANCIAL SERVICES, INC.
By /s/ ▇▇▇▇▇ ▇. Vandervark
-------------------------------------
Title: President ABL Division
------------------------------
FINOVA CAPITAL CORPORATION
By /s/
-------------------------------------
Title:
------------------------------
INITIAL ISSUING BANK
CITIBANK, N.A.
By /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
-------------------------------------
Title: Vice President
------------------------------
SWING LINE BANK
CITIBANK, N.A.
By /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
-------------------------------------
Title: Vice President
------------------------------
INITIAL ISSUING BANK
CITIBANK, N.A.
By /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
-------------------------------------
Title: Vice President
------------------------------
SCHEDULE I
COMMITMENTS AND APPLICABLE LENDING OFFICES
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Working Letter of Domestic Eurodollar
Capital Credit Lending Lending
Name of Initial Lender Commitment Commitment Office Office
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EXHIBIT A
FORM OF
PROMISSORY NOTE
$_______________ Dated: _________ __, ____
FOR VALUE RECEIVED, the undersigned, MicroAge Technology Services, L.L.C.,
a Delaware limited liability company, and Pinacor, Inc., a Delaware corporation
(collectively, the "BORROWERS"), jointly and severally HEREBY PROMISE TO PAY to
the order of _________________________ (the "LENDER") for the account of its
Applicable Lending Office (as defined in the Credit Agreement referred to below)
the aggregate principal amount of the Working Capital Advances (as defined
below) owing to the Lender by the Borrowers pursuant to the Credit Agreement
dated as of October 28, 1999 (as amended, supplemented or otherwise modified
from time to time, the "CREDIT AGREEMENT"; terms defined therein being used
herein as therein defined) among the Borrowers, MicroAge, Inc., the Lender and
certain other lender parties party thereto, Citibank, N.A., as Collateral Agent,
IBM Credit Corporation, as Documentation Agent, The CIT Group/Business Credit,
Inc., as Syndication Agent, and Citibank, N.A., as Administrative Agent and for
the Lender and such other lender parties, on the Termination Date.
The Borrowers jointly and severally promise to pay interest on the unpaid
principal amount of each Working Capital Advance from the date of such Working
Capital Advance until such principal amount is paid in full, at such interest
rates, and payable at such times, as are specified in the Credit Agreement.
Both principal and interest are payable in lawful money of the United
States of America to Citibank, N.A., as Administrative Agent, at
_______________, _______________ __________ in same day funds. Each Working
Capital Advance owing to the Lender by the Borrowers and the maturity thereof,
and all payments made on account of principal thereof, shall be recorded by the
Lender and, prior to any transfer hereof, endorsed on the grid attached hereto,
which is part of this Promissory Note; PROVIDED, HOWEVER, that the failure of
the Lender to make any such recordation or endorsement shall not affect the
Obligations of the Borrowers under this Promissory Note.
This Promissory Note is one of the Notes referred to in, and is entitled to
the benefits of, the Credit Agreement. The Credit Agreement, among other things,
(i) provides for the making of advances (the "WORKING CAPITAL ADVANCES") by the
Lender to the Borrowers from time to time in an aggregate amount not to exceed
at any time outstanding the U.S. dollar amount first above mentioned, the
indebtedness of the Borrowers resulting from each such Working Capital Advance
being evidenced by this Promissory Note, and (ii) contains provisions for
acceleration of the maturity hereof upon the happening of certain stated events
and also for prepayments on account of principal hereof prior to the maturity
hereof upon the terms and conditions therein specified. The obligations of the
Borrowers under this Promissory Note and
the other Loan Documents, and the obligations of the other Loan Parties under
the Loan Documents, are secured by the Collateral as provided in the Loan
Documents.
MICROAGE TECHNOLOGY SERVICES, L.L.C.,
as Borrower
By /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
-------------------------------------
Title: Treasurer
------------------------------
PINACOR, INC.,
as Borrower
By /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
-------------------------------------
Title: Treasurer
------------------------------
ADVANCES AND PAYMENTS OF PRINCIPAL
================================================================================
Amount of Unpaid
Amount of Principal Paid Principal Notation
Date Advance or Prepaid Balance Made By
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EXHIBIT B
FORM OF
NOTICE OF BORROWING
Citibank, N.A.,
as Administrative Agent
under the Credit Agreement
referred to below
____________________
____________________ [Date]
Attention: ____________________________
Ladies and Gentlemen:
The undersigned, MicroAge Technology Services, L.L.C. and Pinacor, Inc.,
refer to the Credit Agreement dated as of October 28, 1999 (as amended,
supplemented or otherwise modified from time to time, the "CREDIT AGREEMENT";
the terms defined therein being used herein as therein defined), among the
undersigned,, MicroAge, Inc., the Lender Parties party thereto, Citibank, N.A.,
as Collateral Agent, IBM Credit Corporation, as Documentation Agent, and The CIT
Group/Business Credit, Inc., as Syndication Agent, and Citibank, N.A., as
Administrative Agent and for the Lender Parties, and hereby jointly gives you
notice, irrevocably, pursuant to Section 2.02 of the Credit Agreement that the
undersigned hereby requests a Borrowing under the Credit Agreement, and in that
connection sets forth below the information relating to such Borrowing (the
"PROPOSED BORROWING") as required by Section 2.02(a) of the Credit Agreement:
(i) The Business Day of the Proposed Borrowing is _________ __, ____.
(ii) The Facility under which the Proposed Borrowing is requested is the
_______________ Facility.
(iii) The Type of Advances comprising the Proposed Borrowing is [Base Rate
Advances] [Eurodollar Rate Advances].
(iv) The aggregate amount of the Proposed Borrowing is $__________.
[(v) The initial Interest Period for each Eurodollar Rate Advance made as
part of the Proposed Borrowing is __________ month[s].]
The undersigned hereby certifies that the following statements are true on
the date hereof, and will be true on the date of the Proposed Borrowing:
(A) the representations and warranties contained in each Loan Document
are correct on and as of the date of the Proposed Borrowing, before and
after giving effect to the Proposed Borrowing and to the application of the
proceeds therefrom, as though made on and as of such date other than any
such representations or warranties that, by their terms, refer to a
specific date other than the date of the Proposed Borrowing, in which case,
as of such specific date;
(B) no event has occurred and is continuing, or would result from such
Proposed Borrowing or from the application of the proceeds therefrom, that
constitutes a Default; and
(C) the sum of the Loan Values of the Eligible Collateral MINUS
$20,000,000 exceeds the aggregate principal amount of the Working Capital
Advances PLUS Swing Line Advances PLUS Letter of Credit Advances to be
outstanding PLUS the Available Amount of all Letters of Credit then
outstanding after giving effect to the Proposed Borrowing.
Manual delivery of an executed counterpart of this Notice of Borrowing by
telecopier shall be effective as delivery of an original executed counterpart of
this Notice of Borrowing.
Very truly yours,
MICROAGE TECHNOLOGY SERVICES, L.L.C.
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
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Title: Treasurer
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PINACOR, INC.
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
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Title: Treasurer
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EXHIBIT C
FORM OF
ASSIGNMENT AND ACCEPTANCE
Reference is made to the Credit Agreement dated as of October 28, 1999 (as
amended, supplemented or otherwise modified from time to time, the "CREDIT
AGREEMENT"; the terms defined therein, unless otherwise defined herein, being
used herein as therein defined) among, MicroAge Technology Services, L.L.C., a
Delaware limited liability company ("MTS"), Pinacor, Inc., a Delaware
corporation ("PINACOR", and together with MTS, the "BORROWERS"), MicroAge, Inc.,
a Delaware corporation (the "PARENT GUARANTOR"), the Lender Parties party
thereto, Citibank, N.A., as Collateral Agent, IBM Credit Corporation, as
Documentation Agent, The CIT Group/Business Credit, Inc., as Syndication Agent,
and Citibank, N.A., as Administrative Agent and for the Lender Parties.
Each "Assignor" referred to on Schedule 1 hereto (each, an "ASSIGNOR") and
each "Assignee" referred to on Schedule 1 hereto (each, an "ASSIGNEE") agrees
severally with respect to all information relating to it and its assignment
hereunder and on Schedule 1 hereto as follows:
1. Such Assignor hereby sells and assigns, without recourse except as to
the representations and warranties made by it herein, to such Assignee, and such
Assignee hereby purchases and assumes from such Assignor, an interest in and to
such Assignor's rights and obligations under the Credit Agreement as of the date
hereof equal to the percentage interest specified on Schedule 1 hereto of all
outstanding rights and obligations under the Credit Agreement. After giving
effect to such sale and assignment, such Assignee's Commitments and the amount
of the Advances owing to such Assignee will be as set forth on Schedule 1
hereto.
2. Such Assignor (i) represents and warrants that it is the legal and
beneficial owner of the interest or interests being assigned by it hereunder and
that such interest or interests are free and clear of any adverse claim; (ii)
makes no representation or warranty and assumes no responsibility with respect
to any statements, warranties or representations made in or in connection with
any Loan Document or the execution, legality, validity, enforceability,
genuineness, sufficiency or value of, or the perfection or priority of any lien
or security interest created or purported to be created under or in connection
with, any Loan Document or any other instrument or document furnished pursuant
thereto; (iii) makes no representation or warranty and assumes no responsibility
with respect to the financial condition of any Loan Party or the performance or
observance by any Loan Party of any of its obligations under any Loan Document
or any other instrument or document furnished pursuant thereto; and (iv)
attaches the Note or Notes held by such Assignor and requests that the
Administrative Agent exchange such Note or Notes for a new Note or Notes payable
to the order of such Assignee in an amount equal to the Commitments assumed by
such Assignee pursuant hereto or new Notes payable to the order of such Assignee
in an amount equal to the Commitments assumed by such Assignee pursuant
hereto and such Assignor in an amount equal to the Commitments retained by such
Assignor under the Credit Agreement, respectively, as specified on Schedule 1
hereto.
3. Such Assignee (i) confirms that it has received a copy of the Credit
Agreement, together with copies of the financial statements referred to in
Section 4.01 thereof and such other documents and information as it has deemed
appropriate to make its own credit analysis and decision to enter into this
Assignment and Acceptance; (ii) agrees that it will, independently and without
reliance upon any Agent, any Assignor or any other Lender Party and based on
such documents and information as it shall deem appropriate at the time,
continue to make its own credit decisions in taking or not taking action under
the Credit Agreement; (iii) confirms that it is an Eligible Assignee; (iv)
appoints and authorizes each Agent to take such action as agent on its behalf
and to exercise such powers and discretion under the Loan Documents as are
delegated to such Agent by the terms thereof, together with such powers and
discretion as are reasonably incidental thereto; (v) agrees that it will perform
in accordance with their terms all of the obligations that by the terms of the
Credit Agreement are required to be performed by it as a Lender Party; and (vi)
attaches any U.S. Internal Revenue Service forms required under Section 2.12 of
the Credit Agreement.
4. Following the execution of this Assignment and Acceptance, it will be
delivered to the Administrative Agent for acceptance and recording by the
Administrative Agent. The effective date for this Assignment and Acceptance (the
"EFFECTIVE Date") shall be the date of acceptance hereof by the Administrative
Agent, unless otherwise specified on Schedule 1 hereto.
5. Upon such acceptance and recording by the Administrative Agent, as of
the Effective Date, (i) such Assignee shall be a party to the Credit Agreement
and, to the extent provided in this Assignment and Acceptance, have the rights
and obligations of a Lender Party thereunder and (ii) such Assignor shall, to
the extent provided in this Assignment and Acceptance, relinquish its rights and
be released from its obligations under the Credit Agreement (other than its
rights and obligations under the Loan Documents that are specified under the
terms of such Loan Documents to survive the payment in full of the Obligations
of the Loan Parties under the Loan Documents to the extent any claim thereunder
relates to an event arising prior to the Effective Date of this Assignment and
Acceptance) and, if this Assignment and Acceptance covers all of the remaining
portion of the rights and obligations of such Assignor under the Credit
Agreement, such Assignor shall cease to be a party thereto.
6. Upon such acceptance and recording by the Administrative Agent, from and
after the Effective Date, the Administrative Agent shall make all payments under
the Credit Agreement and the Notes in respect of the interest assigned hereby
(including, without limitation, all payments of principal, interest and
commitment fees with respect thereto) to such Assignee. Such Assignor and such
Assignee shall make all appropriate adjustments in payments under the Credit
Agreement and the Notes for periods prior to the Effective Date directly between
themselves.
7. This Assignment and Acceptance shall be governed by, and construed in
accordance with, the laws of the State of New York.
8. This Assignment and Acceptance may be executed in any number of
counterparts and by different parties hereto in separate counterparts, each of
which when so executed shall be deemed to be an original and all of which taken
together shall constitute one and the same agreement. Manual delivery of an
executed counterpart of Schedule 1 to this Assignment and Acceptance by
telecopier shall be effective as delivery of an original executed counterpart of
this Assignment and Acceptance.
IN WITNESS WHEREOF, each Assignor and each Assignee have caused Schedule 1
to this Assignment and Acceptance to be executed by their officers thereunto
duly authorized as of the date specified thereon.
SCHEDULE 1
TO
ASSIGNMENT AND ACCEPTANCE
ASSIGNOR
WORKING CAPITAL FACILITY
Percentage interest assigned % % % % %
Working Capital Commitment assigned $ $ $ $ $
Aggregate outstanding principal amount of
Working Capital Advances assigned $ $ $ $ $
Principal amount of Note
payable to ASSIGNOR $ $ $ $ $
LETTER OF CREDIT FACILITY
Letter of Credit Commitment assigned $ $ $ $ $
Letter of Credit Commitment retained $ $ $ $ $
ASSIGNEE
WORKING CAPITAL FACILITY
Percentage interest assigned % % % % %
Working Capital Commitment assigned $ $ $ $ $
Aggregate outstanding principal amount of
Working Capital Advances assigned $ $ $ $ $
Principal amount of Note
payable to ASSIGNEE $ $ $ $ $
LETTER OF CREDIT FACILITY
Letter of Credit Commitment assumed $ $ $ $ $
Effective Date (if other than date of acceptance by Administrative Agent):
(1) _________ __, ____
ASSIGNORS
, as Assignor
--------------------------
By
----------------------------------------
Title:
------------------------------------
Dated: _________ __, ____
, as Assignor
--------------------------
By
----------------------------------------
Title:
------------------------------------
Dated: _________ __, ____
, as Assignor
--------------------------
By
----------------------------------------
Title:
------------------------------------
Dated: _________ __, ____
, as Assignor
--------------------------
By
----------------------------------------
Title:
------------------------------------
Dated: _________ __, ____
, as Assignor
--------------------------
By
----------------------------------------
Title:
------------------------------------
Dated: _________ __, ____
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(1) This date should be no earlier than five Business Days after the delivery
of this Assignment and Acceptance to the Administrative Agent.
ASSIGNEES
, as Assignee
--------------------------
By
-----------------------------------------
Title:
----------------------------------
Dated: _________ __, ____
Domestic Lending Office:
Eurodollar Lending Office:
, as Assignee
--------------------------
By
-----------------------------------------
Title:
----------------------------------
Dated: _________ __, ____
Domestic Lending Office:
Eurodollar Lending Office:
, as Assignee
--------------------------
By
-----------------------------------------
Title:
----------------------------------
Dated: _________ __, ____
Domestic Lending Office:
Eurodollar Lending Office:
, as Assignee
--------------------------
By
-----------------------------------------
Title:
----------------------------------
Dated: _________ __, ____
Domestic Lending Office:
Eurodollar Lending Office:
, as Assignee
--------------------------
By
-----------------------------------------
Title:
----------------------------------
Dated: _________ __, ____
Domestic Lending Office:
Eurodollar Lending Office:
Accepted (2)[and Approved] this ____
day of ___________, ____
CITIBANK, N.A.,
as Administrative Agent
By /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
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Title: Vice President
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(3)[Approved this ____ day
of _____________, ____
MICROAGE, INC.
By /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
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Title: CFO, ExVP & Treasurer
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(2) Required if the Assignee is an Eligible Assignee solely by reason of clause
(a)(viii) or (b) of the definition of "Eligible Assignee".
(3) See footnote 2.